In this hour, Elder Law and special needs attorney Jim Koewler talks with Suzanne Newman about how to appoint people to represent you in situations where you’re unable to act for yourself – a who’s who of people who should be involved in your estate plan. This segment focuses on trusts.
- Initial Trustee: Grantors (the people setting up the trust in the first place)
- Successor Trustee (After initial trustees both deceased or physically/mentally unable to continue as trustee): Person who gets stuff done, meets deadlines, and doesn’t buckle under pressure from other heirs.
Irrevocable Third-Party trust for disabled person
- Grantors are initial trustees
- First Approach – Trustee: Person who will look out for disabled beneficiary but will not cave in to unreasonable demands for money from trust and will not resent having to deal with beneficiary
- Second strategy:Trustee: Bank or trust company or trusted family memberDistribution Committee (to make decisions on when to pay out for benefit of beneficiary, taking pressure off the trustee):- Special needs attorney- Social worker- Family member(s) (maybe)
HIPAA Release (Gives access to health information. Doesn’t grant decision-making authority.
- Include everyone who is named in Health Care Power of Attorney
- Include any other family members or friends who are likely to help look after you if you need care (long-term or otherwise)
- Include elder law attorney and, if attorney has one, attorney’s care coordinator
You can listen to the podcast or watch it on YouTube. Learn more at protectingseniors.com.
View Episode Transcript
*The following is the output of transcribing from an audio recording. Although the transcription is largely accurate, in some cases it is incomplete or inaccurate due to inaudible passages or transcription errors.
The following podcast is by Mr Jim Koewler, elder law and special needs attorney, helping and protecting those who need long term care. And welcome everyone back to this final segment in this hour with Mr Jim Koewler, attorney. Pros is on final you can’t keeps will have to see. That’s true. That’s true. But we’ve been talking about this whole topic of who do you trust? Basically, who should you name as your representatives in times when you cannot act for yourself, not only towards the end of your life but also after you pass away? And one of the things I think, Jim, you’ve really eloquently explained is there’s a lot of different pieces to the pot pie that we don’t think about when we turn around and say what you know, who should we name or what should we do? And so I encourage all of our listeners, if you haven’t started with segment one, start because there’s a lot of different pieces of the puzzle that comes together. And here we are at our last segment of the hour and we’ve gone through, you know, wills, we’ve gone through, you know, power of attorney, we’ve touched on different aspects of a state, you know, administration. But now we move into what’s called trusts, and you know that’s a word that people kind of know about if they’ve heard but a lot of people, they don’t realize the benefit of a trust and they also don’t understand really what a trust does and what the different types are. So obviously we’re looking for your guidance here. So, unless there are two with trusts, there are two big categories and then within the irrevocable category, there’s lots of different variations. Okay, the simple kind of trust, what, at least in Ohio, is called a revocable living trust and I suspected called same here in all fifty states. It is a substitute for a will. Correct you put stuff into your revocable living trust now, while you’re still alive, you are the trustee, or you and your spouse together are the trustees. You still manage everything the way you did before. It’s just named in and owned by the trust. Or actually, depending on how your state requires naming things, it’s owned by you in your capacity as trustee. Right, okay, it’s kind of like a corporation is a person under the law. Always worded me out so a corporation can own things. Right, a crust is not a person under the law. It’s just a shell to put around things, the way to own things. But we stopped to name the trust e, the trustee as the owner. Okay, it’s so they know, somebody knows who would call if they have a claim against this thing or have to fagre out where to send it. Okay, right. So the initial trustee with revocable living trust is usually the people who set it up, the grant hours or set lawyers or trust orers or whatever your every term your state uses. Okay, I usually use grant hours. That goes all the way back to law school for me and that maybe an Ohio. Think it may not. I didn’t go to law school here in Ohio, went to I you. I was thrown bobbing night through the chair at you and as in the tenth row the so you still own it as trustee. You still manage it pretty much the same way. You just have changed the title everything. So now your bank account is checking count in the Jim Kaylor Trust. Right, your land is owned by Jim Taylor as trustee of the Jim Kaylor Trust. Okay, so that’s that’s all it is. It changes the name, but you still because you can revoke it. It still has the same tax consequences, still tied to my soccarity number. Yeah, okay, but what it does when you die is it avoids going to probate court. It’s a private contract between yourself as grand tour and yourself as trustee. And then when you die as successor trustee, takes over. Same for a revocable living trust. The same personality in the successor trustee as with an executors, someone who gets stuff done right, push through the paperwork, get it done, get the project finished. Okay, it’s all because this is all business. You’ve died now. Okay, so let’s just gatherating