The Legal Exchange 4-15-17

Weekend Shows
Saturday, April 15th
00:54:01

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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 powers. Welcoming to illegal exchange account must be kind season Paris I think he took sides with the arms on you guys in the group. And things like public key a partner with the law firm of coaching and talent. With the masters in taxation Todd welcome how are you I'm never better in you I am great thank you we have on the agenda for today we've got. An interest in federal district court case the southern district of Indiana. We're gonna talk about how latches note doesn't sound like much but how there was us all ogle what we do know pooled trust was created. Drafted wrong. And then. Not allowed to be reformed OK explain what happened and why and a Korean employees all of the all of this and we'll explain pooled trust and how they're. A wonderful last minute planning technique. And also how Massachusetts is thinking about getting rid of them. Remember we talked about this gonna show you where we are now know bring up to speed on exactly where we are with that hole. Proposed regulations what I know and it's actually good news a visit to date. And then I've got a new. Math help win one of our trust again. We just like you last week trumpets sound he air I wish we had sound effects may be our producer can do some sound effects source. Because another. Medicaid trust the kind we talk about all the time. Was approved for mass health and I'll explain to you what the issues were and how it worked and why it worked in. All the bells and whistles and even we used an annuity for excess assets that we're not in the trust. Prior to the five year waiting period passed creek you know we always leave assets outside trust so there's always something outside the trust kicking around. And we an protected those within annuity. As wells a little last minute little advance planning combined together equals success story and. Asked. We do we have a couple of asked Todd questions from listeners that you can certainly has taught on our website and also we have tides bring new glad that he is written. For the month of April the month is half over folks before you know what the entire month he'll be gone. If you own a home if you when he rental home if you own rental property he. You need to request this guy did tied his written it's a guy to the different types of real estate ownership didn't and it detailed the risks and rewards associated. With each type of ownership so he's listed out every possible way you could own your thing. And he's given a description and maybe why you really don't. Necessarily want to own real estate with someone other than a spouse in high your feeling could avoid probate potentially reduce or eliminate your state taxes. You can also own it in such a fashion that will protected from long term carry expenses. You can also. Have language in the air that would even protected from future divorces your beneficiaries. Call right now to request your free copy of Todd Skype is written for the month of April at his real estate guide. 8668485699. At 8668485699. If you prefer you can always download a copy on our web site. Legal exchange showed dot com just click on the articles and guides ten. So Susan here's the situation down in the federal courts in the southern district of Indiana. Interest in situation. The woman who created this pooled trust her name was givens who you ask Q giving. There are vulnerable but it won't trust so she apparently created this pooled trust. Put about 500000. Dollars into. And then named herself. As the ultimate beneficiaries. Beneficiary. And then after it was created apparently she died within two weeks. Of creating this. Obviously she was probably headed into the nursing home but because she was it died after two weeks. There was really no money paid. By the state on her behalf on her behalf. So while these pooled trust have a payback provision. There was really nothing to pay back to the state. So you're thinking well I guess as unfortunate and sad is that is that somebody died in two weeks after having created this. It would seem that the full 500000. Dollars is still probably sitting in this trust. Why is there a problem yeah why is there because there's no liability to the yeah except she named herself as the beneficiary. Oh that and yeah she's deceased and so the the charity. More than nonprofit who is the trustee on all pulled trusts him and I'm gonna explain to you folks. Exactly what do pooled trust is when we use it how it works as well I just want us lay out the facts. So the trustee of the pooled trust said. I'll since there's no one to pay two will just hang onto it for charity. And so they did her. And over to who years went by. And then that kids. Of givens. For how to play. Saying we gotta reform this trust this was a mistake she meant and means that kids. As the beneficiary on the trust after we pay back the stake. So they filed that action. Accept the court said well. Two things here one. You were really able to show us clear and convincing evidence. That your mother wanted you kids. To be the beneficiaries because clearly she didn't she named herself. So you need to have something to show us and they said you