The Legal Exchange 12-2-17

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Sunday, December 3rd
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This is the legal exchange which John let's keep from the low for a look Cushing and Dolan and Susan powers of the Armstrong advisory group. Each week Todd and Susan we'll discuss many topics including estate planning how to avoid probate and protecting your money from a nursing home. If you need assistance in any of these areas for have a question about another issue that may affect your future. Call 8668485699. To make an appointment that's 8668485699. Operators are standing by now here are your host Don let's game and the season for hours. Welcome into the legal team to eat. I'm season Harry and the guys with the I'm stunned by three group hunting by Todd lets the parking lot firmer Cushing and only. With a masters in taxation. Todd welcome how are you welcome to the season. It's official. Keep in December is here it's the holidays it's crazy I know I still like it. Like the holiday gift yet not yet at the same thing I got to last year and you bring ID gifting assets off some relatives that I was able being stuck pig it's getting season at the gifting guide I think it's appropriate. I think it's appropriate let's. Let's tell you about some other thing Massachusetts is gonna trying to a solid gift. Yeah one of the things that they're trying to do is suspect about it gifts coming from the state just let me put that out there right up front I don't disagree but but this one sounds good and I'd love the idea I'd love it. I mean. It's all about the cost of prescription drugs. And how to get that cost down. Through direct negotiation. Vs what we have right now is this your folks who are on Medicare from Medicaid and so forth rather than try to cut Medicaid. And and hurt people that way. But to spread the cost down and and I think it's one of our explain how works and I hope other hope they get approved and hope other states jump on the bandwagon. So it would be a present. Next I wanna go to Ohio there's an appellate court case there were years where the power of attorney signed somebody into a nursing home. In the agreement they signed was to use as power of attorney the money. Of the person that's going into the nursing home mom in this case. To pay for her care. Seems harmless enough but if you don't follow the agreement maybe things aren't as they appear. So we'll explain some of that. And lastly we have at a very interesting caregiver child question now I was reading this article. It is said that the caregiver child exception. Work. If the child that's living with a parent has a full time job. And the parent actually pays to bring help and when that child's not there interesting does that matter. Daytona interests. And you know what as they mention. It is to bring new month so we have a brain who died in what better guy to give you all been taught to guide. T gifting assets so brave new guide that he's written for the month of December it's the implications. Of gifting your assets and we're talking about. Income tax implications state active patient. And Medicaid implications of gifting your apps that don't means small little gifts that you're giving our. Holidays are birthday we're talking about those folks that are giving away. Highly appreciated assets like your home like stocks that may be highly appreciated. There are such great tax implications in Medicaid implications of giving your stuff away huge there is a better way to protect your Athens there's a better way to perhaps you let me those SP taxes while you're doing so. Call to every Questar copy of Todd gifting guide right now 866848569. That's 866. 8485699. If you prefer you can download a copy of tides bring in new gifting guide by visiting our website. Legal Eckstein issue dot com just click on the died and articles tab in it he missed any of today's or any of our passions you can also find their podcast there. And listen to them York can be. This is I'm so excited about this drug coverage plan that Massachusetts is leading the way. In trying to get. Done it's a trying because they do need to applying to the CMS which is the center for Medicare and Medicaid Services who of the federal government. For them to approve. This request by Ohio are by and tarred by Massachusetts. Massachusetts is saying. Look we understand how we understand that when somebody goes on Medicaid. And there's an FDA drug that has been approved yes and in individual. In mass on Medicaid needs it. We have to buy it there's there's no option there. And so because we know we have to buy it. The federal government has put in place a mandatory discount that's already predetermined. OK for the drug companies to offer that. To Massachusetts and to other states in the okay well that sounds good except last year that prescription drug costs went up I'm sorry. In 2014 the prescription drug costs went up by 25%. Wow in 2015 the prescription drug costs went up by 14%. Well what's happening is these discounts just aren't content. Not making a difference in the cost they just jacking up the prices so that they can be discounted I think one you got that huge increase in price and and through that yet but that's the drug companies are getting to the point where they're saying OK well. We know what the built in discount for the state is going to be right why don't we just raise our drug prices and offset pat. Right. And I think that's what's happening in and so Massachusetts has said look. Rather than cut Medicaid in and try to cut a hole Medicaid program and just think it more efficient. Right and allow us as a state. To directly negotiate with drug companies. For their prescription drugs that we need nice island directly negotiate our own prices our own discounts. Outweigh one you don't know what the discount going to be eaten and true. Direct competition yellow competition is good for pricing I would say hey if you wanna make sure I by the drug from you. And not from this generic counterpart or this drug company that drug company. Work with me you know if not gonna go to this and gonna go to the lowest bidder yeah certainly. And and it seems common sense that but you still