Real Life Stories 3-12-17
Mar 12, 2017|
A show about every day people just like you who have run into legal problems or encountered legal issues because of circumstances that they either didn't plan for, or were subjected to.
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 and Tillman 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 and our web site legal exchange showed dot com 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 the lead late teens buying season Paris nothing into the eyes of the arms on advisory group. Don't think by Todd let he apart with a lot from Cushing and Alan. With a masters in taxation. Todd welcome how are you I'm never better and you I am great thank you what do we have on the the docket for today we have three stories. Unbelievable there's shocker I know this when it actually really it's such. Practical. Situation I ran into. And it was where the you know we're talking about funding for full had a revoke Coble trust and we had discussed whether or not they want change to your mobile trust because. One of the things they were doing. What's protecting assets from the nursing home for a lot of other questions or Al Hadi fun with life insurance honey pundit with IRAs. You know. And they had these ideas and and there's a lot of misconceptions about funding trusts in general. Never mind these specific assets so run through a whole host of specific assets. At what you would fund the trust whether it's revoke a bull or irrevocable thought that it would be perfect for the guy. I'm it's partly. 92 year old widow who comes. Unbelievable healthy and never went against the H&R. And and you know put some assets and how to testament Arie trusts and has one daughter that she really wants a protector assets for analysts had in place with the test elementary trust. Have to explain what all that yet you folks but I'll end up telling you what we ended up doing for her and even at 92. The question that was being bag was to try to protect assets that are signal. They turn on explained here how we ended up on that case. And then finally at just that and a brilliant except. I guess that's a happy story it's it's one in which planning was done back in 2002 for one of my clients and we had put the home in some money into the trust. And then we had left some money outside the trust and now the individual lived her life from 2000 to 2017. Now they're going in the nursing home in the nursing home advise them to Cecil and so to get. The Medicaid application and she thought better about it and called me and said what you did the trust planning maybe you can help us and I explained the process and explain to you exactly how that can play out and how the Medicaid application process will work. For someone who did planning in advance. Cart thinking maybe you folks are listening thinking well I wanna do my cleaning an advanced that you're not shore. If you need a regal global trust during eerie bill global trust that you know what you want to accomplish. You just don't know the right path for you. Hi has written a guide for the month of march it's the difference is between re vocal bowling eerie though global trust in this guide will help you decide what type of trust. Is right for you injure feeling. It talks about the various factors he need to consider when determining this. It talks about protecting your home in your money the best way to leave assets to your children including the option of divorce proofing your inheritance. It discusses income and estate tax issues of both types of trust. In it outlines how you can not only reduce but potentially eliminate your state taxes. Call right now to request your free copy of tides bring new guide revoke double vs eerie vocal tracks. 8668485699. That's 866. 8485699. If you prefer you can always download a copy on our website legal exchange showed dot com just click on the guides and. Articles. Socialist talk about funding these trusts tank revoke a point irrevocable trusts and that was really the premise of this entire first story situation that I that I ran into. Last week and so again the individuals come in they have a revoke of trust and who. We certainly based on their age talked about the fact that they wanted to Nathalie update their documents by. They were. And and and maybe they wanted to shift to the irrevocable trust which we ultimately end up doing. They didn't realize that they want it now and irrevocable not just remarkable. The beginning part of the meeting was about finding their existing reputable trust and had questions about. Putting either life insurance in or. An IRA. And basically said they say it's meanwhile the re vocal trust cannot be the owner of the IRA. Or the life insurance policy. But is it best to name the trust or people as the beneficiary. Beneficiary not owner so there's a distinction wrangling beneficiary and owner. We currently the south for. Folks the first thing you need to do is think about. And gather the value of the estate. Itemize what you have real estate vacation property rental property IRAs. Annuities. Life insurance these are the categories. That your gonna be dealing and get those all ironed out and find out what percentage. Up each category make up your statement. Then you all that's gonna impact how you go about funding the trust right and and what should go in well let's talk a minute about. Life insurance. Because that's a big item might remember life insurance is valued on the date of death. Not what it's worth it. So if it's term insurance has no cash value has zero rate. If it's whole life for universal life it probably has some built in cash surrender then. But that isn't for state tax purposes that is what you care about. You care about the death benefit face value but what if it's your kids who are gonna