the trust send it out the way the trust instructions say. The trust is basically has its way to own things. It has its own internal will, making air quotes now for those who aren’t watching but are listening, because it has distribution instructions when the trust winds down after the grant or dies. Okay, as its own internal will. So it’s basically carrying out the same thing, but you don’t have to go to court over it. To get it done. You don’t need someone else’s permission to change names on the account because it’s right there in the trust and the bank has a copied the trust the the title office as a summary of the trust. You don’t want to file the whole trust because the charge per page. Okay, but then the successor trustee after you passed away just distributes and accordance with the instructions. Might there be a fight over it? Of course, these are airs fighting over money or sentimentality or something. There might be a fight, but that’s not a probe. It could be a back in probate court, but if there’s no fight you don’t to go probate court at all. Okay. And irrevocable trust is a different thing. And irrevocable trust is meant to preserve some of the assets past your death. Maybe it’s an irrevocable trust for someone who has special needs and you need to last as long as they survive. Maybe it’s an irrevocable trust because you want to set some stuff side now and not have it subjected to being spent down by a medicaige should you need long term care five years or more down the road. Or you set up any revocable trust because you’ve got plenty of money, you’re living fine and you want to set something aside for your grandchildren and great grandchildren have any generation. You want to go out to pay for college or first down payment on a house or whatever. Right so. And irrevocable trust is usually meant to live past your lifetime. If your revocable living trust has enough in it, you can simply make it irrevocable when you die. And but it’s built. It’s got language built in like your standard. Your vocable trusts irvocable from the beginning so that it lives on and carries out your instructions. It will once you die. By the way, the trust has a get. Has To get its own soccared number, actually called an employer ID number, from the IRS, and it will pay higher taxes on its own income. Because Trust pay higher taxes. They get the top tax bracket pretty quickly. But that’s the cost of using a trust to shelter your assets. Okay, it’s cost doing business. You don’t like it, don’t use an irrevocable trust. But if you got some of the special needs, please don’t let the taxes flip you out. Okay, use it. Irrevocable trust with someone’s special needs. If you want to set stuff aside for protect it from long term care costs, lump it take pay. Let it pay the taxes. Don’t sweat it because if it helps you sleep at night worrying less about long term are in your future. Is a possibility of long term hearing your future. Fine, that’s a job, okay, but the cost of that job is higher tax rates. Right, but the air vocable trust then can live on after you die, perhaps long after you die. Bloodline Trust, legacy, frost, all sorts of things. Family trusts, okay. There are trust that own businesses that are now through three, four, five generations of ownership where family still loan, it’s family still operates, but the trust owns it. Okay, and I think too, when you’re saying things like I have a friend that has is well off financially and she’s concerned about one of her children that if she died that all of the money that they would receive would just be evaporated and she doesn’t want to have that happen. So she’s like spend, thrift, trust, yeah, and drift. Yeah. So what she’s in times of same idea is that he’s getting a payment every month. Yeah, basically upon her death. Yep, Yep. I’ve got a client this that not the one for whom we created this list, but I’ve got a client who has a special needs son and potentially special needs granddaughter. She’s sides it. Three aren’t good. A spendthrift daughter, a manipulative ex wife, and so we are layer upon layer for this poor guy. So we can sleep at night. Okay. So with an irrevocable trust, especially for someone with special needs, you’ve got to basic approaches, and I’ll bring this to the top of my top of my screen so I can look at it and not lose sight of the camera quite so much. The grant tours can be the initial trustees if that’s the way you want it, but if you want to make it really solid and protect this from long term care cost, then you don’t. You set it up, but you don’t be the initial trustee. Okay, you get immediately jump into your evocability. You find someone you trust. We call him a trustee because you want to trust them, you want them to carry out your say. Can every every trustee trustworthy? Oh Heavens No. I wish it were so, but it’s so. The trustee doesn’t necessarily have to be an attorney. They can be, but do you good? It can be a family friend, it could be a family friend, could be a brother, sibling, a exactly. Okay. Generally someone your age or younger, since the idea is this to live beyond you. Sure you want it your age, you’re younger, and you definitely want successors. You want some form of successorship in there for trustees. Okay. Or you can go the other way and go to the institution, a bank, a trust company, etc. Okay, you had apparently a good experience with the bank, but that was simply winding up your dad’s trust. A Trust for someone with special needs. Use as a lot of discretion. Should I pay out for this special needs person who wants to buy a new computer? Yeah, or buy a bigger television or whatever. Okay, banks are great at set instructions a spender of trust where they’re going to pay x amount every every month. They’re