Estate planning just got a bit more complicated, thanks to a recent ruling by the IRS. The ruling was issued in March 2023 and is Revenue Ruling 2023-2; it has significant implications for individuals who have an irrevocable trust as part of their estate plan. Continue reading “Understanding the Impact of Recent IRS Ruling on Trusts and Estate Planning”

Every trust is either revocable or irrevocable, but which trust should you create? Find out what factors go into the decision of what trust is right for you.  We look at your age, wealth level, family circumstances, desire for flexibility and control as just some of the factors that go into this decision.

This video clears up all the confusion surrounding the current five year lookback for Medicaid. Learn about what the 5 year lookback is, the associated penalty for nursing home/institutional Medicaid coverage and the new 2.5 (two and a half) year lookback for community Medicaid effective in 2024.

Learn about why it can be critical for all family decision makers, and trustees in particular, to be present during an estate planning consultation. Family dynamics, your intentions as well as the intentions of those close to you should be carefully weighed and considered by all parties prior to signing a Trust or other legal instrument.

Transcript:

Michael Levitis  00:03

Good day, everybody, this is Michael Levitis from JurisQ, a legal network, we will bring a different attorneys to answer your questions on law. Today I bring it back Irina Yadgarova. Irina, good day, how are you?

Irina Yadgarova  00:17

Hello, how are you?

Michael Levitis  00:19

Good, thank you. Of course, we bring it back for trusts and estates and elder law issues, because this is what you do. You see all types of real life examples, and stories where people need your help, or should have went to you ahead of time. I want to talk about how a trust or an estate is such a very important decision that not only affects, of course, your estate, you, but it affect your loved ones, because decisions you make during making the trust, affect generations to come. So you told me off camera, how important it is that whoever is affected by these decisions, whoever is making decisions, everybody’s together in one room, so to speak, with yourself, with an attorney. So you can really know all the facts evaluates all the risks, or the pros and the cons and know how your estate will work down the line with your descendants. So that’s what we decided to bring you in for this particular issue. So tell us, first of all, why is it important that all decision makers and people who are affected by decisions are in the same room with the attorney?

Irina Yadgarova  01:45

It’s funny, sometimes people ask me: can my son come to the consultation? Can my adult daughter or niece or somebody who’s very close. I always encourage that very much, because it’s very important for everybody, especially the individual who’s going to be the trustee, to attend the initial consult, if possible. I actually had a learning lesson, my myself, which I shared with you off camera. Just last week, I had an individual come in, who’s the trustee of this woman’s trust, they signed all the paperwork. I’ve spoken, I actually spoke with both of them numerous times, but for the initial consultation, where most of the information was divulged to me by the client. I gave all of my advice and feedback and explained the terms of the trust how it works, he was not present for that conversation. So I’ll give you the actual concrete example. It involved the irrevocable asset protection trusts, which is a huge part of what I do, how I help individuals in my practice. One of the detriments, one of the very few negatives of this type of trust, and why it’s only appropriate for typically for individuals who are 55 and up, is that you cannot obtain financing. Through this type of trust. It’s difficult. You could but only certain lenders would give mortgages or financing such as Quantic bank and some others, and it’s not as simple as if you’re doing it on through your own name, and the interest rates are not as preferred.

Michael Levitis  03:17

.To refinance, right? If you want torefinance or cash out?

Irina Yadgarova  03:22

Correct. Home equity loans are not as simple, you could still get it. But it’s not as simple of a process because their legal department has to review the trust, they have to understand that. For mortgages, for sure you only have a couple of lenders like Quantic bank and their rates are not preferred. So this is why you get the trust is ideal for whomever has already paid off the mortgage, who’s not really planning on refinancing soon. Whoever is not, so and 55 and up, because typically, you’re not going to be obtaining financing as much as the younger individual. There’s other mechanisms to get cash out. But that’s beyond the scope of this.

Michael Levitis  03:56

Sometimes it could be too premature in forming a trust.

