The Legal Exchange 7-15-17

Weekend Shows
Saturday, July 15th
00:54:03

Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

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 exchange with tot he times his impact. But I think the armed and advisory group. And doing by Todd lets the apartment with a loss from Cushing in talent. With a masters in taxation. Todd welcome how are you never better and you I am great thank you what do we have on year. List of things topic today we've got. A series of cases that I wanna deal with the the first one is out of Illinois. And the Illinois cases it is interesting because it's United States district court case that allows. Nursing home residents. To sue. The state. For failing. To. Promptly process Medicaid applications. I mean it's important and it really wanna show that was you know maybe I'll take you guys through Medicaid application process and let you know. Why I'm so passionate about this case here because I know what they're talking about it. I know how long it takes a nobody thinks that's easy thought a couple of forms. Oh it works and they'll get you if you don't promptly respond well got exactly Susan you've got deadlines and if you if you miss and you're in trouble but it famous and it's like nothing happens. Not knowing that so good I'll be glad to talk about that next there's a case out of Wisconsin now. You know why I Ollie say whether I think it's a good decision her decision. Maybe I don't have all the facts in this case can sometimes when your reading a decision. You don't always know you know what went on what the arguments where there might have been some facts that are missing. But this is a Wisconsin case where they determined. That the establishment of a testament eerie. Trust testament Uri spousal trust. Created. Eight disqualifying. Transfer. And penalized. The surviving spouse we'll have that dive into what a policeman Jerry trust is his middle covered as an awful lot youngster takes some time I want to explain what the test manner trust is how it works why it works when do you Dan intact. They're not used all the time that's that's something you just do as an advance planning technique race but there is an appropriate time to use its all trying to. Explain that to you. We also have asked Todd we do we have a. The questions from listeners and we have a new guide that Todd has written for the month of July. It's an operational guide to the use of light the states an eerie vote Coble trust and folks if you've been thinking about. Bypassing the attorneys and just giving your home awaiting your children. Need to stop don't do anything until you have read this guy because there are so many pitfalls. They can occur when you just give your assets away and Todd has highlighted. What those pitfalls are the pros and cons of light to states vs doing full transfers to trust or out right here kids. He explains what alight the state is and who should actually consider using him. You need to get this guide if you are concerned about protecting what's probably your largest asset which is your home. Call right now for your free copy 86684. 5699. That's 866848. 5699. He's also included information about a brand new Massachusetts Supreme Court decision. That discusses these late for the states specifically. 8668485699. If you prefer you can always download a copy on our website legal exchange showed dot com just click on the guides and articles tab. In a few missing in today's show or any of our past shows you can always download our podcasts and listen at your convenience. And you know Susan not only does it discussed the Supreme Court case discuss these like the states. It blesses him now and it's not just a life estate that's being blessed and in case. It's the fact that the remainder interest is in any ref Coble trust and the gas and in the air remarkable trust that remainder interest. Is also protected from the cost of long term care so it's a very good positive. Decision for all of us really. The entire country but certainly in Massachusetts they it is I I agree that he tried and there's a right way and a wrong way so. Buyer beware folks to use these lack of states that you need to educate yourself on the proper way. In feed it even makes sense that you even knee alike as the U mean aren't you light the state. He may just today I need to put hair escaping in place and sometimes people put the whole house in the trust and don't reserve life to state and the Supreme Court case discussed that as well because it covered alternate the daily and the NATO case. So even if you didn't to a life just Dayton put the whole house in the trust. And even if you had the right to use an occupied. The property in the trust. And that the Supreme Court said that's okay it does not. Rise to the level of making the assets in the trust accountable. Just 'cause you're using it perfect so I thought that was very important decisions so great great stuff. Let's let's run over to Illinois and talk about eight just a federal district court case the United States district court case out of Illinois. In which the court said of course that the state opposed it but the court said. No it's okay to allow this to go forward in the in the case was that that nursing home residents. Are suing the state for not processing. Their application in a timely manner. In other words there either people who war. Waiting to get. Are applying for Medicaid. And that application itself is taking a very long time or they've been approved for benefits and the state hasn't paid the benefits yet. So couple things so when you actually go and apply for Medicaid tide that kinda draws a line in the scene and retroactive the the use stop paying. I've practiced very important that they understand that when you're going through this application process. That that day you apply. You can go back three months from that day if you