Hey guys. This is Greg McIntyre, the Elder Law guy helping seniors protect their assets and legacies. It’s one of my favorite times in the evening when the Roomba is buzzing in the background.
My buddy, cleaning the floors. Not a creature stirring, but the Roomba and me.
I just finished writing an article and published it on the Secure Act. The Secure Act was passed into law by the president on December 20th of 2019 and it sounds absolutely amazing, the Secure Act. It’s going to make us more secure. It actually is meant to inspire employers to have a tax deduction and discounted way to implement retirement programs like 401(k) or IRA programs. However, it also severely impacts the way that we might plan or save for retirement. So I would urge you to go to mcelderlaw.com and check out the Secure Act. What you need to know. I actually wrote this and pulled it out of a magazine article I am writing right here. Here’s the magazine article, a spotlight in the magazine called the Secure Act. What you need to know.
I pulled that out. That is true. Under the Secure Act, there could be significant loss or reduction of actual savings that are passed to a child beneficiary. There’s a few key points and key things that Secure Act affects, and I’m going to show those right now. Key points, age of minimum required distributions. Required minimum distributions, RMDs. That age has now been pushed from that really arbitrary age of 70 and a half to 72. You can now not take deductions until you are 72 starting January 1 of this year. You don’t have to take them at 70 and a half. So as you take deductions out of qualified assets like 401(k)s or IRAs, you have to pay income tax on them. If you pass that IRA because you pass away to your spouse as a beneficiary, then your spouse can spread his or her distributions over their lifetime.
That leads into what is called a stretch IRA strategy when passing an inherited IRA or a beneficiary to your children, children or grandchildren. How about non spousal inheritors? People who are beneficiaries who aren’t a spouse? And/or say next to kin, say a child, for example? Could take previously, could also spread their distribution over their lifetime. Well, that was significant because, number one, you might have a child that was a spendthrift. You wanted to make sure they didn’t get a lot of money at one time, and then that money could be spread to be taken over that child’s lifetime. Number two, when that child took those distributions the same as you once you’re now 72, previously 70 and a half, once that child starts taking those distributions, then they’re taxed at their income tax bracket for that year.
I mean, you could be talking about a tax of, I think the highest federal bracket right now is 37%, but really could get into, say 37 to 40-plus percent in tax. I’m talking about taking away that retirement savings that you’re trying to pass to a child and sending a large portion of that to the government. So because you have a child now has to take that distribution over a 10-year period, has to take that distribution over the 10-year period. That’s a huge change. A non-spouse IRA beneficiary must take distribution within 10 years. Traditional IRA owners may keep making contributions indefinitely. So you can keep contributing to your IRA, which is I think a nice bonus. You can keep contributing to your retirement longer even after you start taking distribution.
So you can keep putting retirement savings that can be invested. I mean, the whole point of a traditional IRA or 401(k) or a qualified annuity, the whole point of … Let’s say an IRA 401(k) was to allow pretax money to go in, it’ll be a larger amount than you would put in post-tax after it was taxed as income. Actually employment taxes were taken out. All the payroll taxes, so to speak, were taken out. After those were taken out, it would be a smaller chunk. It would grow slower, but with a larger amount you can grow faster. Plus, you don’t get taxed on your gains as long as you don’t take it out early. There’s no penalties, you don’t get taxed on gains. You can’t take any money out of an IRA 401(k) before 59 and a half. That’s still the same. But you have to start taking the required minimum distributions at 72 now instead of 70 and a half.
The trade off with having those large growth gains and not having to pay tax on the gains is that you still have to pay income tax that comes out. Therefore with a child now, they could severely be impacted by having to pay those income tax because of elevated distributions because of taking it over a 10-year period as opposed to their lifetime. Now, you could use what’s called an accumulation trust. Accumulation trust could hold the money and give it to the child over their lifetime. You still take a tax hit, but for the cash out of the IRA or the qualified benefit, the qualified fund. But you could make sure that that child doesn’t get a large amount of money at one time, spread that still over longer than a 10-year period. Could also use disclaimers if it were going into trust and the trust was a beneficiary. There’s specific ways to set that up.
The trustee in writing can disclaimer the cash benefit that’s coming to a child and pass that to the next generation, and say, “skip that generation.” Because, maybe the child was going to be at a higher tax bracket or would put the child at a higher tax bracket. The child decided to forego that to say, “Give to a grandchild to pay for that grandchild’s college and other things,” who would be in a bottom tax bracket starting out. So there’s a lot of different ways. There’s some exceptions for disabled adults, minors. They don’t have to take over the 10-year period, but minors do. The 10-year period does apply once they reach 18, so there’s some quirky exceptions in there, but they’re very narrow.
So really, this changes the way we’re thinking about now distributing assets to children or non-spouse inheritors. Especially from a financial planning aspect, but also from a legal aspect and planning aspect as well and whether we’re going to use things like accumulation trust and also disclaimers to give some flexibility and control there to maximize your … How about minimize your tax burden and the tax burden on your beneficiaries and maximize the amount that you save that’s going to actually get to the beneficiaries? So if you have any questions about the Secure Act, please feel free to call our office or go online and chat with us or contact us on one of our forms on our website.
You can reach our office by dialing (704) 749-9244. Or, again, go online to mcelderlaw.com. That’s (704) 749 9244 or online at mcelderlaw.com. The Secure Act, I don’t know that it makes us actually more secure. I think it gives us sometimes some more problems. Plus, it’s troubling when the federal government can go back and rewrite the rules, even though we’ve already given our money based on what we thought the rules were. But that’s the deal, so the Secure Act. Check out the article on mcelderlaw.com on the blog.
The Secure Act. Federal legislation that changes the way we pan retirement.
The Secure Act was signed into law by the president on December 20th, 2019.
The Secure Act… Sounds great, right! Sounds like something that absolutely makes us more secure by simply reading the title. But this title, like many others, can be deceiving. For years we have heard rumors of a piece of legislation that may change the way that IRAs and other qualified assets function and finally, the “Secure Act” is it.
Qualified funds are those that are saved, pre-tax, before the money hits your paycheck and is diverted straight into a qualified fund like a 401k or IRA. These funds are allowed to grow, be invested, and with the additional buying power of securities within the environment of a traditional IRA, for example, can accumulate more wealth (theoretically) over time than if you purchased investments such as stock after payroll taxes were deducted. Many employers also participate in matching plans that is essentially “free money” that can help you accumulate more wealth to be used for retirement. When you pull money out of a traditional IRA you do not pay taxes on the gains but do pay income taxes on the distributions. So, this is a great deal for retirement savings but what if the government can simply vote to change those rules? Well, that is what they just did with The Secure Act. How can these changes impact you?
Previously the age where you were required to start taking Required Minimum Distributions or RMDs as industry jargon refers to these mandatory distribution was 70 1/2 years old. The Act pushes back the age at which retirement plan participants need to take required minimum distributions (RMDs), from 70½ to 72, and allows traditional IRA owners to keep making contributions indefinitely.
Non-Spouse Beneficiaries, generally children, of Traditional IRAs and 401(k)s could previously spread the distributions from that qualified asset over their lifetime to maximize the total distribution and minimize the income tax the beneficiary would have to pay on all distributions in any given year. This strategy was often referred to as the “Stretch IRA”. However, the Act forces these distributions to non-spouse beneficiaries to be spread over a maximum of a 10 year period. Under the Act, there could be significant loss or reduction in actual savings that are passed to a child beneficiary of a retirement asset. Each distribution the child takes during a year is taxable as income. Large annual distributions could force the child’s income to be taxed at the highest level which could take a large chunk of the intended distribution. So, now that the Stretch IRA strategy has been all but eliminated when passing wealth to the next generation, what is the new strategy?
ACCUMULATION TRUSTS: Accumulation trusts would allow for the IRA distributions to be deposited into the trust for pay outs to a beneficiary over periods longer than 10 years. This may be very important when there is concern as to how a beneficiary may spend large distributions unwisely or in a short period of time.
DISCLAIMER: There is a procedure by which a Trustee of which the IRA is a beneficiary may disclaimer the inherited IRA benefit and pass that benefit to the next generation. For example, disclaimer the benefit from child, presumably due to being in a higher tax bracket, to a grandchild.
Age of Required Minimum Distributions is now 72 years.
Traditional IRA owners may keep making contributions indefinitely.
Non-Spouse IRA beneficiaries must take distributions within 10 years.
NEXT STEPS? Those using individual beneficiaries for their IRAs may want to reconsider their beneficiary designations and consult with an estate planning or elder law attorney to reconsider their estate plan and how the IRA beneficiaries and their overall plan may be impacted under the Secure Act If you would like to sit down and discuss your estate plan with an attorney at McIntyre Elder Law please call: 704-749-9244 or online at: mcelderlaw.com.
If your trust isn’t convertible then maybe it should be…
Estate planning is all about flexibility. If you cannot anticipate future contingencies and adjust accordingly, then you’re going to be stuck. When you’re stuck, you cannot protect either your assets or yourself. So how do implement flexibility in your estate plan to prevent from getting stuck? The answer is it’s all about the tools you use.
Trusts are one of the most valuable estate planning tools simply because of their ability to be flexible. Specifically, trusts allow you to integrate terms to anticipate just about any significant risk. But not all trusts are created equal. Just because a trust can be flexible, does not mean that all trust are flexible. Before we dive into what we mean by flexibility, let’s take a look the two main types of trusts.
The Revocable Trust
You may have heard this type of trust called the “living trust” or the “family trust”. Ultimately, regardless of the name, they tend to have a similar function. The best way to explain a revocable trust is it’s just a pot where you can put your stuff. Just like a pot, you can put things in and take things out as you please. The principal benefit of having a revocable trust is twofold.
First, the revocable trust avoids probate. And, while all trusts allow for probate avoidance, the revocable trust is the simplest method to consolidate assets for probate avoidance without otherwise tying those assets up.
Second, the revocable trust allows for you to plan creatively. You may have a plan for your estate that is more ambitious than the plain ol’ transfer of assets to spouse or children. For example, you may want to set up an education fund for your grandchildren. Maybe you have a farm and want to make sure it stays a farm for generations to come. A trust is the easiest and most efficient way to accomplish these goals.
The Irrevocable Trust
An irrevocable trust does everything a revocable trust does. The primary difference is who holds the power. In a revocable trust, the Trustee, the person who manages and administers the trust, is typically the Grantor, the person who made the trust. The result is that the Grantor’s ownership interest and power over the assets does not change once assets are deposited into the trust. For example, if you transfer your home into a revocable trust, where you are also the trustee, it is still your home and you have all the power to occupy, manage, sell, etc. that you had before. The asset transferred to the trust is still “in your name”.
Irrevocable means that the Grantor does not hold power over the trust and cannot retain power in the assets held by the trust. Since the Trustee is the person who manages the trust and therefore has power over the trust assets, the Grantor and Trustee cannot be the same person. Although, the trustee can be anyone other than yourself or your spouse, they can even be a child or sibling.
When a Grantor transfers an asset to the irrevocable trust, that transfer is a gift to the trust. The trust becomes the owner and the Grantor’s ownership interest in the asset is extinguished. The asset is no longer in the name of the Grantor once transferred; however, that does not mean that the Grantor cannot still benefit from the asset. For example, assets in an irrevocable trust can generate income and that income can be enjoyed by the Grantor. Likewise, the Grantor can occupy real property held by the trust.
Irrevocable Vs. Revocable
So why would anyone create and fund an irrevocable trust? The simple answer is protection of assets. A revocable trust is an amazing tool, but it does not always provide a comprehensive level of protection that may an individual may need based on the risks their assets face. Thus, when evaluating whether you may need a revocable versus irrevocable trust, it is first necessary to understand what risks your assets may face.
Probate is the process by which a Decedent’s assets pass to his or her heirs. This process is court mandated if the Decedent’s assets are not otherwise designated to pass directly to the Decedent’s heirs e.g. a trust or beneficiary designation.
