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>> Good evening.

I'm glad you're with us tonight here on LIFE Ahead on PBS Fort Wayne I'm the host of the show Thandi Thompson but our real guest is a gentleman you're going to meet in a minute.

But I think most of you if you watch this regularly will recognize him.

Brian Nugent is with us here this evening.

That means it's going to be a legal show.

So if you have legal questions, this is your chance to call in and you know, get some advice from Brian.

>> Now our main topic is going to be talking about elder law and estate planning and we're going to try to solve some of the questions that you might have that I have and even some I don't want to call them myths but misunderstandings I think that a lot of people have about that.

>> OK, let's meet Brian Nugent again.

>> He has been on our show many, many, many times.

Yes.

On our show monthly nowadays.

That's right.

>> Good to see you, Sandy .

Good to see you.

Thank you.

You've had a good winter.

A great winter so far we've had sunshine lately which makes it a lot easier to suffer through it.

>> It does seem like it was you know, it's been so cold lately but with the sun shining you don't mind it as well in northeastern Indiana.

>> So we're going to it's going to be cold but as long as the clouds part and we have some sunshine, it's most definitely a much more enjoyable winter for sure.

>> Well, according to weather records, February's really the worst.

>> Is it?

Well, you should know you should know you're the weather weather expert.

It depends on what you call it works but it's generally the coldest month and the Snowy is not historically as far as records and of course that can change.

>> For me it's the gray days in the winter that are tough.

Yeah, out and out.

>> That's the tough part by March you know, you're like if we don't have sunshine at least an hour this week.

>> Yeah.

You know, the days are stretching now though.

The days are stretching out so the sun is up earlier.

>> The sun is going down later.

You really can see a change from where it was in mid-December for sure.

That's right.

OK. All right.

And about weather and I'm sure you're discussing weather with your friends as well.

Certainly this is a challenging season but we'll get through it and it'll be spring in no time.

>> OK. Elder law and estate planning that's basically what we're going to be talking about.

>> Brian, what's the difference between estate planning and estate planning attorney and somebody who helps you with elder law?

>> Sure.

So I know we've talked about this before but I always like to set the stage so estate planning we're planning for where my money goes at the time of my passing.

>> Who's going to be responsible for making sure my debts are paid and transferring the wealth in the manner in which I'd like to have have accomplished during my lifetime?

>> Typically we do that through a will through trust beneficiary designation on items elder law does all of that.

>> But elder law is also focusing on protecting assets during your lifetime.

So asset protection and maybe securing benefits from programs like Medicaid or VA. >> So elder law is a little bit more robust than estate planning and both are important and come into play for folks at different times of their lives.

>> Got it.

OK. All right.

And what we've also talked about, Ryan, is you don't have to be elder to use the number long term.

A lot of young people do to get documents in place.

>> You know, whether it's a guardianship or naming a power of attorney things they should have especially if they have children.

>> Yeah.

So when I think of elder law I know the word elder.

The first thing you think of as somebody that's five and or older but elder law attorneys oftentimes are working with as you said, Sandy guardianships or special needs trusts, supplemental needs trusts those types of things.

So for folks that may have disability we want to shelter assets inside of a special needs trust supplemental needs trust to make sure that those assets are there to take care of them throughout their life and they're also able to access public benefits.

>> Got it.

>> All right.

Now I'm going to switch to another money issue about taxes a little bit.

Yes, ma'am.

A lot of people are concerned or it seems like they are when you hear people talking about if they have to pay a lot of taxes.

>> Sure.

When they pass away maybe they're not worried about it but maybe the power of attorney or their children or or somebody might be what's that situation do you.

>> I mean are there taxes that to be you'd be responsible for ?

>> Well, it affects a very narrow part of our population.

In Indiana there is no inheritance tax any longer in the surrounding states.

I think Illinois is the only state is still hasn't it?

Maybe Kentucky has an inheritance tax meaning the state imposes a tax but Indiana ,Ohio, Michigan there are no inheritance taxes that are imposed by the states.