couldn't show you're eligible three months retroactive back. You know financially eligible. Yeah but if not he wants so you always want to preserve. The farthest back you can go date of eligibility. And it's a function of the day you apply. So the date you file application 33 months back is as far you can go. And then of course going forward if you weren't eligible until say that day you'll applied. Going forward you still wanna preserve that date. He applied. And and what happens is when we talk about this process what's a reasonable. There's a statute that they say it's under that. Reasonable prop statute of the Medicaid laws. Reasonable props up 45 to ninety days. It's reasonable props but they don't leaving union aptly it's kind of a volley back and forth and request information from you act you apply you get active. They only gave you thirty game. On I think that's a fair example let's run through how it works in mass so you can see what they're talking about it Illinois and why at 45 and ninety day rule. Is what they deem to be reasonable so we apply today. Within thirty days were gonna receive a letter from the states saying. Here's some additional information. That we need they always ask for we know it's coming. So you put together as much stuff that you possibly can. You know woody put together bank statements brokerage statements three years of tax returns Social Security card Medicare card. You know life insurance policies. Everything that you have as a nasty deeds you attach all this information in fact a lot of times they want up to five years. Were the statements. Sometimes you you can't last and then ask for what. So you'll plot. And within thirty days you're gonna get a notice from them saying. Here's what else we want. Now you have thirty days to respond to that notice OK now you're sixty days into a 45 or ninety day period. Follow on the tenth hole. And then hopefully. They've got now everything they need after that. After that that information request. And then they need to respond to. Information request. Within thirty days there's your ninety day. And within that thirty day period you're gonna get a response if it's an approval. -- ago I can tell you in Massachusetts generally the approvals they pay they start pain right away I've not seen a problem there. But remember you can get a denial. Ray and if you get a denial and you got thirty days to apply for a fair hearing then you've got to wait who knows how long until they give you a date. And and you get that date for the fair hearing and you attended an arguing it raise that you get thirty days to prepare brief that you got to wait. Who knows how long until they give you a decision on that I mean so it could be six easy on your six months to a year. Laugh if you get the denial. If you get the approval no but the folks aren't about the denial they're just saying. You know we're either applied and they're not processing it properly or we've been approved and they're not paying promptly. So state states around the country listen to this. Illinois says you can be sued if you don't follow year old rolls out so that Medicare application process is quite the process. Yeah you know they'll go that alone thugs get some expert advice when you're going to any of this stuff start educating yourself Todd has written a guide. For the month of July this one specifically discusses. Life the states and that's what you would use on your home which is. Quite frankly for a lot of us the largest asset that we have an hour our biggest concern. Don't just give it here kids don't just put simmons' name on the DDR creditor picked filed their tax implications. Don't go it alone folks call to request a copy of Todd sky that he has threatened. You can receive your free copy by calling 8668485699. That's 86684856. 99 you can always download a copy on our web site legal exchange shoot dot com just click on the guides and articles tab. And remember if you missed any of today's show or any of our pasture as you can always download our podcasts and listen at your convenience. You weren't listening to Todd lets you apart in with the law firm of Cushing and Alan I'm Susan powers of financial advisor with 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 illegally exchange in the securities America companies are not affiliated. Your financial strategy has to include a thoughtful insurance plan insurance exists to protect your assets. We're friends of the insure a match agency can prepare personalized plan that gets you the best coverage at the best price call insure a match at 84499. Match let's before for 99 match many of our listeners don't know home and one or two cars that describes you you're the perfect candidate for free consultation to make sure your property and family are safe and properly covered. We'll also dig out all the discounts preferred customers like you can qualify for. Call insure a match to compare multiple rates and carriers and 844 and 99 match let's 8449. B nine match insure a match works with the leading carriers in the industry Laker bella Plymouth rock and more. Their license for all types of insurance can save you time stressed the money with just one phone call and one relationship. Well today 84499. Match or go online and ensure a match dot com. Preferred stocks are unique investments that can be an effective part of a financial portfolio but it's important to understand the various types and the various benefits that come with any purchase hi this is Barry Armstrong there are several types of preferred stocks including street preferred and cumulative preferred you can also purchase preferred stocks through exchange traded funds or ETFs if you own preferred stocks or are interested in adding them to your portfolio called now for my free guide understanding the basics of preferred stocks call 803934001. That's 800. 3934001. Call now 800. 