1 00:00:40,639 --> 00:00:44,259 Robert: April 28th, 2024. Welcome to the Women and Money podcast. 2 00:00:44,270 --> 00:00:47,689 Robert: As well as everyone smart enough to listen. I'm Robert, 3 00:00:47,700 --> 00:00:51,450 Robert: Suze and KTs producer and we decided that today we're 4 00:00:51,459 --> 00:00:53,959 Robert: going to revisit the main part of an episode from 5 00:00:53,970 --> 00:00:57,669 Robert: July of last year, all about trusts and what you 6 00:00:57,680 --> 00:01:01,310 Robert: need to know about them. It's an important topic to resurface. Next Sunday's Suze School will be all about real estate. 7 00:01:01,319 --> 00:01:04,269 Robert: Please don't forget to go to MyAlliant.com and take the 8 00:01:04,279 --> 00:01:08,069 Robert: Stay Safe quiz and make sure you enter your email address, 9 00:01:08,389 --> 00:01:14,069 Robert: because next week Suze will tell you why you need to do that. Again, the 10 00:01:14,080 --> 00:01:20,930 Robert: stay safe quiz is on MyAlliant - my alliant.com. 11 00:01:21,750 --> 00:01:23,849 Robert: And now... Suze. 12 00:01:24,120 --> 00:01:24,730 Suze: Ok, 13 00:01:25,620 --> 00:01:30,410 Suze: Suze School, take out your little Suze notebooks 14 00:01:31,489 --> 00:01:35,949 Suze: and I'm just going to briefly tell you the difference 15 00:01:36,129 --> 00:01:41,870 Suze: between a revocable trust, an irrevocable trust and a special 16 00:01:41,879 --> 00:01:43,309 Suze: needs trust. 17 00:01:44,819 --> 00:01:49,470 Suze: So let's start with the kind of trust that almost 18 00:01:49,480 --> 00:01:53,160 Suze: every single one of you out there in my opinion 19 00:01:53,169 --> 00:01:58,239 Suze: should have known as a revocable trust also known as 20 00:01:58,250 --> 00:01:59,910 Suze: a living trust, 21 00:02:00,629 --> 00:02:07,419 Suze: a revocable trust or a living trust is used primarily 22 00:02:07,959 --> 00:02:15,190 Suze: for efficient estate planning and asset management during one's lifetime 23 00:02:15,199 --> 00:02:19,490 Suze: and after death. what do I mean by that 24 00:02:20,660 --> 00:02:25,839 Suze: When you have assets that you own in your individual 25 00:02:25,850 --> 00:02:28,508 Suze: name or joint tenancy with somebody 26 00:02:29,460 --> 00:02:33,720 Suze: and you are going to be passing those assets down 27 00:02:33,729 --> 00:02:38,160 Suze: to somebody who is a beneficiary and their names are 28 00:02:38,169 --> 00:02:41,509 Suze: not on the title of your assets. 29 00:02:42,758 --> 00:02:48,520 Suze: The most efficient way to pass those assets down to 30 00:02:48,529 --> 00:02:55,750 Suze: your beneficiaries is through a living revocable trust. Got that. 31 00:02:56,020 --> 00:03:03,079 Suze: Just that simple. Why? Because if you don't have a trust, 32 00:03:03,610 --> 00:03:05,859 Suze: hopefully you have a will. 33 00:03:06,610 --> 00:03:10,089 Suze: When you have a will, the assets that are passed 34 00:03:10,100 --> 00:03:14,698 Suze: down through a will in most cases have to go 35 00:03:14,710 --> 00:03:20,000 Suze: through probate, which is a very lengthy and costly court 36 00:03:20,008 --> 00:03:23,960 Suze: procedure in certain states. It could take six months, one 37 00:03:23,970 --> 00:03:26,320 Suze: year or two years to be able to complete the 38 00:03:26,330 --> 00:03:27,199 Suze: procedure 39 00:03:28,089 --> 00:03:33,869 Suze: and it's just a total waste of time and money. 