get that death benefit it's still included in here ST exactly and that's why funding the trust is important so. That the mistake they were thinking about here is that the life insurance policy. Do you have to change the owner. Or just the beneficiary. Well firmly re vote Kabul. Trust standpoint you only need to change the beneficiary OK and I would say that almost Barton on almost every time. The best beneficiary of a life insurance policy would be your re vocal trust if you have a regal Coble trust okay. Do you change the owner. Just make sure the money gets into that trust and avoids probate so that it can be sheltered Farsi tax purposes and so they can be distributed to the family members. In a way that you want me be divorced proving you know more or whatnot and so that takes care that that's whether it's term or whole life. Now if it's. If it's. Up big policy that you wanna get out of your state for state tax purposes because. Let's say a million or two million dollar policy and it's causing your state to be taxable okay. Then you wanna get it out of your state then you need to make the old error and the beneficiary. An irrevocable life insurance trust which is going to be different and you are irrevocable Medicaid two very different. It will be completely the ownership and the beneficiaries. Completely out of your state first a tax purposes thereby lowering. The value of your state keeping you hopefully now under. The estate tax exemptions so that we don't owe any taxes is there a five year look back for that kind of a transfer as well. For Medicaid there would be but likely people that are doing revoke of trust and worried about a state taxes at the federal level for shore. Don't really care OK but yes there would be a five year waiting period. Okay. And if and if it's an existing policy a three year waiting period to get an out yours that you can't transfer light on policy ahead. And yeah on your death and then die it would be included. OK but there's never a downside to getting it out eat it and if you don't transfer it so transferred and hope you live the three years. Never downside. From on Medicaid perspective life insurance very tricky right if you're doing a Medicaid plan. Then you can make the designated beneficiary York irrevocable Medicaid trusts. But not likely the owner because if you change the owner every time you pay the premium you be trading in new five year waiting period for Medicaid eligibility okay. So you don't wanna change the owner on a life insurance policy whether it's term or whole life. Unless. It's paid up. So term is never paid up. But if it's a whole life policy and it's paid up then I would change the owner and the beneficiary. To the irrevocable trust okay because I wanna not only not that it would get out of my state. Like the irrevocable life insurance trust what. But because I wanna protect it from the nursing. So you got to change dealer okay so that's a little a little more complicated when you're dealing with life insurance. IRAs you're absolutely right never change the owner only changed the beneficiary. For the re Boca bull or the irrevocable I would say yes you can do it either way. As for revoke a bowl whether you're married are single doesn't matter. When you're single you can make the designated beneficiary of a Medicaid trust the Ira. But if you're married I wouldn't do that because when one spouse dies the other spouse might be getting minimum distributions that could be. Larger then the income earned in that would cut the principal distribution from the trust and I don't want okay. Other than that folks real estate rental properties brokerage accounts. They can be re titled we've moved to either the revoke Kabul for the irrevocable trust. And I recommend it in order to success. Only utilize. Which ever trust you established in you know funding these trusts the re vocal in the arena he Indy eerie vote public trust that's included in Todd guide. Along with all of the other differences and more similarities. Of these two types of trust Todd bring you guide is yours. You will call to get your free copy at 866. 8485699. That's 8668485699. You can learn hi if Italy can avoid probate you can protect these assets are nursing home costs. You can also eliminate your ST taxes. You can download a copy of tides bring a guy on our website as well legal eggs gene showed dot com just click on the guides and articles tab. In it he missing two days or any of our cash youth you can download our podcasts and listen catcher leisure. This is a brain knew guide if you have a requested that you should now 866848. 569. You're listening to Todd black ski apartment with a lot from Cushing and Alan I'm Susan powers of financial advisor with the arms on advisory group. Are gonna take a quick break and we'll be right back in just a few minutes here on the real life stories of the legal exchange. Securities offered to securities America member finreg SIPC 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 she named all the Armstrong advisory group real life stories of the legal exchange and securities America companies are not affiliated. -- state an asset protection planning can be overwhelming where do you start and how do you know what type of trust is -- for you hi this is -- are strong and I'd like to talk to you about the law firm of Cushing handle and they've been creating a state plans for folks in New England for more than thirty years and they can help you -- -- all the different types of -- available I can understand the confusion when it comes to a state planning do you need to -- global trust do you need an irrevocable trust and what's the difference -- -- an expert advice and -- -- dollars put together a free guide it will help you decide the best plan for you and your family