3934001. To get my free guide where you can download the guide rate 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. Gary Armstrong representative Armstrong advisory group in the securities America companies are unaffiliated. Tune into the legal exchange which Todd let's do and Susan powers if you're dealing with a loved one who may need nursing home care and 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 legal exchange with Todd black ski I'm Susan powers of financial advisor with the arms and advisory group. And enjoying byte public key partner with the law firm Cushing and talent with a masters in taxation. On today's show we have Todd skied it is written for the month of July it's an operational guide to the use of light to states and Geary spoke oval tracks. In this guy. The pros and cons of giving your ass at the way to your kids to vs using a light the state vs train turning into it trust. It also includes information. On the brand new Massachusetts. Supreme Court decision that Walesa's the use of life at stake. You can receive your free copy by calling right now 8668485699. At 866. 8485699. If you don't really for the snail mail to deliver your copy of tides article. You could always go to our website legal exchange showed dot com and click on the guides and articles tab and download your own copy. Right away. So Susan let's take a minute and and code to. It's a case out of Wisconsin. Won I think is. You know perhaps again not having all the facts sometimes. It seems like it's it's missing. The point it seems like it it's not accurate. And let me let me tell you what they said what they did and then we can talk about how these actually two war. If it was a true testament or trust this one said that that that. The court declared that a test of Hillary trust was established first spouse and that that. Transfer to the truck test manner trust. Created a disqualifying. Transfer in with a disqualification period of five years. You know the five we will look back. Well. I think that's wrong. And let let's explain how and when you use these explain what it is because that I'm sure a lot of folks are familiar with them. I think you're right so eight A test and Hillary trust is a trust that is established. Inside your will okay and remember a will. Does not operate. Until you're dead right so it's not what you can actually fund. In advance when that's silly it's basically senior well. You would have language that would create this track out I can't quietly as my ass in trust for the benefit of you put all the language right now so it's not like a separate document link if you created it rebuild Kabul are very vocal trust. Very different and the ones we talk about all the time OK so it's a testament read Troxel. OK well then you're thinking you know. Why would why would you create these well. The rules on testing manner he trusts are. That they're funded through your whale right because it doesn't exist you have to put everything in your name. So that when you Don your will can grab it. I know what goes to probate I I hit and it's say yes to that that those two probate your right yeah that that is gonna send all those assets to probate. But you've fund you you load up the estate. Of the person who is. Dying that's when you do it a case if you had joint assets which most people who are married catching passes houses owned jointly and bank and brokerage agency remove this exposes lean from. In this case you remove the healthy spouse's name from this stuff in but it. In that I spouse's name okay so explain what the strategy is Eric and I got that accurate and that's exactly that's exactly the point so. In this case you know we have rules that say that the trust rules say that. That trust rules and the transfer rules don't apply. When you transfer assets in a trust that's funded. Bio will. OK so if it's funded through will then the trust and transfer rules don't apply that means there's no five you look back that's a transfer rule. About what applies to transfers into a test manner trust it also means that the trust rules don't plane all that language we have in there about. Prohibiting distributions of principal and all that we need to you can put discretionary. Language in there that it can discretion rarely pay out. Principal and income to the surviving spouse. This is all for the surviving spouse because who setting this trust up is a dying spouse right. Not to help these houses you would never do this if you have two healthy spouses. I mean you're cute irrevocable trust planning that we talked about or revoke of trust planning. In advance of you know when your health. But if you happen to have a dying spouse stage four cancer you know they get terminate you know they get some terminal illness that they're declare well. They're probably not going in the nursing so this is not a nursing home motives for this state to Alex telling how they were now you know who does it and when did do it. Let's talk about how our allocate the. In the meantime. If you're thinking you know lot I don't need this crazy lawyer stuff I can do this on my own I'm just gonna take my home. And on the train answered to my kids and I put my kids on the do not do that until you read tides guide because he has deep hailed. The pitfalls of giving your assets away and yes even if you reserve a life estate. You're still creating the issues that maybe you're not thinking about like. Making your home subject to your kids divorces or any type of creditor that your kids who might have you might be creating. In unnecessary tax for your kids as well get Todd sky it lifts all of the pitfalls. The pros and the cons of using a light this date in who should actually consider using month. Call right now for your free copy. 8668485699. That's 8668485699. It also go to our website legal exchange. Oh dot com and download your own copy. So now we know when to use right. You