Now I am not only not the trustee, but there will be no trust at the start?
I feel like working with this guy is like a doctor learning to do heart surgery by cutting you open.
I contacted an elder law attorney and have an appointment Dec. 16th, but need the ok from my nephew.
That lawyers secretary emailed me eight pages of forms to fill out and get back to them, so we could meet
with all the cards on the table to start.
Emailed current lawyer Monday morning, followed with a call to his secretary Wednesday, and got an email
Friday afternoon at 4.
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Steve,
Thanks for your patience. I was hoping for Option 2 because it’s the least confrontational and the best financial result for the beneficiaries and Mr. Dillon. I’m sorry I didn’t reply prior to your meeting with Mr. Dillon’s attorney but I’m happy to coordinate with his attorney through this process as well it just may slow things down.
So we’ll have to know Mr. Dillon’s finances as well, but based on Beverly’s we have about $831,000.00 with the property.
Completely agreed that we are putting some trust into Mr. Dillon cooperating here, so hopefully he stays true to his word since the entire plan will be contingent on it. The general outline for the plan is that we would not have to touch the property, since Mr. Dillon needs a place to live so the house will be exempted. After taking into account his assets and income, would leave about $157,000.00 of assets in his name. For example purposes, that means the remaining $774,000.00 would go into a Medicaid compliant annuity payable to Mr. Dillon at $4,000-$8,000.00 per month. He could put that money into a bank account for Beverly’s children (the bank account could be inside of a trust). This would qualify her immediately for Medicaid to pay her bill to the nursing home. This means the annuity would pay over a 8 year timeframe. Should Mr. Dillon pass away, Medicaid must be designated as the sole beneficiary of the Medicaid annuity to re-coup any payments made for Beverly up to the point of his passing, so, for example if the annuity paid out $500,000.00 and he passes away, then Medicaid will come after the remaining $274,000.00. Again these are risks, and you and the rest of the family have to decide if they are acceptable risks knowing the alternative paying each month.
This initial phase won’t include a trust, but we can, with Mr. Dillon and his attorney’s approval, set up a revocable trust, where the money from the Medicaid annuity would go and could transfer to her children upon his passing free of probate. In which case, yes, we would need to name successor trustees for him.
Regarding your question of how to liquidate the retirement accounts; I would suggest splitting the liquidation over this and next year to limit the income tax burden from the total and complete liquidation. Liquidating the IRAs is a point-of-no return move, because once the IRAs are liquidated, we can’t change course, the income tax liability will be owed.
Hopefully this provides some clarity, but if it’s ok with you, I think the next best step would be to review the plan on last time and go through the next steps. |