The risk of probate is twofold: time and money. Let’s start with time. On average, a probate case can range anywhere from six months to two years. If any of the heirs sue or challenge the will, it can drag out the process considerably.
With regard to money, probate can be expensive. Probate can be demanding, and any executor will want to pay an attorney to take the burden off his or her shoulders. Further, probate is open season for creditors to come in and take a piece of the inheritance. Many people pay their bills as they come due, so they tend to not worry about creditors. However, most people’s probate creditors are from those debts incurred right before their death e.g. medical bills and nursing home bills. Both revocable and irrevocable trusts avoid the probate process.
Let me throw some numbers at you. Currently, 70% of individuals over the age of 65 will need some type of long-term care in their lives. This number is steadily rising because of the ageing of our population and the advancement of medical technology. With that being said, long-term care can range anywhere from $5,000.00 to $10,000.00 per month. Most individuals cannot afford that kind of bill and, even if they can, they will likely not leave anything behind for their loved ones.
A good option for many people, who do not have comprehensive long-term care insurance, is to utilize Medicaid to pay for long-term care. However, you first have to qualify for Medicaid and Medicaid can pose a risk to assets after you pass away. Not only does Medicaid set an asset threshold or ceiling for qualification i.e. a maximum amount of assets you may own and still qualify, they also want compensation for the money they pay out. The manner by which they receive this compensation is to take the Medicaid recipient’s remining assets when they die (we call this the Medicaid Death Penalty). In North Carolina, Medicaid is limited to only taking those assets passing through the probate process above. However, it is important to note that, among trusts, only an irrevocable trust can avoid the Medicaid Death Penalty.
Considering that there are some major benefits to having assets transferred out of a possible Medicaid recipient’s name and likewise avoiding probate, an irrevocable trust can be an amazing tool for asset protection.
Protection Vs. Control
The main consideration you must make in crafting your estate plan is: what’s more important for you, protection or control? The, perhaps, most valued aspect of a revocable trust is the amount of control the Grantor retains in the assets transferred to the trust (100%). Although, retention of all that control comes at a price, your assets still exposed to most risks.
Exposure to risk is not a good reason to brush the revocable trust off as a useless tool. In fact, depending on your particular situation, the revocable trust may be a better fit for you. For example, a young professional with a child, some assets, and fledgling retirement fund is a perfect candidate for a revocable trust. This person does not face the same risk for long-term care that someone retirement age would. They would need to ensure that they have their affairs in order if something were to happen to them i.e. distribution of assets and avoidance of probate. But they would not necessarily need to begin to transfer assets out their name to avoid the risks posed by nursing home bills.
Compare that example to someone retirement age who, over a lifetime, has built a retirement and acquired a significant amount of assets. This individual has more to lose and more opportunity for loss.
Let Them Have Cake and Eat it Too
The main goal in estate planning for any attorney is to get the best of both worlds for your client (also known as the “Hannah Montana approach” to estate planning). The thing is, you may currently benefit more from a revocable trust but you may also want the ability to benefit from the protection of the irrevocable trust in the future. In comes the Convertible Trust.
A convertible trust is one that converts from revocable to irrevocable upon a triggering event. With a convertible trust, you can have both control and protection. This type of trust allows you to start out revocable, so you can maintain all control and flexibility while your risk exposure is low. And, when your risk exposure is high—because of your age, health, or legal position—the trust converts, and you benefit from the protection of the irrevocable trust.
The conversion must be triggered by something that indicates you have a higher risk exposure than before. The trigger is built into the terms of the trust, so that the trust can automatically covert upon the triggering event. Some possible triggers that could be built into a convertible trust are: admission to a nursing facility; diagnosis of a debilitating physical ailment, such as Parkinson’s, or Multiple Sclerosis; or diagnosis of a cognitive illness, such as Alzheimer’s or severe Dementia. Note: you would not want to build in triggers that could be considered a fraudulent evasion of payment for debts or liability on litigation. For example, filing of bankruptcy or having someone obtain a civil judgement against you should not be triggers built into the trust.
No matter where you are in life, you should have a plan that works for you now and in the future. That plan could include a convertible trust or any of the other important estate planning tools that are available to you. To learn more about convertible trust and other estate planning tools, give us a call at (704) 259-7040 or look us up on the web at Mcelderlaw.com.
What is an Estate? The RETURN of Hayden Soloway to the Elder Law Report is EPIC as the team discusses what an estate is. Do You Have An Estate?
Greg McIntyre: Hi, this is Greg McIntyre with McIntyre Elder Law, and this is the Elder Law Report. The Elder Law Report is a show that we do every week. It comes out on Facebook and YouTube, and we send it out by e-newsletter. So if you want this, go to our website, mcelderlaw.com. That’s mcelderlaw.com, and sign up for the Elder Law Report. And I have back by popular demand, Hayden Soloway, the famous Hayden Soloway. Right? Homecoming queen, Hayden Soloway.
Hayden Soloway: Oh, Greg.
Greg McIntyre: That’s who’s in the house today, radio star Hayden Soloway. We’re going to talk about what is an estate. We’re going to define what an estate is, so Brenton, myself and Hayden, we’re going to talk about what is an estate. And when I think of an estate, I think of… (music)I want to cross my legs when I think of estate, and I want to smoke a pipe. That’s right. Don’t you?
Hayden Soloway: Yes.
Greg McIntyre: That’s what I want to do.
Hayden Soloway: Lovely home-
Greg McIntyre: Yes.
Hayden Soloway: And beautiful grounds.
Greg McIntyre: Can you please go fetch the dogs?
Hayden Soloway: Yes, and the Mercedes.
Greg McIntyre: Yes.
Brenton Begley: Jeeves.
Hayden Soloway: This and this is actually one of the definitions is for just this.
Greg McIntyre: Do you have any Grey Poupon?
Hayden Soloway: I do.
Greg McIntyre: Can we say Grey Poupon?
Hayden Soloway: Yeah.
Greg McIntyre: Okay. I don’t want to get in trouble for saying Grey Poupon.
Brenton Begley: It rolls off the tongue.
Greg McIntyre: I mean, perhaps you don’t have any Grey Poupon. And perhaps you don’t fetch the dogs or have-
Brenton Begley: A butler named Jeeves.
Greg McIntyre: A butler names Jeeves, and a house in the Hamptons, right? Nothing against people who do-
Hayden Soloway: Oh, no.
Greg McIntyre: Right, nothing against people who do. However, I think there’s a misconception out there about what is an estate, right? I’m going to keep playing the song throughout, while we’re talking.
Hayden Soloway: Can we do a little maybe…
Greg McIntyre: We can quiet it down a [crosstalk 00:02:09].
Hayden Soloway: George Strait or something.
Greg McIntyre: Yes, that’s a good point.
Hayden Soloway: something a little bit more mainstream.
Greg McIntyre: Mainstream? I think I might get in trouble for copyrighting. I don’t think I’m going to get in trouble for copyright [crosstalk 00:02:22]. Straight up. I’m such an attorney, I’m scared to get sued.
Hayden Soloway: Something that represents an estate maybe a little more like this. A little two bedroom, one bath house….
Greg McIntyre: So that’s what most people have, is… most of us have normal lives, right?
Hayden Soloway: Just [inaudible 00:02:41] rental property…
Greg McIntyre: We know all about rental property, that could be rental property? And now, Brenton before, when we were pre-gaming the show, we were talking about it, you made a great point about most lawyers.
Brenton Begley: Yeah, they say that 95% of lawyers represent 1% of the people, right?
Hayden Soloway: Yeah.
Brenton Begley: And the context in which we were talking about that is that, you have wealthy individuals, right?
Greg McIntyre: Right.
Brenton Begley: People who you think would have an estate, they have all that free legal advice, or discounted legal advice. Because we’re just knocking down their doors to give them help right?
Greg McIntyre: Sure. [crosstalk 00:03:25]
Brenton Begley: Yeah, tax breaks, or asset protection-
Hayden Soloway: You’re probably getting those random phone calls, at 9 o’clock at night, “Come in and see attorney Joseph and do your business with me because we know you want to protect your property…”
Brenton Begley: Exactly.
Hayden Soloway: But when you get to when you get to real life-
Greg McIntyre: Right.
Hayden Soloway: That you’re not pursued and perhaps the perception is of this being an estate as opposed to your own property, which is probably more valuable to you.
Greg McIntyre: I think there’s a misconception that the estate and estate planning, is for the rich.
Hayden Soloway: Yeah. I think that’s-
Brenton Begley: Mm-hmm (affirmative).
Greg McIntyre: Then why do I need to do anything, right? Why do I need to do anything with what I have, when… really, I talk about middle-class guilt a lot and I talk about the middle class getting hammered in this country. And we are a law firm of the people, we are working for everyone. Not that we don’t have wealthy clients, we do. And we have nothing against that. I’m fully, all in favor, of somebody being able to make their fortune. However, we also provide estate planning for everybody in between, right, for all spectrums-
Hayden Soloway: And all ages.
Greg McIntyre: Yeah, and it’s affordable. People don’t understand that… or how about I see people get jammed up or in frustrating situations for the family, because they have worked their whole life to get a house or some monies and savings.
Hayden Soloway: Making payments for 30 years.
Greg McIntyre: Yeah making payments for 30 years, paying the bank back three times as much as they bought the house for on the mortgage.
Brenton Begley: Right, exactly.
Hayden Soloway: And that’s not far off the statistic.
Greg McIntyre: That’s about correct. And when they do that, sometimes lose it all in the end because of liens, or longterm care situations, because they didn’t properly manage or do any estate planning ahead of time, or thought it was unavailable to them because they weren’t the one percent.
Brenton Begley: Yeah.
Hayden Soloway: Think about how much they pay for insurance. Fire insurance, flood insurance, and things like this. Over a period of years, I don’t know how much insurance runs a year, I’m fortunate my husband-
Greg McIntyre: Its not cheap.
Hayden Soloway: -Pays our bill. And where you can protect your home or others-
Greg McIntyre: I should have been in insurance.
Hayden Soloway: And all these other casualties in catastrophes with a one time visit with an attorney, doing this, the estate work necessary and then its done. You don’t pay every month.
Brenton Begley: You know, the misconception that estate planning is for rich people, right, is dangerous because if a rich person fails to do some planning, they usually have enough wealth to where they can transfer something, do their heirs the next generation, right. Where they can benefit from it. But for normal individuals, in the middle class, they work all their lives to save something so that they can give that to the next generation. Right. And those assets can be taken very, very easily in a lot of different ways. I mean, the cost of longterm care one is probably one of the biggest risks out there. Individuals like you and I face. So that’s.
Greg McIntyre: And that’s probably part of the dilemma and the knock on long term care insurance sometimes is it’s just out of reach. As far as affordability. They don’t feel like they can budget.
Brenton Begley: Right.
Greg McIntyre: So you don’t, and then you wind up in a situation where you’re, you’re scared, you’re going to lose the house or not be able to pass that on or, lose all the retirement. Those are tough situations. That’s really what we’re sub set up to do is to help people permit that.
Hayden Soloway: Well, they are people we sub set up, rather than establish a dynasty.
Greg McIntyre: How do you like the ON AIR sign by the way.
Hayden Soloway: I absolutely love that.
Greg McIntyre: That is false.
Hayden Soloway: Yes.
Greg McIntyre: Okay. You go ahead and I’m going to, I might, I’m going to turn it.
Greg McIntyre: Yeah. When you talk, when you spit fire like that, I got to.
Hayden Soloway: I grew up where, one my grandfather left and then here with this, my father, my father grew it a little, left an inheritance to his children, that’s a lot of people want to do it that way but they’re families and I know a mom said one family, two families. I think did very well, there’s picking it all. They carry your children, I’m giving you a good education. Go out and get a job.