40 00:03:35,009 --> 00:03:37,889 Suze: Now, a lot of you have been told you don't 41 00:03:37,899 --> 00:03:41,970 Suze: need a living revocable trust and I'm combining a revocable 42 00:03:41,979 --> 00:03:44,630 Suze: trust and a living trust so that all of you 43 00:03:44,639 --> 00:03:45,789 Suze: can relate to this. 44 00:03:46,729 --> 00:03:50,229 Suze: You don't need that if you own a house that 45 00:03:50,240 --> 00:03:54,139 Suze: you own in joint tenancy because if you die, it 46 00:03:54,149 --> 00:03:57,759 Suze: will pass immediately to the person that you own it 47 00:03:57,770 --> 00:04:01,070 Suze: in joint tenancy with. Yeah. Well, what happens if you're 48 00:04:01,080 --> 00:04:02,550 Suze: both killed in a car crash? 49 00:04:03,570 --> 00:04:06,830 Suze: Now, what happens to that house? Now, that house is 50 00:04:06,839 --> 00:04:11,630 Suze: governed by a will. If you don't have a will, 51 00:04:12,350 --> 00:04:16,820 Suze: then that house is governed by what's called intestate succession 52 00:04:16,829 --> 00:04:21,450 Suze: where the state that you live has already decided who 53 00:04:21,459 --> 00:04:26,539 Suze: is going to get your assets upon your death? It 54 00:04:26,549 --> 00:04:31,619 Suze: usually passes either to your parents, your children, your spouse, 55 00:04:31,630 --> 00:04:35,049 Suze: whatever it may be, there is a succession 56 00:04:35,779 --> 00:04:40,579 Suze: passage every single state has. If you don't have at 57 00:04:40,589 --> 00:04:45,679 Suze: least a will where you've dictated how your assets or 58 00:04:45,690 --> 00:04:48,089 Suze: who your assets should pass to. 59 00:04:48,890 --> 00:04:52,799 Suze: Oh, you own a house in joint tenancy with right 60 00:04:52,809 --> 00:04:57,279 Suze: of survivorship. So you think you don't need a trust 61 00:04:57,839 --> 00:05:01,269 Suze: and now one of you is in an accident or 62 00:05:01,279 --> 00:05:05,750 Suze: has a stroke and now they're incapacitated, 63 00:05:06,029 --> 00:05:10,859 Suze: they don't know you, they don't recognize anybody. They're totally incapacitated. 64 00:05:11,190 --> 00:05:15,429 Suze: You need to sell the house maybe because that person 65 00:05:15,440 --> 00:05:18,670 Suze: was contributing to the mortgage or it's a two story 66 00:05:18,678 --> 00:05:20,849 Suze: house and you need a one story house. But now 67 00:05:20,859 --> 00:05:25,690 Suze: you need to sell the house. Can you, you cannot, 68 00:05:26,100 --> 00:05:32,329 Suze: because the person that's incapacitated cannot sign the deed to 69 00:05:32,339 --> 00:05:35,519 Suze: sell it. And since you own it and joint tenancy, 70 00:05:35,928 --> 00:05:40,899 Suze: it takes both signatures to sell that house. So what 71 00:05:40,910 --> 00:05:43,589 Suze: are you gonna do now? Now you have to go 72 00:05:43,600 --> 00:05:45,130 Suze: down to probate court 73 00:05:45,738 --> 00:05:48,679 Suze: that will cost you a lot of money. Have your 74 00:05:48,690 --> 00:05:52,260 Suze: spouse or whoever you own that house with in joint 75 00:05:52,269 --> 00:05:52,950 Suze: tenancy 76 00:05:53,820 --> 00:05:59,279 Suze: declared incompetent. So you can sign for him or her 77 00:05:59,290 --> 00:06:01,920 Suze: and vice versa. Got that 78 00:06:02,799 --> 00:06:08,058 Suze: you could avoid all of that if you simply put 79 00:06:08,070 --> 00:06:13,010 Suze: your assets like your home, like your stock portfolio, like 80 00:06:13,019 --> 00:06:19,000 Suze: your bank accounts, all of those things in a trust. Now, 81 00:06:19,010 --> 00:06:24,200 Suze: obviously you can make your bank accounts pay on death accounts, 82 00:06:24,630 --> 00:06:28,880 Suze: transfer on death accounts. You can set up everything like that, 83 00:06:29,950 --> 00:06:35,350 Suze: but that doesn't take care of the problem of incapacity. 