Real Life Stories of The Legal Exchange 12-3-17

Weekend Shows
Sunday, December 3rd
00:54:02

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

These are the real life stories of the legal exchange with Susan powers of the Armstrong advisory group and Todd let's just from the love for a month Cushing in Dover and Susan Intel and have been helping people understand and react to legal issues that they're faced with every day and there are here to help you to. If you have a story to share contact us on our web site legal exchange show does come that's legal exchange showed Doug come. Now here are your posts Todd let's deep and Susan powers. Welcome into the real life stories of some games I didn't have anything besides it would be Armstrong Kaiser group. And doing by Todd let's keep apart with a lot from the Cushing in Dillon with a masters in taxation. Todd welcome how are you and I'm never better and you I am great thank you can't believe were in new month new month new year twelve model year he had almost the new year off close the near happy holidays everybody at that time and I think it's time to start thinking about shifting which is why our guidance about. Think we have to get I've got new gift. I've got a new guy at. That's its go and freeing your stock in the north surprising now that so many people don't realize that. The gifts that problems I can be created with gifting the implications. Gifting feels good but it hurts our it can't hurt yet sure you don't do it right into it. Couple of interest in situations I ran into one. Oh we had four family where. The mother lived in rented out the other three then. The other three units and then she decided to give it all the kids are doing yourself legal work through and the kids reported a nominee realty trust them one kid gave away his 13 to his two kids in this is getting to be a really big nightmare share. And now mom's 95 and not doing very well. And they're worried about the capital gains taxes they might be in have incurred as well he should be because of the gifting is not even a Medicaid question. We'll talk about that in and how not to do those things and wind not to do those things turn this husband wife came in. Listen to the show when they have one rental property one vacation home in a primary residence. And some other assets and they thought their state plan wasn't pretty good order but they thought after listening to the show that made the comment and have us. Look it over. While we T hear how they. Used their nominee realty trust a creditor protect their rental. Property and explain to me how their nominee realty trust owns the other two properties and those are in separate trust for extra protection and boy folks were gonna learn how inadvertent gifts. Can be made when you don't even think. You're making again like in this case and lastly. We have a situation where you know you got to think outside the box a little bit right husband wife come in. There worth about four million with a million dollars in a home in one's going you know into the nursing home is already in the nursing home and they're wondering you know what can we do now. Can we get eligible for last minute should we even apply. Or not lots of tax considerations to think about here a lot of money end. Everybody all the attorneys they went to said no you can't applying published just do nothing at this point. While generally do nothing is not a good answer. Auditing and there. You know what else folks doing nothing or even just giving your stuff away also not a good answer. We're not talking about gifting small things folks and a tiny about those holiday gifts to those bird Vegas. We are talking about me be transferring your home to the name of your kids what do you reserve relate with the nor. Maybe adding a child's name on to a brokerage account you don't realize what you're doing you're injured gifting them. Half of those assets your gifting them your cost basis as well nothing good comes from that folks we hate taxes we hate. Unnecessary a voluntary taxes. Even more. Call right now for your free copy of tides Branyan gift being guide it is going to show you the implications of gifting this out that the way. Whether it's income tax implications. Steep tax implications. Nursing home implications creditor implications it is fraught with problems folks. Call for your free copy of Todd gifting guide right now. 8668485699. That's 866. 8485699. If you prefer download a copy and our website. Legal exchange showed dot com just click on the guides and articles have. In if you miss any of two dates or any of our past June she confine our park that our podcasts on the web site. And you New York can be easy for you to say right now. So folks let's take a minute and look at this one Christmas troubling to go on a large number of levels. 01 that's for family house. Mom lives in one unit rents out the other three collecting the rent clearly needs the money to live on I mean that's what she does right. And it makes it makes sense. Then for whatever reason. She decided to. Deed over to she do it over to the children. And not retain a life estate but. Keep what is known as a use and occupancy agreement. She probably figured I need to Ernie I'll do it myself ultimately prove me. Start the five year clock foreigners. And I guess she did. Do those things she cherry did she did get our costs time that what and she did start the 5 o'clock for nursing home purposes so I guess that's why this is not. A Medicaid questioner. So I do suspect that the house would be protected from the nursing home sounds like it was done years ago. As she is now 95. I don't think she did this. Recently so we're talking weather and and 95 years old now and and they're worried about a step up in basis because this gets better by the way let's keep going to she's got this ability to live there under this use and occupancy agreement. The kids then keep the property into a nominee realty trust. With the three kids as beneficiaries. I guess that's okay for them they took it out of their names put in a nominee realty trust and named three kids as beneficiaries which really didn't do anything. Seoul with a nominee realty trust folks they aren't they were