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>> Good evening.

Welcome to PBS Fort Wayne here.

I'm Sandy Thomson, the host of this show which is called LIFE Ahead.

And the reason we call it LIFE Ahead is we tried to give you education and information which is a mission for us here at PBS that will help you as you make choices and decisions for your LIFE Ahead.

And every week we have different guests and different topics.

I think you're going to like our show tonight.

We have a very interesting topic and a very interesting guest.

We're going to be talking about trust with a trust be a sensible thing for you to set up and how do you even go about it?

Well, Brian Nugan who was here last month is with me again tonight and he's pretty much an expert in this field.

>> So let's just talk to him.

Hi, Brian.

I said how are you?

I'm fine.

Nice talking to you.

Last month we talked about long term care and tonight we're talking about trust and you're going to be back next month.

>> I am 60.

That will be March.

>> Right.

Keep that in mind if you like this guy and have some questions for him.

March 16th 730.

>> Meanwhile we're here live tonight so let's talk about trust.

Brian, explain first of all what a trust is.

>> Some people may not really even understand the concept.

Sure a trust is a contract contract that has basically three parties to it.

We have a set lower the person that makes the trust.

So that might be the client of the elder law estate planning attorney someone called a trustee.

The trustee is like a manager of the assets that are placed in the name of the trust then a beneficiary the beneficiary is the person that enjoys or benefits from the assets the trust.

So those are the three main players in a trust that trust is a contract that's prepared based upon the client's wishes on the client's wishes.

>> But how do I know what kind is right for me?

Brian and I and you have a lot of clients and have had so many years of experience so you've dealt with different kinds of trust.

What are some of those types?

Great question.

There are any number of different types of trust.

A trust is like a giant umbrella describing all different types of trust.

There can be revocable trusts sometimes called living trusts or irrevocable trusts.

We might have real estate trusts.

We have special needs trusts for folks that are special needs.

>> We could have insurance trusts, any number of different trusts but all of those different trusts have those three categories that I talked about before those three players the settlor, the trustee, the manager and the beneficiary and the different type of trusts that we choose is based upon what the client wants to get accomplished.

So what I think it's important for people when they're going in and talking to an elder law attorney estate planning attorney is that they are candid with their attorney about what it is that they want to get accomplished and then hopefully with the guidance from the attorney we can select what that type of trust that's appropriate for them and what they the goal that they want to achieve.

>> Is this something, Brian, that you consider a part of your portfolio, if you will, or an asset or is it like I've heard a lot of people will in there will might say, you know, upon passing X amount of money or percentage of what my assets whatever will go to set up a trust for my grandchildren or something is that a typical thing?

>> So when I think of portfolio I think of an asset that somebody has like an investment portfolio a trust could be part of one's estate planning.

You Sandy were describing a type of trust that's inside your will we called testamentary trusts.

So that's last will and testament testamentary trust.

So in my will I'm saying when I pass away I want so many dollars to be set aside by way of your example for my grandchild or percentage of my estate for my grandchild and then I want that money available to them as they age if they need the money.

But when they reach particular benchmarks let's say at age twenty five they're going to get a percentage the money that you've set aside thirty five or forty five.

So that is a way to shelter one's assets and make sure that somebody isn't getting the money too early in their life or I've had clients where they might have the money go to their children or grandchildren much later in life so that they're creating a retirement for them through the money that they've inherited but oftentimes will use trusts that we established during our lifetime as a means of avoiding probate.

So you were saying earlier about a trust in your will you can do a trust in your will but oftentimes we might do it a trust outside of the will that allows one to avoid probate.

>> So before you die before you pass away so then that trust if you have assets in the name of the trust for example, a home could be in the name of a trust an investment account or brokerage account could be in the name of the trust and if those assets are titled in the name of the trust at the time of one's passing the the trustee doesn't need to go to court.

It's kept out of the public eye.

You don't go through the probate process how the expense of hiring an attorney we avoid all of that by using living trust to revoke that sounds very attractive actually.

>> Yeah, OK, we're you've talked about different kinds of trusts and whatever but if I were to come to you or an attorney and say OK, I'm going to put some money in my in a trust let's say for my grandchildren or something like that, how do you know what I want to do or what things do I consider before even deciding on a trust?

What makes it attractive to me?

>> So first we're going to typically what I'm doing when I'm having a discussion with my clients instead of them the client focusing on what it is that should go into the trust or how to trust should work.