So that's the state I call it inheritance tax.

>> Well, people did and I remember I mean even growing up hearing older people talk about well, I'm going to have to pay so much inheritance tax, you know.

Yeah, but what was it eight or nine years ago?

>> But they could have been in 2010 11 12 something like that .

>> They got rid of it.

But so if we're not going to be paying state inheritance tax the next question is is there a federal tax that needs to be paid?

>> Oh, so just like in every April, right.

>> We're starting to get prepared for our income tax season.

We have a state income tax return with a federal income tax return in our states.

We also could be paying federal state tax but it affects point one four percent of the population.

So a very small portion of our population.

>> So this in the year twenty twenty five you could have thirteen point nine million dollars at the time of your passing and pay no federal estate tax and if you're married you can take your spouse's thirteen point nine million dollars worth of credits.

>> So we're almost at twenty eight million dollars that a married couple you would have to have before you pay any tax.

>> So the discussion of avoiding that inheritance tax, avoiding estate tax, it doesn't necessarily come up in a lot of meetings anymore.

We made to attorneys your estate planning attorney or elder law attorney may dispel that concern for you right when you're coming in to speak to them so that that isn't a large part of our planning anymore because it affects such a small part of the population one four by one four percent.

>> Yeah.

How about not many people not many people and probably not a lot of people with the combined resources have twenty eight yeah just shy of twenty eight million yeah.

>> Yeah that's a large chunk if you do call me I'd love to meet you you know.

>> OK all right then are you taxes.

That's one thing that we want to talk about.

>> What about gifting you hear a lot of people I know in the past especially talked about gifting is a way to decrease their assets.

Sure to pay less when they pass away.

>> Is that still something that happened in gifting to their children, grandchildren, whatever?

>> Well, right now our gift tax exemption this year is nineteen thousand dollars so you can give nineteen thousand dollars a year away and not have any gift tax consequence as the person that's giving it the person that gives it actually pays the tax.

>> So there was a time in estate planning we would look at some type of a gifting program over time to reduce the size of the estate but that that gifting now isn't nearly as common as it once was because that federal estate tax level as those credits are so high that I don't see a lot of gifting going on just for the sake of doing that extra to reduce one's estate.

I'm not seeing that as frequently.

I will add something to that though because we're talking about elder law and protecting assets during our lifetime and securing benefits.

One should be aware of that that nineteen thousand dollar gift tax exemption is appropriate for the IRS when we're looking to we can pass money and not have a tax consequence.

But if we're one that's looking to secure Medicaid at some point Medicaid permits you to gift only one thousand two hundred dollars per year in total.

So federalized a gift tax nineteen thousand dollars per person Medicaid if you are if you're looking to become a Medicaid recipient at some point total of one thousand two hundred dollars per year total not not per person but in total and sometimes people can get confused between I heard yeah I heard you on PBS and I could give away nineteen thousand dollars et cetera with no gift tax although that's true it could negatively impact your ability to secure Medicaid if that's part of what you're looking for .

>> OK so something to keep in mind in that way as far as Medicaid.

>> Yeah you know looking at that as a possibility in the future are there any other things you should be concerned with in terms of estate planning?

>> Well as far as estate planning is concerned, we were mentioning before about guardianships we were mentioned about special needs trust, supplemental needs trust.

If you have someone in your life that you're thinking to give money to and perhaps they are receiving Medicaid or they're a you know, they've been determined to be disabled if you're transferring wealth to them at the time of your passing that could negatively affect their ability to receive ongoing Medicaid.

So you might consider having that money transferred into a special needs trust supplemental needs trust for their benefit.

So that's something for someone to consider if you're looking at Medicaid at time of passing.

But typically we're considering Medicaid and securing those Medicaid benefits during your lifetime, not necessarily when you're passing.