the owners. They put it in the trust. Name themselves as beneficiaries of the owners all over again so my point is with a nominee realty trust if you got one of those in your the beneficiary. You're the owner it's a trust in the treatment and where you are even avoiding probate and then sell. And okay well that's how it's all that's fine and they went on they say well then one kid gave his 13 interest. To his two kids on her green. So now there's five people. That'll in this property. Tour of which are a generation below. Skipping. A generation. OK so it's getting complicated. Interestingly enough while all this has been done guess who's still collecting the rent even though she hasn't don't anything. Mom mom. Well mom you don't know anything how can you continue to collect the rent I don't think you use and occupancy agreement rises to the level of a life estate. We're hoping to make that argument. Because they're question here is all about capital gains taxes and that's all I wanna focus on here. Two that was their question right they come in saying. We now are wondering if we sell this property has mom's gonna ultimately she's she's moving out and you know she's 95 and we're gonna ultimately let's say we sell the property. Well what would be our taxable people would be the taxable event to us. And I explained to them up and explain to all of you who have given away their assets. If you're given away the asset you've given way to basis. So now mama I'm sure this property probably has zero priests. Yeah different apparently she's probably depreciated throughout the year so three quarters of it for sure has zero basis elbit apart she lived and or is still living in now looks like she's moving now. Has very. So you know just pick a number I mean I think they were to sell this thing for 500000 dollars. If they're truly is zero basis there'd be 500000 of gain. Even after the little basis that you got that mom had that she gave to you. You know it's. Still a lot lot of game. And that gain would be subject to about 28 point 8%. Capital gains tax rates between the Fed and the state. Almost 30% well. So there was 500000 of gain you're looking at a 158000. Dollars tax. And that's why there were in so folks that's what happens. When you give away assets. That have a low basis again this is really low because. When you decree when you rent you depreciate property. And that's the capital gains tax problems not to mention the fact that she's collecting the income which you shouldn't be doing which the IRS may have an issue with her income is lower as well on the kids tour and a tired tax bracket that collect more tax I think that's an IRS problem waiting to happen. What in any manner so. Ultimately folks. There is one safety that I will throw out there for them and I did throw out there for them. And for you. As long as mom is living there you might be able to qualify under this thing called the state of Gwynn. Which is a case that says if you gave it away. And reserve in a life estate but still lives there and pay all the bills. And you might get an implied life estate and cause it to be included in her state for state tax purposes. Even though she doesn't own it. Thereby taking advantage of this step up in basis meaning I died owning it and now the kids would get a base is equal to fair market value on the date of death. That is the step up that's what eliminates. Capital gains taxes. When the kids go to sell. That's why learning how to gift is so important and the lesson here is. If I'm gonna give something away. It's not going to be an asset with low basis. Because it creates larger capital gains tax liability than I would create on the estate tax front. By dying. Hoarding it yet to get some advice folks she got to get some good advice people who do this all day every day Todd sky is written for the month of December it's his guide to gifting assets. It has the example of how much tax you pay when you give your stuff away vs how much taxes paid. If your children or your beneficiaries inherit your assets. Priceless guide here folks call rate at a receive your free copy. 8668485699866. 8485699. Or you can also get a copy of tides free gifting guide brand new folks. By visiting our web site legal exchange showed dot com just click on the guide. And articles to having you can download your free copy right away. You're listening to Todd black ski from the law firm Cushing in Dolan I'm Susan powers Anthony till it by two with the arms on advisory group. We'll take a quick break and we'll be right back on the relay stories of the legally exchange. Securities offered through securities America member finreg SIPC advisory services are with the securities America advisors think securities American misrepresented to do not provide legal advice therefore it's important to consult with your legal advisor regarding your specific situation she named all the strong advisory group real life stories of the legal exchange and the securities American companies are not affiliated. Hi this is very Armstrong and if your regular listener to my show you know that I -- a great deal about Smart retirement planning each year certain limits are set by the government and these key numbers are critical for you to understand if you want to maximize your savings I'm not gonna bore -- with the numbers but this is information that can help you plan accordingly and alleviate a lot of unwanted and unnecessary stress call my office right now and 803934001. And asked for my brand new free guide called key numbers for 2018 it's chock full of charts and statistics they can help you and areas of retirement planning that you might need the most that number again is 803934001. Or you can download the guide right now at Armstrong advisory dot com. Dirty suffer through securities America incorporated member camera SIPC and advisory services are with the securities America advisors incorporated Barry Armstrong represented if Armstrong advisory group in the securities America companies are on affiliated representatives of securities America do not offer legal or tax advice always seek the advice of a professional familiar with the laws in your state if you're landlords looking to find an easier