you can receive this free guide the differences between -- global and irrevocable trust by calling 8668485699. They can even show you how it's possible to eliminate your state taxes while at the same time protecting your assets from creditors and long term care expenses caller right now and get this free -- 8668485699. That's 86684856990. Or download it right now from their website legal exchange showed dot com. -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 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 buildings 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 legal exchange I'm Susan Harris stepping into the sides of the arms and advisory group. Enjoying by Todd black ski apart with unlocked from at Cushing and Allen with a masters in taxation. On today's show we have tides bring you guide is written for the month of march it's the difference is between revoke a ball in your evil global trust. And if you've been trying to figure out what type of trust is right for you and your family I think that this guy will be agreed helped TO. It will show you what factors she need to consider including your age your marital status your network your family dynamics. It talks about protecting your home in your money. It discusses the best way to leave assets to your children it deet tails the income and estate tax issues of both the regal global. In theory of a global trust any outlined how you can not only reduce a potentially eliminate your estate taxes. Call right now to request your free copy of this bring new guy at 8668485699. At 8668485699. If you prefer you can download a copy on our website. Legally exchange showed dot com just click on the guides in our. I'll tap. So Susan let's talk about this next situation and you can get grief sometimes from something like this now this was and 92 year old. Minute each box and movement brings her apparently only daughter turns out to be her only child. And we start talking. About planning. And I have to ask like I do everybody pulled. In which he told me 92 almost all of that you would get so. Again I didn't think. That that was the case but it doesn't change that age should not change your recommendation I think that's I'm trying to drive here as a point. So let's flip the strength so what do champ she's got an only child she's 92 she seems to be doing fine. And she's really happy with the previous turn. Shocker. And and turns out that. Way back when she was in another state. She had a testament Arie trust and what is that how is that different for them. Live contrasts OK a customary trust means that it's sketchy too much as I have a trust I sort of take a look at. And I see that it's a will she hands. And what that means is the trust is created in the whale. Okay which means it does not exist until you die so you can't find it in advance. So if you can't find that in advance to it's created inside the whale. You're not even avoiding. So I'm not sure why it tests Metairie trust would have never been done for her back whenever she did it doesn't seem to make really a lot of a lot of sense to me. Missing out one that one major area that many people want which is avoid probate. To order and I found out that when she moved up here (%expletive) on trial lawyer and had a revote Coble trust on. So I'd look at that and answer her questions regarding. You know what apparently wasn't explained she wasn't done right turned out that. IOC would answer questions and that concerned she had were addressed in the revoke of trust as I said it ultimately is done right. A that it except it's revoke a bull and in one of the concerns you've mentioned in fact you brought your daughter with you one of the concerns you mentioned was we don't. Making sure that these assets get to your daughter and that they're protected for your daughter for life race. That's that after you're dead that divorce proofing that creditor protecting those kinds of things. And I said okay fine I said the revoke or trust you have is not doing. Has had so that's one item we need to modify. I think that why you're so concerned about. Making sure when your daughter gets these assets that she has actually get him it's held in trust for Aaron. That's protected for her and for her whole life wouldn't. I said are we being short sighted by not thinking of the fact that we also wanna protect them for her. Well your living room. Mean what if you got sick and went in the nursing home there could be a lot less assets left. For us to protect for her after your gone India ongoing trust. And she said yeah that to the point. So now I know that the test Metairie trust was really kind of useless and the revoke a ball trust while it did some of the things that they wanted to do. Did not do. And they are done there are differences there is some marked differences between every vote among the area local traffic and Todd sky that he's written for the month of march. Distinguishes all of these pin differences and similarities between the two types of tracks. You call right now to get your free copy of the spring new guide at 8668485699. At 8668485699. If you prefer you can always download a copy on our website legal Eckstein showed dot com just click on the guide and. Article. And so let's continue with the announces okay so now we've determined. What she has has pros and cons more cons than pros. And we've determined that going forward we're not only gonna fix that but we're gonna make it irreparable. And you and and by the let me tell you got home worth about 800 in festival assets were about a million mention about 300 and and Ira and about a hundred cash. Turns out by the way between Social Security pension and all interest and dividends that are being generated. She's. Able to live. On that she's about 80000 a year she's getting