Greg McIntyre: Heres the middle class guild that I’m talking about, here’s what I’m talking about. Is it’s this thing that’s ingrained in us, from somewhere. It’s either from our parents or the environment or it’s just there. It’s, and I hear this, we’re going to spin down every dime we’ve ever made because we’re proud and we’re going to do that because that’s what we need to do.
Greg McIntyre: Do you think that wealthy people think that way?
Hayden Soloway: Sometimes.
Greg McIntyre: Sometimes?
Hayden Soloway: I don’t know if it’s Bill Gates or several of the multi billi-
Greg McIntyre: Look at my wife coming in. Get a shot of her.
Hayden Soloway: God, what.
Greg McIntyre: The Queen of [inaudible]. Lets bring her, I’m bringing her in. Hey Steff, Steff, yeah come in this way.
Hayden Soloway: Just to finish our point, there are billionaires who are not leaving a significant amount of their money to their children. They made their money and they want to incentivize their children to go into work. [Crosstalk 00:08:38]
Greg McIntyre: Thank you for coming in today.
Steff: Hey, yeah sure.
Greg McIntyre: Steff’s visiting us today. Yes.
Steff: Hey good morning guys, I missed you [crosstalk 00:08:49].
Greg McIntyre: She’s coming in to, Steff are you doing the books today?
Steff: I am.
Greg McIntyre: Is that what you’re working on?
Greg McIntyre: Well, thank you for coming. I appreciate it. You’re doing a great tern-around.
Steff: Sure, is this live?
Greg McIntyre: It is live.
Steff: Oh hey
Hayden Soloway: What do you think Steff? What’s an estate?
Steff: Oh wow, that’s a big question for just walking in the door.
Hayden Soloway: Do you have one?
Greg McIntyre: Do you have an estate?
Hayden Soloway: What is your estate?
Steff: My home, my assets, cars, bank accounts, investment accounts.
Hayden Soloway: If heaven forbid we passed, is our estate taken care of?
Steff: Yes. Yeah. We have the plan.
Greg McIntyre: We’ve got a client, because we signed the plan, Brenton actually drafted our estate plan.
Greg McIntyre: How did it feel after you signed that estate plan?
Steff: Good. It felt like, its always good to have a plan in place. It gives you this sense of peace.
Greg McIntyre: To me it was like a weight lifted off my shoulders, that’s taken care of. That is really taken care of. I mean we have people that sometimes are so anxious and worried. I mean literally I have people, I don’t know if you sat down with some of your clients, Brenton, but then say, “I’ve been up at night worrying about that.”
Brenton Begley: Oh please, yeah.
Greg McIntyre: That’s, I hear that a lot. “I’ve been up at night really worried about things”. By the end its “thank you so much. I’m so glad we’ve gotten this or getting this taken care of. I’ve been up at night, I’ve been so worried about this.” Right.
Brenton Begley: Right. So I mean yeah, that’s the peace of mind that you have when you know that at the end of the day your assets are being protected. Right? I mean it’s a big deal too because we’re talking about estate, you mean assets in general [crosstalk 00:10:38]. [inaudible 00:10:36]
Greg McIntyre: This stuff on how estates, estates during life versus in death.
Brenton Begley: Okay.
Greg McIntyre: Right. Because that factors in and relates to estate planning versus permit. I’ve got to [inaudible 00:10:52] I’m going to the toilet.
Brenton Begley: So just to finish up, saving assets in general is a good thing for the next generation, but it’s not all about leaving an inheritance. Sometimes it’s, Hey, look, I don’t think it’s right that I should give everything that I worked hard for to the government or to some facility that for no real good reason is charging the amount that they charge, right. So, but I mean, kind of going into what Greg mentioned, here’s your estate while you’re living, right, and your estate when you pass away. Okay. And those two things aren’t really any different. I think what a lot of people don’t understand is that a lot of people think that you don’t have an estate until you die, That only happens right when you’re dead.
Hayden Soloway: And did they not realize the possibility but lawsuit or something like that can devastate an estate. Just a raw, a bad wreck, in a bad place, it can be severe.
Brenton Begley: Right? And so when we talk about estate planning, we’re talking about more than what happens after you pass away. We’re talking about protection of assets during your life and after your life.
Hayden Soloway: Some people don’t realize what can happen. Should they become totally disabled and need nursing care. I think they all think that their Medicare is going to, or Medicare and Medicaid are going to pay for their expenses and a lot of people think, Oh well I’m going to hit, they’re going to take my house. And they think that’s automatic, where you say you had just enough education to understand that we can protect the house and you can have the money that you need to go into nursing home. Once your your property’s protect and say, what’s the saying, have your money and then eat it too? Or.
Brenton Begley: Have your cake and eat it too, that’s right, yeah. If you want to eat money, you can do that. That’s [inaudible 00:12:50] the thing is to say, I mean you can get Medicaid to pay for your long term care. That is an option. There’s other options out there and you can save more than just the home too. It depends on when you plan. Right. I mean, [crosstalk 00:13:03]
Hayden Soloway: I think the 1960s era, of Jaguar everywhere.
Brenton Begley: Yeah, absolutely, you have to give up the jag. Yeah. The gold coins, any of that, all of that. That can absolutely be protected. The risks that you face when it comes to paying for longterm care because they can cost anywhere from $5,000 to $10,000 a month, hundreds of thousands of dollars a year, right? And that doesn’t count all the other medical costs that you have up to that point. You know, a couple that’s 65 years old or older. All right. Retirement age, they’re expected to spend, both of them, $300,000 in medical expenses. Now, that doesn’t necessarily count longterm care. Those are unreimbursed medical expenses.
Hayden Soloway: I have a friend who, within the past 30 days, she and her husband had to go into a longterm care facility and it’s one of these, it’s flexible. You can move from one level to another. Well, they are at the beginning level where they are both confident they can take care of each other. So they have their meals in there. It’s a beautiful place. It’s $3,000 a month. I mean, he becomes, he’s a paraplegic. He gets to the point where he needs more care than she could give him. They, move to the next level, and let’s just estimate that it’s another $3,000 a month. But when you get to the Alzheimer’s units, the locked units, they can be $100,000 a year without question.
Brenton Begley: Oh yeah.
Hayden Soloway: And so right now they’re paying $36,000 a year just to live there. And just to make, essentially, where are you going to get the money? It’s going to come out of your estate, you’ll want to protect it. Then you go on Medicare and I mean, excuse me, on Medicaid and Medicaid can pay for it once your assets are gone. So we want to protect the assets. So that you go straight to the Medicaid.
Brenton Begley: Right, that middle-class guilt that Greg was talking about is a lot of people think themselves, well, I have this money. I might as well use it to pay for longterm care because I don’t want anyone else to pay for me. You know, I don’t want to be on anyone else dime. But the reality is, is that you pay for Medicaid. We all pay for Medicaid. Every time you got a check, a little right. A little part of that goes towards Medicaid. So I mean, the thing is that mindset is toxic for individuals who want to save their assets because Medicaid is not living off someone else’s dime.
Greg McIntyre: So we’re having that debate and that discussion about the viability of using Medicaid for longterm care plans [crosstalk 00:15:39] and whether the ethics of doing it, okay, and that’s very political. You’re a very political person. Hey, so there’s some political aspects to that, right?
Brenton Begley: Yes.
Hayden Soloway: Yes, such as.
Greg McIntyre: So yeah. [crosstalk 00:15:56].
Hayden Soloway: So I’ve worked and paid taxes and.
Greg McIntyre: Hey, hey you know what? My grandfather, who passed away with nothing, had that exact same mentality and worked his whole life to get a small farm house and worked everybody else’s land, and paid the government. Why Was this country founded?
Hayden Soloway: It was actually, it was founded on a religious [inaudible 00:16:20] basis. And when they found out that the people who didn’t work caused the people who do work to not work as hard ,and thousands of them died they realized they needed to take all of the
Greg McIntyre: I don’t know about that. Here’s what I would say. I’m not saying you’re wrong. How about, how about this, it was a revolt against British charity. And what was the charity?
Hayden Soloway: It was taxation.
Greg McIntyre: It was taxation. It was taxes man, it was the whole thing was over control and taxation without representation, right? So the people were overtaxed, they couldn’t keep their money. Right? Part of the reasons this, part of the founding, written into the constitution kind of , fabric of our country is that you can obtain property during your life. You can own property, you can own money, right? You don’t have to be a noble to own land and you can pass that land. You don’t have to be the 1%, you don’t have to have a estate like that to own land. You can be anyone at all [crosstalk 00:17:22] and then pass that on to your kids.
Hayden Soloway: Self Sufficiency and self responsibility.
Greg McIntyre: If you look at history and the Boston tea party and the things leading up to the American revolution, it was all about taxation without representation. And the fact that the common man like Ben Franklin who could be self educated, right? People like that deserve to own property and were on par. And we’re the same as getting one with livability, the same as the 1% in the world of this country. And estate planning, be there to hold on to property and give that away when you pass away, it’s fundamental to our core.
Brenton Begley: and you know what can ruin an economy is when each generation has to start over from zero, sir. Nothing. That’s how you ruin an economy. Yeah. I mean, look at any country that has a [crosstalk 00:18:18] traditional wealth, the smooth transition of wealth from generation to generation ensures stability and stability ensures a good economy.
Greg McIntyre: Sure.
Brenton Begley: I mean.
Greg McIntyre: and to your point, to independence, we want families to be independent. Should your kids always have to take out student loans and have hundreds of thousands in debt every generation or to the home that you bought and you pass on, that you didn’t lose when you had to go to a nursing home and Medicaid had to pay because that paid for a grandchild’s college. Right. And they might be able to escape some of that debt. And I don’t think we should be in this debt mentality economy.
Brenton Begley: Well, you bring up a good point too, because there’s this bubble, right? That student loan debt, we’re in debt trillion dollars, right?
Greg McIntyre: [crosstalk 00:19:08] that housing bubble that burst in 2008 and put the world in this economy.
Brenton Begley: there’s two that are going on right now. The two big bubbles, right? The longterm care bubble that no one’s talking about. People who are losing assets because guess what? We’re aging as a nation, right?
Greg McIntyre: Sure.
Brenton Begley: Baby boomer generation has gotten past that retirement age, the next generation after that, that was a large generation too. I mean we have that silver tsunami coming and we have not planned for it. Just like we hadn’t planned for student loans. So if we have all these people losing assets, they’re not going to transfer it to the next generation who has trillions of dollars in student loans. What’s going to happen to our economy? I mean, so it’s fundamental not only for you personally to have an estate plan in place, but it’s fundamental for everyone in the United States to have that plan to make sure we have a stable transition of wealth and make sure the economy runs the way it should.
Hayden Soloway: Right.
Greg McIntyre: I just think.
Hayden Soloway: I never really thought about it like that.
Greg McIntyre: People like you, you are so political. You do such a great job at what you do and I respect that. I also, I just think people deserve to be able to protect what they have during their life and what they worked so hard for. Because you did give so much to the government during your life that’s taken out of every paycheck. You should be able to hold on to some things and you do pay for that Medicaid benefit during your entire life. That’s what you do, right?
Hayden Soloway: [crosstalk 00:20:41] We talk about Medicaid as the owner of the most wrecks committed in one year by anyone, even
Greg McIntyre: Tiffany was talking about art. Tiffany or Taylor were talking about some of the wrecks they’ve in been with you when they were going to signings.
Hayden Soloway: Just one.
Greg McIntyre: Just one?
Hayden Soloway: Just one. We were coming back in from via Seattle. (laughter)I didn’t haver anything to do with it. Anyway,
Greg McIntyre: Its nice [inaudible 00:21:06].
Hayden Soloway: And one of those wrecks was all that did some serious injury that could’ve been a catastrophe that I may not have been able to avoid had I not known you, [crosstalk 00:21:17]
Greg McIntyre: Brent was bringing up estate planning, proper estate planning trust, things like that can shield assets from liability. Minimum limits, car insurance in North Carolina, anybody know what it is? 3,800 so 30-60. 30,000 for an individual, 60,000 for all. I have a family of eight. If we were all in that Honda Pilot sitting right there and some bad car, I mean there would be some big bills if we were all seriously hurt or worse.