great at that. There’s no discretion, there’s no decision making. Just is it another month? Is it first a month? Cut a check, first month, cut of check. wrote ministerial duties. Okay, discretion. Should we buy? Let should we buy a type TV for this special needs beneficiary. I’d like people on Special Needs Trust more than I like banks. Now we can do a hybrid. By the way, the Bank can hold, but there can be a distribution trustee who makes the you know, makes the discretionary decisions, while the bank is still managing the investment, where the principle as an investment. Okay, then you get both and that’s fine. You can go that route. You can have a committee of distribution where maybe it’s a special needs law attorney, a special needs social worker, a particular friend of the child with special needs or an anform uncle. Okay, so you can create that committee that can also oversee distributions. Simply give instructions to the bank. As long as a bank understands. Committee says spend, the Bank spends. That’s what you want. So you can find them you trust to manage the investments, even if you don’t use a bank. I’ve got a friend WHO’s great an investments. Fine, that’ll be the the management trustee and I still have a committee or a person to make distribution. If you find somebody who can do both, awesome. If you can find split it up, okay. And then, finally, we’re going to. I think we’re going to squeeze it in hipper releases, health information, portability and Accountability Act. The P is portability, not privacy. This goes back to the hipper law of Jesus was at the Clinton administration and but within that insurance portability was also privacy. It was buried in there in that law. Okay, this is the thing where the whether your doctor asks you when your first arrived the first time you go there, can we who can we talk to about your health? Right, Informati, we college and leave a message on your answing machine. Yeah, exactly. Well, I am a big believer in creating broad hipper releases. That applied everybody, because you may not know what nursing home you’re going to be in when you suffer dimension and if you suffer dimensions, to late to sign a hipper release to so I like big brought and you may not know the the hospital where you taken after car accident. Yeah, because it’s not going to be the one where you usually go. Perhaps. Okay, so I like big broad hipper releases, so you can decide a time who can have this information. I’m a big believer in these things. If you worried about long term caring your future, and you should worry about long term caring your future. If you feel one of these out like you’re going to need long term care, but you never need it, fine, at least you’re ready. Okay, this in good powers of attorney exact, because this allows someone to be your advocate for care because they have the information. This, combined with a healthcare of power attorney, gives you a lot. So name everyone in the hipper release. Unless there’s some particular reason to lead a person out, there is no this person first. That’s person second. Right, everyone could have the information, because any one of them could be the one advocating for you on Tuesday because the other on your daughter, or I’m your niece, or I’m your Soandso and those you know. Obviously it might be I took mom to a doctor appointment and I need to get some information. You know. So, absolutely. Yeah. So. And if you’ve got an outlaw, turney of choice. Name you’re out of law attorney. If you allow attorney has a care coordinator, name the care coordinator. Good Point. Absolutely good point, Jim. This has been so eye opening. I’ve learned so much in this hour. And sometimes I think I have. I know enough to be dangerous. I would have really been dangerous and I was giving somebody this kind of advice. Thank you so much for your wisdom today on this, because I think it gives us a lot to think about. Thank you. I well, and you know everyone, we have a whole bunch of topics that we’re going to be coming your way and we hope to get Jim back here soon. So I just enjoy what you’re hearing and we’re looking forward to, you know, hearing more from you in the near future, Jim. So thank you again. Thank you for Jan State of Ohio residents, you have a friend to help you navigate long term care while protecting your assets. You can reach Jim at wwwoprotecting Seniorscom or just email him at j Koewler afe. That’s j Taylor AFE at protecting Seniorscom.
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Founder and CEO of Answers for Elders, Inc., Suzanne Newman proclaims often, “Caring for my mom was the hardest thing I ever have done, but it was also my greatest privilege.” Following a career of over 25 years in sales, media, and marketing management, Suzanne Newman found herself on a 6-year journey caring for her mother. Her trials and tribulations as a family caregiver inspired an impassioned life mission outside of the corporate world to revolutionize the journey that so many other American families also find themselves on. In 2009, she became the founder and CEO of Answers for Elders, Inc., subsequently hosting hundreds of radio segments and podcasts, as well as authoring her first book. Suzanne and Answers for Elders, Inc. have spent 14 years, and counting, committed to helping families and seniors along their caregiving journeys by providing education, resources, and support. Each week on the Answers for Elders podcast, Suzanne is joined by vetted professional experts in over 65 categories including Health & Wellness, Life Changes, Living Options, Money, Law, and more. Suzanne lives in Edmonds, Washington with her husband, Keith, and their two doodle dogs, Whidbey and Skagit.
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