84 00:06:35,540 --> 00:06:38,000 Suze: Do you understand that everybody, 85 00:06:38,769 --> 00:06:44,500 Suze: The thing with a revocable trust is that it has flexibility. 86 00:06:45,850 --> 00:06:50,380 Suze: You, if you create the revocable trust, you are known 87 00:06:50,390 --> 00:06:54,760 Suze: as the trustor and you have the ability to modify 88 00:06:54,769 --> 00:06:59,618 Suze: that trust, amend that trust, revoke the trust, do anything 89 00:06:59,630 --> 00:07:05,899 Suze: you want during your lifetime. It does not change your 90 00:07:05,910 --> 00:07:10,480 Suze: tax status. You don't have to create another tax form 91 00:07:10,489 --> 00:07:11,859 Suze: for it, nothing. 92 00:07:12,570 --> 00:07:17,309 Suze: Everything stays the same. All that changes is that everything 93 00:07:17,320 --> 00:07:20,679 Suze: now is in this suitcase, you put it in this 94 00:07:20,690 --> 00:07:25,149 Suze: suitcase and in this suitcase that's known as a trust, 95 00:07:25,160 --> 00:07:29,989 Suze: hold all of your assets that have a title to it. 96 00:07:30,880 --> 00:07:35,670 Suze: Just that simple. Everybody, you do not put an IRA 97 00:07:35,679 --> 00:07:39,070 Suze: or retirement account or any of those things in a trust. 98 00:07:39,899 --> 00:07:44,320 Suze: It's mainly your bank accounts, your stock accounts, your buildings, 99 00:07:44,329 --> 00:07:48,399 Suze: you own your home, whatever it may be that goes 100 00:07:48,410 --> 00:07:49,760 Suze: in trust. 101 00:07:50,559 --> 00:07:54,730 Suze: Also, if you have a minor child, 102 00:07:55,890 --> 00:08:02,820 Suze: a minor cannot directly inherit money. They're a minor therefore, 103 00:08:02,829 --> 00:08:06,019 Suze: within a revocable trust, 104 00:08:06,880 --> 00:08:11,140 Suze: you can name a trustee to take care of the 105 00:08:11,149 --> 00:08:13,890 Suze: money for your minor child 106 00:08:15,279 --> 00:08:19,019 Suze: and leave instructions as to how you want that person 107 00:08:19,029 --> 00:08:22,339 Suze: to invest the money or when that minor child is 108 00:08:22,350 --> 00:08:25,739 Suze: to get that money at what age you can control 109 00:08:25,750 --> 00:08:27,899 Suze: all of that. 110 00:08:28,850 --> 00:08:32,929 Suze: So again, the components of a revocable trust 111 00:08:33,809 --> 00:08:38,309 Suze: is a trust or the person who has created the trust, 112 00:08:38,479 --> 00:08:43,270 Suze: the trustee, the person who makes all the decisions, what's 113 00:08:43,280 --> 00:08:46,468 Suze: in the trust and usually the trust or and the 114 00:08:46,479 --> 00:08:48,789 Suze: trustee are the same people, 115 00:08:49,630 --> 00:08:55,049 Suze: the successor trustee who takes over if your trustee becomes 116 00:08:55,059 --> 00:08:58,229 Suze: incapacitated or something happens to them 117 00:08:59,640 --> 00:09:04,140 Suze: and then your beneficiaries and it's just that easy. 118 00:09:05,000 --> 00:09:11,830 Suze: So that's what a revocable living trust is mainly all about. 119 00:09:12,640 --> 00:09:16,539 Suze: In my opinion, the less money you have, the more 120 00:09:16,549 --> 00:09:20,030 Suze: you need a living revocable trust. 121 00:09:20,849 --> 00:09:24,520 Suze: Next in irrevocable trust, 122 00:09:25,890 --> 00:09:32,179 Suze: an irrevocable trust is exactly what that name says. It is irrevocable. 