were really able to get to that standard. Of clear and convincing evidence to say. Let's reform the trust so that would be like if they were able to produce a well that was created the same everything the kids immediate different trust from before that point something maybe there was ongoing giving pattern. Who knows. Apparently whatever the reason is when your at this level of Reading a decision they don't give you that level right tale. But they weren't able to give you a clear and convincing evidence to make us change the trust. That McCourt said. You know what. Even if you court. Produce clear and convincing evidence that word latches I used early you're not just means you waited too long. Latches means that you sit on your rights if you sit on your rights to reform the trust too long. Now it's too late for you to change it there for charity you get to keep it. And that's how they send it while so clearly I have lots of lessons that we can learn Yasser from this reading between the lines. Drafting lessons that we can learn here but before we got into that I thought that I would maybe spend a few minutes just explaining to you what do pooled trust is. And why we would you please do because we don't do an awful lot pooled trust now. Open you know what folks there can be a lot of viewers out there that are faced with a loved one going into the nursing home. And no advanced planning was done. So pooled trust are always. A last minute cleaning tool that's right okay I think only time you would do it is if you're faced with. Losing everything and if not an ending in events. Like difference in this case she said I've got this 500000 dollars of assets. One I take it and put it into a pooled trust. Magically if you do that it's. As if it's no longer yours and you. And it's in a trust for your benefit now explain that in a minute. That transfer. Does not trigger a five year waiting period for Medicaid eligibility. Only if it's in this pool to only if you put it this bull truck it's an exception. To the five year waiting period and so wonderful I transferred my 500000 dollars away I'll immediately eligible for Medicaid. Okay well. Why is that good well that's good because instead of my spending my money at fourteen or 151000. Are as we heard seventeen the other day it means. On the nursing home per month. I'm gonna now be at the Medicaid rate which allows me to pay 6000 a month. I'll and by the way the money in the pooled trust the charity the nonprofit that is serving as trustee on these pooled trust. Is allowed to use the money. To take care of the individual who's in the nursing home. You can't use it for food or shelter. But chick can use it to bring a companion in to check on maybe bring another doctor and for additional medical services. Buying and things TVs like pants you know other. Make their life more comfortable wouldn't. Wonderful. So this sounds like a win win. And when you die there must be a payback provision to the state so that's when you look back that's why there's no look I would still win win. And a little piece needs to go to charity. So I know we need to get into a break so we come back and explain to us. Why these old trusts are win win wins yes and then why Massachusetts is looking to change. The rules on them now okay you know what folks if you haven't thing you're planning maybe years sitting there thinking I don't need to protect going out that's the long term care expenses. I am a homestead declaration in my house. Guess what. Medicaid long term care that's all exempt from the homestead protections. Todd sky daddy is written for the month that he put his guide to the different types of real estate ownership. It explains why your home is not protected from long term care expenses by relying on homestead. Call right now to get your free copy of this brain you guide. 8668. For eat 5699. That's 8668485699. Or download a copy and our web site legal Eckstein showed dot com just click on the guides an article have. If you miss many today show our our cash as you can always download our podcast and a listen at your convenience. You're listening to Todd Lipsky apart in with a lot from Cushing in Dolan. I'm Susan powers of financial advisor with the Armstrong advisory group we're gonna take a quick break but will be back in just a few minutes here in the legal exchange with Todd. Let ski. Securities African 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 pushing in on the Armstrong advisory group to legally exchange and the securities America companies are not affiliated. It's not too late to get a great raid on a whole mortgage leader bank specializes in a wide variety of purchases and refinance loans at some of the most competitive rates in New England a dedicated loan officer will work with you every step of the way and their local decision making means a faster closing call 8776917. To 900 that's 8776917900. Workers at leader bank dot com. Member FDIC equal housing lender and the lowest number 449250. Subject to credit approval leader bank a step ahead. 