have to go through all these hopes 'cause it's a federal program. So he's tough to jump through all these hoops again and approved and whatnot. But it seems so common sense oriented to me it does it's certainly and then think about this let's say they get approved. If Massachusetts gets approved I can assure you. All the other states are watching bill Guthridge and that's why when you talk about different he's slog that's out there you know across the country. We don't hear that it's not just in Massachusetts because all the states looked to the other states that say wait. Look what they're doing over there were gonna do that tale and so let's play out that string Susan if in fact we have. Multiple states that now get approved to do this now what have you done with the direct competition. Now all the drug companies have to deal with all the states. And their individual demands to come up with some kind of competition. Yet to drive down the prices of the drugs you know I think they're they are the drug costs are probably the most outrageous. Costs that we half who who in in I say the most to me it seems like the most outrageous I don't know for sure. But but it's just so high in and so this to me is a great. Great solution I think it's fantastic and I eight can I ask you a question do you kind of keeping on the theme of gifting here. I know you mentioned that. We we know that right now you can give away 141000 miles per year per person it's dated Sunday that. Because people are gonna start thinking about this at Christmas time and yet here is an EPA yes yes so you get away. 141000 gallons per year per person to anyway you want today great weather related or not and can you just explain. Why eat what the hire us as you can do is solid is doing radically different from if anyone's concerned about protecting it's from the nursing home. Yes because that that is a really good point because when you talk about. Medicaid. And IRS. There's two different rules like. You know we're just talking about Medicaid as a relates to these drug costs as well Medicaid as it relates to. Gifts is entirely different than the IRS as it relates to Gibson by the way when you said 141000 dollars that's today yet. 28 team which is also in the guide materials about this. They've increased it finally it's been I don't know how many years year. It's gone from fourteen to 151000 so you can do 151000. In twenty and 2018. Now when I say do what I mean you can make it gift of 151000. To whom ever you want. And don't need to file a gift tax return. Don't need to pay any gift taxes and you don't use up any of your gift tax exemption OK it's freebie. But if you get 151000 dollars to anybody. And this then it decide you're gonna apply for Medicaid you'll have have created a disqualifying transfer and will be denied Medicaid for five years. So even though the IRS's Yad go ahead have that it. If you have any concerns about anyone going into the nursing. Its next five years. Put on the brink and I think that's a great lead into the hole gifting guide because we need to talk about. Went to gift howdy gift what the implications of gifting are. Not only from a Medicaid perspective but from a tax perspective whether it's gift tax state tax or. Income tax or capital gains tax you think about it a gap there's impacts when you're giving your stuff away folks you may not be realizing that. Even if you don't have a taxable estate from an estate tax perspective. You could inadvertently be creating unnecessary taxes or if you give your stuff away like you're still living so. Todd sky he's written it goes over kind of the pitfalls that you'll you don't wanna get trapped in. By giving away here ask that there's a better way to protect in the Asian better way to reduce or eliminate those and state taxes spoke. Call right now for tides bring you gifting guided 8668485699. At 8668485699. If you prefer you can download a copy of tides bring it gifting guide on our web site. Legal exchange showed dot com just click on the guides and articles task. You're listening to Todd lets each apartment with a loft from Cushing and Ellen. I'm Susan power is a financial advisor to the Armstrong advisory group. We're gonna take a quick break and we'll be back in just a few minutes on the legally exchange with Todd black ski. Securities opera through securities America ink member and that SIPC an advisory services offered through securities America advisors think securities America in its representatives to not provide legal advice therefore it is important to consult with your legal advisor regarding your specific situation Cushing and on the Armstrong advisory group to legally exchange in the securities America companies are not affiliated. Hi this is very Armstrong and if you're a regular listener to my show you know that I talked a great deal about Smart retirement planning each year certain limits are set by the government and these key numbers are critical for you'd understand if you want to maximize your savings I'm not going to be for you the numbers that this is information that can help you. Playing accordingly and alleviate a lot of unwanted and unnecessary stress call my office right now and 803934001. And ask for my brand new free guide called key numbers for 2018 it's chock full of charts and statistics that can help you and areas of retirement planning that you might need the most that number again is 803934001. Or you can download the guide right now at Armstrong advisory dot cops. Dirty suffered two securities America incorporated member -- SIPC and advisory services are with the securities America advisors incorporated Barry Armstrong representative Armstrong advisory group in the securities American companies are on affiliated representatives of securities America do not offer legal or tax advice always seek the advice of a professional familiar with the laws in your state if you're landlord looking to find an easier way to collect rent payments than you need to hear about leader bank's online rant collection product called zero and it's a great service for landlords allowing them to collect tenant's rent payments electronically and he rent dot net without the need to collect checks mostly in the