I want just to have a discussion with them and find out what their goals are.

Oftentimes it's not the amount of wealth that someone has.

It's the goals that they want to achieve and what's important to them we that would decide do we use a trust, do we not use a trust and also the assets they have for example if I have an IRA individual retirement account and I want that to go out right to my children and on that IRA I can designate beneficiaries then I may not need the trust for the funds in that IRA but if I want those funds from the IRA to be held and then distributed to my children or grandchildren over time and control that those distributions a little bit more, perhaps the beneficiary on that IRA would be the trust and we could distribute those assets over time so we can do that as well.

>> Oh OK. That's interesting.

>> Cindy just called in Brian and we appreciate you watching LIFE Ahead here.

>> Cindy Cindy wants to know if you could give more information on special needs trust and are very, very important.

>> They're very important.

Who needs them?

How do you go about it?

Is this something you put in a will or you activate now how does that work?

>> So a special needs trust could be a standalone document you spoke about before or it could be inside the will itself a special needs trust would be someone that requires we would define them as a special needs person.

This could be a person that has a physical condition or a cognitive condition and they would be eligible to receive benefits as a result of that condition that they have.

>> So what we want to be able to do is hold funds in a special needs trust, a supplemental needs trust for their benefit and the money inside that trust would be used for that individual to pay for things that they couldn't receive through programs such as Medicaid.

So it may be that Medicaid would provide housing for you and and basic needs for food.

>> But if you wanted something extra I wanted a TV for my living room.

I wanted clothing that I wouldn't be able to have a stipend for or even more therapy could be therapy as well.

>> Any of those things that aren't paid for through a program the funds in that special needs trust would be available to pay for that.

>> Generally there are two types of special needs trusts that we deal with.

>> One is when it's createdfor the benefit of your spouse and another and another one would be when we're it's been we're benefiting somebody aside from yourself on when we're creating the special needs trusts today for the benefit of someone else, you can determine once the person that was the beneficiary that special needs trust who got the money from that for those extras once they pass or no longer eligible for the funds in that special needs trust, we decide where the money goes so it wouldn't necessarily be going to reimburse the state for money they've spent for that person.

That's getting a little a little confusing but the ideal is for these to be created in advance.

You can create them inside your will you create them as a standalone special needs trust.

But anyone that has a special needs child or special needs person in their life should seriously take a look at these and speak with counsel about having one prepared.

>> Yeah, for sure.

I think that's an excellent recommendation because you know, you have to look at the future and maybe this person that needs the trust maybe their parents are going to pass as well and they're all alone.

>> Sure.

And the the risk that you're running not creating that special needs trust is that when the if you're giving money outright to someone that is a special needs person, those funds that they've inherited, they would have to spend those funds, lose their benefits and once they've spent the money that they've inherited then reapply for those benefits.

>> So the idea is that we have funds for their use to pay for things that any programs that they're receiving money from Medicaid was the example I provided earlier.

>> You wouldn't lose that Medicaid but there's still a pool of funds sitting there that could be used to benefit.

>> Now we talked about the different three different parts of a trust and you talked about the trustee.

>> Does the trustee have to be the same person that's a trustee of your in your assets named in your will that would be your trustee or your executor or could you have a bank or an attorney or somebody else be the trust of a special needs?

Sure.

Well, if it's special needs trust or any other type of a trust, the three players in a trust settler that's the person that makes it the trustee.

That's the one that manages the money in the trust and implements that trust in keeping with the terms of that that trust that contract that you prepared.

>> So it the personal representative or the executor of your estate does not need to be the same person that you've appointed as the trustee of the trust.

They can be different.

You also indicated, Sandy , about using a corporate trustee like a bank or a formal trust department.

Those are excellent options assuming that there's enough money in the trust that can provide payment for that professional trust department.

They're an excellent option for folks to consider especially if they don't have loved ones in their life or people that they might really rely upon that would be able to serve in that capacity.

>> Or if you're thinking a very long term trust we want to use a corporate trust department oftentimes so that we know that corporate trust department is going to be around for a long time to service generation.

>> You got it.

And I can't help but ask because some of you might be thinking this so if you put these moneys in a trust, do you make any money off of them or not when you say do you make any money to help your son?

>> Well, let's say I'm the one who sets up a trust for somebody.

>> Is this trust going to acquire any additional money like some other investments might?