Irina Yadgarova  04:00

Correct. It’s my job as a counsel to explain all of these ins and outs to the client. It was her property solely. So it’s her, she understood all this, she had no problems with this. But her son, who was a trustee, I guess didn’t maybe necessarily bother to understand all of these ins and outs prior to signing. He was the one who wanted to obtain financing very shortly after the signing of the trust. He was really understandably upset that he wasn’t aware that this would make it more difficult to obtain financing. This is just why it’s so important to have all the decision makers in the room for your initial consultation with an estate planning attorney. Because even though we get bits and there is so much information, so much that I wasn’t even made aware of that the client had because this trustee kind of like de facto manages a lot of her affairs, and she didn’t think it was important enough. So especially when we’re dealing with seniors, where you have close family members who are sometimes calling the shots, it’s important to have everybody in the room and understanding the entire situation.

Michael Levitis  05:16

Right, because maybe there are other fact that the person who came to the client is not considering, whereas their kids may say: wait a second Mom, Dad, what about this?

Irina Yadgarova  05:28

Family dynamics, because I have another client, who just postponed their initial full consult with me, because only one of the daughters was available, they wanted that daughter to manage this estate planning process. But her sister who’s on vacation now is the one who manages the finances. So we kind of be like a weird loop. She kind of had to have all the parties in the room. That’s why we work also with their accountants, there has to be information that goes out to their insurance carriers, you have to have a holistic approach.

Michael Levitis  06:02

Also, you said, there is another example that you had this week, that really showcased how important it is that everybody’s on board.

Irina Yadgarova  06:10

It’s very sad, actually. It’s kind of like, the inverse example where somebody should come to an estate planning attorney. Oftentimes they don’t. So in this specific scenario, I had a young child of a physician who passed away, and there was no planning, really, in the family. I asked: did she know that she was terminally ill that she have noticed that she was going to pass away? So the daughter said she kind of had self diagnose, she didn’t want to confront the issue. So what was the out the outfall of all this, it’s really harmful to her side, the decedent side of the family, because this was a very hard working woman who acquired a lot of property and titled it with her husband. So it was just if properties, and the way that they were titled Is her name and his name. In New York, even if you don’t put as husband and wife or as joint tenants, if you acquire it while you’re married, it’s considered to be 10 tenants by the entirety. So when one spouse passes away, the surviving spouse inherits the property outside of any court process automatically. The father ended up with these properties. He does have minor children, and he has this adult child. The concern now of the woman side of the family, the woman who passed away, is that – what if this guy ends up getting remarried? It was really her money, essentially, that purchased all of these properties. It could fall into the hands of this third party who wasn’t involved in purchasing these properties, because he could do as he pleases, right? He can add her name to the property. It’s his property now. So this is why it’s important to have an estate plan, this woman who passed away, she was relatively young, she was in her 50s. Even though some individuals, they know they’re ailing, they don’t want to confront these issues. But this is a harmful impact to her children. So it’s just another example of how important it is to make sure that you’re planning your estate, especially if you have these triggers in terms of health, deteriorating, or any crucial changes in life.

Michael Levitis  08:30

Irina, you brought up very good points here that estate planning not only can help you get Medicaid, Medicare, but also helps you shape how your hard earned property can pass down to your one side of the family, the other side, what happens if your kids remarry, because you don’t know what’s going to happen for 5-20 years from now, so you want to be able to have more control. …. you can’t control what happens to your property probably 200 years from now, but you can control in the near future. What happens for the benefit of your family, your immediate family, and that is why it’s so important to get an attorney for estate planning and tell them all the facts and talk to your doctor, explain what are the dynamics of the family to home, do you want to prior to pass and then as we discussed, also get that family involved. They also know what is going on, unless you want to keep it confidential, right? Irina, if you want to keep it confidential, that’s your case.

Irina Yadgarova  09:39

Absolutely. That’s a really good point, and even in that case that I mentioned earlier, where the individual should have brought her son along, the only reason she should have brought him along is because they get along and she wants him to do whatever he pleases. If this was a situation where it’s wholly owned by her and she wants to call the shots versus should name somebody a trustee that she doesn’t see eye to eye live. But when you have, it depends on what type of family dynamics would warrant a conversation. Absolutely, she doesn’t have to give notice to anybody, even the beneficiaries of the trust. But certainly when the trustee is signing on to a document, he should know what the terms are. These are important points that should be hashed out prior to engaging in the plan.