Hayden Soloway: And lawsuits, liability.
Greg McIntyre: So that, so that insurance, if you had a 30-60 plan, I guarantee a $60,000 is not going to cover all those medical bills for me, my wife and our six children.
Hayden Soloway: So again, if I were the [inaudible 00:22:03] responsible. [crosstalk 00:22:03].
Greg McIntyre: What’s the first one your attorneys coming at? They’re coming after your personal assets. They’re coming after your retirement.
Hayden Soloway: Your home.
Greg McIntyre: They come after your home.
Hayden Soloway: Your car, whatever you got
Greg McIntyre: It’s all on the table, That’s right. So how do we forbid that? Our suppliers demand that.
Hayden Soloway: Really, really just plan ahead, I mean, trusts are a great,
Greg McIntyre: sure.
Hayden Soloway: I personally love a trust just because of how flexible that they can be. Right. So one thing that we use to protect assets is a trust and they protect assets, not only if you get sued in the future. You don’t want to put assets in the trust after you’ve gotten sued. You know, [crosstalk 00:22:42]
Greg McIntyre: That’s why I don’t like putting a car in the trust fund with other property.
Hayden Soloway: Why is that?
Greg McIntyre: Well, okay, so let’s say I want to separate my home in other months, from other monies from the car that might have the wreck and hit something and hit a car load full of eight people. If that liability is there remote, the trust is to help stop that extinction of liability to recover assets. If we put the car inside of the trust with the other assets, then it’s in that snow globe environment with them and that’s all tape still, right. So I just think putting a deadly weapon, [crosstalk 00:23:18].
Hayden Soloway: And another thing.
Greg McIntyre: putting a deadly weapon and something that really has a ton of liability attached here with the other assets is a dangerous thing.
Brenton Begley: A few of the other assets are a [crosstalk 00:23:35] idea. Yeah. Well, yeah, I mean that’s the thing is a trust can cover a plan, I mean, not only getting sued, but planning to longterm care, planning for medical debt, just paying old medical debt. Right? I mean, you inherit that in North Carolina, right? Dr necessary is old antiquated. Don, doctor [crosstalk 00:23:45]
Greg McIntyre: as a spouse, I could be on the hook for
Brenton Begley: Exactly.
Greg McIntyre: your spouses medical bills as well as nursing. [crosstalk 00:23:54].
Brenton Begley: That person.
Greg McIntyre: that debt you might owe the state of North Carolina for a Medicaid debt or something like that. You can think you [inaudible 00:24:01] for that person and then all of a sudden you find out can attach to yourself or your estate when you pass away.
Brenton Begley: That’s right.
Greg McIntyre: So protect the home, Ladybird deeds, trusts, those things. All elements that are designed to protect the common man woman and protect your assets.
Hayden Soloway: One thing that I wanted to ask is there are right ways and wrong ways to do things and I know we have run across clients who have had [crosstalk 00:24:25]
Greg McIntyre: I know there’s a colleague in Eugene from WCC, Charlotte Tanisha. Every once in a while they’ll look at the camera and smile. Okay, so they’ll be talking, right. We’re talking look at each other. Then every once in a while, that must be training in journal or Anchor school, or something. Or TV school.
Brenton Begley: They have that?
Greg McIntyre: Yeah, in TV school and you learn to look at the camera and smile.
Hayden Soloway: maybe if I just positioned myself in this way, because I’m usually [crosstalk 00:24:54].
Hayden Soloway: Well what are the things, that you could do things the wrong way without guidance as in some of the clients that we have had who have put their homes into their children’s names and they may have protected the home but their children don’t get sold it and left with nothing. So there are ways to protect the property its also to protect your interest in that property as well, so.
Brenton Begley: That’s such a good point. Over exploitation is a real thing. I mean it happens all the time and I mean we see it, we see it all the time and we help try to protect against that. So empowering individuals with the right tools to protect themselves because [crosstalk 00:25:32].
Greg McIntyre: How about employing right people to take care of everyone in your property if something happens.
Brenton Begley: That’s right.
Greg McIntyre: Just to get estate planning earlier on. with foundational docs. So the general journal, arbitrary healthcare power of attorney, living wills, those are the four. And even we could look at more complicated things like trust. Is it snowing outside?
Brenton Begley: It looks to be,
Greg McIntyre: it is snowing outside
Hayden Soloway: It is.
Speaker 5: It is snowing
Hayden Soloway: Wait, I don’t know where you live [crosstalk 00:25:53], but around here there’s a little bit of smoke can create a great deal of excitement.
Speaker 5: You see it a little bit. Yes.
Brenton Begley: And liability.
Speaker 5: We’ll talk about car wrecks.
Greg McIntyre: I mean, some people, if you are out on the roads today, give me a call. (704) 749-9244 in all seriousness, man, what a great topic, great topic Taylor. I’ll give Taylor Shelton our office credit cause she says, I never give her any credit and I steal her ideas. She had the idea of talking about “What is an estate”, because a lot of people don’t know. An estate is what you have during your life while you’re alive, but also, when you pass away. So to probate an estate, nothing is better… than having a good estate plan during your life to avoid a bad experience when you pass away. Protect your property from Leins when you pass away. Hey, you guys did a great job this morning. Thank you. I’ve missed the overall report.
Hayden Soloway: Me too.
Greg McIntyre: and I’ve missed doing the show with you. [crosstalk 00:27:07]
Greg McIntyre: Yeah. So, to cover that. We’ve got, I’ve got the table, I’ve got the podcast tables set up right.
Hayden Soloway: and the ON AIR sign.
Greg McIntyre: And the ON AIR sign, and I just want to get back to basics, keep that going.
Hayden Soloway: So there’s so much to say.
Greg McIntyre: there’s so much to say. that’s kind of where we started when you started out writing blogs and do the other wall report every week. Then doing the radio show, kind of miss the radio show too.
Hayden Soloway: Me too. Of course I’ve seen you on TV. You’re getting to be a household name.
Greg McIntyre: Those are really short clips, on TV, like a four minute or five minute job [crosstalk 00:27:45]. I like long form a little better. So how about there’s a place for both, but long form, let’s just talk and get more than in depth on subjects. We can talk for another 30 minutes.
Hayden Soloway: If you’d done a TV show, We’d probably be a little more rehearsed and more notes and things like that, this is kind of an around the table discussions. Kind of share it with people things [crosstalk 00:28:02]
Brenton Begley: I don’t know it will end up being more organized because we have a, yeah, we have a lot of spitball type conversation and that’s the way to really do it. I mean that’s my favorite consultations. Those are the ones that have no format, right? People ask me questions, we jump around from topic to topic. That’s how you learn, right?
Greg McIntyre: You learn and then, and then we have tools and experience to format that or put that into a nice plan for you or give you some nice options. So, Hey, if you have any questions about estate planning, organizing your assets, protecting them from Leins, paying for long term care, out of pocket with longterm care insurance or you know, the Medicaid option. Give us a call at McIntyre Elder Law. You can call us by calling our main number. It’s (704) 749-9244 or you, in addition, I will direct you to our website. It’s a time, there’s a wealth of knowledge. They’re both writing in blogs, research, Elder Law TV, Elder Law radio. You can find all that there. That’s MCelderlaw.com M in Mike, C as in Charlie and then elderlaw.com like McIntyre, right? So mcelderlaw.com and you can look at our estate planning pages, but really I’d love you to sign up for that.e-newsletter.
Greg McIntyre: The elder law report is the way you get really, really awesome information like we’re talking about today. We don’t all have the same point of view on this show or in this office. We all have different political points of view. We all have different things that feed in. But I think we forced each other to look at things in different ways, which IS beneficial and we can talk, unlike politics today, I’ve always wanted to do a political setting.
Brenton Begley: You know that’s right.
Greg McIntyre: I mean, I’ll, if I’m in a political show, it will be the number one show in the world. Okay. In the world,
Hayden Soloway: It would.
Greg McIntyre: I would probably, I might not say [crosstalk 00:30:07] who’s that guy they pulled off YouTube or whatever? Alex Jones. Right.
Hayden Soloway: Yes.
Greg McIntyre: I don’t know if my show would stay on [crosstalk 00:30:10].
Hayden Soloway: They banned him [crosstalk 00:30:07].
Greg McIntyre: I would be banned, for multiple reasons. But here, we keep it PC and we keep it within line, but we have a lot of good discussions. So anyway, I appreciate it. [crosstalk 00:30:18] Yeah. If you want to do a political side. Oh, okay. It would be cause I would shout, you know, I would throw out some challenging questions.
Hayden Soloway: Of course you would.It’d be fun.
Greg McIntyre: It’d be fun.
Hayden Soloway: I’m prepared.
Greg McIntyre: And feisty.
Hayden Soloway: I’m prepared.
Greg McIntyre: I know.
Hayden Soloway: It would be different. I mean this is really off the cuff. It’s spontaneous. None of this. We came up with a general plan and one idea, maybe three or four basic things we wanted to discuss and then we expand on it from there. If we had a political show, we would have much more organized notes written. At least I would. We’ll do one one day.
Greg McIntyre: [crosstalk 00:30:54] is killing it on his review show. You ever listen to [crosstalk 00:30:57] ? I.
Hayden Soloway: I think I do occasionally.
Greg McIntyre: I Don’t think you really organize the plans. I think he just [crosstalk 00:31:01] Oh God. Oh God. Sorry. I’m not with her.
Hayden Soloway: No he said so.
Greg McIntyre: I’m just kidding.
Hayden Soloway: He ran a good campaign
Greg McIntyre: Right, right.
Hayden Soloway: He had good ideas. An he announced [crosstalk 00:31:15]
Greg McIntyre: Sure.
Hayden Soloway: From a point of view a Republican would take ,he had really a good,
Greg McIntyre: Do you think it was in the bag?
Hayden Soloway: I think so.
Greg McIntyre: He didn’t think [inaudible 00:31:28] was going to be such a contender. [crosstalk 00:31:28]
Hayden Soloway: But he said that himself [crosstalk 00:31:29] and he said he was considering running for office again. I think possibly Senate.
Greg McIntyre: He’s talked about that. He’s talked about [crosstalk 00:31:35]
Hayden Soloway: So we’ll probably see him in another. [inaudible 00:31:42]
Greg McIntyre: I mean isn’t that true? Like the political realm or anything? How, see all of everything relates back to estate planning.
Hayden Soloway: I want to see where this goes.
Greg McIntyre: The organized plan wins.
Hayden Soloway: Yes.
Greg McIntyre: The person who plans, the person who has the defined goal, the person who …maps out their plan for success will achieve their goals, he who adheres to that plan wins, every single time. Okay. In politics or in life or in estate planning and probate. Right. So its important to plan, so right now this episode is brought to you by [inaudible 00:32:22] (laughter).
Greg McIntyre: Who would tell you? Planning is extremely important. I didn’t say that about Hayden. So anyway, thank you.
Hayden Soloway: He’s a good guy.
Greg McIntyre: He’s a great guy.
Hayden Soloway: Whether you’re a Democrat or a Republican [crosstalk 00:32:35].
Greg McIntyre: Yeah, Democrats and or both.
Hayden Soloway: He’s the one to listen to.
Greg McIntyre: Sure, sure. Anyway, thanks for listening guys and watching and we’ll be back. So I’m going to try to persuade Hayden to come back. I don’t know if you want Hayden to come back. Give me a thumbs up or a shout out in the comments. Okay. Cause I’m miss her. Anyway, have a good day. Goodbye.
I think planning gives you clarity. In that respect, Elder Law is Clarity. It helps families plan, think about the future, protect assets and gain peace of mind. As we head into the new year, everyone is making and breaking resolutions. I love this time of year because of the planning aspect.