about a three it's close. But she can live on it. But so be it those are the facts right so take those actions are what we gonna do. Well. If we set up an irrevocable trust the first grief that you might hear from. People would be taught she's 92. Which. Doesn't take five years to protect these assets from the nursing home. What does. It takes five years well why bother. Me. Because I'm not get a bet against her she looks great she's in good health five years and maybe she makes it. What she doesn't. No downside as we say over and over and over there's no downside to getting the clock started when she makes it three years is all for not. Yeah great question so let's say she makes it three years now remember what is it what assets in my gonna leave outside the trust here. The 300000 in the Ira can win anyway without a big adverse tax consequence we talked about that just in the previous story. About funding a trust with a night so that Ira is gonna stay out of act ordering you wanna leave a 100000 in cash your bank account outside the truck that's fine. Let's not get greedy here we got one point eight million between house and money that we protected. Good idea engines. So to your point Susan one she's really not spending principle anyway so this money is likely to disorders they stagnant. She's spending what she's earning. And she makes it three years and even if during a three year period she needed a little and home care she need a little more expenses. Or whatever. Maybe there's only you know instead of 400000 there's only 300000. Left outside the trust. When she gets sick in years 3. Or am I gonna do. Probably get a private pay for two years. We got the money IRA you take it out its taxable I get a medical deduction it's almost tax free. Use it to pay the national and get me beyond my five year window 'cause the clock running only need to pay to repay two years. To see one point any one million mean millions and you spend maybe 300 grand over two years just to save one point eight million. I would do that every day the point is that. With the clock running we have that option in teaching me never going to a nursing home but. Everything else take effect on day one. Pro me heavily instantly doubling in all of that it takes effect that they want and and having that trust created test. Take care of the divorce proofing a creditor protecting where the only daughter so that that money would would be available via for the daughter and protected. From her creditors for her whole Muslim. And then she said can this daughter I I don't think is gonna have any children there is at this point there's no children. No grandchildren she wanted to go to charity so everybody's gonna win the Fam is gonna win cherries are gonna win. And and and so what a wonderful way of of setting this up and even though it's an irrevocable trust I explained to her that. Her life and change she got 400000 dollars that we left outside the trust. Plus she's living off all income from all her money just like before. Life hasn't changed at all. In which they say about this do and that creditor protection for the daughter is moms 92 Sadat is probably in her sixties. That money's gonna be protected from her potential nursing home expenses our whole inherent to be protected. Because of that and Harris trust protections built in the years so it's a win win win win all the way ala Rocco liberalize got to understand too we are planning understand which kind of trusted you for you when and it and it can work she obviously had. Bad advice along the way yet and you know what folks I would say if you request tides guide for the month of march is brainy guy gets the difference is between revoke global. In theory will quibble trust maybe you're not concerned but nursing home cleaning in the revoke Coble trust. Makes sense for you maybe just wanna make sure you avoid probate or reduce her limiting your state taxes. Maybe you have a special needs child or grandchild that you're concerned about. Maybe you display do get your cleaning in place because you want to protect from those potential future divorces. What ever your objectives in your goals are this guy is gonna help you decide what type of trust is right for you in New York annually. Call your free copy right now at 866. 848569. And that's 8668485699. If you prefer you can always download a copy on our web site. Legal exchange showed dot com just click on the guides and articles have and you can download your free copy. You're listening to public key partner with a laugh from Cushing in Dolan. I'm Susan power as a financial advisor with the am trying advisory group and we'll be right back here in the real life stories of the legally exchange. Your financial strategy has to include a thoughtful insurance plan. Insurance exists to protect your assets our friends of 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 at 844 and 99 match let's 84499. Match insure a match works with the leading carriers in the industry like our bella Plymouth rock and more. Well today 844 of 99 match or go online and ensure a match dot com. Hi this is very Armstrong did you know that the federal funds rate set by the Federal Reserve influences all other common interest rates the federal funds rate is the rate that banks use to charge one another to borrow money and while it's one of the lowest rates in existence it is rising observers expect additional rate increases in 2017 the Armstrong advisory group has written a free guide to inform you of the challenges that exists while investing in a rising interest rate environment if you have questions about how these rising interest rates might affect your financial strategy call 803934001. To get this free guide were downloaded at our website financial exchange showed dot com if you have