123 00:09:34,590 --> 00:09:40,409 Suze: You cannot change it once you create it, period. And 124 00:09:40,419 --> 00:09:47,070 Suze: an irrevocable trust is created to accomplish specific estate planning 125 00:09:47,080 --> 00:09:56,090 Suze: goals such as asset protection, estate tax reduction or Medicaid planning. 126 00:09:56,659 --> 00:09:57,969 Suze: How does it do that? 127 00:09:58,869 --> 00:10:04,830 Suze: Once the assets are transferred into an irrevocable trust, 128 00:10:05,739 --> 00:10:09,770 Suze: You as the trustor also known as the grantor . 129 00:10:10,590 --> 00:10:15,650 Suze: You, the one who put them into this trust, you 130 00:10:15,659 --> 00:10:21,940 Suze: are going to relinquish total control and ownership totally over 131 00:10:21,950 --> 00:10:27,459 Suze: those assets. So once you put money into that trust, 132 00:10:27,979 --> 00:10:31,280 Suze: it's now out of your estate. You may think you 133 00:10:31,289 --> 00:10:35,280 Suze: own it, but it is no longer yours. It's in 134 00:10:35,289 --> 00:10:39,239 Suze: that trust, you cannot change it. And it's held usually 135 00:10:39,250 --> 00:10:44,319 Suze: until you die for the benefit of whoever you named 136 00:10:44,330 --> 00:10:45,059 Suze: on that. 137 00:10:45,909 --> 00:10:50,900 Suze: Now, if you wanna make changes to that trust to 138 00:10:50,909 --> 00:10:56,569 Suze: an irrevocable trust, it will generally require the consent of 139 00:10:56,580 --> 00:11:00,689 Suze: the beneficiaries of that trust and you have to have 140 00:11:00,700 --> 00:11:04,750 Suze: court approval, one or the other or both 141 00:11:05,479 --> 00:11:11,218 Suze: another reason that people love an irrevocable trust or they 142 00:11:11,229 --> 00:11:15,789 Suze: think they do anyway, is that an irrevocable trust can 143 00:11:15,799 --> 00:11:24,299 Suze: shield your assets from creditors, lawsuits or other claims. So, 144 00:11:24,309 --> 00:11:29,380 Suze: unlike a revocable trust that does not provide any asset 145 00:11:29,390 --> 00:11:31,299 Suze: protection whatsoever, 146 00:11:32,479 --> 00:11:39,539 Suze: an irrevocable trust does provide a level of asset protection. 147 00:11:40,450 --> 00:11:43,030 Suze: How does it help you with taxes? 148 00:11:43,929 --> 00:11:50,880 Suze: Irrevocable trusts are used to reduce estate taxes, not income 149 00:11:50,890 --> 00:11:57,119 Suze: taxes necessarily, but estate taxes because once you remove those 150 00:11:57,130 --> 00:12:02,710 Suze: assets from your taxable estate and you've given up control 151 00:12:02,719 --> 00:12:04,559 Suze: of those assets 152 00:12:05,510 --> 00:12:10,890 Suze: and anything about them as they grow, they're not in 153 00:12:10,900 --> 00:12:15,239 Suze: your estate. So if they grow to be very large 154 00:12:15,250 --> 00:12:20,348 Suze: and then passed to the beneficiaries, they're not in your estate. 155 00:12:20,380 --> 00:12:25,130 Suze: So they're not counted for estate tax when you die 156 00:12:26,020 --> 00:12:28,080 Suze: for Medicaid planning. 157 00:12:29,080 --> 00:12:33,840 Suze: Now, listen, if you anticipate the need for a long 158 00:12:33,849 --> 00:12:39,419 Suze: term care or nursing home expenses, it is true that 159 00:12:39,429 --> 00:12:44,380 Suze: an irrevocable trust can help protect your assets and qualify 160 00:12:44,390 --> 00:12:47,820 Suze: you for Medicaid benefits. Now, how does it do that? 161 00:12:48,229 --> 00:12:54,200 Suze: When you transfer your assets into an irrevocable trust, you 162 00:12:54,210 --> 00:12:57,699 Suze: create a separation, so to speak between you 163 00:12:58,320 --> 00:13:04,209 Suze: and your personal assets