Page 29 - Oshea Funeral Guide Final
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trustees will step immediately into Let’s utilize the example of “Rose
your shoes, without having to go Smith”, a fictional prospective client.
through the length process of probate. Rose has pension and security income
Administratively, the only thing for of approximately $3,000.00 per month,
your family to do, will be to have your and owns her home outright and free
successor trustee(s) begin managing of any mortgage. Her home is valued
the trust’s affairs, and disposing of the at $400,000.00, but she has few other
trust assets as per your directions. assets. Rose knows that she wants
to live in her home until her demise,
A common circumstance that is but has a history of Alzheimer’s in
encountered in New York is the elderly her family, and wants to protect her
decedent who owns both their long major asset (in this case, her home)
time New York residence, and a Florida so that her children will have a nest
condominium for their retirement egg, and her grandchildren will be
years. In these circumstances, without able to go to college without taking
an RLT, the family of the decedent out student loans. Rose will nominate
will have to probate the decedent’s an independent trustee (a trusted
will (or, in the absence of a will, relative, friend or colleague), transfer
bring an administration proceeding) title of her home into the Rose Smith
in both New York and Florida. After Irrevocable Trust, and reserve herself
accounting for filing fees, legal fees, a little estate. Rose continues to live
service of process, and the potential in her home, and remains eligible for
necessity for travel, this can more the same property tax exemptions to
than double the cost of administering which she was previously entitled.
the estate. By utilizing a RLT, you can
avoid these problems, save money Six years later, Rose requires nursing
and time for your heirs, and leave a home care, and spends three years in
lasting legacy for your family. Almost a nursing home prior to her eventual
without exception, we advise that our passing. Had Rose maintained her
clients who own real estate or other home in her individual name rather
property in multiple states utilize an an transferring her home to the trust,
RLT for estate planning purposes. her estate would be liable to the
nursing home for the cost of the care
- at $10,000.00 per month for three
Irrevocable “Medicaid” Trusts years, $360,000.00. Her family would
The irrevocable “Medicaid” trust is a inherit 10% of her estate, with the
special type of trust utilized to protect nursing home taking the remainder
your assets - and in some cases, make of the funds. However, because Rose
you eligible for government benefits utilized proper planning, the home
- in the event that you require certain passes outside of her estate, and her
forms of care, while safeguarding your creditors cannot collect against the
assets for the benefit of your heirs. house.
In New York State, the average cost Upon her passing, Rose’s life estate
of a nursing home is approaching terminates, the house may be sold
$10,000.00 per month at the time of by her trustee, and the full proceeds
writing. In the downstate region, the from the sale - all $400,000.00 - are
cost of such care already exceeds that distributed to her heirs as per the
number by approximately 20%. As terms of Rose’s trust. It is important
such, the cost of care quickly diminish to understand that there is a statutory
your hard earned savings, and prevent “look back” period which you
your children from inheriting the must surpass in order for the trust’s
money that they otherwise would. benefits to apply to your particular
O’Shea Funeral Homes - Page 29