reduced local neighborhood banks to do their business and now a collection of local banks are offering this unique program including leader bank and stolen bank member FDIC. If you're a landlord and are interested in having your bank acquired does he ran technology tell them McCall does he ran team at 7816418691. That's 7816418691. Or visit Z Rand dot net stopped chasing down late payments and running to the bank to make your deposits at your bank to add zero to its list of offerings. Visit C Rand dot net or call 7816418691. For more information at 78164186917816418691. Or zero rent dot net. You'll tune into the legal exchange we've done let's do and Susan powers if you're dealing with a loved one who may need nursing home care. Don't delay Coleman at 8668485699. And let us help guide you through the process while protecting your assets that's 8668485699. Welcome back into the leader in the top lefty in season powers financial advisor with the arms and advisory group. And I'm doing by Todd black ski apart in with the law firm of Cushing in Dolan with a masters in taxation. Until they show we have tides bring new guide for the month of December it's tied to fifteen guide in its complete guide to understanding the income tax state tax. In Medicaid implications of gifting away your assets. Folks there is a better way to protect your assets aside from giving them away. Not only can you protect your assets from creditors but your kids will receive a step up and cost basis upon your death. What does that mean he means no capital gains taxes when they south. Call right now to request your copy. Todd gifting guide at 866. 8485699. At 8668485699. If you prefer you can download a copy on our web site legal exchange showed dot com. Just click on the guides an article tab in if you missed any of today's or any of our past suits you can always find our podcasts. On the website and listen at your convenience. Like sometimes we should change the title. Think gifting feels good but he can really hurt. It at the at the at bat every coach at catching. I mean because it really can't we don't think about all the different. Taxes and creditors in divorces and risks that are involved. Medicaid. In in May yet simple gift will Colin get the hang our you have to find out all horrible things happen when you get. You think I'll never again it's not. All bad. Just do it right yet it's not all that I'm intimately let me shift gears and go down to Ohio there's now an appellate court case in Ohio that I thought I'd mention about people who and nursing homes in this case. That's on I believe under power of attorney will call David. He signed an agreement under powered attorney for mom when he admitted her to the nursing home. And one of the agreement she signed was he agreed to use her money. As power of attorney. To pay her bills he did you tell people forget. But he didn't sign it personally he did sign this power of attorney so you're right to tell people never to sign that personally do and. He did sign this power return but you're right it's still hurts a little so this is a little bit different in the arbitration clause you tell a very different than arbitration clause in this is just to be on the hook I mean this is to be on the hook financially but he said that he agreed. As part returning to use her money to pay her bills. Makes sense pair OK without pay. Turns out though that she was in the nursing home for I'm gonna guess about a year. And then she got discharged on better rehab to share what happened she came home. And when she left the nursing home there was a 100000. Dollars owed to the nursing. I'm like his pay very many bills you know. In fact the superior court. Said the trial court said well looks like of the high energy use about 56000. To maintain the home page electric bills. Etc. and that those were somehow okay which I kind of understand. And would want. Somebody to be able to maintain the house and pay a bill. And about thirteen thousand were unauthorized payments like dog grooming funeral expenses. Things like that. OK so those are not acceptable. Well that didn't make the nursing home happy southerners and by the way sued David and the mother. Cast a wide net yeah you always do. I'm not crying for himself are going to be lies about these hearings are. It wasn't very clear to me although we always need to be careful when Europe are returning it doesn't necessarily mean you'll be named in a lawsuit right. And so they want the appellate court. And the nursing home appealed saying this isn't right you're telling me that. Whirling and get thirteen thousand dollars because those are the only amounts that you considered. Unauthorized. Payments by David Bruton. The appellate court reversed. And sent it back down to the trial court to say you need to recalculate. These damages. Because. The way we see is the power of attorney signed an agreement. To. Pay the bills of the nursing home. And therefore every time an invoice came in. He should've used the money first to pay the invoice of the nursing home and then. Pay any other bills and like household maintenance pillar something like that in so. He didn't say that the household bills or not acceptable. Bills that need to be paid to I think as the power of attorney you probably have that obligation chair Tim maintained. In that property right. But he said they'd just need to recalculate it more and that he should've been paying your bills on a regular basis so got sent back down we don't have an answer. But we do we got an answer that there's going to be more money owed to nursing home than thirteen thousand dollars out like kind of the order that they came in Morse. So you know folks again if I am admitting somebody we're the lessons we take away from this that's really what we want from this kind of discussion. No what is the lesson we take away from this. You know maybe figure out how we're gonna sign these documents we going and I'm thinking healthcare proxies a better way to go but maybe some planning which I wanna talk about for even a minute. Yeah I you know what folks. In terms of cleaning toddler sky weak holiday gifting assets guide but it truly is about putting your plan together doing things the right way rather than just giving them away all willing LT shirt. Put your plan in place and do things the right way call right now for you copy of Todd gifting guide. At 866848569. Earning. 