I have been planning for our firm, my wife and I have been planning our goals for our family this year. This is a perfect time of year for people, families to get their affairs in order, make plans like Estate Planning and gain the clarity and peace of mind that comes along with that.
Review What You Have. Talk about past documents that may be out of date. For example, 25 year old Wills. In Probate, we see it daily, invalid Wills, Named executors who have passed on, etc. Revamp documents. Know what you want to leave to your loved ones that is existing now. Sometimes people will name specific things in Wills, that no longer exist..Then it’s a hassle when it comes time to probate the Will.
Take Inventory. Take Inventory of both people and things. Once you think about all that you have and the people that matter in your life things become much clearer.
Define Your Goals. What are your plans?… to take a cruise for 10 years? To spend all money down? To preserve money for the children and/or grandchildren? To send them to college? To protect assets in the event of long term care? The retirement… The house?
Meet & Discuss. Meet with your spouse… Family if need be… Communication is great here! Meet with a professional to discuss how to accomplish your goals and make a plan. Now you practice Estate Planning & Elder Law…. That is what your firm does…
Q. You can help? Absolutely…. We would be glad to help.
Q. What is a planning session like with you? Very easy… We sit down with the client or family and walk through the assets, define goals… flush out what is most important? Control of assets for example or protection of assets. Then we use our legal knowledge, tools and experience to help the client plan for the future. It’s really that simple. AND… Once their planning is done you can see the peace of mind it gives people. That’s what I love.
Q. So how might people get in touch with you and your firm, Greg? Call us at: 704-749-9244 or online at mcelderlaw.com/estateplanning… That’s mcelderlaw.com/estateplanning. We would love to help people kick off 2020 with peace of mind and estate planning in place. It is a perfect time of year to get this done!
In this Elder Law Report we are providing all Estate Planning, Trust Planning and Lady Bird Deed Maps all in one place just for you for FREE. These maps can really help in planning your strategy for how to protect your hard earned money and property.
The Estate Planning Map can be used to route assets through or around the probate estate and to examine how long term care and liens may attach to your estate. There are various tools to protect and pass assets outside of the probate estate built right into this map.
What do you value more? Protection or Control? Perhaps a little of both. See if a trust is right for you and if so which kind with this map.
Know how a Lady Bird Deed works? Curious? These deeds can mean the difference in losing or saving a home when long term care is needed. See just how they work with this map.
Making a Will is an extremely common concept. You own stuff and you want to make sure a certain person or persons get that stuff when you die. What’s not commonly considered, however, is what will happen when that transfer of assets takes place. There’s some good, there’s some bad, but all are things you should be aware of.
The “Oops” Transfer
Let’s say you’re a gun owner. You’ve purchased a couple firearms over your lifetime that are good quality and will serve as part of a decent inheritance. Let’s say you want to leave on or all of these firearms to your son Chuck. Now Chuck was a little wild growing up. He and his buddies got popped in high school by the local Sheriff for driving around in the bed of a truck, smashing mailboxes with a baseball bat—a state and federal offense. Now Chuck, as the main perpetrator of the smashing, got charged and convicted of a felony. Chuck cannot legally own or possess a firearm because of this felony. If he is found to be in possession of a firearm, he is in big legal trouble.
What was originally a gift out of the kindness of your own heart, turned into another felony charge for ol’ Chuck. . . Oops. What could have been done? Well, a little preplanning would have allowed you to set it up so that the firearms go to someone else or to be held in trust until Chuck gets his rights to own a firearm back.
Let’s say you own a home with a mortgage. You refinanced a couple time and refurbished a couple rooms in the home. So, your mortgage is pretty high. High enough that you may not pay it off during your life. Let’s say you pass away and leave the home to your child still owing $60,000.00 on the mortgage. What happens to it?
Well, it’s no surprise that somebody has to pay it. In this case there is really two options: 1) Maybe you had insurance on the mortgage such that if you died owing a balance, the insurance would pay that balance so that your heirs would not have to. Most people do not have this type of insurance; 2) If you don’t have mortgage insurance, then the beneficiary who received the property must pay it. It is important to note that the beneficiary is not personally liable for the mortgage. But, if they want to keep the home, it must be paid. Also, if they sell the home, part of the proceeds must go toward paying off the mortgage.
Finally, the beneficiary has the option of refinancing. If they do, they will become personally liable for the mortgage. This really is not a great option unless the beneficiary can get a better rate and/or the beneficiary wants to get some of the equity out of the property.
Death and Taxes
What are the tax implications of dying? Well, there’s a few but I’m going to focus on one: basis. Okay, we’re gonna get technical here, so stay with me. Let’s say you bought a vacation property for $100k. Your basis in that property is $100k, what you paid. If you sold that property for $300k, you would have a gain. The gain is the difference between the basis ($100k) and the profit ($300k). Thus, the gain here is $200k. You would be required to pay capital gains taxes but only on the gain. So, here you would apply your capital gains rate (let’s say 15%) to the gain of $200k. The capital gains tax would equal $30,000. Quite a large chunk of change.
Let’s say you decide to give that property away during your life. The person who receives the property will have the same basis you have and will suffer the same tax consequences if they sell the property. However, if you were hang on to that property and your beneficiary were to receive as an inheritance, they get a “step-up” in basis. This means that their basis in the property will be fair market value at date of death. That eliminates all the gain built into the property. And, unless the property appreciates significantly, there will be little to no tax consequences of selling the property once received.
A little bit of preplanning can prevent the assets you leave behind from being a burden. I f you have questions, call the experienced attorney at McIntyre Elder Law: (704) 259-7040.
The Value of Using Irrevocable Trusts in Medicaid Planning
People often wonder about the value of using irrevocable trusts in Medicaid planning. Certainly gifting of assets can be done outright, not involving an irrevocable trust. Outright gifts have the advantages of being simple to do with minimal costs involved, including the cost of preparing and recording deeds and the cost of preparing and filing a gift tax return. Many financial institutions have their own documents they use for changing ownership of assets so there are typically no out-of-pocket costs for the transferor.
So, why complicate things with a trust? Why not just keep the planning as simple and inexpensive as possible? The short answer is that gift transaction costs are only part of what needs to be considered. Many important benefits that can result from gifting in trust are forfeited by outright gifting. These benefits are what give value to using irrevocable trusts in Medicaid planning.
Prior to state implementation of the federal Deficit Reduction Act of 2005 (DRA) in recent years (with the exception of California), federal Medicaid law contained a bias against trusts: Most transfers of assets to trusts had a 5-year lookback period, whereas there was a 3-year lookback period for non-trust transfers. This different standard induced many clients to elect outright gifting in preference to gifting in trust. The DRA leveled the playing field by imposing a 5-year lookback period for ALL transfers. Removal of the bias against trusts shifted the discussion of elder law attorneys with clients to the real benefits of gifting in trust versus gifting outright.
Key benefits of gifting in trust are:
Asset protection from future creditors of beneficiaries
Preservation of the Section 121 exclusion of capital gain upon sale of the settlors’ principal residence (the settlor is the trustmaker)
Preservation of step-up of basis upon death of the settlors
Ability to select whether the settlors or the beneficiaries of the trust will be taxable as to trust
As promised!!! LIVE FULL Asset Protection seminar FOR FREE right on Social Media… All for you today. ANY QUESTIONS? Go to: mcelderlaw.com or call: 704-749-9244.
Greg McIntyre: This is Greg McIntyre. I’m doing a full seminar for you right now, full video seminar or full webinar style seminar. This is similar to something that I would give live. I do a lot of speaking engagements. We’re going to talk about asset protection. We’re going to talk about situations that might happen to affect your assets. We’re going to talk about elder law and estate planning issues from deed planning to trust planning to long-term care insurance.
Greg McIntyre: We’ll talk about everything right now. This is something I promised that I was going to do, and we’re going to do it for you live right now. So thanks so much for watching and I hope you enjoy it.
Greg McIntyre: We’ll start the Estate Planning seminar. So as promised, we’re going to do a live Estate Planning seminar straight from social media today. This is similar to one that I might give in front of a live audience at a dinner or something like that. We give those all the time, so I want to be able to give that to you and show it to you.
Greg McIntyre: Just had to check and make sure we’re up. We are, and I’m Greg McIntyre, the elder law guy, helping seniors protect their assets and legacies, and you’re at McIntyre Elder Law’s social media page or webpage, one of the other, however you got here or perhaps the podcast. If you need more information, go to mcelderlaw.com.
Greg McIntyre: Now, we’re going to dive right in today. We’re going to talk about deed protection, foundational planning, trust planning, and long-term care insurance solutions. We’re going to talk about that entire thing. So, are you ready? That’s the real question you should be asking yourself. Are you ready for what might come? Are you ready for a tragic accident or healthcare situation? Or you might need extensive long-term care that could sacrifice all your assets.
Greg McIntyre: Many times people lose everything they’ve worked for their entire lives for the last few years of their lives. It’s not right. I never liked it and that’s why I’m an elder law attorney. So I’m Greg McIntyre, the elder law guy. Again, helping seniors protect their assets and legacies is our mantra.
Greg McIntyre: It has been for a long time, helping seniors protect their assets and legacies. JD, MBA, that’s a Juris Doctorate MBA that means law degree, and master of business administration. That’s just some of my education. I’m an estate planning and elder law attorney and a very proud member of ElderCounsel down here on the bottom left. And let’s see. I’m going to get a pen here.
Greg McIntyre: This is ElderCounsel, so very proud member of ElderCounsel, which is a national group of estate planning and elder law attorneys. And that gives me a really deep bench. So it’s not just me standing up here. It’s also others that helped me answer questions and I help them with their issues and questions as well. So ElderCounsel is a great organization.
Greg McIntyre: I’m an elder law attorney because I like helping people. I really enjoy helping people. I’ve done a lot of courtroom work also in the past, but I don’t feel like I help people as much as I do in the estate planning and elder law. When I help someone save their home, save their entire retirement accounts, activate a healthcare benefit or a long-term care benefit like Medicaid to pay for assisted living or nursing home care or for veterans aid and attendance pension benefits, that makes me feel great and it’s a win-win for the entire family.
Greg McIntyre: So how many of you out there have careers where you help people? You feel great when you really help people at the end of the day. How many people out there have careers or are retired and had careers where you help people? Maybe you were a policeman, a fireman. Maybe you were an attorney. Maybe you were a school teacher or a financial planner. Regardless, I guarantee you help people and it made you feel good at the end of the day.
Greg McIntyre: Hey, this is my Grandfather McIntyre right here. He was probably in his 80s or early 90s there. This is me awhile back. I may look a bit older, maybe a couple of more wrinkles by now. But Papa Mack, that’s really my why. That and I could put a picture up here of my six children and my wife who really worked hard to help our clients. I actually put a picture up here of some of my clients.
Greg McIntyre: But everybody needs a why. It’s not just the grind. When I’m working late, I do have six children, so daddy’s got to work. But when I’m working late, I’m thinking about my grandfather who spent 10 plus years in assisted living care and spent down really everything he had.
Greg McIntyre: If he would have had someone like me at that time as an elder law attorney, things might’ve been different. But he lived to be in his late 90s and stayed in assisted living care over 10 years. So really keep my family and my loved ones in mind when I’m doing estate planning and elder law and pulling some late nights. It always makes me feel great. It makes me feel great when people talk about us and recommend us.
Greg McIntyre: This is Samantha Yelton. Samantha was kind enough to give us a testimonial and talk about a little of the work that we did for her and her mother.
Hayden Soloway: Hi, I’m Hayden Soloway and I work in McIntyre Elder Law for Greg McIntyre. We have a guest today, Samantha Yelton. And she’s going to talk to us a little bit about her experience here at McIntyre Elder Law, a little bit about herself, and I hope that you will learn something and enjoy meeting Samantha.
Hayden Soloway: Samantha, hello.
Samantha Yelton: Hello.
Hayden Soloway: Thank you for coming.
Samantha Yelton: Thank you for having me.