over 400000 dollars in invest more assets you can set up an appointment for a free consultation with one of our advisors who can help you navigate this new rising interest rate environment that's 803934001803934001. Terry suffered a securities America incorporated members in SIPC and advisory services are with the securities America advisors incorporated Barry Armstrong representative Armstrong advisory group the securities America companies are unaffiliated. You're listening to the legal exchange and it's 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 I think questions from listeners for you. First question comes from Rudy and aren't double masks and review by Ricky writes my wife and I owns seven rental properties jointly in the air valued in total around twelve million dollars I generate around 200000 a year rental income. But I'm concerned about the state taxes and I'd like to start passing some of the properties onto my son who will be taking over the property management forming. What is the best way to do that. And I'm gonna go on a limb here and say that they had him for years Hampshire and if they've had him for years. Almost regardless of what they paid for them if they've been renting them for 27 and a half years the basis is zero. And that's critical. When you think about the bill gain capital gains. That's associated with properties like this right so. Why bring that up this has he said he wants to start getting it to his children passing it to his children her son is only his only son now. Folks. If you are thinking about this idea please stop thinking about. As a bad idea and explained why that it's time so even with twelve million dollars with basic estate planning right husband and wife. They can shelter. Almost eleven million. With basic revote trusts okay. So or irrevocable I don't think this client needs are for this client needs regal. So if I can shelter eleven million dollars from estate taxes now. Leave me only one million dollars subject to tax even at 40%. And I know what's 400000 that's a lot of money. That really is small. Compared to the capital gains. On even if ten million of the twelve million real estate and there's zero basis and it's all built in gain. And some of it is depreciation recapture. Even if you took ten million of gain in multiplied by 30%. Capital gains tax. That's three million. And that would be triggered because if he deed to his son during his life right he would be giving his son his basis which is as Cyril because he's depreciated it right so you really before you make any decisions about gifting real estate especially. Rental property. You really need to do a basis analysis. You need to look at the basis and determine whether or not I'm creating. A larger. Capital gains tax liability by giving it away to my child and building in the capital gain. Or dying owning it paint some F state tax. And. Getting a full step up in basis for capital gains tax purposes so you kind of pick your poison which tax is larger. Yeah I'll take four degree and vs the three million yea inadvertently trigger by just giving you know we'd during your lifetime. All artillery unit to consider the Massachusetts state tax to which I get it. There would be you know probably a million dollars in Massachusetts state got a. He got relieved and that all added on and tapped as much as if he just Steven Holloway three million if you had yes you really got to look at what that capital gains tax is. Before you start making gaffes and there's credit problems is deport your subject subjecting it all the divorces. You've given away your rental property while you're living you've lost the income yeah maybe maybe you need that rental income to live on. And it looks like he is he'd he'd have to then talk to an attorney ever begins. He's got these seven rental property he owns jointly with his wife not even wealthier could've kind of a creditor protection from that standpoint he actually writes isn't he should absolutely be owned and LLC's. Probably multiple. LLC's 22 nevermind losing your assets to a state taxes you could lose. Two lawsuits went living because of fuel them personally they would soon you personally. And they would go after all of your assets not just that whatever is tucked away in the LLC or multiple. LLC's would be the case here and in even if you're looking at in a little vacuum. The income tax perspective his son is gonna be taking over the property management of these properties for him which means he's involved which means maybe he will want to keep them. When he inherit them in it he inherits them. Instead of receiving them is they get. He can start read depreciating them calling for spreading the business so with the wind wind from a tax perspective apps you gotta do it right and if you set up the LLC it could be already in existence for him because if he came to me saying I inherit all these properties the first thing I would say it's we set up an Allah sake right. So LLC would be definitely in dollar lots of good questions there again I you need to get some legal advice through idiot I would say sooner rather than laid there and maybe here at thinking about wild act and it sounds like my situation. I have a lot of rental properties. You need to own them properly there it's just fraught with potential nightmare is if you don't have amnesty plan in place. If you're trying to figure out what type and is steeped in what type of trust is right for you when your family. Todd Skype he's written for the month of march it's the differences between revoke double in Erie evoke double trap we'll help you determine what type of trust is right for you. You can call to get your free copy of this bring you guide. 