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On today's show we have Todd sky that he's written for the month of April it's his guide to the different types of real estate ownership. In if you've been thinking about protecting your home by giving it away by putting it in your children's name or meeting adding that joint owner to it to avoid probate. Do not do anything until you have read Todd sky because you could. Be unnecessarily. Creating a voluntary tax that does not need to be paid in this meaner. Find out there right we don't own your home don't find out when it's too late folks. 866848. 5699. At 86684. Heat 5699. You can also download a copy on our website legal exchange showed dot com. Just click on the guides and articles tab if you have a primary residence and vacation property. A rental property you need to get a copy of Todd guide to. So Susan let's we're talking about a couple of tribal trust. Why would you use a pooled trust purses same distance street in new. Right so is this a last minute situation we'd laid out with a donor or is relayed out how it can be used for the and the payback provisions and and the charitable peace I'll I'll go through that little bit more you would use this you know again last minute and when an annuity. Either the amount like a 500000. Dollar annuity for someone who's ninety's just gonna kick out way too much income. Right Reich as if you divide that I like a three year pay out. The monthly payouts going to be more than 141000 a month yet in July any appeared to roll like that and here is the most commercial companies will issue them shorted and Nike air when it. So there are times when when the annuities just don't work and these are are way better. So back to the pooled trust we've got the pooled trust in place and we've got. Trustee who's the nonprofit. Using the money to take care of the donor or the person it's in the nursing home wonderful. Medicaid has been established the individual lives there lets say Gibbons actually didn't die in two weeks and ended up living there for. I don't know. Three years and all the money that was spent on her care. Act the Medicaid rate. Right so even if it's running up a bill like four grand. A month and that's the 6000 dollar rate minus whatever she might be receding in social security and pensions so that he's a tab of about four green and yes it was almost a degree due today. Right yet. So even now and we are only spent a 150000. Dollars of the 500 seat at 315 last. Up at 350 that's left because that was more than two years that they were in the nursing home. We cut a check. For 20% of the balance. To the charity. Yeah and that we take a 150 while of course 150 Carty went back to the status date. And we gave 20% of what's left to the charity Newton and then the balance. Most of the thing after the thing if they're named as the race beneficiary. Not with dividends because she didn't do that. So that was a big problem for her and her family but do you see why it's a win win win. Family gets money state gets reimbursed they're made whole. And charities get something. Is a win across the board. Yeah they changed the rules yet in Massachusetts for summaries and by the way this is a federal law. Massachusetts has proposed as one of the changes in their proposed regs that we talked about that we're set forth in December of two when he sixteen. They wanna get rid of this orca just gone wiped off the pooled trust gone. Well I thought to myself. This is more restrictive than the federal government. We'll they get paid back they mean hold they get money for charity. I don't get a in this as the upset that we saw from a lot of people around. The commonwealth that came along with me to the this outcry this public hearing that was held. And we were able to voice our opposition to these ranks folks these rakes and here's the latest in information I have on them right. I try to keep you up to date all I've been doing it over the over the last several months. These regs are currently situated where they could have simply wrote final rank. On the February 1 and submitted them and they did an effective since February 1. Newark. They're not effective march 1. They're not effective April 1 so that's going to be that sign right so to me I think it is Susan I think the only thing we have to think about here is that they are thinking about it and lightly making changes to it. Have no idea whether we're gonna like the changes or not but I would think that anything has to be better than just eliminating pooled trust. No news is good news on your home and that wonderful way to to way to go and you know what folks that pulled trust that's the last minute cleaning technique maybe if you do your cleaning in convenience you will not have to put your Feeley threw. The ordeal a seeing what can be done if anything. Any last minute cleaning scenario. Start by educating yourself for a lot of us are home is our largest asset. Maybe you have rental property that you are largest asset. Todd sky is all about realist the it talks about all the different options that you have for earning nap real estate. There risks the rewards associated with each type in it tell you why you really don't want to own any property with anyone who is not your spouse. Call right now to get your free real mistake I did Todd is written for you for the month of April. By calling 866848. 