Hayden Soloway: We met you at the World Series, and tell me how, you’re not a veteran. And so you were looking at the booths. We had one set up there.
Samantha Yelton: I had previously thought about contacting an attorney to help me with some things for my mother protecting her assets, and I just happened to see the booth. And of course, the elder law caught my attention. And so I went over and Greg was actually there. And I spoke with him and he introduced himself and told me what he was able to do. And I gave him my phone number and it just went from there.
Hayden Soloway: So tell me a little bit about your mom.
Samantha Yelton: Well, of course, she’s elderly. She’s in her late 70s and my father passed away about two years ago. And so she’s by herself and I was just trying to prepare for the future, for her future.
Hayden Soloway: So let’s talk a little bit about you. Tell us a little bit about Samantha.
Samantha Yelton: Well, I’m a mother. I have one son and I’m also a home care nurse for Hospice Cleveland County. And I really enjoy my job and that’s something that I’m very passionate about is helping others.
Hayden Soloway: Since you need an information that your mother, what did Greg suggest that you do for her? What kind of work did she need done to prepare her?
Samantha Yelton: Well, I actually came to him to get more information about the lady bird deed, which is something that I had heard about in the community and of course, working for hospice. I’d heard that term thrown around a couple of times, so I wanted to get some more information about that and see if that was something that we could do to help protect her property just in case she ever had to go into a nursing home.
Samantha Yelton: And also she had a healthcare power of attorney and durable power of attorney, but I felt like those needed to be updated since my father’s death.
Hayden Soloway: So tell me your experience working with Greg and getting the documents done. You came to our office?
Samantha Yelton: I came here and I told him what I wanted and he was able to provide information and tell me step by step what I needed to do. There were some things I needed to take care of on my end as far as getting titles transferred into my mother’s name. And so once all that was completed, then Greg and his team took care of it and very knowledgeable, very professional, good experience.
Hayden Soloway: They’ve got a good career, very knowledgeable and we do a lot of things in the community. We go to homes and-
Samantha Yelton: And you did.
Hayden Soloway: … even various places, yes. I’m so glad that you came and talk to us today.
Samantha Yelton: Thank you, my pleasure.
Hayden Soloway: I hope you enjoyed listening to Samantha’s story. Everyone has a story. If you can’t visit us, if for some reason your home bound for some reason or it’s a long drive and you don’t like to drive that far, we’ll be glad to come see you. Thank you.
Greg McIntyre: So, thank you so much, Samantha. I’m going to tell you, it makes me feel so good when somebody recommends me or somebody gives us a great positive review, and we’re very fortunate and blessed. We’ve gotten a lot of those. Samantha Yelton’s review is absolutely to die for. I mean, I love it and it makes me feel happy. It makes me feel good that we helped people. It makes me feel good that we helped save a home and keep that in the family, and keep her mom in control of the house for the rest of her life.
Greg McIntyre: That’s what a lady bird deed can do. We’re going to talk about a little bit of that today. Also, it makes me feel great with healthcare professionals like someone from hospice would come and use us, that they think that much of us and that makes me feel great. So thank you so much Samantha for doing that.
Greg McIntyre: Talk a little bit about state planning today, a little bit about benefits planning and a little bit about probate. We have three departments in our office. The estate planning, really I should change that. It should be really pre-planning. So if I were to change that, I would change that to pre-planning or the word pre- there instead of estate planning, and keep planning. But because it’s a little different than traditional estate planning.
Greg McIntyre: Estate planning, I think, maybe wife or spouse, two kids, 30s, early 40s, maybe trust with the children so that they’re cared for and guardianships, things like that, appointed, who’s going to be the guardian and caretaker if we both die. It’s a little different in elder law. So we’re pre-planning. We’re looking at retirement assets, retirees, soon to be retired. How can we plan to protect everything we’ve worked for, for our entire lives? So we keep the eye on the ball for the long-term care piece and what might come.
Greg McIntyre: In benefits planning, we do certainly help people in Medicaid crisis planning situations to activate Medicaid benefits to pay for a nursing home or assisted living care or we activate veterans benefits to help people pay for in-home assisted living nursing home care or just when they’re having some trouble. They may be eligible for this veterans aid and attendance pension benefit. I mean how great is that.
Greg McIntyre: If you look back through some of our videos, you’d see recoveries of $34,000, $22,000, $8,000 in back benefits on veterans aid and attendance as well as ongoing benefits between say, $1,200 and $1,800 depending if you’re a veteran, the spouse of a veteran, a spouse of a deceased veteran. Those two things, the Medicaid benefit and aid and attendance benefit can be amazing. A lot of times we’ll see what I would call the crying wife come in saying, “Hey, husband’s been in care for a couple of years. We’ve lost a couple of hundred thousand dollars, a few hundred thousand for care. How do we save some of it for retirement? What do I do?”
Greg McIntyre: And I can help with that. I can help people save for retirement. And we call that Medicaid Crisis Plan. That’s what we call it, Medicaid Crisis Plan. So we help with benefits planning, also probate. Probate is an area where you already passed away or a loved one has passed away. It would include probate, estate administration or trust administration, ministering trust. And it could include guardianships as well, which is while people are alive.
Greg McIntyre: So how many people over the age of 65, what percentage of people out of a hundred are going to need some type of long-term care during their lives? What percentage of people over the age of 65 will need some type of long-term care according to a US Department of Health and Human Services report, 2005 report? What do you think? Put in the comments. How many people … What do you think?
Greg McIntyre: It’s actually 70% of seniors, 70% of people over the age of 65 are going to need some type of long-term care during their lives. That’s huge odds. I mean, that’s huge. That’s better than Vegas odds or worse than Vegas odds and Vegas wasn’t built on winners, right? So that means that … Look at the cost, the high cost of long-term care. That means they’re going to have to spend out 70% of people over the age of 65 on in-home assisted living or nursing home care.
Greg McIntyre: So you have to ask yourself, do I have long-term care insurance or are my pockets deep enough to pay for it? Does Medicare pay for long-term care? No, it does not. It will pay 20 days for us for rehabilitation in full. And then part of the remaining 80 days, if you keep progressing so to speak and keep making progress or else at some point they’re even in the hundred days, they’re going to say, “You need to pay out of pocket.” And it’s very hard to appeal and stop those decisions.
Greg McIntyre: So what I suggest for people to start with, and so that’s what we keep on our mind as well is that 70% number. We know that and when we’re planning, we have that in mind. So foundations, let’s start there with foundations. We call those general durable power of attorney, which is on the street, they call it a financial power of attorney, healthcare power of attorney, living wills and wills.
Greg McIntyre: So general durable power of attorney, healthcare power of attorney, living wills and wills. Those are the four foundational documents. We’re going to review those in full next and people, you shouldn’t underestimate getting your foundations in place. Having these in place can absolutely mean the difference and being able to protect everything you have or losing it. Mark my words, and I do this every day.
Greg McIntyre: I want you to meet Mr. Foundation. He is extending a hand. He is the most interesting man in elder law. Mr. Foundation is going to help us illustrate some foundational planning today. So Mr. Foundation, look at that. He’s twirling his mustache. He looks smug because he has in place a general durable power of attorney. He knows that gives him options in his estate plan.
Greg McIntyre: There’s a reverse built into the plan. He can change directions, and he can count on his loved ones, the person or persons he appoints that he trusts to take good care of him and his money and retirement and home and real estate well into retirement even if he needs long-term care. I would say it’s probably the most important foundational document there is.
Greg McIntyre: It appoints a trusted person called an agent or attorney in fact to handle your financial and legal affairs while you’re alive. It survives incompetency and incapacity. If you don’t have a general durable power of attorney, then you could be stuck in a crisis. What do we mean by that? Well, you could be stuck because if you become incompetent or incapacitated and you don’t have it, then your accounts are frozen. No one can access them.
Greg McIntyre: You might say, “Well, I’m married. My husband or my wife can access them.” That’s not true. If you have an individual retirement account, it’s just for that individual. You might say, “But I’m the beneficiary on that account.” That doesn’t matter. A beneficiary cannot access the actual account or life insurance product or policy or annuity.
Greg McIntyre: Those things are individual assets or stocks or bonds, individual assets. You must have a general durable power of attorney in place. It needs to be recorded at the Register of Deeds to survive incompetency or incapacity, and it is extremely important that you only appoint someone you trust a thousand percent because you’re really handing them the keys to the kingdom to be able to have access to your financial assets. Very important document to have in place.
Greg McIntyre: If not, you could be stuck and your family could be going after guardianship for you or for your loved one who has become incompetent or incapacitated. And then the courts are over and have to approve the way any money is spent and it’s hard to save assets at that point. So must need to get that document in place.
Greg McIntyre: Healthcare power of attorney, it is extremely important to have a healthcare power of attorney in place. Mr. Foundations over here, he looks happy. Look at that beard. That’s a healthy beard right there. He’s happy, and he’s adjusting his glasses. He can see. He knows that he’s going to have someone that’s going to step in that he trusts to make important healthcare decisions for him.
Greg McIntyre: Life or death healthcare decisions, long-term care decisions, medication decisions. Is it important to have a HIPAA-compliant document or make sure the healthcare power of attorney is HIPAA compliant? Yes, if you want to pull medical records. Try getting medical records without a HIPAA-compliance form and it appoints a trusted person to handle those decisions. Only when you can’t, we write in there that only when you can’t, it survives incompetency and incapacity. It does not have to be recorded to Registry of Deeds. It automatically does that.
Greg McIntyre: So, a healthcare power of attorney is extremely important. I might ask some stupid questions today, but do you think it’s important to have someone appointed to make your life or death healthcare decisions? Of course, it is.
Greg McIntyre: A living will. Mr. Foundations looks really confident right now because he has a living will in place. Who should make my end-of-life decisions? Should it be someone else? Should it be my spouse? Should it be my kids? Well, that kind of puts that guilt-ridden decision on the spouse or on the kids. I don’t know if I want my four beautiful little daughters to decide whether daddy lives or dies.
Greg McIntyre: Now, this is for a situation where daddy or I might be incompetent, incapacitated. I can’t act for myself, terminal, incurable. Let’s say brain death has occurred on being maintained by respirators. Is it okay to let me go at that point? It’s my voice in the room saying it is releasing from liability to hospital, the doctors, my agent, my healthcare agent for complying with my decisions.
Greg McIntyre: That’s an extremely important document that should be in place. It does not need to be recorded at the Registry of Deeds. If you have the special religious requirements that need to be in there, a Catholic living will might want to make sure that there’s no flirting with suicide or mortal sin, the last rites of the Eucharist are administered by a priest.
Greg McIntyre: Those are extremely sensitive documents that matter that can decide whether you live or die in a certain situation that are very personal, can make the difference between you living on like a Terri Schiavo for years and the courts being unwilling or unable to make a firm decision on what could happen to you. This lets it stay in your hands and it’s your voice in the room even when you can’t speak.
Greg McIntyre: Hey, he’s pretty happy here because he’s putting in place … He’s A-okay because he’s putting in place the last will and testament. When does a will have power? Does it have power while you’re alive? No, a will only has power after you pass away. So an executor would be appointed. Your general durable power of attorney, your financial power of attorney would cease to have any power at that point.
Greg McIntyre: Clerks get irritated when you try to … Or mad, not happy. The law is against you if you try to use a power of attorney after someone’s passed away. It ceases to have power and everything needs to go through the executor or a trustee of the trust if you have a trust to handle asset disposition after you’re gone. Does a will allow me to pass property the way I want? Yes, it does. Yours should, but you need to think about other things.
Greg McIntyre: Now you need to think about liens that could attach to things as they go through the will. You need to think about it. Does a will protect my assets? No recording requirements. Don’t record your will because then it becomes kind of the public record at the Registry of Deeds.
Greg McIntyre: So, let’s say you don’t have long-term care insurance. You need, or your spouse needs nursing home or assisted living care. Medicaid comes in and pays for that care and attaches a lien after you pass away to your probate estate when you probate your will. You go down to the courthouse. You open up the state, you hand the clerk your loved one’s will and say, “Hey, can you help me here?”