way to collect rent payments and you need to hear about leader bank's online -- collection product called zero and it's a great service for landlords allowing them to collect tenant's rent payments electronically and he rent dot net without the need to collect checks most landlords used local neighborhood banks to do their business and now a collection of local banks are offering this unique program including leader bank and stolen bank member FDIC. If you're a landlord and are interested in having your bank required to zero and technology tell them the cold as he ran team at 7816418691. That's 7816418691. Or visit Z Rand dot net stop chasing down late payments and running to the bank to make your deposits at your bank to add zero to its list of offerings. Visit C Rand dot net or call 7816418691. For more information at 78164186917816418691. Or zero rent dot net. Your team into the real life stories of the legal exchange with Susan powers of the Armstrong advisory group and Todd let's keep from the law firm of Cushing and building if you have a legal issue you like just to discuss on the show send us an email and we may read your story on the air contact us through our website at legal exchange showed does come up that legal exchange show. Dot com. Welcome back into the real life stories of completely changed on season power is something into it by two of the Armstrong advisory group. And I'm joined by Todd black ski a partner with the law firm of Cushing in Dolan with a masters in taxation. On today's show we have Todd bring new guide to these written for the month of December it's his gifting guide in unfortunately. A lot of people find out the hard way. About the implications of gifting their assets a week during their lifetime. We're trying my income tax implications as steep tax implications and nursing home implications. In creditor implications. There's a better way to make sure your assets and make it's your beneficiaries. Call right now for your free copy of Todd brand new gifting guide 8668485699. That's 8668485699. If you prefer you can download a copy on our website legal exchange showed dot com. Just click on the guides an articles task. Susan let's take a look at this next case. Husband and wife right come in they were listening to the show. And they have one rental property. One vacation home. Primary residence. And some other arrests and Curtis on the radio they're fairly confident when they came in that they have a pretty good estate plan in place then but they felt it's never. Never a problem to get it review second opinion chair and I and so I've you know kudos to you and anyone else who. Thinks that might make sense based on them acquiring new information that maybe they ought to get that review. So they come in we start asking the questions that I always in state planning documents and please let me take a look at. If in fact they're in good order on happiness and your on your way. And and so I looked through in the first thing they said as well let me give you the nominee realty trust that we have in place. Folks so far even this program how many times have I mentioned the award nominee realty trust right these are tricky documents. They are not true rule. Trusts in mind since they are more like an employer employ the arrangement. Right it's more like a principal agency. Relationship flow through to flow through there not really. Trusts even though the word trust is and it. So they start to tell me right after that while Todd we've got. Our rental property and we put that in a nominee realty trust so that it would be protected from creditors. Then we were really Smart and we took our rent our primary residence and our vacation home. And we put those in a separate nominee realty trust you to keep them separate. So that there would you know again further creditor protection purposes to keep that lawsuits from that tenants away from. Those buildings. Okay good and and I'm just listening in and then everything else is pretty much you know between my wife and I we've got joint ownership of properties and designated beneficiary so we are avoiding probate in making sure the assets get to the other one. So we feel pretty good. That were in good shape I hope you are kind when he burst their bubble. But they are worth about one point eight million. And I explained to them in and explaining to all of you that. If you just have everything jointly on let's forget the nominee realty trust just Furman. You make your. Your 401 k's your IRAs your life insurance brokerage accounts all these are either designated beneficiaries or have. Joint ownership arrangement. They will avoid probate they will make sure that all the assets go to the surviving spouse. And they will. Insure that you pay unnecessary state estate taxes not so much federal there are only worth one point eight million. But here in Massachusetts for the one million dollar exemption. If you waste the first to Stevens. One million dollar exemption and leave everything directly to. Surviving. Spouse the surviving spouses worth one point eight million. And is worth more than and a million dollar exemption. And therefore when. He or she dies. In a pay tax. Massachusetts goes back to dial in number ones and not only did you ways the first spouse to dies green on exemption. You wasted the second spouse dies million dollars in exactly right and it goes back to dollar one to the tax on one point eight million to about eighty grand here and so unnecessary taxes. That's problem number one with their state plan and that's all because they didn't have I trust whether three vulnerable are eerie about a lot of nominee really trust that revoke Coble you're able. In place that's exactly right at least some kind of a trust to grab and utilized. That first. This season's. An exemption amount. And shelter some of that million name. And you have folks tide is talking about giving away your assets in not having things positioned properly today. He is a brain new guy it's his guide to gifting assets if that time of year folks. Don't have your your mindset be stuck on. Do we yourself legal planning and is gonna give my stuff always I have to worry about the nursing homes Santa wary about the