>> So the trust is a vehicle in which that holds assets.

So all you're doing is you're putting assets into the name of the trust and and the trustees goal is to continually produce income for the benefit of the beneficiary.

So it is an investment then it's it's a tool that holds investments.

>> The trust itself is not an investment but the stock let's say I purchased stock in a company and I put the stock in the name of the trust the stock could grow and right.

>> That would make your trust increase.

That's another phone call.

This from Jack.

And the question is are 529 plans part of trusts and wills and how are they passed on if someone does die?

So a 529 plan is actually it's not part of a trust that's a separate plan.

You can make contributions to a 529 plan during your lifetime and the funds in those plans could be used for as I was referencing before, for people that are special needs it can be used for other purposes as well.

But it isn't part of your will.

It isn't part of your trust.

That's a separate plan that you would fund during your lifetime and there are some tax benefits for individuals that are funding those 529 plans that sometimes make them more attractive.

>> Would you set up a trust with a specific thing in mind say you would go back to grandchildren again, hear that in your will you say OK, X amount of money to go be put in a trust for my grandson and kid.

Now here's the question can you specify things that he can spend it on to pay for his college tuition or he can buy a car or and then you set times OK at twenty one to get so much in it thirty he gets so much OK take it from there.

>> So as I was saying before Sandy a trust is just a contract so you as the client of the attorney will come in and say I want my contract my trust to say that the money could be used for purchase of a vehicle at a particular age or if a child is doing well in life and I want them to benefit by being able to travel with this money.

>> Those are those normally what I like to see actually instead of saying particularly a car or particularly to travel is we're giving the trustee that we appoint the decision making ability to say gosh, this person is a productive member of society.

>> They're doing really well and I think it's appropriate almost like a pseudo parent.

I think it's appropriate for them to receive a vehicle.

>> I think it's appropriate for them to be able to travel.

But there are specific reasons we establish trust as well.

So if a grandparent wants to establish a fund for the kids grandkids to be able to pay for their college, most definitely they can do that.

>> If we've if we've gotten the kids through school and they reach a particular we can make a distribution from the trust so they become sort of like the Guardian then of those finances that are in the trust and they can decide when to disperse it if you have it specified a particular.

>> So they're like the manager of the money in the trust so it would be their duty to manage the money to make sure it's invested appropriately, to make sure it's continuing to grow to comply with the terms of the trust make distributions of particular ages.

So they are they do guard the money.

They are a guardian of the sense over the money.

But I think of them as a manager they're managing it.

They are are overseeing it and making sure that it's not being wasted or silly investments aren't being made but we often see trusts as a way of avoiding probate.

>> So I oftentimes think that's one of the big things and that in itself is certainly working something.

>> Yeah, OK, now I want to ask another question here on behalf of one of our viewers and I think that I'm trying to look at the prompter here.

>> I think that is Charles right.

>> Charles Charles says that can you explain irrevocable Medicaid?

OK, so for trusts.

>> Yep.

You mentioned that earlier.

It's an excellent question, Charles.

Thank you so remember I said earlier trust is like a giant umbrella describing any number of different types of trusts.

Yes, One type of trust that is probably as common as the revocable trust that we use to avoid probate are irrevocable or asset protection trusts and the money that's placed into those trusts assuming it's there for a period of time we really want them to be ideally in place for a period of five years or more if those Medicaid trusts asset protection trusts are set up appropriately and an individual at some point in the future is admitted to nursing home memory care unit something like that the money inside that trust could not be accessed for their care.

It would be protected for the children, the grandchildren and they typically then would apply for Medicaid benefits to pay for their stay in the memory care unit nursing home particular assisted living facilities.

Also are Medicaid eligible.

>> So yes, those irrevocable asset protection trusts are oftentimes used to protect one's estate if in fact at some point in the future they may be going to they may have an out-of-home placement as I suggested before but those are very ,very commonly used as well.

>> We've had some wonderful questions tonight from our viewers.

That's great me I love the questions and I want to remind you while you're all watching us this evening I said earlier and keep in mind that Brian we'll be back with me here on LIFE Ahead on March 16th.

That's the Wednesday night of course at seven thirty.

So if you're thinking of something now you want to ask Brian or you want to do a little exploration before you do, you can call in then again that's March 16th.

>> OK, but we're here tonight.

I have another question.