Greg McIntyre: First, I’m going to tell you we can’t give legal advice and they can’t. They’re not attorneys. Second, they’re going to tell you or you’re going to find out even if you go to an attorney that you need to apply for probate letters and publish in the paper for four consecutive weeks and wait 90 days from the date of that first publication. Now, this is in most estates. What happens, there’s other unique situations where that might not be required.
Greg McIntyre: Why do you publish in the paper? Why is there a 90-day waiting period? It’s a lien period for liens to come in on your estate. And when liens come in on your estate and attached, it forces the sale or auction of the items going through the estate, which is how people lose homes every day of the week in every 100 counties in North Carolina. Millions, if not billions of dollars in property that changes hands ripped out of the families legacy.
Greg McIntyre: Does it pass to the family like you wanted to in your will? Does it help the children? Does it help the grandchildren go to college? It’s sold to pay the state for that Medicaid lien, which is paid for by tax dollars that you paid your entire life. And you paid three times as much for that home. Then you borrowed from the bank with interest over 30 years. So you’re losing a lot of asset there. You’re losing a lot of value, a lot of money. So a will could or could not be the right place to pass your home and other assets. So you need to think about that.
Greg McIntyre: Thank you, Mr. Foundations. Look at that smile, look at that smile, the most interesting man in elder law. I appreciate that. I appreciate that, Mr. Foundations. Thank you for helping us with foundational documents.
Greg McIntyre: So just to recap, general durable power of attorney. Financial power of attorney allows someone to manage your financial situation if you are incompetent or incapacitated. Healthcare power of attorney lets someone manage your healthcare decisions only when you can’t. Living will says when you are in a situation where the only medical procedures that can be done, all they’re going to do is prolong your suffering. It’s okay to let me go and it’s your voice in the room. A last will and testament helps you draft how you want to pass property.
Greg McIntyre: Now, our wills are going to have a memorandum with them that lets you write your important personal items too in there even if you have five pages full of memorabilia or pictures or china or smaller things. So we make sure we pass things correctly to your loved ones, but you should consider if a will is the only way that you pass things and does the will really protect the assets the way you want.
Greg McIntyre: So how do we protect the house? Many people are interested in how do we protect the house. What do we do? Well, let’s talk about it. We can use quitclaim deeds. At what age should a person give away their home? What age do you think? I say there’s never a good age. In fact, if you look at the tenants of my practice, there’s two. One is to protect assets and also keep the senior and the client or the client in control of those assets for the rest of their life. And two is to leave available healthcare options like long-term care options for that senior so that our planning doesn’t step on that or hurt that.
Greg McIntyre: A quitclaim deed is just simply giving whatever you have, lease on the dog and all, to someone else. It could be to your children. You’re deeding the house to the children. But there’s danger in that. I have seen children try to throw their parents out of a house. You might say mine won’t but I still believe kids are nicer to mom and daddy when they’re still in control of the property.
Greg McIntyre: If you did that, it’s still accountable asset transfer under the Medicaid planning part. So remember in North Carolina, there’s some Medicaid rules there. Three years for assisted living is the lookback period, five years for nursing home Medicaid. So they look back on all transfers and if this was done within that time, they’re going to count that and deny that benefit or they’re going to make you transfer that quitclaim deed back into your name and make your children do that.
Greg McIntyre: So it needs to be done outside of Medicaid, lookback period and pass this property outside of the will or state. So that will, we went over earlier this quitclaim deed, it’s going to pass it before you die so it’s going to pass it right now. But you’re at the mercy of the owner.
Greg McIntyre: Also, there could be tax consequences here. So whatever you paid on the property to buy the property, you’re going to pass that tax value onto your children. If they sell it, they’re going to pay capital gains or what you paid for it versus what they sell it for. So it could add some taxable gain there as opposed to having a step up in basis with a deed transfer like a life estate deed or lady bird deed or pass them through the will or a trust.
Greg McIntyre: So this is what I’m concerned about with quitclaim deeds and giving your property away. What percentage of people over the age of 65 suffer from elder abuse according to the National Center on Elder Abuse? According to the National Center on Elder Abuse, 10% of people over the age of 65 … And I think that’s a really low number. I think that number should be way, way, way higher, probably double, triple or more higher. It should be much, much, much higher.
Greg McIntyre: So the reason I think that that should be higher is because I think that a lot of financial abuse goes unreported. Lots of financial abuse goes unreported for elders. And I don’t want that to happen to you or a loved one in your family. That’s why I’m not a huge fan of quitclaim deeds. I’ll do it if you need to but I’d rather see you protect the property because there’s ways to do it and still qualify for the Medicaid benefit or leave that qualification on the tape.
Greg McIntyre: So let’s talk about how to do that, life estate deeds can help. That allows you to stay in control of the property for the rest of your life. So it allows the senior or client to stay in control of the property, husband and wife or single person for the rest of their life. And then automatically outside of the will, not through the probate estate, pass it directly to a loved one, directly to a loved one.
Greg McIntyre: It must be done outside of the Medicaid lookback period, this life estate deed transfer. And it can be done … You could have a hundred properties, 10 properties, 5 properties, and put life estate deeds on all of them. And for Medicaid planning purposes, it’s not countable as an asset. It’s protected and safe unless you do it within that three-year lookback period for assisted living or five-year lookback period for nursing on Medicaid.
Greg McIntyre: So you have to be aware there that the lookback period still counts. It’s a countable asset transfer. But it passes outside of the will or a state and directly to loved one automatically when the last one of you and your spouse pass away.
Greg McIntyre: However, lady bird deeds, and who is this here? Who’s this pretty lady? That’s right, Lady Bird Johnson. So Lady Bird Johnson, the wife of Lyndon B. Johnson, his administration implemented the Medicare, Medicaid current modern day that we experienced and have, that system. A lady bird deed is also called an enhanced life estate deed. It’s built off that framework. It is not a countable asset transfer for Medicaid planning.
Greg McIntyre: The Medicaid system in North Carolina has carved out an exception and a policy for lady bird deeds, which is amazing and excellent and I love it. And you should too. You should take advantage of it. A lady bird deed beats the five-year lookback period. You could put one on today and even if you needed to access long-term care or assisted living, nursing home care or assisted living Medicaid, well then the lookback period, three years or five years, it’s okay. It’s absolutely okay.
Greg McIntyre: It’s not a countable asset transfer. That is awesome. I’m going to give that a big check mark, not a countable asset transfer for Medicaid purposes, beats the five-year lookback period. Beats it, not countable. Passes the property outside of the will and the estate, yes, yes. I’m so happy. And it passes it directly to loved ones.
Greg McIntyre: This one deed has been responsible for saving so much money in property for families. It is meant for your home and any surrounding property up to a value of $572,000 this year, $572k, so as long as it’s worth $572,000 or less. And it could also include contiguous attached properties, as long as those properties are touching. So it has to be the primary residence, so your home … Doing such a bad job writing home there, but you get it. Your home and any surrounding property up to a value of $572,000 immediately protects that. I give this two thumbs up, a big check mark. I’m going to put check marks all over the screen. It’s just I’m so happy about this deed. It has helped so many people and so many clients. I would urge you to seek counsel and see an attorney about whether it could be for you.
Greg McIntyre: That foundational work is a strong and powerful package. A strong and powerful package for many, many families for many, many families and can keep a lot of value and money and property. Do you think a home worth a couple hundred thousand dollars could help a family? Sorry, Lady Bird, we’re check marking in all over the place. Of course, it could. Absolutely, it could. A couple of hundred thousand dollars could absolutely send a lot of my kids to college. It’s just a beautiful thing, great thing for North Carolina. I’m going to give North Carolina a hand right now and our policy makers and legislature.
Greg McIntyre: So let’s talk about trusts. Many of you might say, “Hey, trust are for me,” and they might be, but let’s talk about whether that’s true or not. Let’s talk about the types of trusts. First, let’s talk about … I’m going to change my pen color here … revocable trusts. Many times you hear that as a revocable living trust. What does revocable mean? What does the word revocable mean? Well, it means you can revoke it. It means you have the ability to stop it. It means you as the creator can destroy it, can put money in, can take money out. You are in control of it, period. Just you.
Greg McIntyre: The word revocable specifically means capable of being revoked or canceled. So that’s the main difference between a revocable and irrevocable trust, capable of being revoked or canceled. What about irrevocable? What does irrevocable mean? Irrevocable means not able to be changed, reversed or recovered, final. This is final. Once you put it in place, it is in place. It is final. It cannot be reversed. It is final.
Greg McIntyre: We draft a couple of kinds of irrevocable trust. One is a Medicaid asset protection trust. Another might be a veteran’s asset protection trust. This is the one we do the most of, this irrevocable Medicaid asset protection trust. And you could place your home in a Medicaid asset protection trust, an irrevocable trust or money in an irrevocable trust. So you could put your home in here and you could also put money in here, either one.
Greg McIntyre: You could do the same thing over here with a revocable trust. You could do your home in here and money in here. The difference is, let me tell you the difference. Does Medicaid count? Assets, this home and this money in a revocable trust is yours. Is Medicaid counted as yours? The answer is yes, in a revocable trust like this one right here. In a revocable trust, Medicaid counts. The money and property is yours or your spouse’s. It’s no protection. So if we’re looking at Medicaid planning or long-term care planning, the revocable trust is not the option.
Greg McIntyre: Now, if we have a planning that we’re doing and we’re going to put money and property in there and we want to protect it against liability and make sure it’s there for future generations, and then distributed over time revocable trust and there’s long term care insurance in place, this might be a great tool. But for Medicaid planning purposes, no, we’re going to use this irrevocable trust. We’re going to use the Medicaid asset protection trust. It’s what we’re going to use.
Greg McIntyre: And we’re going to start that five-year lookback period the second that we put any money or property in here. So we’re going to start ticking, tick-tock, tick-tock. We’re going to put up some money and a home in there, and it’s going to start that five-year lookback clock ticking. If we sold the house, the money from the house sale could stay in the trust and not be affected by Medicaid or the lookback period. We could rent the house and the money stay in the trust.
Greg McIntyre: It gives us a little more flexibility than a lady bird deed does because the lady bird deed stays on that property until you pass away. That’s the way we could do it. You could sell the home but then you would simply have money and that might put you to run afoul of the Medicaid rules.
Greg McIntyre: So those are a couple of differences in trust, revocable and irrevocable trust, and how we use them in Medicaid planning. And if you have any questions about that, please feel free to ask. Call us, go to mcelderlaw.com. I have a number of videos just on the trust issues, or you can read about some articles we’ve written on that or give us a call, 704-749-9244. We’ll be glad to schedule a consult and help you with those issues.
Greg McIntyre: Hey, special thanks. I’d like to give a special thanks to all the veterans out there. Thank you for your service. I am a veteran of the US Navy. I was in the US Navy for four years and I enjoyed my service. Some of it was tough, but I’m glad I did it and it was a great vehicle to get me where I am and it made a man out of me. There’s no doubt about it. I married my wife, met and married my wife while I was in the military. Living in San Diego, and I’m very proud to be a certified attorney through the US Department of Veterans Affairs. And I handle veterans aid and attendance pension benefits on a regular basis for veterans.
Greg McIntyre: Now, veterans aid and attendance pension benefits are a special kind of benefit that you as a veteran, or a spouse of a deceased veteran, might qualify for. It can give anywhere between say $1,280 and $2,800 per month to a veteran or a spouse of a deceased veteran if you qualify. And you received back pay to the date of qualification. So imagine how that money can help with your everyday needs, especially for in-home assisted living or nursing home care. Nothing makes me happier than to have someone who has a shortfall. They make much less than the private pay of an assisted living facility.