taxes you know what it's gonna come backed up by you folks. There's a better way to pulling your assets and make sure they get to that next generation. Call for your free copy of tides bring it gifting guide right now. 8668485699. At 8668485699. Can also download a copy and our website legally exchange show dot com. So that that was the first problem that I saw with their situation yes it would avoid probe that's right. But and it would not help reduce the term care so far. Approached their nominee realty trust and I said let's take a look at this so the nominee realty trust that had the schedule beneficiaries on the rental property. With kids. For what reason thankfully. The schedule beneficiaries on the home in the vacation home property. Was. Themselves. So it's kind of weird how they did it's like they almost wanted to give the house to give the rental property the children said. Did you wanna give the rental property to your children because folks that's exactly what happens. When you set up nominee realty trust right. When you senate nominee realty trust who ever the beneficiary is. In the schedule beneficiaries. Is the owner not when you lie. Right away right away. So goal dust off all of your nominee realty trust that you have out there. And look and see who's listed as the schedule beneficiaries as their their field. So in this case I explained to them I said look here's what you not thought about. When you named that children. As the beneficiaries. One I'm guessing you're still collecting the rent on. Yes we are. While the IRS says you don't own. The kids don't therefore you're not entitled to the that's problem number one that's an IRS problem I don't know that it they picked up on an error or even know about it so we're not on down. Problem number two is you think you've protected these assets from creditors. But you have now. If in fact. You. Mom and dad were listed as the beneficiaries. And attendant got hurt on the rental property and sued. He would through the owner. We just have to think with the pirates. The beneficiaries and if it was mom and dad they're gonna sue you directly city not protected it from thought he would do when all your other assets in different. By suing you directly they can go after every asset you own your home your vacation home your investment portfolio. Because you're the owner. Sockets and an LLC. You're the owner so unsettling it's Harry who's the owner so under this situation. The kids that are actually the owners because they're listed as. The beneficiaries and they don't even know. So they never. Hid assets that their personal laughs can you imagine that mean if a lawsuit happens. And they discovered that the beneficiaries on this nominee realty trust our billions now the two kids. Now both of them will be sued. And all of their personal assets will be exposed sent me to the creditor. You think you've helped your child and you I'm Dan you've harmed. Right if that creditor issue comes down. Let's spend a minute. Let's say. Sally one of the children get to divorce. You don't realise it mom and dad but they own it that's now subject to the divorce and you could end up losing the property that you think you loan. That you don't own. But it's gonna be subject to Sally. And Billy's divorce in its not even that they'll just put me on it because that's not plummeted primary residence that imports that's. That moment I don't know I mean he could completely given it away. And so that's the risks of of creditors giving it away there's capital gains are not to mention in the capital gains tax is a problem to use so. There's one problem after another here folks and we got them on track and we said we're gonna fix that it ran in and clean up all the SP before something bad happened. Not too late for them folks it's not too late for you hopefully that you're not gonna find out when it is too late the U giving us that the way that you own them the wrong way. Call to request a copy of Todd guide to gifting assets. It has examples of what happens from the tax implications whether it's income tax or estate tax to the nursing home implications to creditor implications. All of that information is included in Todd reunion guide. To gifting assets you can receive your free copy by calling rate now 8668485699. 8668485699. Visit our website legal exchange you dot com you can download your free copy up there as well. You can also submit your questions for Todd if he'd like to ask him a question. Will be able to read it on the here and hopefully we'll stop you from being one of net his next real life stories we're gonna answer those listener questions after we take a quick break. You're listening to Todd let's eat a lot from Cushing and Alan. I'm Susan powers of financial advisor with the Armstrong about three and will be back in just a few minutes are the real life stories of the legally exchange. If you're landlord looking to find an easier way to collect rent payments and you need to hear about leader bank's online -- collection product called zero and it's a great service for landlords allowing them to collect tenant's rent payments electronically and he rent dot net without the need to collect checks mostly in their dues local neighborhood banks to do their business and now a collection of local banks are offering this unique program including leader bank and stolen bank member FDIC. If you're a landlord and are interested in having your bank acquired does he ran technology Tillman McCall does he ran team at 7816418691. That 7816418691. Or visit Z Rand dot net stop chasing down late payments and running to the bank to make your deposits at your bank to add zero to its list of offerings. Visit C Rand dot net or call 7816418691. For more information at 78164186917816418691. Or zero rent dot net. Hi this is very Armstrong and if your regular listener to my show you know that I talked a great deal about Smart retirement planning each year certain limits are set by the government and these key numbers are critical for you'd understand if you want to maximize your savings I'm not going to be for you the numbers that this is information that can help you plan accordingly and alleviate a lot of unwanted and unnecessary stress