and therefore your eligibility for Medicaid 164 00:13:04,219 --> 00:13:09,640 Suze: allowing you to preserve assets for your beneficiaries while still 165 00:13:09,650 --> 00:13:16,359 Suze: qualifying for Medicaid, which is governmental assistance. Now, obviously, there's 166 00:13:16,369 --> 00:13:20,380 Suze: five year look back periods and things like that. But 167 00:13:20,390 --> 00:13:23,020 Suze: you know how I feel about this, 168 00:13:23,460 --> 00:13:29,500 Suze: I've said to you before, I personally believe that when 169 00:13:29,510 --> 00:13:33,320 Suze: you have money and you get older, that money is 170 00:13:33,330 --> 00:13:36,130 Suze: to take care of you. And I understand that some 171 00:13:36,140 --> 00:13:39,030 Suze: of you say, but Suze, what happens if I have 172 00:13:39,039 --> 00:13:42,539 Suze: a special need child or something like that? Maybe you 173 00:13:42,549 --> 00:13:46,169 Suze: get insurance, maybe that is when whole life or universal 174 00:13:46,179 --> 00:13:51,479 Suze: life insurance comes to play. But while you are alive, 175 00:13:52,849 --> 00:13:56,250 Suze: I think it's really important that you look into the 176 00:13:56,260 --> 00:14:01,359 Suze: difference between care in a nursing home. When you are 177 00:14:01,369 --> 00:14:05,590 Suze: a private paid patient versus care in a nursing home. 178 00:14:05,599 --> 00:14:11,549 Suze: When you are on Medicaid also to be on Medicaid, 179 00:14:11,559 --> 00:14:15,909 Suze: you have to be in a Medicare approved nursing home. 180 00:14:16,760 --> 00:14:21,090 Suze: And as time goes on with Medicare, possibly going bankrupt 181 00:14:21,099 --> 00:14:23,900 Suze: just like social security. Although I don't think that will 182 00:14:23,909 --> 00:14:24,419 Suze: happen 183 00:14:25,130 --> 00:14:29,250 Suze: and the majority of the people in many ways are 184 00:14:29,260 --> 00:14:34,080 Suze: in nursing homes on Medicaid paying the most amount of money. 185 00:14:34,090 --> 00:14:34,989 Suze: All right, 186 00:14:36,330 --> 00:14:40,070 Suze: you never know when they'll cut that back. So just 187 00:14:40,080 --> 00:14:42,349 Suze: be careful here. 188 00:14:43,010 --> 00:14:48,710 Suze: Now, in an irrevocable trust, you can also set specific 189 00:14:48,719 --> 00:14:53,309 Suze: terms and conditions for how your assets should be distributed 190 00:14:53,320 --> 00:14:58,510 Suze: to your beneficiaries. And again, this can be really useful 191 00:14:58,520 --> 00:15:03,650 Suze: for you if you have concerns about the financial responsibility 192 00:15:03,760 --> 00:15:07,789 Suze: of maybe your kids or your beneficiaries and you want 193 00:15:07,799 --> 00:15:12,150 Suze: to provide for them over an extended period of time. 194 00:15:12,590 --> 00:15:13,289 Suze: All right, 195 00:15:14,400 --> 00:15:20,849 Suze: an irrevocable trust just like a revocable trust avoids probate 196 00:15:20,859 --> 00:15:27,210 Suze: just so you know, and so that is a good thing. However, 197 00:15:27,530 --> 00:15:31,969 Suze: what's really important to remember the main differences and think 198 00:15:31,979 --> 00:15:38,140 Suze: of the names of those two is revocable versus irrevocable. 199 00:15:38,270 --> 00:15:42,929 Suze: And are you sure you really want to do that 200 00:15:44,030 --> 00:15:47,429 Suze: before you do this? It is crucial 201 00:15:48,309 --> 00:15:50,880 Suze: because once you do this, you cannot change your mind 202 00:15:50,890 --> 00:15:54,979 Suze: with an irrevocable trust that you really consult with an 203 00:15:54,989 --> 00:16:00,250 Suze: experienced estate planning attorney or financial advisor 204 00:16:00,969 --> 00:16:06,250 Suze: to really determine if an irrevocable trust aligns or is 205 00:16:06,260 --> 00:16:11,369 Suze: really in sync with your specific needs and goals. 