Michael Levitis  10:24

Perfect. Listen, this is why I love having you on because not only teach us the law, but you give us real life examples. So when people are watching your videos, they see what could be the outcomes.

Irina Yadgarova  10:35

I just want to tie that up by saying that the ideal plan in that situation was for him to get the financing and then literally a day after to sign the trust. It’s not that we wouldn’t have done what we did. It’s just he would have waited a bit longer.

Michael Levitis  10:50

Makes sense. Timing is crucial is everything, and unfortunately, our time is coming … to an end … we had a very interesting session. Irina, I hope to have you back again next month, with more FAQs on trusts and estates and elder law. Irina Yadgarova, thank you very much. Today we gave general information, and of course, if you want to consultation, you want specific advice on your situation on your possible estate planning. Call the number on the bottom of the screen. Thank you everybody for tuning in.

Irinaa Yadgarova  01:45

It’s funny, sometimes people ask me: can my son come to the consultation? Can my adult daughter or niece or somebody who’s very close. I always encourage that very much, because it’s very important for everybody, especially the individual who’s going to be the trustee, to attend the initial consult, if possible. I actually had a learning lesson, my myself, which I shared with you off camera. Just last week, I had an individual come in, who’s the trustee of this woman’s trust, they signed all the paperwork. I’ve spoken, I actually spoke with both of them numerous times, but for the initial consultation, where most of the information was divulged to me by the client. I gave all of my advice and feedback and explained the terms of the trust how it works, he was not present for that conversation. So I’ll give you the actual concrete example. It involved the irrevocable asset protection trusts, which is a huge part of what I do, how I help individuals in my practice. One of the detriments, one of the very few negatives of this type of trust, and why it’s only appropriate for typically for individuals who are 55 and up, is that you cannot obtain financing. Through this type of trust. It’s difficult. You could but only certain lenders would give mortgages or financing such as Quantic bank and some others, and it’s not as simple as if you’re doing it on through your own name, and the interest rates are not as preferred.

Michael Levitis  03:17

To refinance, right? If you want to refinance or cash out?

Irina Yadgarova  03:22

Correct. Home equity loans are not as simple, you could still get it. But it’s not as simple of a process because their legal department has to review the trust, they have to understand that. For mortgages, for sure you only have a couple of lenders like Quantic bank and their rates are not preferred. So this is why you get the trust is ideal for whomever has already paid off the mortgage, who’s not really planning on refinancing soon. Whoever is not, so and 55 and up, because typically, you’re not going to be obtaining financing as much as the younger individual. There’s other mechanisms to get cash out. But that’s beyond the scope of this.

Michael Levitis  03:56

Sometimes it could be too premature in forming a trust.

Irina Yadgarova  04:00

Correct. It’s my job as a counsel to explain all of these ins and outs to the client. It was her property solely. So it’s her, she understood all this, she had no problems with this. But her son, who was a trustee, I guess didn’t maybe necessarily bother to understand all of these ins and outs prior to signing. He was the one who wanted to obtain financing very shortly after the signing of the trust. He was really understandably upset that he wasn’t aware that this would make it more difficult to obtain financing. This is just why it’s so important to have all the decision makers in the room for your initial consultation with an estate planning attorney. Because even though we get bits and there is so much information, so much that I wasn’t even made aware of that the client had because this trustee kind of like de facto manages a lot of her affairs, and she didn’t think it was important enough. So especially when we’re dealing with seniors, where you have close family members who are sometimes calling the shots, it’s important to have everybody in the room and understanding the entire situation.

Michael Levitis  05:16

Right, because maybe there are other fact that the person who came to the client is not considering, whereas their kids may say: wait a second Mom, Dad, what about this?

Irina Yadgarova  05:28

Family dynamics, because I have another client, who just postponed their initial full consult with me, because only one of the daughters was available, they wanted that daughter to manage this estate planning process. But her sister who’s on vacation now is the one who manages the finances. So we kind of be like a weird loop. She kind of had to have all the parties in the room. That’s why we work also with their accountants, there has to be information that goes out to their insurance carriers, you have to have a holistic approach.