call my office right now and 803934001. And ask for my brand new free guide called key numbers for 2018. It's chock full of charts and statistics they can help you and areas of retirement planning that you might need the most that number again is 803934001. Or you can download the guide right now at Armstrong advisory dot com. Dirty suffer through securities America incorporated member finreg SIPC and advisory services are with the securities America advisors incorporated Barry Armstrong represented if Armstrong advisory group the securities American companies are on affiliated representatives of securities America do not offer legal or tax advice always seek the advice of a professional familiar with the laws in your state. You're listening to the legal exchange and its time for. Ask. The segment where time will answer your questions about anything and everything that's included in the estate planning process. Once again here's Todd lets PN's Susan powers. Welcome back tot have a couple questions from listeners for you. First question comes from Michelle in Norton mass and Michelle Wright with my mother recently passed away. And I just learned that she transferred her home to me after my father died in 2006. And kept delay ST I am an only child well we'll might cost basis be her original cost basis of 55000. Where the value one heard the of death a 600. You know the stature we are just talking about this problem in the last situation right. This is the single biggest issue and it's worth talking about again it constantly. Comes out room. The difference here is. Michelle. That you're going to be able to wipe your brow. Because in this case it says that that she transferred her home to you. Mean she must have inherited it from your father and I'm guessing so father died in 06 yep. That property was probably jointly owned with mom mom would've got the property assuming it was purchased before after 1977. Mom would've got half step up in basis. Makes sense so now. Mom has 100%. Of the property. Mom then takes 100%. Of the property. And deeds it to you Michelle. But in the deed reserves. A life estate. A simple sentence that you. All out there need to look at if in fact. You recall. Giving your house to your children. In any way. Go back and look at the huge difference for one sentence. If any your deed it says I hereby grant my property to sell Ian Bailey. But reserve. The 08 legal life for state. In the below describe property. Then. You get what is known as a step up in basis what you talked about a minute. If that single sentence is not there it says I give my ass I give the property two. Billion Sally. And that's it legal description. And not about one sentence of reserving a life estate is not there. Very very big differences when it comes to selling the property for capital gains tax purposes. So let's run through the difference in Michelle you're on the winning side of this equation with. So it says that the cost basis was 55000. So assuming that's what Michelle's basis wise and let's open up a little let's say there was a half step up in basis so she got. Now a new 55000 dollar basis plus what they paid for let's just make it a 100000 trees in numbers. Still worth six. Right so now what. So now when Michelle gets the property because mom gave it to you. Your basis would be a 100000. It's a gift during life. And for all of you that read the deed and it says I gave it away with no retained like a state that's your basis I carry over basis from your parents. What they paid is as if what you paid. And then when you go to sell the property if there's no light for states Michelle this is you. If there's no life estate went up child goes to sell the property. The child in this case sells it for 600 says that's what the Kostis. That's what the value it's. The child would be able to say I received 600 minus 900000 dollar carry over basis leaves me a capital gain of 500000 dollars. The tax is almost 30% it's 28 point eight federal and state laughs at them and hit the green there's your 150000. Tax that the kids get to pay. Again assuming they don't live there and most kids don't. Okay that's. How I wanna spend a 150000 dollars on or after. Michelle. You don't have to. Why hasn't shall. Your parent gave you the house but had that magic language in there it's and I reserve life a state the right to live there. That reservation causes the asset to be included. Meaning you'll only have the remainder interest your mom's still kept the president right to live there she was the present owner until she died legally. Therefore the value of that properties included in her state. She then used an end up inheriting it technically all at death. Getting a full step up in basis so it looks like you paid 600000 dollars for the property. Which is fair market value on the date of death. You sell it for 60600. Minus 600. Zero capital gains. Savings. 150000 in tax and likely unless mom had other assets that bomb terror over a million. Zero estate taxes paid when mom died. If she's under a million in mass. Just like in the case he you know what folks he can also. It does seeing benefits if you do you planning in abeyance in addition to eliminating those capital gains taxes he getting that step up in basis. You can all so. Start the clock to protecting those assets from long term care expenses. May have dodged a bullet on this one Michelle from a tax perspective that just as easily mum could have gone into. A long term care facility or dad could've before he. Only your assets properly so Todd it's written a brain knew guide for the month of December. It's his guide to gifting assets in it shows you all of the implications. Be it income taxes the tax nursing home or creditor implications when you in your house that's a way. Call right now for your free copy of this debris in new guy 866848. 