might have done a remarkable trust years ago now you have a husband who's got terminal illness and all of their problems but they're competent user have cancer and be completely content and share just. You know not doing so well. And and so. You have them creator will with a trusted. You then put the all the assets in that spouse's name rank and by the way this trust inside we'll have all of the estate tax. Shares and buckets in there to help us show her. Assets for a state tax purposes just like the trust we talk about all the time yet. And then when that spouse passes away so let's say I've gotten out to 82 the world's. And one is sick and one is it may have revoke trust and they come and sit in and now of course the 82 year old who's healthy. Is worried about nursing care. Well we can always do planning further help the spouse and 82 and start a five year clock running. But wouldn't it be wonderful if there was a wait and not have a five year clock run former. This is how you do. That six baskets all the assets put in the six spouse's name. Six pounds put together a test seminary trust. That says upon my death the assets are held for the benefit of my surviving spouse yeah. And sheltering assets in there under the marital share and the remainder share for a state tax reduction or potentially. Estate tax elimination purposes and so that's covered. What's not covered. Yeah I'll go to probate rain I get that folks sometimes to have the best of all worlds you have to pick and choose what you want. And what you don't want. So it's all go to probate I'm OK let let the lawyer take you through probate it's not going to be that big of a deal. When at the end of the day you now have assets in a trust. That are sheltered for a state taxes. Providing a great deal of access. For the help these bounces. But protected from the nursing home. Immediately. So no five year clock. No five year waiting period because that transfer rules do not applying under the Medicaid regulations. To this kind of trust and the flexibility. For the healthy spouse in terms of access. Of the assets in the trust but trust rules don't apply either so in English that means you might have a trust instead of saying. Income to spouse for life. Principle. No access. Can't get. In might just say. Principal and income can be paid to this bounce in that trustees' sole discretion. While that's much better access. Why because the trust rules don't apply to this kind of trust either so that's where I don't understand why. The Wisconsin court. Created in eligibility period here. I must be missing something in that case I didn't obvious I didn't do it I have I read it but I. He'll I don't I might be missing something so a lesson it is if you do have someone falls down who's right who's dying yeah. You know you need to seek concluded that I there's actually an opportunity do some some real good planning quickly to and you know maybe something good can come out of something that's so tragic share you know what folks. If you do you're. Inning in Indians you don't have to worry about all this stuff you can set it and forget it if you well. Kyle to get a copy of Todd skied that he is written for the month of July it discusses probably your largest asset your primary residence. It's like the states in your evil global trust there is he right away in the wrong way. To create a life of state the air is situations where you makes cents Brady is a life estate in there are situations where you should not. Use a life ST call to get Todd skied right now 8668485699. 8668485699. Or visit our website. Legal exchange showed dot com click on the guides and articles have and you can download your copy. He and read it right white. You weren't listening to Todd lucky for a lot from Cushing and Dolan. I'm Susan power is a financial advisor with Armstrong advisory group. We're gonna take a quick break and we get back we have York listener questions here 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 is Susan powers and Michael Armstrong. Mike if it released their June meeting minutes last week in that meeting they've raised rates again where we act now with them yes and fed controls the overnight lending rate which the rate at which banks lend to each other money over the short term IE overnight and that raised currently set at between one and one quarter percent. Historically when the Fed raises rate the longer term rates tend to go up with that. While the Fed has increased rates four times since December 2015 those longer term rates which are entirely market driven have actually declined recently with the ten year treasury yield today sitting around 2.3 percent. So why does the Fed wanna raise rates right now what they're jacked it. Shares are generally when the Fed is raising rates. It's trying to slow period of strong economic growth for the fear of markets getting ahead of themselves and this period has been interest India's while we have seen a very strong stock market. The labor market and inflation rates have been you know pretty weak in comparison to those that targets. At this point it seems like the feds just trying to return to a more normal environments that they if they do we head into recession they have some sort of tools and so what does this mean to the average Americans you know at the moment not a whole lot as long as long term rates haven't moved. We don't see a lot changing the banking industry that said if rates do begin to climb in any significant fashion. Not only savings and lending rates be impacted but you could see some impact the stock and bond markets as well so how about CD's that we in Cassini upward momentum there I don't see at any time soon you really need to see some longer term interest rate news for CD rates to really be impacted. Okay thanks Mike if you have a question about the economy about your portfolio or making about advice that you think