206 00:16:12,239 --> 00:16:15,739 Suze: All right, last but not least 207 00:16:16,500 --> 00:16:19,229 Suze: a special needs trust. 208 00:16:20,030 --> 00:16:23,890 Suze: Now, a special needs trust is also known just so 209 00:16:23,900 --> 00:16:29,330 Suze: you know, as a supplemental needs trust. And this is 210 00:16:29,340 --> 00:16:31,929 Suze: just simply like a legal arrangement 211 00:16:32,510 --> 00:16:36,440 Suze: and it's designed to provide for the financial well being 212 00:16:36,450 --> 00:16:41,690 Suze: of an individual with special needs or disabilities without jeopardizing 213 00:16:41,700 --> 00:16:48,570 Suze: their eligibility for government benefits. Remember when somebody has special needs, 214 00:16:48,580 --> 00:16:52,580 Suze: that means they have special needs, meaning they can't necessarily 215 00:16:52,590 --> 00:16:55,890 Suze: take care of themselves they need aid of some kind 216 00:16:56,099 --> 00:17:01,530 Suze: and many of your children may be in that situation 217 00:17:02,099 --> 00:17:08,800 Suze: and therefore maybe they happen to be on SSI which is 218 00:17:08,810 --> 00:17:12,510 Suze: governmental aid that pays them 600 or some odd dollars 219 00:17:12,520 --> 00:17:16,520 Suze: a month and that they need that money. 220 00:17:17,219 --> 00:17:22,069 Suze: But if they have any money in their individual name 221 00:17:22,079 --> 00:17:26,030 Suze: or if you leave them money outright, 222 00:17:26,670 --> 00:17:30,270 Suze: chances are they will be disqualified from SSI. 223 00:17:31,829 --> 00:17:35,939 Suze: And good luck getting back on to SSI. 224 00:17:37,920 --> 00:17:42,760 Suze: That is what you really need to know. So again, 225 00:17:43,209 --> 00:17:45,609 Suze: it's a legal arrangement 226 00:17:46,280 --> 00:17:52,979 Suze: to provide for their protection, their financial well being without 227 00:17:52,989 --> 00:17:59,020 Suze: jeopardizing their eligibility for government benefits. So the primary purpose, 228 00:17:59,030 --> 00:18:03,849 Suze: everyone of a special needs trust is to enhance the 229 00:18:03,859 --> 00:18:10,540 Suze: quality of life of the beneficiary by supplementing their government 230 00:18:10,550 --> 00:18:15,089 Suze: assistance rather than replacing it. Did that make sense? 231 00:18:15,530 --> 00:18:17,780 Suze: So wouldn't you want to have your cake and eat 232 00:18:17,790 --> 00:18:21,189 Suze: it too, for that child or that person where they 233 00:18:21,199 --> 00:18:26,589 Suze: get governmental assistance and they still have access to money 234 00:18:26,599 --> 00:18:31,869 Suze: that maybe you are going to leave them. So, truly, 235 00:18:31,880 --> 00:18:36,479 Suze: the key characteristics and I guess I'd call features of 236 00:18:36,489 --> 00:18:41,150 Suze: a special needs trust is that you are again preserving 237 00:18:41,160 --> 00:18:43,310 Suze: government benefits 238 00:18:43,859 --> 00:18:49,679 Suze: for individuals that have special needs that rely on benefits 239 00:18:49,689 --> 00:18:55,800 Suze: provided by the government such as Medicaid or SSI. And 240 00:18:55,810 --> 00:19:01,319 Suze: by the way, SSI stands for supplemental security income. 