5699. That's 8668485699. Can also download a copy and our web site legally exchange show. Dot com just click the guides and articles tapped. Taught our next question comes from parents in Hudson math. In Karen writes my father passed away in October and my mother would like to get some assets to defeat me for Christmas. Can she gift only the 141000. From herself or could she get 20000. Because my father was alive this year or is it too late. Now he's had how we have we stump the payload that's one that's an interesting question. That does a very interesting question first let's explain what she's Thai share. The ability to make gifts. And related taxes that go with that it's called a gift tax. If you give 141000 dollars and by the way folks that's a free BM and explain what that means but that freebie is increasing in 2018. 2151000. All that information we have for you so that is going up authority slate did. Out there that's what's gonna happen. This. 141000. You can make a gift to anybody so who she decides to give to two is not relevant. And that gift is gift tax free. Meaning. Federally. That giver and that's always important because lots of people think the recipient. Has some tax beret because the recipient received this 141000 dollars. Well the recipient. Has no tax burden whatsoever however it is not an income tax burden is not a gift tax burden. The recipient can receive any amount. Of money as a gift. And the recipient pays no tax so I just you know in decades and Todd I am comfortable receiving monetary gift from. You don't have to worry you'll have no coach. Interpretation and missed a Honda and and and so so that's our problem. But big giver. Is the one that has the paint attacks. But in Massachusetts and by the way in every state except Connecticut. There is no state. Gift tax. So we don't have to worry so they're masked making gift there's no state gift tax for the gipper. And there's no federal gift tax for the gipper. Because. The giver is giving 141000. Dollars or less. Per person. Per year no need to file a gift tax return only if taxes. However. If you go over that. That you have to start filing your tax return but you have the ability to get 5490000. Dollars company gift certificate tax exemption. The question though is. Can't we use dot father who is deceased to double the amount of the exemption. No would be idiots. I don't think it matters that he's going to the only way you can do that is he would actually have to make a gift. And he can't make again if he can't sign that check he can't. He can't actually do it. And you can't even agree to split gifts because he would have to sign the gift tax return saying I consent of the splitting the gifts. So I'm gonna say no. On the ability to double that exemption. After he's gone. Okay interesting very interesting C needs take care of these things before and folks not when it's too late. If you have a question you would like to ask Todd. Visit our website legally Justine showed dot com and click on the asked Todd tap maybe will be able to read your question on the air and hopefully. His answer will stop you from being tides mixed real life story in. In the meantime I would also encourage you to call now for your free copy of tides bring in new. Excuse me guide to gifting assets that he is written for you it. Nursing home and creditor implications of giving away your assets there's a better way to on them. And to protect them into and make sure they get to your beneficiaries. Call right now. 8668485699. That's 866848569900. Download your free copy. By visiting legal exchange showed dot com you can also download our podcasts and listen to our show at your convenience. You are listening to Todd black ski apart in with the law firm of Cushing in Dolan. And season power is a penny until it buys it would be Armstrong advisory group we're gonna take a quick break and we'll be right back with more on the relay stories of illegally exchange. Hi this is very Armstrong and if your regular listener to my show you know that I talked a great deal about Smart retirement planning each year certain limits are set by the government and these key numbers are critical for you'd understand if you want to maximize your savings I'm not going to be for you the numbers that this is information that can help you. Playing accordingly and alleviate a lot of unwanted and unnecessary stress call my office right now at 803934001. And ask for my brand new free guide called key numbers for 2018. It's chock full of charts and statistics they can help you and areas of retirement planning that you might need the most that number again is 803934001. Or you can download the guide right now at Armstrong advisory dot com. Securities are for two securities America incorporated member finreg SIPC and advisory services are with the securities America advisors incorporated Barry Armstrong represented if Armstrong advisory group in the securities America companies are on affiliated representatives of securities America do not offer legal or tax advice always seek the advice of a professional familiar with the laws in your state many of you listening to the legal exchange know that Todd let's do you spent his career helping people just like you with their state planning needs a common theme among his clients is the question of legacy claiming. We all leave our children in the best possible shape but gifting our assets in a home or vacation property in creating huge capital gains tax problem that the kids choose to sell the home. The problems can become disastrous if one of the adult children has creditor issues or goes through divorce you know the old adage you can't take it with you and that inspires people to start giving assets away as gifts it can be a good strategy but the devil is in the details pushing in Dolan has written a brand new guide that explains gifting strategies it's pretty by calling 8668485699. You can also download a copy on our website at legal exchange showed dot com just click on the guides an article stab you worked a lifetime accumulating well now you should spend a few hours making sure it stays in your family though right way. Call 8668485699. Or downloaded right now have legal exchange showed dot com. Into the real life stories of the legal exchange we Susie powers and Todd let's game. Susan until they've been helping people solve their legal problems for years and they can do for you to. Be a part of the show by emailing us your story on our website at legal exchange showtime drama that's legal exchange show time job. Welcome back into their real life stories of the week it's jeans and his comparison thing into the sides of the arms on advisory group. And doing by Todd lets be a partner with the law firm of Cushing and talent. With a masters in taxation. Until they show we have tides bring new guide for the month of December it's tides fifteen guide in its complete guide. To help you understand the income tax and state tax nursing home can creditor implications. Of giving away your assets unfortunately. So many people find out. When it's too late. What they have done they may have created unnecessary taxes due by giving their assets away there is a better way. To make sure your assets are protected to make sure that you were feeling avoids probate. To keep those assets in your blood lying in maybe even to eliminate your ST taxes. Call right now for your free copy of tides bring new gifting high. 866848. 