8668485699. Or download a copy and our website legal. Exchange showed dot com. Yeah because we talked about gifting Susan you know when I try to related to this particular case you know. How what should they have done well I don't mind making some dips but. Maybe. And when he used the word gifting but I mean it's because it's not really give but transferring. Assets to an irrevocable trust. For the benefit of the family. Might be the best gift you could give. Of all kind of all time that a lot of people feel like if they're giving those assets they do feel like they're giving those assets to revoke a trust that they're giving them away for average that they got no control they've got no power. That's what it feels like it they're giving it a way so let's let's relate that idea Susan to this gift to this. Our this Ohio appellate court case so instead. Of owing the nursing home a 100000 dollars and what if mom. Had done in a state plan obviously she did something she created at least the power of attorney for her song right she did some basically. So she did some basic planning. And if that's the case then. You know. What should she have done maybe she could have taken all her assets or a good chunk of her assets. And put them into an irrevocable. Gifting trust our answering your vocal Medicaid trust. It's it's really not even a gift it's it's an incomplete gift. Forgive tax purposes. But it's tucked away not owned by the children which. A lot of people might have done instead of this to get it to the children it's not owned by the children it's owned by the trust but it's protected. From the cost of long term care which really means it's protected for. The spouse if there is one. The kids ray later so was that like at great gift to the children in and had they done that in this case. They wouldn't of had to worry about all in the nursing home a 100000. You know could she would of applied for Medicaid. If she had set up the trust five years in advance of going into the nursing home and then needed this nursing home care even though it was only. It was still considered long term issues there about a year but she and upcoming home. She wouldn't vote every month to come home that's the goal would you go into come back home cans in this case she was able to come home and it in on nursing homes it says they owed a 100000 but if she was in there for a year. She would vote about a 14250000. Dollars and you're up here in new England and think about where she'd be tied how much better actually because what that under green algae hat. You're exactly now she got out O'Donnell she and that's right. Now she's out she comes home she's still got the 100000 or whatever she put in the trusted him to continue to use in live on. Because then be notes to lots of these people. It's in the trust you didn't give it away even though you feel like you did. You didn't you protect it you can still access that you can still live off the income so lots of good things that can be done their solemn. I think there's lots of lessons to be learned from this case most of which is planning in advance. Eliminate the problem following an arsenal number one and number two when you're signing somebody in to these nursing homes. Be careful how you sign them in. I'm thinking the best way is healthcare proxy. Okay always because then you're only binding yourself. To make medical decisions you're finding yourself no other way. And I think it's the safest way to do. If you do nothing else folks need that health care proxy you need gap however attorney. You need to trust more than likely but he got to have those beady documents because they are so. So. Powerful so important. It's so important so powerful. Also very important is going to be at trust if you want to protect those assets in Sydney and it isn't ideal folks idiots translates to five. Years you gotta get that clock started maybe you are thinking in January this is the year I'm gonna do it well you know what you've got another January nipping at your heels here folks. Call to request Todd gifting guide right now 86683556. Excuse me 866. 8485699. At 8668485699. Or download a copy and our web site. Legally Justine showed dot com you'll also find the asked contact if you want to submit your questions asked Todd on the air. That's what we're going to be addressing when we get back folks you're listening to Todd let's keep from the locked from Cushing in gallant. I'm Susan powers at I need to advise to the Armstrong advisory group will be right back on the legally exchange with Todd black ski. Time now for Wall Street week in review a look back at the market's performance last week here's Susan powers and Michael Armstrong. Like we just he word on Medicare premiums in Social Security cost of living adjustments for twenty team. What we've learned about social security and we have good news and Maria bad news the good news is that this year's cola is the highest it's been six years at 2% which comes to an average increase of 27 dollars per. The bad is that a lot or all of the trees may be wiped out by Acosta Medicare premiums. There's a lot of small changes sort of security taxes are going up for those earning more than 128700. Dollars the maximum benefit is going up by three point 8%. And disabled people collecting Social Security can earn a small amount more that and changing their benefits so the big news is obviously the 2% column can you explain why a lot of people won't actually see greens yet the math has been complex here but the basics are that increases in Medicare premiums. Can't cause a person's Social Security benefits declined from one year to the next. So over the last few years Medicare premiums have increased but sort of security benefits have not so effectively. Many sir security recipients have been paying a 109 dollars a month instead of full cost of a 134 dollars from. Now that's or security minister finally increasing many recipients will pay the full cost of 134 per. So does this mean and actually getting me. It depends what state