isn't. Since your email questions to Michael at Armstrong advisory dot com. You've been listening to Wall Street week in review with Michael Armstrong no back to the legal exchange with time let's ski 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 he is time lets PN's Susan powers. Yes welcome back Todd if he questions from listeners for you first question comes from Carl and well meaning Karl writes. My mother's significant other passed away recently they each haven't theory book Opel trust leaving everything to the other. My brother consolidated all bank accounting cashed in all CDs and placed them in a personal bank account under my mother's name. Since they didn't move it to a trust is it too late to move it back to his trials my concern is the five year clock would have to start over again. My mother is 83 enhanced early image is so it looks like. Cash and things in ticket out of the trust and put it back an attorney. My question is it sounds like it was never there I mean much if if it was and how did it come. I don't know that the brother took it that's to me is the bigger. Issue here so maybe he was the trustee you know folks it's not clear yet it's it's really I think we should probably maybe. Add some act facts but but fill in some holes share just just to see if if we can help people learn from this seemingly. Oh problematic fact pattern. That I have here because there's just too many things going on so when I see an irrevocable trust yet if it was funded. Says my mother. And significant others so it's a second marriage. Now there are even married you know. So that they left everything to each other so it sounds like he took it out at the significant other passed away. But there's nothing in his trust because it was all emptied out and it sounds like even the trust and the brother chicken out. In now it's back in on his brother the son of the significant other is the son of the mother and I think the seventh son of a mother. So it's it's interesting to see when you when you have a second it's not a second marriage but just a relationship. Right even if it was a second marriage. That's why you do these irrevocable trust you set them up so that you can protect this from happening where if all the assets are now in the hands of the mother which I guess they didn't care that's how they left everything anyway right maybe he didn't have kids in heating care you know that you could potentially be just inheriting the other spouse but if you happen in this trust. This would prevent that from happening because it would be available for the surviving spouse but ultimately going. To the side of the family that you wanted to go to ray but you're right in this case it sounds like but the fact pattern they are leaving everything to each other maybe they didn't care about who. Each side of the family wearing. So that aspect is okay if that's their choice my question is assuming they took it out of the trust and not sure how they would have gotten out of the trust. Again to to get it now. If it's an irrevocable trusts like we prepare. The trustee cannot make a distribution to himself. That's prohibited. So the trustee would have had to make a distribution to another. And if another child another sibling. Perhaps if if the brother had a sibling yes may be to that sibling in other child of the mother. So and then get it back to the mothers some rattle so regardless of how he guided out is it too late to do kids take a mullah in here because they've restarted o'clock in this case yeah I'm leading right up to that now means a problem that is once it once it's out even if it's for a second. If it hits that account. To take it out and put it back and even if it's just first second ever hits anybody's account I'll read deposit. Into the trust. Would start at 5 o'clock and that's how they would know everybody says how they now when you apply for Medicaid. Right as we talked about earlier when you apply for Medicaid they want all the statements. And they're gonna see the initial deposit. Although Austrians actions are right right and some of the deposit is there at that starts a new five year clock for an 83 year old who has early dementia. Doesn't mean we don't try no you absolutely try and put it in and get the clock running into everything it can't keep momma or home. That's should be the goal anyway. And so yeah you're gonna have to start at 5 o'clock over again. And it's unfortunate that question here though is. It says and placed them in a personal bank account under my mother's name so they gave them back to mom. If they hadn't given it back to mom there might have been. Race something you could do because. You know it it came out of the trust but never went back to the person who created the trust. That wouldn't start a new five year waiting period in and of itself so that transfer out wasn't the problem. It was the deposit into my mom's account rank and now mom having to deposited back into the trust is what's gonna create a problem. So yeah I think Carl this is a tough situation for you and one we can all learn from don't take things out when you put it in that's why they're there and question needed of course. Right you know pick the phone get some advice if you have a trust or think that means is an attorney out there somewhere. Mary certainly when an advise you likely I hope not to take the money out of the trust me though don't we tell B yeah always call me just ask your lawyer before you act. So we can stop something like this from happening you'll get the guidance should need I assure you yeah you know what folks a lot of us. For a lot of us are home is the largest asset and some of you might be out there thinking I'm just gonna give it to my kids while living. Maybe no worries are related they maybe I won't but you know what that's not the right way to go. Todd Skype he's written for the month of July discusses the