241 00:19:02,609 --> 00:19:09,069 Suze: And so that's what's really important. Again, these programs Medicaid 242 00:19:09,760 --> 00:19:15,699 Suze: as well as SSI, they are based on the financial 243 00:19:15,709 --> 00:19:20,229 Suze: need of the person. So if you have a child, 244 00:19:20,239 --> 00:19:25,300 Suze: a special needs child and they are dependent 245 00:19:26,079 --> 00:19:32,160 Suze: on this money that's coming in from SSI they would 246 00:19:32,170 --> 00:19:36,900 Suze: be disqualified if they were to receive from you a 247 00:19:36,910 --> 00:19:41,660 Suze: significant inheritance or even a gift directly, it would disqualify 248 00:19:41,670 --> 00:19:45,689 Suze: them from that assistance. So a special needs trust is 249 00:19:45,699 --> 00:19:46,569 Suze: structured 250 00:19:47,030 --> 00:19:52,369 Suze: to hold assets for the benefit of that beneficiary without 251 00:19:52,380 --> 00:19:56,229 Suze: affecting their eligibility for Medicaid or SSI 252 00:19:58,119 --> 00:20:02,729 Suze: so you supplement their needs. That's why it's also called 253 00:20:02,739 --> 00:20:08,660 Suze: a Supplemental Needs Trust. And this trust is designed to 254 00:20:08,670 --> 00:20:15,939 Suze: supplement but not replace government benefits. It can however, provide 255 00:20:15,949 --> 00:20:22,099 Suze: funds for additional expenses that can enhance the beneficiary's quality 256 00:20:22,109 --> 00:20:23,699 Suze: of life and well being. 257 00:20:24,400 --> 00:20:27,500 Suze: You know, so maybe they need medical treatment or they 258 00:20:27,510 --> 00:20:30,069 Suze: have to go see a dentist or things that aren't 259 00:20:30,079 --> 00:20:35,139 Suze: covered by insurance. It can also be where they use 260 00:20:35,150 --> 00:20:40,260 Suze: that money in the special needs trust. Right? For what? 261 00:20:40,270 --> 00:20:47,390 Suze: For therapy, maybe for education, maybe for transportation, recreational activities. 262 00:20:47,750 --> 00:20:51,579 Suze: Let's see, maybe personal care attendant, things like that. 263 00:20:52,410 --> 00:20:58,510 Suze: Now, here's what's really important. The trustee of the special 264 00:20:58,530 --> 00:20:59,869 Suze: needs Trust 265 00:21:00,979 --> 00:21:07,209 Suze: is typically managed by a trustee by a person who 266 00:21:07,219 --> 00:21:09,550 Suze: has a fiduciary duty 267 00:21:10,369 --> 00:21:15,188 Suze: to act in the best interest of the beneficiary 268 00:21:15,900 --> 00:21:19,619 Suze: because the trustee and that probably will be you if it's, 269 00:21:19,630 --> 00:21:25,150 Suze: your child is responsible for managing the assets that are 270 00:21:25,160 --> 00:21:30,260 Suze: in that trust for making distributions for the beneficiary's benefit 271 00:21:30,930 --> 00:21:35,869 Suze: and to ensure that you are in compliance with all 272 00:21:35,880 --> 00:21:42,369 Suze: laws and regulations, everybody that are applicable to a special 273 00:21:42,489 --> 00:21:43,949 Suze: needs trust. 274 00:21:44,630 --> 00:21:45,329 Suze: Now, 275 00:21:46,060 --> 00:21:53,469 Suze: there are two primary types of special needs trust. One 276 00:21:53,479 --> 00:21:59,160 Suze: is a third party special needs trust and second, a 277 00:21:59,170 --> 00:22:03,000 Suze: self settled special needs trust, 278 00:22:03,810 --> 00:22:09,189 Suze: a third party special needs trust. This is the type 279 00:22:09,199 --> 00:22:13,770 Suze: of trust that is funded by assets that's owned by 280 00:22:13,780 --> 00:22:19,329 Suze: someone other than the beneficiary. So chances are, that's the 281 00:22:19,339 --> 00:22:23,449 Suze: one that most of you