example seminary 2000 announcements or security with a 2% raise you'd get an additional forty dollars per month however 25 of that is going to go the increased cost of Medicare. Therefore you'd only see. A fifteen dollar per month race effectively here earning less than 1250 per month sort of security you're unlikely to receive an increase for 2008 team. Thanks Mike if you have questions about retirement or your portfolio. Please visit Armstrong advisory group dot com. You've been listening to Wall Street week in review with Michael Armstrong no back to the legal exchange with Tom Lipsky and Susan powers. You're listening to the legal exchange and its time for. Ask. The segment where time will answer your questions about anything and everything that's included in the estate planning process. Once again here's Todd lets PN's Susan powers. Welcome back to other questions from listeners for you. First question comes from carrying in Boston asking Karen writes my aunt gave me your house valued at 600000. Around three months before she died. Reserving a light at state. Her total state was valued at one point two million and now be exact it there is looking for a portion of those taxes to be paid by me. I'm not sure than in actually responsible for this tax is this a legitimate. Requests. For it it. And in short the answer is. Yes. OK I mean as a beneficiary. Of the estate they are. There are at state tax apportionment. Rules okay right so lots of the times the whale says that earned the trust has an I mean arguably. It's not a probate asset and so I suppose it would be a little harder for them to come after her. But arguably. You know in order for that house to be sold. Right yeah so let's say she got a house in order for that house I think she's gets this 600000 dollar home in she doesn't need. Current common share you know you give it is just that this is her niece her arm out yes and she and she's yeah it's. She is she collects this house and she's like that's great I'm glad my you know onto gave me this house but you know honor one of whom. I want money yeah let's face it that's what the kids generally watch Sharon. And so they're out they got their own house they're gonna sell it. She tries to sell that house. And she died and in Massachusetts I'm guessing right so with a with a estate worth one point two million dollars. There's now an automatic lean. Placed on that property in Massachusetts so even though she gave Ajax a couple of weeks a couple of months before she died in a manner. And if it's satellite has it would have been included inner state that's why. You said she reserved a life is yeah I idea so it's included in her state OK so because it's included in her state fully we even know what's gonna pass by operation of a lot of the surviving. Owner that's true yeah. And it would avoid probate that's also true. But remember. Avoiding probate does not mean you pay no taxes. Avoiding probate is just a way aid to get more efficiently get an asset to somebody who might not going to probate. But in this case that reservation of the life estate is actually very beneficial and that really goes right toward gifting guide. That's very beneficial. Because now Caron gets the house. As if she paid 600000 dollars sport so that's our cost base that's right. So she sells it for 600000 dollars she's got zero gain. Zero capital gains tax. Huge win why because. On T in this case did not give it away during the life she kept a light the state. Which means she kept enough to have it fully included in her state she didn't cut. All the strings on the gift waited in a much different story for Aaron. If she didn't raise their life and stayed in she just gave it to our right then it would be completely not part of the estate anymore of course the value of purse they would've been under. Would have been under the million although there's still might have been some estate tax to that's a completely different question. But nevertheless there would have been a carry over basis and she would've been stuck with a capital gains tax. That's due when she goes to sell that property because she wouldn't got the basis that. On T paid for itself ideologue on it was 25 green and and now she's inheriting this 600000 dollar house. Scant 575000. To write a game taxable gains after huge number is 30% roughly that's a big tacked on a 16070000. Dollars between federal state and and. Obamacare tax that's a lot of money. So so when she goes to sell this house now there's this rules out so legally they're gonna say you know get back to the idea does she have to pay. No there's so many problems with this up what this approaching is. But does she have to pay the tax well. Let's put this way. She can't tell if she tries to sell that house. She's got they're gonna see that she got the property through an estate and because like tenant died yet. That means the buyers attorneys critical look at the state look at the registry of deeds. And say do YC. A. Form filed at the registry. Releasing and Massachusetts a state tax that might be due by the deceit and if that release of Massachusetts a state tax lien is not on record. The buyers attorney will tell the buyer don't buy it he does not have good title. Put the release on so if there's taxes do. She better pay him to released only yes or Karen and you can't just get out and get the 600000 dollar home and not pay the piper in terms and. Of the estate right now again it won't be a lot on one point two million again technically would only be her portion of that which now carries a 50% yeah. In the tax on one point two million maybe forty go see at 600000. Cost you forty point out as half of it out. So tell me that's not a bad deal Karen I definitely would step up to the plate. But folks learn about gifting lots of problems here you know what folks you can learn. How about keeping that requesting tides bring new guide to these written for the month of December is guide to gifting assets in your reviews all of the tax. Implications. In the Medicaid implications. Of giving your ass that the way call right now for your free copy 8668485699. 