right way to own your home the right way to protect it whether it's to protect it from your kids creditors repeated divorces me do you want to reduce or eliminate estate taxes. There's a right way and a wrong way to when your home and Todd it's guys like the states and your remarkable trust. Deet tails that's for you call right now for your free copy 8668485699. That's 8668485699. You know his visit our web site legal exchange showed dot com click on the guides and articles tab you can download a copy. Right way. Our next question comes from Linda in Brewster and Nelson Linder writes I transferred my home to an eerie look global trust years ago but never reserve to life at stake. Is it possible from media create one now is there a reason that I should. I can tell you this is exactly why the guy is so important. These are the kinds of questions we need to understand about life for states and how they work. It is a term that is thrown around far too often and too frequently and too easily Everest aren't like I got one of those. And they're popular I'm not saying they're not. In this case Linda. I'm actually thrilled that you didn't reserve. Is that. I think in this case Wendy you're living in your home. You you probably could testify if we needed to to the fact that you been enjoying yourself just like you always have been before you put your house in the trust. I go I will suspect that you are paying all your bills just like you used to write Audi a personal account. You're living there there's no threat of view not having the ability to live there and remember you aren't even if you're not the trustee of the irrevocable trust. In this case. You would have the power to remove and replace the trustees so no one can sell that house if you see the for sale sign cooperative and remove the trustee. And stop the process in this inherit them in the way as well you've gone unless I still under U bad things can always happen you should be in charge. To the extent possible of who you leave your assets to right until you pass away. And so I I think Linda having said all of that you can see why there's no downside in what you've done. And the reason I don't think you need to reserve one now and by the way you can't. I don't think you can now go back and get. A life estate and a house party to answer to deter us right because in order to reserve life estate you have to own the house. Aside I transfer my house to use Susan. And in that heated says I reserve the right to live there so I have to own it give it in reserve. Got right now this has already been all given so how can she reserves something she's already given completely away is perhaps the trust could grant her. A life estate but would they be and need for it and actually I don't think the trust could actually do that manually. So the answers no you can't get it and no reason to get it here's why. If you wanna sell your house now. All the money would go into the trust. All protected from the nursing home. All know capital gains tax liability on the first 250000. Dollars of gain. Great you could then have the trust by another house maybe you wanna downsized Linda. You can have the trust buying another house. And it would be purchased directly inside the trust. And we would not restart the five year waiting period for Medicaid eligibility purposes. Wonderful. Right so you have all the bells and whistles you want if you have a life estate. Eight calculated portion based on your page. Of the proceeds. Would end up in your hands because that represents the life tenants value. It does go down the older you get based on IRS tables. But nevertheless the asset that portion of the proceeds that goes to your pocket as a life Tenet Linda. Would now be at risk for the nursing home all over again. Don't want it you can't you know and some people say I don't care I want that piece just so I have some money to live on well that's okay and that's a good thing. You know what we need to dive into this a little bit further when we get back as I wanna talk about that whole process of selling when you have a like a state financial work push it actually considered doing that in the meantime folks. If you have a question you would like to ask Todd. Visit our website legally exchange showed dot com and click on the ask Todd tapped. Maybe will be able to read your question on the air and hopefully. His answer will stop you from being one of his next real life story is while you are out there you can also download his guide about this topic specifically about. The use of light the State's END eerie vote Coble trust in them an email that right out to use of the you know the downside and the upside of using these tracks. You can also call right down to get your free copy. 86684. 5699. That's 8668485699. To receive your free copy right away. And don't forget folks if you missing in today's show you can always download our podcasts and listen your convenience. You're listening to Todd at ski a partner with the law firm of Cushing in Dolan. I'm Susan powers financial advisor with the arms on advisory group and we'll be right back on illegally exchange with Todd black ski. 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. 8668485699. That's 8668485699. Welcome back into the legal exchange at top. I'm season Paris I think it took sides of the arms an advisory group. I'm joined by Todd let's key apartment with a lot from of Cushing in talent with a masters in taxation. On today's show we have Todd sky DD is written for the month of July it's an operational guide to the use of light the states in Erie though global trust. In if you've been thinking about giving your home await your children you need to stop do not do anything until you have read Todd guide. There are so many pitfalls that can occur when you just give your assets away. And you need to know the downside risk of using like a states as well allies. The really really bad we've just giving your stuff awaiting your kids call right now for your free copy of this guide. 