So but if you had someone in your life that was getting those benefits and they have a threshold of funds or assets that they could have in their name, we should be aware of that when we're doing estate planning and make sure that the funds go into something like a special supplemental needs trust for their benefit.

>> Got it right before that you talked about you could only gift twelve hundred dollars of hundred dollars if you plan on or getting Medicaid.

>> That's right.

If you get over that if they get well if you gift over that there is they call it a penalty.

Those are my words that so it's called a penalty by Medicaid they'll look back and say well how much have you given away in the past six months, the last five years and so for X dollars every X dollars that you've given away, Medicaid says we're not going to provide benefits to you for a certain period of time.

Could be a month, could be two months, could be ten months depending upon how much money was given away.

>> So to your earlier question about giving money and planning about Medicaid at the time of your passing, it's not so much at the time of your passing during your lifetime if there may be a situation where you were looking to get those Medicaid benefits at some point you should be very cautious with your gifting.

>> The assumption is that if you were giving money away over that twelve hundred dollars the assumption by Medicaid is that you're giving it away to reduce your assets in order to be able to get those benefits.

So we want to completely avoid having any appearance of impropriety and the appearance of trying to deplete your assets that way to secure those benefits so folks should be aware of that OK and that and then will involve that five year look back.

>> That's right.

So we look back five years.

How much we've given away and then we divide the amount that you gave away by a certain deviser that changes every year ,OK, every year and in all states do the states set that or the federal well there is a federal level but there's also it's affected.

>> It's it could be different by in every state.

>> OK, I couldn't answer the question for every state.

Yeah yeah.

>> You don't have to back that.

Thank you.

I appreciate that.

Um don't forget you can call us here at (969) 27 twenty four .

>> Any questions you might have for Brian tonight probate is another big issue of course that people look at when they're doing estate planning or when they're looking at finalizing or estate planning culminating sure.

That was a long way to say let's talk about probate.

First of all, explain what it is and then we'll talk about how it might affect you.

>> OK, so probate is the process when you pass at the time of your passing the individual that you've appointed or if you haven't appointed someone the court appoints to serve on behalf of the estate of the the one that has passed typically if we have a will we're going to file that well with the court open a probate matter, appoint someone called a personal representative, ask depending upon if we have a well we don't have a well the terms of the will et cetera.

We may have to ask the court's permission to do certain things .

We may not have to ask the court's permission to do certain things depending upon the type of estate that we have if it's supervised or unsupervised.

>> And so there's an advertising process where we advertise in the newspaper probate.

>> There is no set amount of time that it takes.

You know, states can go on for years if there's litigation, if there are difficult complicated assets to sell or transfer, it could go on for an extended period of time.

It's not hard for a probate matter to be open for twelve months, maybe a little bit longer.

That's not difficult at all.

So when people talk about new here, I want to avoid probate or I don't want to go through probate.

>> Probate isn't a bad thing.

It's just that it can take a little bit longer and I think the state settled because we're looking at yeah, well there's there's you know, making getting the judge to make decisions could be getting the judge to make decisions.

>> It could just be the process that we have to go through.

>> But what often comes with that probate process is there's an expense.

Right.

And that expense typically is an attorney.

>> So is there a way for us to not incur those legal expenses by going through probate so people are looking to avoid probate for a couple of different reasons.

One is to cut down on costs and your estate so you don't have as many expenses too is the speed of being able to get those assets out and three generally is it's it's public.

>> So if I was a nosy neighbor I could go to court, get all the will.

I can see what you've what you've given to whom and how those things are you one of those things to be handled at the time of your passing.

So if we can if we are not going through the probate process, it's private.

So your typically faster it's private and your expenses for the estate administration are typically much, much lower without going through probate.

But you know, estates are being administered on a regular basis.

>> It's not a bad thing just to be aware if we go through probate that some of those things will be in play and from from what I understand from what you've shared with us for settling estate things sometimes of the time extra time can be getting things praise to determine the cost of something if say there was a family with four siblings and you know, mom and dad passed away and you have to decide, OK, we want to make this equal for all four of you.