Greg McIntyre: Their family is paying the remainder and has that burden, or they can’t qualify for Medicaid for assisted living because they’re over the income limit, but way under how much it costs to pay for the monthly care. We qualify them for veterans aid and attendance pension benefits, and lo and behold, they’re making more money now than it costs and they deserve that money. It’s their pension that they didn’t realize they were eligible for based on the fact they were in the military simply during a wartime event and some other factors.
Greg McIntyre: So you need to check with our office to see if you’re eligible. If you’re a veteran or spouse with deceased veteran, go to mcelderlaw.com to learn more about veterans aid and attendance pension benefits, or call us at 704-749-9244. Generally, in a five-minute or less phone call, we can do an assessment on veterans aid and attendance pension benefits and tell you whether we can proceed or not with that benefit.
Greg McIntyre: A long-term care insurance, I told you when we started we might cover a little ground with long-term care insurance. What a great, great thing to have in place that not everyone can necessarily afford, or think they can afford, and that very few people have. But if they did have it, they would be able to pay for in-home assisted living and nursing home care private pay, if they put that in place. You need to put that in place before you’re 70, 71 years old or your age out of being able to put that in place.
Greg McIntyre: The less health care problems, the less health problems you have, the better. But I’m going to tell you right now it’s a great option and many more people should take advantage of it than do. And as you see on the right here, there’s traditional policies, hybrid policies, asset based products using qualified and non-qualified funds and many other options. If you want information on how to qualify for long-term care insurance, call our office, 704-259-7040 or 704-749-9244.
Greg McIntyre: And we’ll help you. We will absolutely help you and direct you in the right direction. We work with people all the time to get these types of benefits and this type of insurance. So call us, 704-749-9244. There’s so many different types of products out there and options. The industry has been totally overhauled over the last several years, the last 10 years, so you might not have it but could qualify for it and it could save everything that you have. So give us a call.
Greg McIntyre: Hey, I’ve worked very hard to create things like this, the estate planning worksheet. We’d love to be able to give you that. Come in our office to receive that or call us, 704-749-9244. It’s my visual way to explore and look at the estate planning and elder law with financial benefits with your home, passing it through trust, a life estate deed, or lady bird deed directly to loved ones avoiding this situation right here where you pass it by will. It goes through the probate estate like we were talking about the liens attaching here. And instead of it getting to the loved ones, it is absolutely taken and sold to pay for that long-term care Medicaid or assisted living Medicaid lien.
Greg McIntyre: I talk about beneficiary assets on this or illustrate that graphically how to pass those, how to pass other investment assets and retirement assets directly to loved ones easily even without using trust, so a little cheap advice there. These are extremely nice tools though. I’ve spent a lot of time conceptually thinking about this and putting it in place. I need to make a board game out of it, but we’d love to give you the estate planning worksheets, so call our office.
Greg McIntyre: Something else that I’d love to be able to provide you with is Saving the Farm. I spent over two years researching Saving the Farm. This is a book that is a book, audiobook, and ebook that I would love to give you. I would love to give you this book. I spent literally over, I mean, tens of thousands, tens of thousands of dollars developing this book. People think you make a lot of money writing books, not true. Not true for me, not in my experience because this is a labor of love. It has been Amazon’s number one elder law book in the past, and I would love to be able to provide it to you.
Greg McIntyre: You can always go on Amazon and buy the book. It’s about a $20 value. I want to say it sells for $20, maybe $19.99. But I also spent over six months in the editing process on this. This book is written for you on how to protect your hard-earned money and property. I literally believe that it’s a legal maze that you’re navigating out there simply by being an American and aging right now, that sometimes you need help with. And I wrote this for you so that you could get some practical help and educate yourself. Even if you don’t come see me, you should read the book. Call our office to get the book.
Greg McIntyre: We have an amazing team. This is just some of our team. We have a lot more people on our team than that, and attorneys. Brenton does a great job in our office as well and has an LLM in tax. That’s what this means over here, an LLM in tax. So he helps research and advise us on some of our tax issues and problems as well.
Greg McIntyre: I would love to be able to see you in a consult and advise you. I’d love to be able to give you this estate planning worksheet, I’d love to be able to provide you with that. I’d love to be able to provide you with an autographed copy of Saving the Farm. I would love to do that. Please give us a call, okay? Give us a call and I’d love to be able to do that. I’d love to have you meet our team and our attorneys. Call us. Call us at 704-749-9244 with any questions. Any questions you have, you call me. And we are going to address those.
Greg McIntyre: Thank you so much for your time and your attention. Again, I’m Greg McIntyre with McIntyre Elder Law, helping seniors protect their assets and legacies. And I really, really enjoy what I do. Thank you so much for listening to the estate planning and asset protection webinar/seminar that we’ve given today and call me with any questions, or visit us online at mcelderlaw.com.
Greg McIntyre: So much for watching the estate planning and elder law seminar. I really enjoyed it. I get pumped giving these. I love what I do. If you can’t tell, I love to write about it, blog about it, do seminars on it. And I hope you enjoyed our webinar style e-course on estate planning and elder law and all those issues. So if you have any questions, go to mcelderlaw.com. That’s M as in Mike, C as in Charlie, elderlaw.com or call us at 704-749-9244, 704-749-9244. Ask for Greg. Have a great day.
Get 2020 Vision in 2020! Greg lays out a 4 step plan to FINALLY get that much needed plan in place that brings with it the peace of mind and clarity you so justly deserve. Learn More: mcelderlaw.com/estateplanning
Happy new year, happy new year’s resolution, I’ve been working on it. I love this time of year. I love the play on 2020 too, I can’t believe we’re in 2020 right now. It’s a new year. It’s a new decade and it’s a perfect time to make a new plan and let me tell you what I mean. I’ve been making plans, I’ve been meeting with Brenton another attorney in our office. We’ve been making plans. My wife and I are working on plans for our business and working on plans for our personal. We’re working on personal plans. This Saturday we’re meeting and really concentrating on planning what we want to do this year. We have a child in college, we have five more at home and we have some goals we’d like to hit ourselves this year as far as maybe trying to save a little money and maybe pay down some student loans, things like that. Just talking about some different things we’re working on and trying to get on the same page and make sure we’re both working together.
I love this time of year because it gives us those opportunities. And if we plan right, I’ve found if I plan correctly, if I really dig deep and do the work, then I can come out of this planning period going into the new year because there’s really nothing different about this time of year. It’s another trip around the sun and we celebrate it and that’s great but you could plan continuously. I just kind of take this time out several weeks and weekends around this time of year to really engage in some planning so that I can set up the year. I find that I have peace of mind and kind of run on autopilot when I can really get my plan down, especially if I have multiple people that are on the same page with me that are working on the same goals and plans, then it’s easier to get there and it’s fun to get there together as a team.
So that’s what we’ve been working on. Hey I’m going to be on Charlotte Today Show coming up, but it’s going to be January 22nd, Wednesday, January 22nd and we’re going to be talking about just this, about getting clear vision in 2020, about elder law is clarity. And what I mean when I say elder law is clarity, I mean it helps you get clear. It helps you see clearly what you want and I have a little formula for how to get there. Okay? And let me tell you what that is. Want to hear it? Here it goes.
2020 vision in 2020, what that means to me is the same thing I’m engaging in right now with planning with our firm, with planning at home personally. Try to involve the kids in the planning too and talk to them because I want them to set goals. I want them to have peace of mind. I want them to have direction. Ever try to hit a target or how about ever try to achieve something without having a target? I mean it’s much better when you can have your targets to find, when you know what your goals are and what you’re working on. So from an estate planning perspective, it’s an amazing time for families to get together, same way, to talk husband and wife, to talk with the kids if you need to, to talk with those people who you might want to be your financial agent if something happened or make healthcare decisions for you or be the executor on your will. Tell those people, communicate, families, everything works better with open communication.
So I would say first review what you have, review the estate planning documents that you have. If it’s a will, we see wills all the time that might not be probatable because they don’t have the requisite number of signatures or notaries or the correct language. They’re not self-proving. Maybe you’re leaving something to your wife and maybe it’s your ex wife or, maybe she’s named in there. I don’t know, there could be a lot of changes. So maybe people have passed away, maybe you’ve accumulated more assets, but reviewing is extremely important. So that’s the first step in my opinion.
How about your powers of attorney? Do your powers of attorney meet your needs? Do you have backups? Because if not, and say your spouse is your attorney in fact, your agent, and then you did those 10 years ago, heaven forbid something happens to your spouse that leaves you out in the cold. So we want to put a secondary person that you trust 100% to be able to handle your financial decisions so we can implement plans.
Take inventory, number two. So first review, review first, review what you have. That’ll put you in a good mindset of bringing you up to date. Then number two, take inventory of what you have now. Take inventory of what you have now, if you want a good workbook to work through, and it’s a few pages, but a good workbook to work through, sign up for our e-newsletter and I have it set up to send it to you automatically and it’s our estate planning workbook, okay? Go to mcelderlaw.com. M-C-E-L-D-E-R-L-A-W.com. Mcelderlaw.com. Sign up for our e-newsletter and you can sign up right there on the front page of the website and it will give you an estate planning workbook, okay? And it’ll allow you to list your inventory, who your family is, right? Inventory your family and inventory your assets, both, and this workbook will allow you to do both.
And that’s extremely important because what that’s going to do when you review and you think about what you had and how things changed and how your documents are working, how your estate plan is working or not working for you now. And then you review your assets. Now you’re in the mindset, you have your head wrapped around exactly what you have. I always find that I have anxiety, no kidding, when I have a lack of data or there’s negative data or bad data, scary data that I ignore, right? Or that I’m ignoring. Right? So there’s either usually when I’m feeling anxiety at work or at home or somewhere else it’s either I don’t know everything, I don’t have all the facts or there are facts that I kind of know, I’m just ignoring them. And trust me, I can go on ignoring things like that for a long time. I think we as human beings can ignore or let things go for a long time or ignore bad facts or bad data.
So you want to pay attention. Those gut feelings are evolutionarily what tells us that something’s wrong, okay? Or we need to do something. I’m still learning to listen to that gut to say, “Okay, I’m feeling something over here. Let me look over there and really find out what’s going on. Look under the hood. Maybe it’s in the business or something else,” and really fix it. Okay? Same thing with estate planning with our families, with our assets, with our legal plans.
So once I dig through the data, good or bad, good or bad, at least I know what’s going on. I have control at that point and I can make changes or fix things. That’s extremely important. And that’s what taking inventory is all about. Whether you want to or not and you know you’ve been putting it off because I put it off too, take inventory. So one is review your docs, two is take inventory, and then three, define your goals, okay? Define your goals.
What I mean by defining your goals is what are your plans? Are your plans to take a cruise the last 10 years of your life? Are your plans to downsize your home and buy a home in a senior community or active older adult community? Are your plans to protect assets and maybe help send the grandkids to college or really preserve the home and pass that along to the kids? There’s a number of worthwhile goals out there, but let’s define what those are. And I find that my goals become really clear, elder law is clarity remember, and we’re in 2020 so we want 2020 vision in 2020. I get really clear, I get that 2020 vision and that clarity once I know all the facts. And it’s easier for me to define and set my goals.
So then once I’ve set my goals, meet and discuss, that’s number four. Meet and discuss. Meet and discuss with the family if that’s important. Some people don’t want to discuss it with the family and for good reason, but at least either way you can always meet and discuss with a professional. A professional would be, for estate planning and elder law, who do you know that might be able to help? Oddly enough, we would be glad to help. If you would like for us to meet you and talk about a new year and a new plan and peace of mind. I find that peace of mind, so much peace comes along with knowing the data, setting the goals and then if I need to meet with a professional. Hey, I’m all about meeting with a professional to get things done.
Give us a call, (704) 749-9244 or go online, contact us at mcelderlaw.com. And don’t forget to sign up for our e-newsletter on our website so you get that estate planning workbook. Have a great evening.
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McIntyre Elder Law 112 S. Tryon St. STE. 760 Charlotte, NC 28284