866. 848569. Inning that's 866848569. Inning. If you prefer you can always download a copy. On our web site legal exchange showed dot com click on the guides and articles have. And you can download your copy there you can also download our podcasts and listening your convenience if you missed any of Tunisia. Todd I wanna tennis circle back to Linda's question from Brewster where she true entered her home out right to an eerie book about trust yes. You explain the process I applauded that yes absolutely think you explain the process. If Linda wanted to sell her home. Trustees' signs the penis out goes the home income the proceeds napping restarts from your look back. From from a five year protection standpoint yeah it just it's firm and start there there will be a right keep that cut why. It doesn't start to read clocked the clock over again because nothing new winning people always ask me why. Well that a new house go and yeah I did. But really all you did was convert assets that were already in there right from one asset to another from real estate to cash back to real estate. That's nothing new. No different than if you had a financial portfolio in there isn't like you have you're buying and selling stuff stocks bonds where have you. When you convert something from a stock to a bond or to a mutual fund. That also does not restart the clock for Medicaid purposes I hope that analogy. Helps people understand why we're not re starting the clock it doesn't. I started in rank and I don't know I don't have the good explanation. So I want to walk through and how that same process would work Linda wants to seller home. But instead of train answering it outrage to contrast. She transferred it out right to Kirk hits. You didn't keep anything a key will be will use the sample of keeping a light the statement how would that process work it Lyndon now Hadley this theater home. The kids have that remainder in tress and ended decide. This houses too big for me. On the downside yet it now it's where you get into the hole. Dealing with the children. Point of view with an idol like in dealing meaning heading their permission right. It means it means you have to talk to them yet to get their permission they have to be apart of that transaction. Up part of the sale whereas when it was in the trust as you explained in a minute ago. It was all about Linda making the decision Linda you know deciding to you know buy and sell the property in controlling brightens through that through the trust so. That aspect doesn't change. And and in this case it would because now if you wanna sell one that would have to sign the pianist and so what all of the kids let's say she's got three children. I get it all three kids who knows that espouses start sticking their nose into this trip strong arming don't get that house back so now. They would have to agree to sell. But then remember the allocation of the proceeds and I talked about between owning it like to state and where the remainder interest is in the hands of children. The proceeds also have to be divided. A small piece based on your age as a life Tenet would go to U. And the light and it. All the rest of the assets the rest of the proceeds from the sale of the house would go to the children the remainder remain. Listed on the. In you know she's older she's like I say she's 75 that's still young enough that it could give her some money. 500075. Years held. They agreed to see now she's lucky that they all agree. To let her sell around. Yet how does that so for example purposes I'm gonna tell you that at 75 year old person. You know maybe twenty. 25% of the money would still go to her. Seven maybe seventy to 75 so even just to keep the numbers easy she gets a hundred they get 400 okay. She needs more than that the fire house she doesn't you know what folks don't scramble to right. Everything down at Todd saying because this example is in the guide that you can request a copy of right now it's his guide for the use of lake estates in Erie though Coble trust. You can get your free copy right now by calling 8668485699. That's 8668485699. Or you can always download a copy and their web site. Legal exchange showed dot com just click on the guides an article steps so the kids there an agreement. I'm in a thousand dollar house month gets under green and they get 400000 she keyed by a replacement house for a hundred grand she read that for an engram back. So she has to ask the kids to hopefully give it back to her. Mean there's no other way around it that's the problem and that's the whole problem one of the biggest downsides of having a life estate in the hands of the children. You need to ask their permission to sell and to get the money back in let's say they're good kids and of course mom will give you the money back. Where's the problem with app that. Wouldn't it could be a gift tax associated with them. When they give it back probably wouldn't it would eat into their 5490000. Dollar exemption. But nevertheless they would need to file a gift tax return I think the bigger problem was the income tax. When the house was sold. Mom would usually get a 250000. Dollar if you're single capital gains exclusion on house that is 500 if you're married did she lose that and she gets her 250 but Sheila got a 100000 dollars a proceeds. Isn't helpful. It's itchy apply it towards some of the 400 no. No the 400000 in the gain associated with the proceeds of 400000. Belong to the children. Who likely don't live there. And therefore they don't get a capital gains exclusion as it's not their primary residence actually Susan so in essence they are gonna have to pay capital gains tax. Unnecessarily. Because of the house was owned in the trust the way I was applauding Linda for having to having done it. There