>> Sure.

And in mom and dad's will they did not break it down.

>> They just say one fourth, one fourth, one fourth.

That could be however, even if we were using a trust, we may still need to go somewhere through some of that process.

We want to make sure if the will is saying or the trust is saying everybody is treated equally so with it, yes, we wouldn't necessarily go through probate.

>> We want everybody to be treated equally.

So if there is a tract of real estate and that's a bulk of the estate, we may need to have that appraised so we determine what the value of that is.

Right.

But that could happen maybe a little bit faster with less expense and beforehand done by no.

I'm saying if we're avoiding probate oh process we're not needing to wait for the PR person to be appointed.

We're not needing to wait through those time periods.

We're not publishing in the newspaper for folks to file a claim in the estate.

So we might be going a little bit more quickly.

But to say that we would avoid having assets appraised determining the value of things by avoiding probate, I don't know that that would necessarily be the case.

>> I have the curious question of course, which a viewer by the way, ask me to ask of course you when we're talking about probate and settling up, settling everything OK so if somebody passes away but you have to notify the public so that if there are any people that owe them money.

>> That's right.

Or that they owe money when I'm when I'm referencing advertising in the newspaper one of the things we need to do when we open the state is advertise in the newspaper and tell the world this person has passed away.

If you believe that they owed you money, then here's your opportunity to file a claim in that estate to be paid.

>> But also if we know that there are potential creditors or there are creditors of the deceased, we also have the responsibility to actively notify them and say to them this person has passed.

We've opened in a state if you believe that you're owed money you should be filing a claim in the estate.

So that is something it's incumbent upon the personal representative.

That process is typically done through the attorney.

You wouldn't have to hire an attorney.

So I'm not promoting that.

You have to hire an attorney every time you go through probate.

But it is a complicated process and it could be involved if you're not used to those those rules and regulations and what you are you're not supposed to do so yes.

If you have an estate you do have a duty to notify creditors.

You have a duty to publish in the newspaper and make sure that folks that believe are owed money or that may be owed money are aware that they have the opportunity to file a claim to be paid two things.

>> Yes.

Number one, how long do they have to notify you?

Hey, you know your dad owed me three hundred dollars for for something.

>> How long do they have?

Sure.

Well they have a period of 90 days within which to file a claim in the estate 90 days 90 days from the past from the date of publication.

OK, but there are different types of creditors as well.

So Medicaid has a different time frame.

There are different life frames but generally you have a period of 90 days.

So we advertise in the newspaper there are 90 days from that data publication that folks have the opportunity to file a claim in the estate.

>> Yep.

All right.

Here's my second.

Yes, ma'am.

And you or one OK, so you say you have to put it in the newspaper.

Yeah, Not a lot of people get the paper.

>> Well, that's that's true about that I you notify uh so we still have to publish in the newspaper.

I understand you have to do it.

This is not the state says this is how you tell the world you have to publish in a newspaper .

It's in general circulation in that area.

So it is true that it's not as maybe the newspaper readers that that reading has gone down and unfortunately it's a very sad without a doubt but yes, that's the process we need to go through.

>> We publish in the newspaper but how somebody's going to know if they they don't.

>> Well, if we again if we're aware of creditors that we have the duty to notify those creditors you couldn't avoid having if you open an estate near wherever creditor you'd have to put them on notice.

>> Yeah, OK, I bring that up because the person that asked me to ask about sure.

>> Totally missed a funeral.

Oh my friend actually a friend because they weren't aware it wasn't in the paper you know social media you can't yeah sometimes things are in there but I do think we're in an interesting time because we are we're in a transition of transition of some sort.

That's exactly right.

I agree.

And at some point I would it wouldn't surprise me if the legislature changed and said we're going to advertise this in a different but currently we're still in the newspaper.

>> OK, OK, there you go.

Now you have an answer.

Hey Peter.

>> That's a call.

He says if a creditor is owed money but the deceased had no money or property, does the credit creditor still get paid?