8668485699. Or you can download a copy on our website legally exchange show dot com. Taught our next question comes from Donna in Chelsea in Donna writes. My father in law lives at home while his wife has been in nursing home for six years on Medicaid. He is recently becomes seriously killing is not expected to surprise his wife. We did some last minute planning with the annuities when the wife went in and he is now accumulated 400000. In cash. That he's received from annuity payments. Does Medicaid have any claim to that money left after he passes is there anything we can do now to protect his money for. His hair so they dodged a bullet on the first I was going in and they didn't take any action. You know it doesn't like they dodged the bullet but but it's not. They didn't take any action too but it's it's kind of hard because those annuity payments are coming in monthly hits and dad and in drips and drabs and it's kind of hard to doing with that even if you want to set up another trust you could. Six years ago. But every month I guess your you've been making news. Making more payments to the trust creating. Constant ongoing five year waiting periods for every single. Payment that you might make or I should say transfer that you might make to the irrevocable trust. So. I'm not sure they could've done much but. Now they're faced with him dying not necessarily going to nursing home ray and and she's got he's got 400000 dollars. I would say that the best you can hope for and this is unknown these are definitely unknowns. Is too. Either. Make a gift now. Because I think a gift now would only create a five year waiting period for. Him here. But even if you do it didn't do that and you changed a whale. To dis inherit your spouse. Which legally you're not allowed to do. Mean there's rules that you condition Harrier spouse you can do with a whale that's not illegal. But then there's this right. That espouse pads. To file a claim against the whale to say look I'm entitled to certain X number of dollars based on the probate code in effecting your statement that buries it may be 50% it may be two thirds at some amount. There are entitled to as a spouse who meeting you can say in the will leave everything in my children. But the spouse would be challenged that and say I get my forced share. As a spouse. Which is what the nursing home would come to this day will come to think you're entitled to see here's degree area on that because the statute says. That eight disqualifying transfer. Is a failure to take an action. That would make an asset otherwise available I mean that you would otherwise be able to get by failing to take the action you're failing to get that asset. That failure to attack act. Is actually at this qualifying transfer. So it's not the disqualifying transferred by the husband. This inheriting this bounce. It's the failure by the spouse. To bring the action. Tough force that claim against the will for their elective shares were caught ray. And that failure to do that could created this qualifying transfer for. Mom who's in the nursing home the wife was in the nursing home. And kick her off Medicaid. Beat the heck yes of this is that this is a tough case you might almost won that you could try that but you might almost wanna say you know what. Give the wife the month the money one lump sum. Have heard in line annuity. And let her stay in the nursing home in Medicaid at least at least use the lower rate than Medicaid rate. Took lead out the money rather than a higher rate so. Donnie I'm okay I'm done I think he needs them personalized advice on this when you needed says Colin. Inexperience of the large turning get some good expert advice on the folks if you had a question you would like to ask Todd visit our website legally exchange you dot com and click on the asked Todd tap. May be will be able to read your question on the air and hopefully his answer will stop you from being tied next real life story. If that last question did not screen do you're planning an ambient I don't know. What would folks call to request your copy of Todd died. 86684. T 5699. That's 8668485699. You can also download a copy and a web site. Legally exchange you dot com just click on the guys' articles tab you're listening to Todd black ski apart with a lot from Cushing in Dolan. I'm Susan power as a financial advisor with Armstrong advisory group and will be back in just a few minutes on the legally exchange with Todd black ski. If you're landlords looking to find an easier way to collect rent payments and you need to hear about leader bank's online rent collection product called zero and it's a great service for landlords allowing them to collect tenant's rent payments electronically and he rent dot net without the need to collect checks most landlords used local neighborhood banks to do their business and now a collection of local banks are offering this unique program including leader bank and stolen bank member FDIC. If you're a landlord and are interested in having your bank acquired as he ran technology Obama called as he ran team at 7816418691. That 7816418691. Or visit Z Rand dot net stop chasing down late payments and running to the bank to make your deposits at your bank to add zero to its list of offerings. Visit C Rand dot net or call 7816418691. For more information. At 78164186917816418691. Or zero rent dot net many of you listening to the legal exchange know that Tom Lipsky has spent his career helping people just like you with their state claiming needs a common theme among his clients as the question of legacy claiming. We all leave our children in the best possible shape but gifting your assets your home or vacation property in creating huge capital gains tax problem that the kids choose to sell the home. The problems can become disastrous if one of the adult children has creditor issues or goes through divorce you know the old adage you can't take it with you and that inspires people to start giving assets away as gifts it can be a good strategy but the devil is in the details Cushing in Dolan has written a brand new guide that explains gifting strategies it's pretty by calling 8668485699. You can also download a copy on our website at legal exchange showed dot com just click on the guides and articles that you worked a lifetime accumulating wealth. Now you should spend a few hours making sure it stays in your family though right way. Call 8668485699. Or downloaded right now have legal exchange showed dot com. You're listening to the legal exchange with Susie powers and Todd let's game. Understanding have taxes can affect your estate plan is critical to building a successful plan if you need help in this area told us right now and make an appointment. 