will want if you have kids. 282 00:22:23,459 --> 00:22:26,000 Suze: So if you are a parent or a grandparent or 283 00:22:26,010 --> 00:22:29,839 Suze: another family member, it allows all of you 284 00:22:30,400 --> 00:22:36,260 Suze: to provide for the beneficiaries needs while maintaining their eligibility 285 00:22:36,270 --> 00:22:43,459 Suze: for governmental benefits. However, what's fascinating and very seldom talked 286 00:22:43,469 --> 00:22:50,069 Suze: about are self settled special needs trusts. Now, this is 287 00:22:50,079 --> 00:22:54,589 Suze: a trust that's funded with assets that are owned by 288 00:22:54,599 --> 00:22:58,219 Suze: the individual that has special needs. 289 00:22:58,569 --> 00:23:03,489 Suze: It is typically used when somehow the beneficiary comes into 290 00:23:03,500 --> 00:23:06,869 Suze: assets through maybe a legal settlement or an inheritance or 291 00:23:06,880 --> 00:23:08,729 Suze: a personal injury settlement. 292 00:23:09,530 --> 00:23:15,310 Suze: And that Medicaid will require that any remaining trust funds 293 00:23:15,329 --> 00:23:21,430 Suze: are used to reimburse the state upon the beneficiary's death. 294 00:23:22,489 --> 00:23:27,150 Suze: So if somebody who is a special needs person has 295 00:23:27,160 --> 00:23:31,630 Suze: the capability, they can or a lawyer can, let's say 296 00:23:31,640 --> 00:23:35,260 Suze: they got a car accident settlement, put the money into 297 00:23:35,270 --> 00:23:38,948 Suze: a self funded special needs trust, they can use it 298 00:23:38,959 --> 00:23:43,629 Suze: while still then being on governmental aid. But upon the 299 00:23:43,640 --> 00:23:49,229 Suze: death of that person, that money then will go back 300 00:23:49,239 --> 00:23:50,579 Suze: to Medicaid 301 00:23:51,010 --> 00:23:52,949 Suze: to reimburse the state 302 00:23:53,760 --> 00:23:58,089 Suze: for any money they spent on this person. Upon that 303 00:23:58,099 --> 00:24:03,670 Suze: person's death. Again, I will reiterate it is important to 304 00:24:03,680 --> 00:24:10,429 Suze: work with a seriously experienced attorney who specializes in special 305 00:24:10,439 --> 00:24:16,869 Suze: needs planning. When you want to establish a special needs trust. 306 00:24:17,979 --> 00:24:23,139 Suze: That is the Suze School for today. Keep this podcast. 307 00:24:23,150 --> 00:24:28,079 Suze: Keep your notes because trust me, that's funny. Trust that 308 00:24:28,089 --> 00:24:31,958 Suze: is what this topic is all about. But trust me, 309 00:24:31,989 --> 00:24:35,949 Suze: there will come a time when somebody's gonna tell you, 310 00:24:35,959 --> 00:24:37,819 Suze: you should do an irrevocable trust. 311 00:24:38,099 --> 00:24:41,660 Suze: You don't need a revocable trust or what's the difference 312 00:24:41,670 --> 00:24:45,000 Suze: for a special needs, trust, whatever it may be. Come 313 00:24:45,010 --> 00:24:51,030 Suze: back and listen to this podcast. But until next Thursday, 314 00:24:51,040 --> 00:24:56,479 Suze: when Miss Travis will rejoin me here for Ask KT and Suze anything. 315 00:24:56,979 --> 00:24:59,319 Suze: There's really only one thing that I want you to 316 00:24:59,329 --> 00:25:01,869 Suze: say every single day 317 00:25:02,380 --> 00:25:08,709 Suze: and that is today. Wherever I go, I will create 318 00:25:09,020 --> 00:25:14,880 Suze: a more peaceful, joyful and loving world. And if you 319 00:25:14,890 --> 00:25:19,660 Suze: do that, if you believe that as always, I promise 320 00:25:19,670 --> 00:25:24,050 Suze: you you will be unstoppable.