5699. At 8668485699. Or download a copy and I website legal exchange showed dot com. In click on the guides and articles. So Susan. What I'd like to do now and it's funny you mention the realistic I'd because think about what. Missed givens could've done. Talk she could've owner real estate differently she could say everything. If she were to own her real estate and Medicaid irrevocable trust this would have been an issue that you would have needed to use the pooled trust he'll. And then she went had this drafting problem. You'd think about all the headaches they can be solved anywhere near it when you're checking summoned into the nursing home. You are so emotionally stressed that point why do you wanna wary about the financial side of things you don't and you know what you're not seeking out you're not you're not thinking about seeking out. I got to see the money gonna say the money you're thinking about I gotta get my loved in the best hearing cans so a lot of these people we hear they've been paying for years and they know and the nursing home shore isn't going to be they're telling them. Hey did you know there's something you could do tiger yes. And speaking of voting real estate we have a win. And in another one of our Medicaid trust and guess what was in there real estate real estate owning cell I think that's an interesting segue but I I do wanna set the table anyway I don't know that I'll be able to get into to the entire thing before the break let me. Let me at least set the table as to the fact pattern hair right so. In this case there was an irrevocable trust two of them husband wife they each created one for themselves back in 2002. You irrevocable trust the homeless transferred in two weeks to do it this way. A nominee realty trust win back then yes with the beneficiaries. Being an irrevocable trust 50% his irrevocable trust. 50%. Hurt. Irrevocable trust and so the property is now a signal used award nominee realty trust sort of in between the that transferring of the property to the Iran. For our purposes think of it as all being in the irrevocable trust in him. And go home and the donor or three changing legal light for state in the deep. Trust in the deed they retained and you'll see it folks if you happen to have done this in the past you just look on your deed and it says you know. Tot and Susan transferred the property to the irrevocable trust and here I reserved a joint and legal life estate in the below described property. You'll see that right on the that's the right to live there the rest of their lives they don't need to worry about anybody kicking them out. OK so that's all well and they also actually put some money in the trust. But there was money that was not in the trust they had left out a significant amount of money some of it was an an IRA but they had to leave it out because it was in the IRA. And so then we or they we were able to use that money. By buying an annuity for them for the money that was outside the trust so obviously what happened here was you know one went into the nursing. One is still healthy and living outside the trust and remember we're taking care of the healthy spouse here. So we were able to bind annuity with the excess assets outside the trust for the benefit of the healthy spouse who's. Outside that who's who's still living. And then the effect inside the trust when we apply for Medicaid. Will they be determined to be non accountable or not. That was the issue so we took care of the inside and the outside assets applied for Medicaid. And the answer is it was approved but what I really need to explain to you is what were the arguments that caused us to go to the fair hearing. So that we could get the approval. Okay folks. Get a stay tuned for that one in the meantime if you have a home you can hear how this story worked out for them. If you have a home if you vacation property rental property. Do not just transfer it into the name of your beneficiaries because nothing good can come of that. He put those properties at risk for their creditors including. Future divorce is call to get your free copy of tides real estate guide find out the right way. To own your real estate get your copy right now at 8668485699. That's 8668485699. If you prefer you can always download tots real estate guide on our web site. Legal exchange showed dot com just click on the guides and articles tab and you can also find our podcasts out there if you missed any of today's show. You're listening to Todd lacked the apartment with a lot from the Cushing in Dolan I'm Susan powers a financial advisor to the Armstrong advisory group. We'll be right back here on the legally exchange with Todd black ski. Your financial strategy has to include a thoughtful insurance plan insurance exists to protect your assets. 