Estate planning is one of the most important things you can do for yourself and your loved ones. In this video, Elder Law Attorney Irina Yadgarova discusses two critical stages in your life when you should start considering creating a trust.

Wed, Sep 28, 2022 1:04PM • 13:38

SPEAKERS

Irina Yadgarova, Michael Levitis

Michael Levitis  00:04

Hi, everybody, it’s Michael Levitis from JurisQ.com. I welcome back Irina Yadgarova, Estate Planning Attorney, Elder Law attorney, Irina. Welcome back. Hello, thank you so much for having me again. 

Thank you. Irina, of course, we’ll discuss important matters that have to do with the estate planning with 

Medicaid trusts. When people think about trust estates, they think: oh, I’ll do that later, when I’m ready 65, right now I’m a bit younger, I don’t want to worry about it and I don’t want to think about it. But we know that is not the case, you have to start preparing earlier. So I want to talk to you about two critical stages in your life, when it’s time to think about estate planning for yourself. Or maybe for your loved ones, maybe you want to think about your parents how that could affect them. So let’s start off with a bit younger people, right? When I say younger, I don’t mean teenagers or early 20s, in college. I’m saying when you’re already professional, you have the kind of business, started making whatever the money, maybe you have a family, and this is when it’s time to start thinking and planning. So can you tell us, Irina, at that stage of your life, what you should think about and consider estate planning and why? I think you said it really well. I think for most people, I would say, late 20s, early 30s, deeper into your 30s and 40s, you have a career, you have a family, you have young kids. So for the vast majority, and I see more and more younger couples coming in, which is great. I think people are paying attention, maybe it was with all the deaths we’ve encountered during COVID and things like that. People have been confronted with the our own mortality, things that can happen to those around us our loved ones. So it’s important to start some sort of planning, and everybody’s situation is a little bit different. But for those who have children, you want to make sure to have your minors be taken care of in terms of who is going to be there a legal guardian, do you want a different person managing their finances, do you know are you and your spouse are the parent of the of the child on the same page, because you can really direct through your Will the courts to honor the decision that you made together with the other parent who would be the legal guardian and the financial guardian, in case you and the other parents are no longer around. A lot of people vacation together. You know, a lot of us take vacations and I see a lot of people coming to me around that time to make sure that they’re protected against that risk, and certainly individuals who are young, but have properties in multiple jurisdictions, that’s very important to think about Revocable Living Trusts, where you retain maximum control, but avoid any kind of probate process. So if you have properties or vacation home upstate or multiple jurisdictions, very important to think about that. You would have to go through court in every state, correct? Which could be very expensive. Yeah, your children or whomever will be taken care of the estate would have to hire Attorneys Licensed in those jurisdictions and go to the courts in those jurisdictions for what’s called the ancillary probate or ancillary administration. So definitely want to try to plan ahead around them. Well, for the younger ones, you said, certainly there’s a lot of wealth being amassed by young individuals these days. That’s another reason to consider early state planning to try to get ahead of some tax planning and again, multiple jurisdictions issues. But otherwise, for typical couples, I would say it’s to make sure you’re taking care of the basics that your young children, that you’re protecting for the guardianship risk need that may arise. Of course, the basic staples of a simple estate plan is the will, right where we take care of the guardianship, the powers of attorney and the health care proxies. Those are all very important. What about another aspect of estate planning, which is asset protection as you start generating wealth, you want to protect  assets  against any incidents like a possible lawsuit, judgment? It’s possible to act early, correct? You have to act early because remember, if you’re an individual who is higher risk, like a lot of physicians maybe have a higher risk, they typically have the malpractice insurance coverage, but they’re the ones who I see call myself and other estate planning attorneys to try to hedge against risk. Once a person has already incurred a creditor or has been aware that they’re going to be called upon in a lawsuit or a collections action, it’s too late to do any kind of real asset protection, it will be subject to Reversal by the court for fraud. You have to definitely step ahead of the game. If you know you’re either at a higher risk or your assets are growing at a rapid pace, and you want to ensure protection of those assets, you kind of looking at it in those buckets of what kind of property am I seeking to protect against what type of creditor, and does it make sense because protecting assets usually goes hand in hand with relinquishing some control over those assets. So asset protection is very common and recommended 55 and up and then if you’re younger, we look at like various facets, everybody’s kind of an individual case when you’re younger. Okay, Irina, you just mentioned another critical phase in your life, when you have to start seriously considering estate planning, which is 55 plus, why this magic number 55?

Irina Yadgarova  06:01

Yes, so 55 is a magic number for a few reasons. The main reason is because when we’re engaging in elder law planning and Medicaid planning, if a person has a crisis and ends up with a stroke or some health condition that necessitates them to go on either Medicaid or long term care health care facility. 55 is the magic number when HRA, which is the Medicaid agency that handles Medicaid in the five boroughs. This is the time where New York State Medicaid, if you’re on New York State Medicaid in your 55 and up again, whether by choice or by default, because there was a health crisis, they will keep track of every single penny dollar for dollar for anything that they’ve incurred on your health care and they will, they’re mandated under New York state law to recover it from your estate. For the last 10 years of your life, 55 and up, any dollar that they spent on any medical care, including prescription drugs, including medical supplies, even the medical gloves, or whatever that was dispensed under Medicaid, everything will be recouped. What is the recoupment is generally through your house because that would typically be your only asset once you’re allowed to get on Medicaid because of the crisis either forced you to spend all your money, or you didn’t have any and you ended up on Medicaid either way.