>> Are there other documents that I need to have in place to set up a trust to set up a trust not necessarily other documents.

>> There may be other documents that you have as part of your estate plan with a trust being one of those if it's appropriate for you oftentimes if we're doing a revocable trust or that living trust oftentimes will also have a will that's called a pore over will pore over or over like a glass of milk pouring into a pitcher of milk pouring over into a glass.

So if I have assets during my lifetime that I didn't put into the name of the trust I should have but I forgot to do that my will at the time of my passing would pick up those assets and pour them into the trust the time of my passing so that there are then distributed to my children grandchildren, to my charities, to my church, whoever it is that I'm remembering through my estate planning.

>> Do you have to mention then in your will that that you have in case I have power over assets they should be put into that trust so or does that automatically happen?

It doesn't automatically happen .

So in your will the Wellwood reference either a particular asset or a particular say anything that I may have in my name alone it would the beneficiary of that that will would be the trust.

And so if I own a lake home let's say and for some reason I fail to put that home into my living living trust during my lifetime that will would pick up that lake home and poured into the trust you got you got it.

>> I love it.

Yep.

So you were asking before though, Sandy , about other documents that you may have in your estate planning.

So oftentimes a trust is a major part of one's estate planning.

Not always it's not always appropriate.

A will is another essential part of one's estate planning.

We all need a well, durable powers of attorney.

I think I mentioned this every time I see you durable powers of attorney for financial matters are essential.

I like health care representative and then health care representative as well as required or something you should have so I you can combine health care power of attorney and financial power of attorney but I really like to see them separate.

>> I think people do do that because people have different skills and maybe the person you name for health care representative doesn't really have a business mind or they just don't like numbers.

They don't want to do that.

But you have somebody else that is particularly good in finances.

>> That's that's correct.

Yeah.

And so my clients are when you're coming into an attorney you should be able to express to your your counsel who it is that may be well suited to make those financial decisions.

Who is that?

It would be well suited to speak to the doctor and when you have a pressure event going on you're needing to make fast decisions.

It always is.

It isn't always the one with a tender heart.

It's appropriate to make health care decisions and that's oftentimes what I hear from clients is that Suzy is an amazing care provider.

However, if she had to make a tough decision, if we were in dire physical straits, I don't know that she could make that decision.

So we're going to pick Becky.

She's the one that can make the tough decisions in those crunch times.

>> So yes, it's nothing against anybody.

It's just people have different skills that might make them more appropriate agreed for that particular job.

>> Agreed.

And you need to be honest with your with your attorney and let them know who it is that would serve well in those capacities and be honest with yourself as well.

>> Sure.

Exactly.

And not just go by emotion like oh, I'll pick my oldest son for this and don't do it that way.

>> No agreed.

And if you're honest with him beforehand and let them know and explain why I'm sure that would certainly serve you well in terms of making your needs known.

Should you tell your children or you're the people that you have in your life that you might be leaving something to should you tell them you have a trust or could that be a surprise?

>> Well, it can be a surprise I suppose.

>> I think the real question is are is there going to be an issue if you let them know in advance emotionally is are going to be a concern in your family if you let them know how you're handling this?

Honestly, most of my it almost is dependent upon age.

The it seems that the older my clients are they're of a generation where they're more hesitant to talk about their finances with our kids.

But I typically encourage my clients to speak with our children, let them know in what capacity they're going to be serving if they are a trustee it doesn't necessarily mean you have to tell your children how you're going to be dividing assets or tell your loved ones how you're going to be dividing assets.

But you would want to let your children know maybe the attorney that you worked with for your estate planning where they might be able to find those documents as far as sharing it or not sharing it, I think that's that's person specific and personality specific and personality specific we have about one minute or less yet.

>> Brian, any last words you'd like to share with our viewers concerning trust?

Sure.

I think that what's important is that when you speak to your attorney that you not go in with the assumption that you know what you do or don't need a trust may be the ideal estate planning tool for you to use.

You may not need that.

So go in talk generally about what it is that you want to get accomplished and your counsel, your elder law attorney, estate planning attorney is going to guide you toward what it is that's most appropriate for you and your goals in the end.

>> That's such good advice as you always have with us here.

Once again, we do appreciate you being here so much.

My pleasure again.

And I love the phone calls and the questions that we've had.

So we're going to see you on March 16th and we're going to see you hopefully again next Wednesday night at seven thirty.

>> Good night