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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 time let's PN's Susan powers. Welcome back tot have a few questions from listeners. First question comes from Eric in Swansea mass and Eric writes but parents are working on their instate an inner putting together a light the state. And the attorney recommended adding me to the deed because I'm their only child. My parents will still live there perform upkeep and pay taxes. I'd like to ensure that I'm not surprised if something affects me negatively whether it's with taxes or with the assets are legally. If I greeted dude but parents' lawyer said that they need someone who can if they get sued. They can always moved me from the. Wow wow check your right to Susan and both of us Ehrlich. I don't understand where the ice where these lawyers come from. I don't know what else to stay real estate world. I mean I feel like just addressing the very end. Peace first. Which it said well reported on there and and I get sued meeting that kid I zoom in we can always just move the deed to someone else. Approximately play a little something about moving deeds or transferring anything. If you're name is on something your bank account your brokerage account deed to property. And then you transferred or gift it which are well to do. To anybody else. Parent family members stranger. And you do that at a time. When you knew. Or should have known. Somebody is chasing you as a creditor. Then that's a fraudulent conveyance. And it will not protect it from the creditor. So I think that last part of this is really a bad. Decision. So that tells you why. And doing really about legal advice. That legal right to because it actually is the twofold thing one. We always tell people not to act children's names to assets because of creditor. And he's saying here because that creditor. You can just transferred later saying no UK me in Seoul. You don't tell me this is actually. Justification. Further justification. For why we tell people please don't put its name. 'cause it's not so easy to fix it later we're about a divorce. All he knew what might have been getting a divorce is get rid of stuff now he and some not gonna work. So that's number one let's go back into sales so that's that's really part of the reason they wanna I wanna put the kid's name you don't. Again this all goes back tore guide right how we only realistic movement we you know we don't wanna at a child's name to it. Even if you retained a life estate which is what they said they get right movement they're gonna retain elect the state yet. Future interest is still there. And you can't transfer. Now the credit or might not be able to move against the parents at least while their living well they're living so that's fine but to creditors not gonna go away. They'll just wait until mom and dad die right here comes the property to the sun and you can't transfer it. After the you know about the Chrysler news I'm I'm still not throw that I get a pro life estate does provide a little more protection for the parents. And remember that's really what we want. We want to make sure the parent or protect right. So I get that but I I don't like it still because. The kids names are on it and much is out the string for selling. What if you know the parents want to move and they need to the kids. You need directs. Technician yeah permission is a good way of putting answers in the need Eric's permission to sign off on the deed. And that even if they get hurt permission I don't think everybody understands that while mom and dad have this right to live there the rest of their lives and they do. What how that translates. Into money when they sell. The older you car. The less value they equate the IRS equates with the light the state. Example if you sell when you're 75 years old. Depending on the interest rate and I Harris table you'll be lucky to get 20%. While of the Tennessee Erik would get 80% Prince Harry could get 80% of proceeds so even if I get the kids permission to sell it. Don't have enough money to buy my new downsize. And I need Eric to give me the money hopefully he will. And then he'll have a gift tax in nets only if there isn't lean on it because he'd get to make somebody. End. He would have to pay capital gains tax because there are definitely there. Whereas a trust which is a much better way to on this. Would not have any of the permission or any of the tax consequences. They would keep their capital gains exclusion. And and you would have no adverse consequences one way or another. With durable trust me it's Eric. I'm thinking given it away. Is not on the to do list Eric and. Call right now to get tied to real estate guy it's gonna walk through all of these risks. In every awards associated with each type of ownership including the trust that Todd spoke about. Call right now for your free copy of Todd to real estate guided 8668485699. That's 866848. 5699. Todd last question comes from Donna in west Warrick Rhode Island and Donna writes. But mother recently passed away and she named Meehan the executor of her state a meeting with her attorney next month and I don't wanna go into the meeting without being prepared. What should I expect with the probate our process we'll be a lot for media candle or does the attorney do most of the pork. Well I guess you're gonna spot you're gonna be happy to hear when I say the attorney does most of the war that's. The good news yeah and he hit and the bad it is it's Sherry does most of the park has added our early really think about it is that it carried us most. I had an hourly credit so. So yeah I mean it it. It's going to be more expensive because you have to go to probate then if again I can't say enough about coming back to the guide and saying how is the real estate loan re right. I mean if she had owned the real estate even in a revoke of Costa doesn't have to be durable not born here of all what costs are. Some way other than