86684856. Million night that's 8668485699. But come back into. He I'm Susan powers of an excellent two with Armstrong advisory group enjoying by Todd lucky a partner with the law firm of Cushing and Alan. With a masters in taxation. On today show we have Todd bring new guide for the month of December it's his gifting guide in it's a complete guide to the income tax at state tax. And Medicaid implications of giving your assets away. There is so many better ways folks protecting your assets of avoiding probate. Protecting your kids from themselves in certain cases protecting from future divorces in protecting from those long term care expenses. Call to request your copy of Todd guide right now 866848. 5699. At 8668485699. If he preferred download a copy website legal exchange you dot com. Just click on the guides and. Articles ten. So Susan this yes this is this question I I got it was not a case but it's it's these publications that I read have. Other lawyers asking other lawyers. For help share and and I thought this was one that really made a lot of sense and really makes a lot of sense to a lot of your listeners out there as well. It's the caregiver child question yeah. And it's interesting because we doing your gifting guide should we be giving things away and when do we give things away in the obviously. As I said gifting is not. Always bad. But it can hurt you don't do it right so it's very important to understand how to do it sometimes when you're faced with a a situation where you're gonna lose everything if you don't make a gift you make a gift root root it just makes sense so this might be one of them. Caregiver child question. So this is says if you have a child. Who has moved into the home of the parents didn't. And is providing care. But has a full time job and and the parent actually pays money to a caregiver to come in during that time when that child is at work a penny. If those two components are going gone. To hand a house and then later on more than two years later the father goes into the nursing home. Can the house be transferred to the caregiver Trout analyst does the caretaker. Child exception. Still apply. Even though that caretaker child has a full time job. And the parent. Brings care in to the house and the child's not there well hang needs round the clock care. There's other hours when some theory and you work and I hear it. But you know like he probably getting cared during the nine eat that's right after word after word our you're still there if they get home at 6 o'clock at night. Yeah they're from six to six or twelve hours of the yeah that you're there whether you're sleeping or upper getting up or yeah whatever app bathroom visits who knows. So. I think it's it's a great question and one that actually made me pods. And and I think the answer is going to be yes you can still get the caretaker top I certainly would take that position in the whole thing is that they caretaker child. Because of them they've kept them the parent. And I think how many yes let's explain that rule the rule says that. As long as you lived there for two years as a child in the parents home for two years. Prior to the parent going into the nursing home okay we've got that covered. He's nuts he's been their long time. And you've provided care not just care but nursing home level care. Q that person. That resulted in keeping person out of the nursing home longer are. Then would have otherwise been the case. And a doctor can support that. Then you can transfer the house to the child gift. House to the child. With no five year waiting period. I don't think these two things having the full time job or providing paying for care when you're not there matters because the two together. That child and the part time care. Are together. Helping to keep the parent. Out of the nursing home longer then would have otherwise been the case because if they were living there. In if they weren't bringing in the care they would be in the minors and I couldn't agree more now before unreal and electrical once I wanna wanna respond to one thing here. I want and now spin this and say OK that means we're making a gift how do we make that gift yet that still makes sense and you know but don't. Request a copy of his guy he's written for the month of December its brand new it's his brain and gifting guide it will show you the right way. To make those gifts the right way to protect the assets and to avoid probate and reduce your state taxes. Maybe eating eliminate your state taxes call right now. 86684. Heat by 699. That's 866. 84 feet 5699. If you prefer you can download a copy on our web site. Legal Eckstein showed dot com just click on the guides and articles task. So isn't let's talk about the next step of this entire question right how do we meet again. Well. One. You prepared deed simply transferring the property to the time when people would likely do. If you do that and you qualified under the caretaker Trout exception. That gift of the house would not create a five year waiting Perry and you would still on Medicaid in there especially. He need to apply not just you oh yeah you have to get through the caretaker tout the instrument with qualified for that. What has happened now now the child would have a carry over basis. This applies to any yet so few guys aren't going to the nursing home and you're thinking of making that gift of your house to your kids and we see it a lot. You've done the same thing here you would have had to carry over basis. But that means is whatever dad paid for the house. Is what you are considered to have paid for the house and so of that on it long time ago when it's worth. When when he about it was fifty grand that he put up fifty grand of improvements into it. So there's a hundred grand. And it's worth 600000. Ayers that 500000. Dollars of