would be no adverse capital gains should get to use her full 250000. Dollars. The money would be in the trust what you need to kids permission. Could buy another house. No problem. So in this case where the kids have 400000. What's been attacks deepening on 400000 a cap well depends on what the game news of that 400000 I mean there are some basis so. You know even if they gain for them was 300 share. Maybe 90000 dollars so until I was 30% federal and state so mom's not gonna get four under back even if they're willing to give it to York that the tax test and act so she just lost in in 9000 incidentally I'm glad work with you financial planners you know all these numbers right you're absolutely right now our I hate number that when that you can't line numbers don't lie now so you definitely get less money back short so it's it's. It's a burden. And and and it's a tax problem says she gets a haircut he and if she has that like ST now. If mom's 75. She may concern with that nursing home protection and that maybe why she gave the house to the kids to begin with she's gonna under green Europeans. Or more if she got back from the kids yet if she would then restart the clock investigator playing yeah rock it aptly write another good point the whole clock thing would start over. Not just on the hundred that she got but on the additional money that the kids if used as you said were nice enough to get back. Those dollars would albeit her hands and we'd be restarting the entire clock. We don't have any trust if she is done this now can she fix it during her lifetime. She could she could I would say that she can hang on to the life of state. And that kids if you're gonna work with you anyway. She could create a trust and the kids could transfer the house into the trust OK and that it kind of give her act the benefits of that control giver not the benefits to control would still receive the step up in basis. Yes there would be a five year waiting period on the transfer but for the kids right they're young enough that that's probably not going to be an issue yeah for them. So there is quite a bit involved. When you think about a life estate not so much when you set it up and put the kid's name line go about your living that's easy. It's when you do something right you wanna move you want downsize you know. You wanna just selling used the money to live on I mean these are all questions that you're gonna play out the string when you're doing the planning. And none of these issues apply when you have a trust. Desperately yeah I'm not big on. Unlike the state. And there are some situations where it makes sense to use a life stately coupled with a near eagle global trust perhaps. You need to find out if you are in this situation that would warrant the use of a light that's the or are if you have giving your homes your kids and reserve that life is that you need to figure out if he can fix what you've done. There's a right way and he wrong way and he really wrong way. Telling your home folks. Call right now to receive your free copy of Todd guide that he is written for the month of July. It's an operational guide to the spotlight as states in your evil global trust. You can receive your free copy by calling 8668485699. That's 8668485699. Or visit our web site legal exchange showed dot com you can download your copy there. You can also click on the path Todd have an asked hide your question I'm always willing to give away. It's free advice you can also find our podcasts out there. If you missed any of today's or any of our cash. Todd let's keep a lot from Cushing and Allan thank you so much thank you Susan always a pleasure. And Susan Paris of financial advisor with the arms on advisory group we thank you for listening today and we 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 cashing in on the Armstrong advisory group to legally exchange in the securities America companies are not affiliated. If you're real estate or property management company Unita banking partner that has all the right tools to keep your operation efficient leader bank is one of the premier banks in the property management and real estate space offering a suite of unique products and cash management services to help you collect rent managed Condo association payments and digitize paper checks leader bank utilizes state of the art technology to offer convenient banking services to its real estate clients such as ECH payments mobile banking remote check scanners and it's innovated to see rent payment platform leader bank has a team of business bankers -- on call to help you and they'll come to your place of business and make it as easy as possible the number to call is 8776917900. That's 8776917. B 900 find out why many of greater Boston's premier property management and real estate companies choose leader bank as their banking partner call 8776917. -- 900 or email be BO at leader bank dot com for more information member FDIC equal housing lender. Your financial strategy has to include a thoughtful insurance plan. Insurance exist to protect your assets our friends at the insure a match agency can prepare personalized plan that gets you the best coverage of the best price call insure a match at 84499. Match let's before for 99 match many of our listeners don't know home and one or two cars that describes you you're the perfect candidate for free consultation to make sure your property and family are safe and properly covered. We'll also dig out all the discounts preferred customers like you can qualify for. Call insure a match to compare multiple rates in carriers and 84499. Match let's 8449. B nine match insure a match works with the leading carriers in the industry Mike Rabelo Plymouth rock and more. Their license for all types of insurance can save you time stressed the money. Well today 844 of 99 match or go online and ensure a match dot com.
READ MOREREAD LESS