her own name even if she didn't have real estate even bank accounts our investment accounts can be owned in. Either revoke Bullard you revoke trusts him. It's how you own your assets. Donna in this case is what dictates. Whether we have the probate process sort of lingering borne out in the average duration to go through probate with them in the state Todd ballpark at least a year. Yeah you know at least a year I would say to take you through it probably could be longer than that and so. You know is it's now that the other question that's being begged her is it is it's something that you know is can overwhelm you. You know I don't think so I think if the lawyer does it. You know well they should be able to show you step by step what it is you need to do you know from filing a whale which they'll do test. Putting together an inventory which is basically asset list of all your assets and the corresponding value. You know they can help you with that and that's why we don't like pro they can that guy on record for the whole world to see all the neighbors or sign up for that anybody can go down and look at your you know your assets because that's the inventory. And of course you've got to notify the creditors by filing in a local newspaper. Again can explain that to the attorney. People ask us to and I don't get probate Todd what is it and that's why I'm trying to explain it now. And the other thing is after you notified them. You ultimately gonna have to get appointed. Executive by the court schedule listed. Doesn't senior executive ray you got a petition the court. And he got to send notice of to all the heirs at law so they have thirty days to object to your appointment. If they don't object and you wait in the court will call you for a return day. In which and the court will W. Executive. And you can run around to all the different financial institutions. With your appointment and the death certificate in hand and they will acknowledge you wouldn't in you can set up. The state administration accounts for the money or sign d.s if they're real estate needs to be sold or transferred. None of that can be done until you get that out of the way ray. You got to file an accounting as to what it was in what it was out of the the probate estate for the whole year. You know so those are that's probably enough. To let you know that there's a lot involved. When you don't approach me. In ballpark cost I think you told me in the past may be somewhere between two to 5%. Thanks sides on the high side I would take too. OK so could be a big number. Think about a million dollar estate folks that's twenty crane and that's a lot of money you can avoid that by having your trust in place don't just. A nightmare probate. Request tides guide it has all of this information in here about avoiding prove me. If you have a question you would like to house Tod visit our website at legally exchange showed dot com and click on the asked Todd tab. Maybe will be able to read your question on the air and hopefully his answer will stop you from being tied next real life story. You don't wanna own property with someone other than your spy who was your primary residence is treated very differently than your vacation or your rental property in the eyes of the nursing home. Find out how they're viewing those properties folks find out what you need to do to protect them if the nursing home is a concern for you. Maybe his wanna avoid probate or reduced or eliminated state taxes mean you want to protect children from themselves. Financially or either protect from future devices. Call receive your free copy of Todd real estate guide. 866848. 56998668485699. Or download a copy on our website. Legal exchange showed dot com just click on the guides an articles tab in if you miss any of today's show you can download our podcasts and listen at your convenience. You're listening to Todd let's be a part in with the law from Cushing and Alan. I'm Susan powers of financial advisor to the Armstrong advisory group will be back in just a few minutes here in the legally exchange with Todd black ski. Hi this is very Armstrong and I'm here to tell you about a new dental product that will make your next visit to the dentist much more enjoyable live beyond -- dental jail is revolutionizing. 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You identify problems and you get a head start on solving them hi this is very Armstrong I'm up early every day helping advise my clients about their problems one of which can be understanding the fees associated with mutual funds there are management fees twelve B one fees and reinvestment fees among others they can have a negative effect on in your portfolio let us help you make sense of these fees by requesting our free guide understanding. Mutual fund fees and expenses call 803934001. To get your copy today call 803934001. Or download it right now at financial exchange showed dot com. Securities offered to securities America incorporated member finreg SIPC and advisory services are printer securities America advisors incorporated Barry Armstrong representative Armstrong advisory group in the securities America companies are unaffiliated. 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. 