5699. That's 8668485699. Or visit our website legally exchange show dot com. And download a copy on the guides an article. Says it's time now to think outside the box. Yeah 'cause I think a lot of people lines they people may be lawyers. They don't always do that. I you know I guess they call us counselors for reasons. Our job is not just to know the law. But tech council people. When they wanna do certain things. Tellem yes she can do it. But then tell him what the pros and cons are. Of making that decision. And then let them eat it. Here's a prime example of that so. I'm gonna life. You know about two years ago. They entered a nursing home. They only have about they only have a whilom place. And they both then and only one in the nursing right they only have a whilom place. But to work our Foreman and one million evidence the homes there's about three million dollars of other money some of which is tied up and and Ira model itself. That would all be at risk I get it there that's a good point 100% at risk so they had gone to a couple of attorneys. Two years ago. And both of the attorney said well. I know you wanna apply for Medicaid. But you didn't do any planning and there's really no last minute playing that we can do for you. Because you really worth too much so I think at this point doing nothing. Is probably your best approach. You know I didn't know a lot about their situation when they came in obviously at first and I'm starting to learn that as I talked to them but. When I hear that story my initial reaction would be. I can't imagine doing nothing is ever the chance. Would sell minority in the nursing home name. Counseled with some twenty years ago or were they concerned at that in winners. Like they were in the nursing OK so steel that's why they went higher day I went there because even try to pay for two year high yeah in this is what they're worth now. They still have about three million. And about a million dollar home and a healthy spouse. So I said all right well let's explore both sides. Trying to apply for Medicaid can I do what I can tell you what those numbers with out explaining we can absolutely get. Him on Medicaid in the healthy spouse taking care. That's probably going to be expensive yet when I say expensive in what way. Well we know the house can be transferred to the community spouse that's not a problem. But you have to liquidate the Ira. Income tax ramifications that. You're gonna have to liquidate. 22 and a half million dollars in their investment portfolio. Who knows how much capital gain. Is you have to weigh in those Casilla and I think a lot of date. Liquidate itself. Your convert everything to cash. That you can stick 120009. Dollars. In the healthy spouses count them. All the rest we need to go and this one of these Medicaid annuities for the healthy spouse that's a large and Gordy I'd get it. But it would work rain and we have the house we have her 120900. Dollars. And as she would have this annuity is so large annuity paying her a relatively large. I'd imagine monthly pay out. I couldn't imagine that you win the Payne had Jiang enormous tax now taken an approach that I think you could I think the tax bill would would be really high in Seoul. One I think before so maybe they're response of of not applying for Medicaid I'm agreeing with this plan saying look. Yeah maybe year. You shouldn't apply because if you do liquidated let's say you spend. 300000 dollars in tax room in the institutionalized spouse dies in six months. All I got me a funnel that money and tax that really didn't get that he can think of these things. Plus the surviving spouse would have so much darn money coming in every month at the surviving spouse got sick. Down the road they likely would be eligible for Medicaid is they get too much income coming in yeah what do you do you're in a pickle folks and you know. Do you plan and it ants Todd sky beauty is written. For the month of December it is brand new it's his guide to gifting assets. Any key is you the alternatives to just giving your stuff away he deet tails all the implications that quite frankly. So many people do not even think of when they just put their kid's name on their house they put their. There brokerage account in their kids names they're so many tax implications folks. Call right now for your free copy of Todd skies and learn the right way to hone your your your assets. 8668485699. 8668485699. Or download a copy on our website legally exchange. Dot com. This is where you think outside the box the doing nothing approach I don't agree with because back then two years ago I would've said you know what let's plan. For both of you re one you've got an income you've got an estate tax problem we might as well set up to trust right now. On for both of you make an irrevocable. Put assets in there much she can so whenever that first Clausen and nursing home dies we will have at least avoided probate. And sheltered assets for state tax purposes. Provided a bloodline plan taken care of the healthy spouse. And most importantly started a five year waiting period running for both of them. Indeed donut to sell you brokerage out at all variants for the title there's no tax implications of doing history title and Susan we've done that out of time again. You re title the assets into the into the east trusting you get a five year clock starting