gain. The 600 that it's worth today vs the 100000 dollar cost basis. That you now have because that gave few house so he'll end at pains and taxes. Could be close 250000. Dollars in tax if it's not your primary residence. If it is your primary residence and in your married you can shelter 500000 dollars yet. You have to still owning use it for two years. As your primary threat or you're single you get to fifty. But you know what. What would be the better thing to do. Why not if if we're gonna make this gift anyway. And here we kind of have to in order to save the house. So here I don't mind making the gift but if I'm gonna do it. Maybe we do it and we retain eight legal life of state in the property. So the deed would say I hereby transfer my property located at two mice and putt reserve. Illegal life estate in the below described. Property and then dad has the right to live there for the rest and light the goal when you in the nursing is just like the real light just like the questions you're asking me from that the listeners had before right. Here's the big difference right by keeping that stream. Dad. On the property that right to live there that present ownership interest which is exactly what life is status. By keeping that. You're gonna cons that property to be included in the estate for estate tax purposes when you. It holds the entire property into the state not to probate estate. So it's not subject to Medicaid leans. Not subject to estate recovery in avoids probity. But it included in the est fort tax calculation. Purposes. Likely he's going to be under a million colors and have much else. And therefore that 600000 dollar home get a fresh basis. So it's as if the child. Paid fair market value on the date of death that's 1200000. So now he sells it for six. And his cost basis is six because of the step up in basis. Because of retaining that life estate that little idea. We eliminated. Close 250000. Dollars in tax. Which would be about 30% on 500000. Dollars of gain. So that is a huge savings and it's so critical to think of these things even in bad. Emotionally charged time. Such as applying for Medicaid and dealing with a caretaker child. It's so critical to get some good expert advice folks and Todd masters and taxi Sheen just eliminate taxes. If it magic wand and otherwise you'd create unnecessary tax yeah you you don't need to do that and you can still make the gift feel good we hate taxes so now what. Really really really. What we really really hate is unnecessary. Taxes and the worst. Areas they'd better way. Legal work should not be a do it yourself proposition folks she needs some good advise call right now to request your copy of Todd gifting guide. Learn the right way to position your house at. 8668485699. That's 8668485699. Visit our web site legal exchange you dot com while you're there you can download a copy of tides bring you gifting just click on the guides and articles tab. You'll also find out there buying too when you're out there and ask Todd tab where you can. Enter your question he would like to ask Todd hopefully will be able to read your question on the air. And stop you from being one of his next real life stories. Todd let's keep from the law firm of Cushing and Allan thank you so much I think you're Susan always a pleasure I'm Susan powers of financial advisor with the Armstrong advisory group we thank you for listening and will be back again next week. On the legally exchange with Todd black ski. Securities offered through securities America ink member and that SIPC an advisory services offered through securities America advisors thank securities America in its representatives to not provide legal advice therefore it is important to consult with your legal advisor regarding your specific situation cashing in on the Armstrong advisory group to legally exchange and the securities America companies are not affiliated. Many of you listening to the legal exchange know that Todd lets you spent his career helping people just like you with their state planning needs a common theme among his clients is the question of legacy claiming. We all leave our children in the best possible shape but gifting our assets you know home or vacation property and creating huge capital gains tax problem that the kids choose to sell the home. Problems can become disastrous if one of the adult children has creditor issues or goes through divorce. You know the old adage you can't take it with you and that inspires people to start giving assets away as gifts it can be a good strategy but the devil is in the details Cushing in Dolan has written a brand new guide that explains gifting strategies it's pretty by calling 8668485699. You can also download a copy on our website at legal exchange showed dot com just click on the guides an article stab you worked a lifetime accumulating well now you should spend a few hours making sure it stays in your family though right way. Call 8668485699. Or downloaded right now and legal exchange showed dot com. Hi this is very Armstrong and if your regular listener to my show you know that I talked a great deal about Smart retirement planning each year certain limits are set by the government and these key numbers are critical for you'd understand if you want to maximize your savings I'm not gonna bore you the numbers that this is information that can help you plan accordingly and alleviate a lot of unwanted and unnecessary stress call my office right now and 803934001. And ask for my brand new free guide called key numbers for 2018 it's chock full of charts and statistics they can help you and areas of retirement planning that you might need the most that number again is 803934001. Or you can download the guide right now at Armstrong advisory dot com. Security suffer through securities America incorporated member finreg SIPC and advisory services are with the securities America advisors incorporated Barry Armstrong represented if Armstrong advisory group in the securities America companies are on affiliated representatives of securities America do not offer legal or tax advice always seek the advice of a professional familiar with the laws in your state.
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