Michael Levitis  07:18

This is such an important point that I really want to emphasize again, you may qualify to get Medicaid, Medicare, you may be okay with you covering your medical expenses, however, correct me if I’m wrong, your children, whoever you want to leave your estate to, from them, the costs could be deducted. You think you’re leaving the house, free and clear, maybe even have no mortgage that you’re leaving it to your kids, when you’re gone?  In reality, the government is going to come in this portion to recoup their expenses, and there’s a mechanism to employ the state’s Estate Attorneys employ to legally go around it and protect that the most important assets you have which is your house. Correct?

Irina Yadgarova  08:09

And I just want to say one thing that I found very interesting. I had a client a number of years ago, he had a will and he for some reason, I don’t know how many viewers out there are under this impression, as well. He was convinced that because his mother had a will, that her  coop would be  fully his upon her demise, she really just owned a coop. She didn’t  have any other assets, and she was on Medicaid. He went to an estate planning attorney and they just did a will. So maybe they didn’t consider the Medicaid implications. Maybe it wasn’t even like a subject that was raised. But he was so upset that during this probate process, Medicaid put a collection on that they had to recover against that. They took a big chunk out of it. He was barely left with anything. But he was just so upset that he did what he thought he had to do, you got the will, but the will has no asset protection element to it. So be very careful when it comes to working with somebody who does elder law when you’re 55 and up, you don’t want to miss those planning points.

Michael Levitis  09:12

You know, these stories, they’re mind boggling when you go to a professional that you think you can trust, this is the reason why you go to the attorney to get professional advice. You get bad advice or the attorney does not admit what he or she should tell you. We should do a whole video on busting myths in estate planning and when you should get second opinion, even after going to an estate attorney. I think in New York, if you’re 55 and up, I don’t think you can just go to an estate, I think you have to have an elder an estate attorney looking at it because if you’re just dealing with taxes or net worth estates you may not be like if you’re not dealing with the Medicaid world. You can’t really be a true estate professional when you’re 55 and up here because it’s so entangled and enmeshed that you have to raise these points and think about them. Okay, Irina, let’s say somebody was really, really retirement age 65-70, they didn’t have an opportunity to watch our videos. This is why we do these things is to educate the public, we give free advice right now, general advice, of course, to educate the public, so they know what’s out there. Because these are very intricate, complex areas of laws so you should know. Somebody didn’t have an opportunity. They went their whole life without estate planning. Now that 65-70 is a too late, or can still be something be done for them?

Irina Yadgarova  10:44

No, absolutely. It’s not too late, and a lot of my clients are actually in their 70s and 80s and the older that a person gets, the more difficult it is to do full asset protection. Because, again, if you recall, there’s these five year look back for nursing home Medicaid eligibility upon a transfer, so you have to take action as early and as practicably as possible, the only time that it’s really too late, is when a person it could be even a younger person. But it’s when a person has some sort of a health condition that renders them mentally incapacitated, and they can no longer direct the signing of a power of attorney to act for them. So in that case, it becomes too late for this to be simple, you would have to go through a guardianship process, because that person themselves no longer has capacity. Usually that’s deep into our old age, but I see this often with young men, young women, again, with stroke or something like that. That’s why it’s important for even those younger just to come back like full circle here. For the young couples, it’s so important to have the durable powers of attorney, because your spouse does not have the right to speak for you financially. Even if you have a joint account, that’s great. You can certainly sign checks there. But what about selling your home or applying for Medicaid or whatever it may be. So that’s really important to have that durable power of attorney in place.

Michael Levitis  12:12

Irina, thank you so much for your advice, because people don’t want to think about it. It’s a little bit unpleasant. Do you wanna plan their vacations, and for homes, nice new fancy cars, they dont want to think about what happens when they retired or after they’re gone. But guess what, it’s unnecessary. It’s a part of our life. It is very important to consult an attorney like Irina Yadgarova early, so you know your options. You can plan your whole life, as you grow in your career, in your business, or whatever you’re doing, you have to implement steps to protect the assets you accumulate. Also very important to think about your parents, maybe your parents haven’t done any estate planning and as we discussed with Irina, down the road, they think they live in the house for you, but the government can take a portion away.

Irina Yadgarova  13:05

I tell them to have  the kids to pay for the planning because it’s really for their benefit.

Michael Levitis  13:10

So kids, take your parents by the hand, bring them to Irina Yadgarova, or parents, take your kids also bring it to Irina Yadgarova, get advice. The number is in the bottom of the screen. Thank you so much. 

We’re going to see you soon with more questions and more answers on Elder and Estate Planning law. Thank you so much. Thank you, be well, bye.