8668485699. At 8668485699. If you prefer you can always download a copy on our web site legal exchange showed dot com just click on the guides and articles task. Todd next question comes from Marjorie in Dover, New Hampshire. In Margery writes I created an eerie vote global trust last year and I'm in the process of doing my taxes for the year. Two I need to file separate tax return from my traps if so will I have to pay taxes at a higher tax free. Lot of. Unknowns in this question. But I'll run through mall and give you an answer one way or another tank. So the just because you've created one of these irrevocable Medicaid trust does not in and of itself mean. That you have to file an income tax okay it's strictly a function of what you've put in. So Marjorie if you've created the trust and funded only with your home that you don't. Or a vacation home that you don't rent. Then it would seem to me that there is no income being generated by that trust assets. If there is no income being generated then there is no need to file a form 1041. And report thanks in no income tax return. Now if Marjorie on the other hand you. What the real estate and that we just talked about and at that time you created it you're advised and told the lawyer that you wore. Agree in agreement that you're gonna put some money. Maybe a bank account or or an investment portfolio. Into the trust. Well then. Likely that individual would have gotten you late tax ID numbers which you would need for the trust so that you can open up these accounts. If you got the tax ID number and you ultimately never put the money. So there's no income. Then you still don't need to file. Why. If you don't file with the ID number you are gonna get a letter from the IRS next year. Or later in this year saying. Where's the tax returns and they don't know whether or not using Tammy and. And so then unique to send back that letter with a letter of your own explaining that there's no income. And ultimately be able to believe it because they'll see note 1099 issued under that ID number and they'll if you have. Jittery needing coming interests that keep on major atrocity having announced that thin air and. So like rental property he or investment portfolio. Is. Then yes you should file the form 1041. When you finally make sure you check the Boxee you look at the form the front page of the form upper left hand corner. As a bunch of boxes. With trust names after complex trusts simple trust grant tore trust. Check that box. Because that's what it is if it's my trust I don't know if somebody else to make it's that cramped tort trust and then. You fill out the return or your accountant fills up to return. Now. When you get this returned sent to you to sign or whoever the trustee is have to sign the return. You have really no idealists on. Its face if you're not an expert York. If there are any numbers at all on that front page that return any numbers and any of the boxes. And is general. Tell your accountant you did it wrong there should be no numbers blank returned. And then a K one kicking out from that returned. A little grand toward letter to you saying here's what you're trust earned interest dividends capital gains whatever it is it. And you take those numbers and you put them on your personal income tax return form 1040 just like he always did in the past. And I'll the return and pay your taxes no extra taxes the trust level tax neutral folks in the Asia quick tip. All zeros or nothing on it tax return at all if you have a question you would like to ask Todd and visit our website at legally exchange show. Dot com and click on the house Todd tap. Maybe will be able to read your question on the air and hopefully his answer will stop you from being tied next real life story. In the meantime if you would like to get a copy of Todd and bring you guided he's written for the month of march. It's the difference is between revoke Opel in theory able Coble trust. It will show you what type of trust is right for you in your family based on your own individualized. Goals and objectives. You can call your request your free copy of this guy right now at 866. 8485699. At 866848. 5699. You can also download a copy on our web site legally Justine showed dot com just click on the guys and articles tab. He missed thingy today show he can download our podcasts as well listen you're leisure. You're listening to Todd black ski apartment with a lot from Cushing in Dolan. I'm Susan powers of clinging to advise it would be Armstrong advisory group will be back in just fifteen minutes on the real life stories of the legally exchange. It's not too late to get a great grade and home mortgage leader bank specializes in a wide variety of purchase and refinance loans at some of the most competitive rates in New England a dedicated loan officer will work with you every step of the way and their local decision making means of faster closing call lead 776917. B 900 that's 8776917900. Or visit leader bank dot com member FDIC's equal housing lender and MLS number 449250. Subject to credit approval. Leader bank a step ahead. Hi this is very Armstrong did you know that the federal funds rate set by the Federal Reserve influences all other common interest rates the federal funds rate is the rate that banks use to charge one another to borrow money and while it's one of the lowest rates in existence it is rising observers expect additional rate increases in 2017 the Armstrong advisory group has written a free guide to inform you of the challenges that exists while investing in a rising interest rate environment if you have questions about how these rising interest rates might affect your financial strategy call 803934001. To get this free guide -- downloaded at our website financial exchange showed dot com if you have over 400000 dollars in invest more assets you can set up an appointment for a