you get an escape plan going. Are you gonna have to private pay poked in Chile for five years if that sick spouse in the nursing home lives that long yup. But you know what. It might be better because now I've not incur all those taxes. I still have three million dollars kicking around if at the end of the on again there's probably interest in social security and pension he got taken to a star. So even if at the end of five years I spent 500 grand yeah. On the nursing home I still have 2.5 million left. And Africa expert you've tapped steer I'll play at that point in now if you just do nothing. And some analysts to ten years there's a million. I agree it's you have got the fun you've got that protection in place you know what you're limited is capped in if you don't do it. And you do the last you do the last minute planning we liquidate everything. Not only do you have the huge tax burden. On the liquidation. I don't think you're gonna be able to protect the assets of the six now if that healthy spouse excuse me. Later gets sick. Yeah 'cause they got this huge income stream coming in. And so I think you really shot yourself in the foot. Whereas this way starting planning even after somebody's in the nursing homes seems crazy. But in the long run. It's gonna work out better for me both parties. Protecting. Everything no matter who gets sick or when but it's gonna cost of that. Period up front and it is sad way around the if that six ballots lives for three years yes your out of pocket 300 B you know what your three years into a five year look back and you haven't wasted. The spouse that was in the nursing emea wasted their state tax exemption. Huge gains from this approached you got to think about the estate taxes and there's a lot to think about when you're doing planning whether it's gifting. Whether it's nursing home planning estate tax planning to divorce proofing. There's lots of factors that go into a planning decision of any time. And otherwise you could. You could do something and ends up. Hurting you more than helping you're hurting your family yeah help you could inadvertently be creating greater taxes. He knows how much we hate taxes we. Unnecessary voluntary taxes went more than anything you own your assets properly you have yours the clean and place. You can help them avoid probate you can protect from themselves. You can protect inheritance from. Future divorce is you can protect assets for a special needs child or special needs Korean child in the meantime you are taking care of each other. First that's the primary objective folks there is a better way to pulling your assets. Find out about the income tax implications the estate tax implications the nursing home implications the creditor implications. There's so much bad that comes from just giving stuff away you absolutely do not want to do that before you educate yourself folks. Call right now for your free copy of Todd has created new guide to gift dignity is written. For the month of December get your free copy right now by calling 866. 8485699. 866. Heat for eight. 5699. Visit our website legal exchange showed dot com you can download your free copy of the guy out there in the guide the articles tapped. You can download our podcast if you missed any of today's show. Real life stories Todd black ski from the loft from Cushing and Allan thank you so much salt thank you Susan always a pleasure. I'm Susan Harris have financial advisor with the Armstrong advisory group thank you for listening will be back again next week on the relay stories of illegally Jeanne. Securities offered through securities America member finreg SIPC and advisory services are with the securities America advisors think securities America and its representatives do not provide legal advice therefore it's important to consult with your legal advisor regarding your specific situation shouldn't on the Armstrong advisory group real life stories of the legal exchange and securities American companies are not affiliated. Many of you listening to the legal exchange know that Todd lets you spent his career helping people just like you with their state planning needs a common theme among his clients is the question of legacy claiming. We all leave our children in the best possible shape but gifting our assets in a home or vacation property and creating huge capital gains tax problem that the kids choose to sell the home. The problems can become disaster support of the adult children has creditor issues or goes through divorce you know the old adage you can't take it with you and that inspires people to start giving assets away as gifts it can be a good strategy but the devil is in the details pushing in Dolan has written a brand new guide that explains gifting strategies it's pretty by calling 8668485699. You can also download a copy on our website at legal exchange showed dot com just click on the guides an article stab you worked a lifetime accumulating wealth. Now you should spend a few hours making sure it stays in your family though right way. Call 8668485699. Or downloaded right now and legal exchange showed dot com. Are you financial advisor who lacks a formal succession plan you're not alone according to investment news 43%. Of financial advisors are over the age of 55 and many have no contractual agreement to care for their clients once they retire hi this is very are strong and we might be interested in buying your practice you worked hard but now it's time to find a successor the -- -- advisory group is a regional firm and we are looking to grow our business through acquisition we will consider both are gays and transactional oriented firms with a solid stable of young advisors who put your client's needs first and provide them with a service and attention to which -- become accustomed if you're interested in talking with us please call me at 803934001. That's 803934001. Or visit us online at Armstrong. Advisory group dot com securities offered to securities America incorporated member finreg SIPC and advisory services are for the securities America advisors incorporated Barry Armstrong representative Armstrong advisory group in the securities America companies are unaffiliated.
READ MOREREAD LESS