866848569. Night that's 8668485699. Welcome back into the legal exchange with Todd muskie. I'm season powers a financial advisor with the Armstrong advisory group and joined by Todd black ski a partner with the law firm of Cushing and Alan. With a masters in taxation. On today's show we have talked got it is written for the month a deeper hole it's a guide to the different types of real estate ownership in this guy deet tails the risks and rewards of each type of ownership in it will help you under Steen and all the various ways to pulling your real estate. And how you should it may be more importantly how you should not. Only your real estate this guide covers information on your primary residence your vacation property. Your rental property did the benefits of having your rental property owned in an LLC. It even discusses the homestead declaration and why you can't rest upon that. To protect your assets from long term care expenses. Called right now to receive your free copy of Todd to real estate guide 866848. 5699. That's 8668485699. If you prefer you can always download a copy on our web site legal exchange showed dot com just click the guides and. Articles ten so Susan. We were I know we had that. Break of that that meet the America segment in between where we talked about past time question and I remember when we left off. We are talking about this new wind that we had in in Massachusetts on a case where. The assets were alone in an irrevocable Medicaid trust him of that trust we speak about a lot funded back in 2002. Thank you 2002. And and they are out now apply for Medicaid and as I said. I kind of let the cat out of the bag and it's paying one steal your own thunder and so that everything in the trust was deemed non accountable so let's talk about. What the arguments were that were made. In how we went about winning them because when they went into the nursing home you apply for Medicaid. In it got tonight yes yes that's what happened to apply. And if you can't get past that gate keeper. Then they cannot use and you have to go to these fair hearing and so that we that we we petitioned for the fair hearing and said I think the states gatekeepers and correct let's see if we can get to that judge so to speak it and to approve it. So remember the property was put in the trust with a reserve life estate outside the trust. I don't know if you remember Susan we talked about the daily case which is actor Supreme Court in Massachusetts right now dealing with this very light the state issue. Trying to figure out if a life estate outside the trust. Is a life estate and property or is their property interest in a trust. We know that has nothing to do with the toss it right not in there. It's outside in the deed. In you have the right to live their mom and dad's root of the world. Such a week it put the property in the trust and we reserves this right to live there. The state came back and said well you know whenever you have the right to live in the property. Then it's available. And therefore it's accountable the property itself the property that was sort of the big items that was almost the biggest item in this trust. Let me reiterate the rule for you so you folks listening can understand what it is we're dealing. There's a law that says if there is any way in which payment can be made. From the irrevocable trust of principle. Then that principle. Is available wouldn't payment equals available right. Then count which makes cents pretty pretty clear there's another regulation in mass that says specifically with regard to real estate. If there is any. Now with regard to real estate and your vocal trust. If by the terms of well trust. Terms of the trust. The asset is available. And it's count. OK but we just said a minute ago available means payable may if it's payable. And it's available and it's accountable right. This part of their regulation says if the terms of the trust says it's available. Then accountable but your tracks. So let's let's let's work remotely trust yeah. I specifically indicated that my argument in the hearing that. There is no language in our trust giving that dole nor the right to use and occupy the property that's the terms. That's what they argued if you use it and the right to use and occupy it means that. It's available. By the terms of the trust. Our trust doesn't have any right to use an occupying number one in number true. No reason that it's being used by our clients is because of the life of state they retained. Outside the trust re not in the trust. In the deed so I argued this particular section. Does not. Apply in you know what folks don't worry about scrambling to write everything down that's tides talking about here about protecting your property it's all included in his real estate guy. That he is written for the month of April you can get your copy right now by calling 866. 8485699. At 866848. 