>> No.

If there's no money there to pay the creditor you don't need to pay the creditor.

>> I will you have to prove to the creditor we can't pay you.

>> Yeah, we would have to if there are no funds if the state is insolvent, the state is insolvent.

So we would creditor no the state is insolvent and the claim wouldn't be paid.

Now that creditor could say I don't believe you.

I'm going to ask for a hearing before the court and I want you to show me an accounting and demonstrate that the estate in fact is insolvent.

But no, if there's no money there they aren't paid.

I will say though, Peter, I want to follow up on that.

Sometimes people have the concern that if I'm serving as the personal representative, if somebody appointed me to serve in that position that I will be responsible for paying my mom's credit card debt or gosh, utility bills went unpaid or whatever it may be and I will let you know if you're serving in that capacity you don't personally have a responsibility to pay the debts of the deceased.

So sometimes I'll hear that.

But no you don't and I wouldn't be surprised.

Sometimes creditors expect that power of attorney to pay out of their own pocket so remember power of attorney is during your lifetime.

>> Oh, that's personal representative.

Yeah.

Yeah they could and that is a question that I think estate planning the elder law attorneys receive from clients on a regular basis which is you know, if I'm appointing them do they have to pay these debts or somebody asks if I'm appointed am I going to be liable for those debts?

>> Those are those expenses.

No, personally, OK, All right.

That's good to know.

OK, all right.

Now we're getting close to the end of our show but I want you to have the opportunity to tell us what other questions you get in settling estates from clients that you've had through the years.

>> What are common from settling estates?

I think the most common questions are length of time.

How long is this going to take before the money can be distributed?

I I like to see personal representatives trying to get the money out to the heirs as quickly as possible, the beneficiaries as quickly as possible.

People have a tendency to get a little nervous.

Why is it taking so long?

So I think the question is how long does it take for the estate to go through process?

How long is it going to be before I can receive my money?

Those are some questions that I hear regularly from folks that are inheriting funds from a deceased loved one.

>> Is it true that it also might be dependent upon when you pass away period of the year because of taxes say you have so if PR has to do the taxes for that?

Well, that's true.

So if the deceased had income tax if they earned enough money in order to pay it file income tax return, then we may have the we may need to file an income tax return for the deceased.

That is true and in some estates not always but some estates depending upon how much the estate earned while it was opened or if there was real estate that was being transferred as part of that estate administration process.

>> We may have an estate tax return that needs to be filed as well.

Oh OK. All right.

If there are things which I know you've shared before, if there are things that you're selling the farm cottage house, whatever that may factor in to because if it takes longer to get those things sold yeah, no doubt about it.

>> And but to your point about tax returns.

Yes.

If I'm selling real state that estate is going to have a tax return that needs to be filed for sure.

>> OK ok ok what else.

>> Anything else that people come to you all the time and say hey yeah I think that you've mentioned a couple of times power of attorney and I've said this before everyone should have in place durable power of attorney health care rep designation and if nothing else a basic last will and testament but most without a doubt the power of attorneys essential to have in place that health care rep designation we are allowing someone to make health care decisions for if you are unable to without those in place we can be forced it.

It's not I shouldn't say forced we may need to use a guardianship.

There's nothing wrong with guardianships but we can avoid having the court involvement and monitoring assets of of the person during your lifetime if you take the initiative to appoint someone to serve as your attorney in fact to that power of attorney as your health care representative to that health care representative designation.

So I would encourage all of our listeners to have those basic documents in place.

It's very important sometimes people will say well I don't have enough money or I don't have enough assets.

Why would I do that?

Actually it's very important for those things to be in place regardless of your wealth.

>> OK, yeah.

All right.

Well that includes all of you.

>> Then again, we appreciate so much Brian Nugent being with us here.

Thank you for coming.

I appreciate it.

And you'll see Brian again next month here on LIFE Ahead.

Meanwhile, have a great night and a great weekend