Michael Levitis  06:02

Also, you said, there is another example that you had this week, that really showcased how important it is that everybody’s on board.

Irina Yadgarova  06:10

It’s very sad, actually. It’s kind of like, the inverse example where somebody should come to an estate planning attorney. Oftentimes they don’t. So in this specific scenario, I had a young child of a physician who passed away, and there was no planning, really, in the family. I asked: did she know that she was terminally ill that she have noticed that she was going to pass away? So the daughter said she kind of had self diagnose, she didn’t want to confront the issue. So what was the out the outfall of all this, it’s really harmful to her side, the decedent side of the family, because this was a very hard working woman who acquired a lot of property and titled it with her husband. So it was just if properties, and the way that they were titled Is her name and his name. In New York, even if you don’t put as husband and wife or as joint tenants, if you acquire it while you’re married, it’s considered to be 10 tenants by the entirety. So when one spouse passes away, the surviving spouse inherits the property outside of any court process automatically. The father ended up with these properties. He does have minor children, and he has this adult child. The concern now of the woman side of the family, the woman who passed away, is that – what if this guy ends up getting remarried? It was really her money, essentially, that purchased all of these properties. It could fall into the hands of this third party who wasn’t involved in purchasing these properties, because he could do as he pleases, right? He can add her name to the property. It’s his property now. So this is why it’s important to have an estate plan, this woman who passed away, she was relatively young, she was in her 50s. Even though some individuals, they know they’re ailing, they don’t want to confront these issues. But this is a harmful impact to her children. So it’s just another example of how important it is to make sure that you’re planning your estate, especially if you have these triggers in terms of health, deteriorating, or any crucial changes in life.

Michael Levitis  08:30

Irina, you brought up very good points here that estate planning not only can help you get Medicaid, Medicare, but also helps you shape how your hard earned property can pass down to your one side of the family, the other side, what happens if your kids remarry, because you don’t know what’s going to happen for 5-20 years from now, so you want to be able to have more control. …. you can’t control what happens to your property probably 200 years from now, but you can control in the near future. What happens for the benefit of your family, your immediate family, and that is why it’s so important to get an attorney for estate planning and tell them all the facts and talk to your doctor, explain what are the dynamics of the family to home, do you want to prior to pass and then as we discussed, also get that family involved. They also know what is going on, unless you want to keep it confidential, right? Irina, if you want to keep it confidential, that’s your case.

Irina Yadgarova  09:39

Absolutely. That’s a really good point, and even in that case that I mentioned earlier, where the individual should have brought her son along, the only reason she should have brought him along is because they get along and she wants him to do whatever he pleases. If this was a situation where it’s wholly owned by her and she wants to call the shots versus should name somebody a trustee that she doesn’t see eye to eye live. But when you have, it depends on what type of family dynamics would warrant a conversation. Absolutely, she doesn’t have to give notice to anybody, even the beneficiaries of the trust. But certainly when the trustee is signing on to a document, he should know what the terms are. These are important points that should be hashed out prior to engaging in the plan.

Michael Levitis  10:24

Perfect. Listen, this is why I love having you on because not only teach us the law, but you give us real life examples. So when people are watching your videos, they see what could be the outcomes.

Irina Yadgarova  10:35

I just want to tie that up by saying that the ideal plan in that situation was for him to get the financing and then literally a day after to sign the trust. It’s not that we wouldn’t have done what we did. It’s just he would have waited a bit longer.

Michael Levitis  10:50

Makes sense. Timing is crucial is everything, and unfortunately, our time is coming … to an end … we had a very interesting session. Irina, I hope to have you back again next month, with more FAQs on trusts and estates and elder law. Irina Yadgarova, thank you very much. Today we gave general information, and of course, if you want to consultation, you want specific advice on your situation on your possible estate planning. Call the number on the bottom of the screen. Thank you everybody for tuning in.

Q:           What is the difference between an Irrevocable and Revocable Trust?

A:            An Irrevocable Trust is the only type of trust that affords creditor protection and there are aspects of it that can never be changed by you Continue reading “Trust FAQs”

Learn about the ideal stages in life and triggers for commencing to plan your estate. Why is 55 years old the magic number? Listen in to find out or check out the transcript.