5699. Maybe needs something to download to sticking to those Easter baskets you can print this out right now as well just go to our website legal exchange showed dot com and click on the guides and articles tap. So so okay so it sounds like. We're doing the right thing here and so this state came back and said. Look. I don't know that they really understood. The life estate part one so. Finally at that sort of not addressing it to me it's it's a no brainer it's just your house and it's not protected satellite interest rate. But they went back and they said we don't really care that the state said right to use an occupied makes it available. And we're not really addressing the life estate piece we're simply gonna say. Lock. Having the ability even if the trust doesn't say it. A live in the property. Does not rise to the level. Of pay ability. So you can use something. But using it doesn't mean that it's. Payable on May remember the law says. If it's payable from the trust to that don't bar the then it's available. So availability. Means pay ability and I think she got it right I think so Tim when she said. Look the reason we know using it doesn't rise to the level of pay ability. Is because you could sell the house who converted to money. And that money is principle. And that can not be paid out to the ground war pursuant to the terms of our trust in him. Win big house not accountable Corey. In addition even though the trustee hold trustee compensation argument to. This was one or I had that trustee serving the donor or the trustee with the same person yes. And they argued can you make it distribution. To pay compensation. While that could be principal. The court said yeah act could be principle but it distribution. For a beneficiary. Is different than current income. Working as a trustee to get paid so that kind of principal coming out. Does not make the trust accountable to they need to recon team I think ticket. So I think that that in this case you're starting to see again folks that drafting. Is the key and you've got to have drafted properly to overcome these objections. What I can also tell you just have few minutes on its spirit share with you the rest of the equation. That's great time there all that stuff in the trust wasn't protected but what about the money that was outside the trust I think there was like a quarter million sitting in an Ira that we could not. Put in the trust in him. Would we do it that how we get on Medicaid. This is our old friend the Medicaid annuity yep. This is where we took that money and remember this had a helping spouses. We have one spouse and one and one spouse now. And folks this is quintessentially. Why we plan. We don't want to bankrupt our healthy spouse who's still living in got the rest of her life to live. Outside the trust because her spouse when in the nursing home now so now we protected the assets in the trust. For the help these houses in the quarter million it's outside the trust we went and purchased an annuity that converted that. Money to an income stream and she's gonna get a check for like I don't know 45000 dollars a month. For the next five years. And then she's going to be in and were immediately on Medicaid. And we didn't have to. You don't spend any money on the national keeping them healthy spouse from being bankrupt. Huge Leah and of course whatever is left will ultimately be available for the children. And even if she gets sick. Later right that trust assets are still ongoing in being protected so you don't want your assets relief part. Yet you don't want to leave and aisle to chants folks educate yourself on the right way to Europe on your assets specifically. The right way to own your real estate assets tied to bring you guides for the month of April it's a guide to the different type of real estate ownership. It shows you the risks and rewards associated with each type of ownership. It tells you how you can avoid probate protect assets and long term care how you can reduce and eliminate your estate taxes he and you can even protect your real estate from future divorces for your beneficiaries. Call right now to get your free copy of tots real estate guy. 8668485699. That's 866848. 5699. If you prefer you can always download it on our web site legally exchange showed dot com click on the guides and articles tab. In a question for Todd click on the ask Todd cabin hopefully will be able to reach your question on the air. Todd black ski from the lot from Cushing in gallant thank you so much thank you Susan always a pleasure. I'm Susan Paris a 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 opera 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 Cushing and on the Armstrong advisory group to legally exchange in the securities America companies are not affiliated. Are you thinking about transferring your home to your children in order to protected from the nursing home did you know that if you do you -- at risk for your children's creditors including future divorces you really wanna write a check your former son or daughter in law just a buyback your own home not only mystery entering the home put your property at risk they can also create a huge capital gains tax when they sell it right now the federal capital gains tax can be as high as 23 point 8% and that's an addition to your state taxes there are better ways to own your realistic they can protected from the nursing home keep it away from your children's creditors avoid probate and not cause unnecessary taxes. Call now for your free copy at 8668485699. Or download your guide immediately by visiting legal exchange showed dot com don't put your home at risk 8668485699. Or log on to legal exchange showed dot com. 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