free consultation with one of our advisors who can help you navigate this new rising interest rate environment that's 803934001803934001. It's. Dirty suffered a securities America incorporated members and SIPC and advisory services are her securities America advisors incorporated Barry Armstrong representative Armstrong advisory group the securities America companies are unaffiliated this is a special announcement for all landlords chasing down league rent payments and making trips to the bank to deposit checks take a hassle out of round date with zero and leader banks all mine rent collection tool he went automatically deducts tenant's rent and deposited into your account visit WWW duds he ran dot net to learn more we see rent your payments for each unit to receive regularly on the same day every month tenants pay nothing in the first six months or free for all landlords visit WWW dug see rent dot meant to learn more or call 7816418691. You're listening to the real life stories of the legally exchanged 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 what's presumed to. Be a part of the show by emailing us your story on our web site has legal exchange showed dot com that's legal exchange show time job. Welcome back into the real experience of having links seems fine season Paris of clinging to advise him to the Armstrong if I three group. I'm joined by Todd black ski apart and with a lot from Cushing and Dolan with a masters in taxation. On today's show we have tied to bring you got that will answer the most common question he receipts which kids. What is the difference between re vocal in your evil global trust. When you read this guide you'll find that there are much more similarities than differences. It will show you how both trust we'll help you avoid probate. Take here that bloodline complaining if you perhaps one news feed your kids from yourself if they are not responsible financially. Maybe there's a gold digging daughter and her son on the U wanna protect those assets from you can protect from future divorces would both types of trusts. It discusses how you can reduce and potentially. Eliminate your state taxes. And it will show you how to protect your assets your real estate your investment accounts from long term care expenses. Call right now to request your free copy of tides bring new guy at 866. 8485699. That's 8668485699. If you prefer you can download a copy. On our web site legally change Sho dot com just click on the guide and. Article ten. So Susan let's take a look at this last situation. Yep. It's it's you hate to use the word happy story because individuals going into the nursing homes others happy about that. It it really shows. The benefits of planning. And it's a client of ours that that and I had back in 2002. And we set up an irrevocable trust and we put the home and we put some money in. And then we've left some money out of course like we always to. And children with a life freely on obstructed on interfered with then. Life was for all these years 2002 out here we are 2017. Really no. Issues. However along the way. She started going to an assisted living. Certainly all right and then some of the bills from the assisted living facility were paid. With money from the trust. Not that that bothers me right away remember these are these irrevocable trusts and and I asked okay well how did. Money. Come out oh it came out from the trustee to the daughter. And then the daughter paid the assisted living couldn't that the way it should be done correct thing that's that's fine our trust as certainly designed to allow for that there's no obligation. Of course by. Daughter to pay the assisted living but certainly it's allowed it the procedure. Was correct. So it's okay that's not a huge problem. Now what will now she's in the nursing home. And also the little glitch is that while she was in the assisted living and we are paying the bills the money was sort of building up. Outside the trust again even though they had used it. And so then they said we'll what we'll do is we'll make 141000. Dollar gets. You know that's the gift tax limit. We'll make 141000 dollar gifts to the daughters. The children to reimburse them for the money they spent. On the assisted living from mom from mom's personal accountant not to trust the personal accountant so everything was good until that. Those were bad race and so now that's the fact pattern we're faced with nice and it's a good job well it is good because they only did that for 2015 and 2016. And the monies available. Available for what you ask available to be available and went a step back at a fifth of its available to be put back. Or what we like to call Q port OK why don't have to worry about it being cured. Folks I know you're here fifteen. You know 141000 dollars is the amount of money that you're allowed to gift away without paying eight gift tax cuts the freebies. If the freebies no gift tax for that much money. Under internal revenue code rules and Internal Revenue Service rules. But not so much for Medicaid. That's because two government entities. They can't really play in the same thing in dot together no they cannot they are mutually exclusive rules and so firm Medicaid purposes. Even though you made that gift from mom's personal account to the daughters. And it's under the 141000 dollar limit. Doesn't matter. Every penny is up five year waiting period. So I said well the trust was created in 2002 and I didn't see any violations along the way. Until this the assets in the trust would be protected the only reason will be denied Medicaid is not because of the trust. But because you made those gifts and 2015 and 2016. And when it put it back. Yang you know what folks it can be confusing you know when you hearing stories about remarkable trust an irrevocable trust and how they operate. And it dated the basis of what the differences between the two Lynn what about the similarities between the channel. Maybe you've been thinking about creating his state and free yourself for your family. Hot guy that he is written for the month of march at the brain new guide it's the differences between B vocal bowling regal global trust. We'll show you how these two types of trusts operate. On it dated the basis they will show you how to accomplish your individual goals and objectives that you can only out. For your family caller right now for your free copy of this brain you guide at 866. 8485699. That's 8668485699. If you prefer you can also download a copy on our web site. Legally exchange showed dot com just click on the guides and. Articles. And so okay I I see that. Pro so far that trust is protect that I see that the downside here with those gifts but but as long as we put that money back into the bank account of mom. That five year waiting period goes away so she's lucky that that money was available and most people who get the menu either kids. So no I know it's it's really helpful that it that it's there. And I said not only wanna get into the fact network you know that they're trying to say well it's not a gift it's a reimbursement. Room for that expenses were paid right why. It you know you can't really do that because. The Q the daughter that paid that assisted living didn't pay with their own money she paid with money from the trust and it's gonna look. Write your reimburse for that race so it's not worth the fight it's better to put it back and and so we'll do that and so now what one well we got like 50000 dollars sitting in. In this bank account. And of course they were. Advice to go to another. Person to do the national title you can get help on Medicaid application go see sound so. Well I I have nothing bad to say about these these folks other than I know them and I know that once. They apply for Medicaid and you pay them to take you through Medicaid application process. Part way. Once that trust gets challenged. They will be like we're not lawyers you need to go hire a lawyer to help you with this aspect of the application process. Right to defend the trust which most of them get pushed back. And that's true and not my question my point would be why do you wanna pay to people. One person go to the lawyers that drafted the document let them apply for Medicaid for you which is exactly what we're doing here. Now the reason I say that is they also don't know how to help. You know to defend the trust in and explain. Why the trust should be approved. They also don't necessarily tell you all the time what to do after degrade it while it may be a little cheaper to use them than a lawyer in the beginning. They may tell you orient it fifty grand sitting in the account now you know the money you put back in whenever the money mom had. Will be able to get on Medicaid is tenacious and that down. What should give that to the nursing home over the next five or four months probably four months. That will be eligible for Medicaid because the stuff in the trust should be protected and will be good to go. And I say OK well. This just cost you 50000 dollars right. That's kit because it. Isn't there a better way isn't there something we can do last minute to try and protect that fifty grand short areas. Well either buying annuity. I know it's a small number. Or will use a pooled trust I think in this case will probably end up leaning towards the annuity. Simply because she's gonna live longer anyway I don't wanna have to give to charity peace and the payback is a saint. Right so your actually saving them management fee and the charity. Peace so there's a little more for the fans are potentially a little more for the family. What the annuity in this case rather than the pooled trust ray you gotta analyze these on a case by case basis it's not one is better than the other all the time. No other lesson here folks is he need to pick up the phone and you need to get some expert advice just find it which are options that are. You can also educate yourself on the differences between we Vogel in your evo Kabul transpire requesting Todd to brain new guy that he is written for the month of march. It discusses the various acted she need to consider in determining. Your plane and what type of trust is right for you it talks about protecting your home in money the best week leave assets to your children. Including the option of divorce proofing your inheritance it. In outlines not only how you can reduce but potentially eliminate your estate taxes. Call right now for your free copy. 8668485699. That's 866848. 5699. If you prefer you can always download a copy on our web site legal exchange showed dot com just click on the guys and articles I have. If you had a question you would like to ask tied. You can click on the asked podcast in Sydney your questionnaire. In if you miss any of today's Barak caches you can always download our podcasts and listen not your leisure. Todd let's keep a lot firmer Cushing and Nolan thank you so much always a pleasure Susan thank you I NC is empowers a financial advisor to the Armstrong advisory group and will be back next week with their real life stories of the legally exchange. Securities offered to securities America member finreg SIPC 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 she named all the Armstrong advisory group real life stories of the legal exchange and securities American companies are not affiliated. Terri suffered securities America incorporated members in SIPC and advisory services are with the securities America advisors incorporated Barry Armstrong representative Armstrong advisory group the securities America companies are unaffiliated.