Speaker 1: Now here's a highlight from Coast to Coast AM on iHeartRadio.
Speaker 2: And welcome back to Coast to Coast George Nori with
Speaker 2: here and Margaret Caroza back with us after a seven
Speaker 2: year hiatus practicing acid protection and a state planning attorney
Speaker 2: sir for fourteen years as a New York State assembly woman,
Speaker 2: and her practice focuses on acid protection and a state
Speaker 2: planning with trusts. Her book is called Love and Money.
Speaker 2: Websites linked up at Coast TOCOASTAM dot com and Margaret,
Speaker 2: welcome back.
Speaker 3: Thank you so much for having me.
Speaker 2: How have you been over the seven years.
Speaker 3: I've been busy trying to help people protect their nest eggs?
Speaker 2: You're still up there on the East Coast, I am.
Speaker 3: We're in the middle of a heat wave here.
Speaker 2: That's what I heard. My mother's in Detroit. She told
Speaker 2: me it's boiling out that way.
Speaker 3: Yeah. Yeah. The poor dog doesn't even want to go out.
Speaker 2: How'd you get interested in the protect of money?
Speaker 3: Well, I guess it helped that I didn't grow up
Speaker 3: with any and I guess I left law school with
Speaker 3: staggering student loan debt, and I re upt my eyeballs
Speaker 3: and credit card debt, and like so many young people,
Speaker 3: I just sort of had to get it together on
Speaker 3: my own. And you know, the title of the book,
Speaker 3: I really think hits home that legal protections, in my opinion,
Speaker 3: are the next realm in personal finance. You know, what
Speaker 3: does it matter how well I've saved and how diligently
Speaker 3: I've invested if I have a forty percent chance of
Speaker 3: moving significant assets to a long term illness to financially
Speaker 3: devastating breakup to taxes. People don't understand, you know, how
Speaker 3: capital gains and a state Texas work, as well as
Speaker 3: general liabilities. You know, we're living in a very litigious society.
Speaker 3: It's a gotcha society in so many ways, and people
Speaker 3: are looking to sue other people for any reason in
Speaker 3: the world. But George, what people don't realize is that
Speaker 3: they are more likely to be in court with a
Speaker 3: former loved one than with a stranger. So we need
Speaker 3: to learn about legal protections keep ourselves safe.
Speaker 2: And what's happening with these massive car break ins these
Speaker 2: days where people are trying to steal anything they can find.
Speaker 2: What do they want?
Speaker 3: Well, they want what you have. You know, it's as
Speaker 3: simple as that. If you have a car and they
Speaker 3: don't have a car, or they want to break into
Speaker 3: your car and steal the catalytic converter and get some
Speaker 3: quick cash. That's what they're going to do, you know.
Speaker 3: So it's incumbent upon all of us to try and
Speaker 3: protect ourselves. I mean, you see the stories all across
Speaker 3: the US about people breaking into your home and claiming
Speaker 3: property rights to the home so you can have a
Speaker 3: vacation residence and lo and behold. If squatters break in
Speaker 3: and they're in there for thirty days and they start
Speaker 3: getting mail at the house, you are not allowed to
Speaker 3: enter the property without going through a legal process. And
Speaker 3: there are people all over the US who are in
Speaker 3: court for years because they didn't protect themselves properly.
Speaker 2: Why is it happening more now and Margaret than before?
Speaker 2: It seems that way.
Speaker 3: It does seem that way, And I think because of
Speaker 3: social media, the bad guys are teaching each other how
Speaker 3: to do it. You know, I'm hearing stories about people
Speaker 3: educating each other about how to be a successful squatter.
Speaker 3: How to you know, what is the difference between a
Speaker 3: squatter in your home who has some rights after thirty
Speaker 3: days and someone breaking and entering. I get this question
Speaker 3: all the time, and it's a question of timing. If
Speaker 3: I have, you know, a video camera hooked up to
Speaker 3: the doorbell, and I see that some nefarious character is
Speaker 3: going into a window, that's the time that I want
Speaker 3: to call nine to one one and have the police
Speaker 3: come out. When it still looks like they broke into
Speaker 3: the property. But if they clean up the area where
Speaker 3: they broke into and now he said, she said, they
Speaker 3: can fabricate a leaf, they and download a lease. And
Speaker 3: this is what they're educating each other about. So it's
Speaker 3: a little bit of a scary environment out there, and
Speaker 3: that's why we need to educate each other about what's
Speaker 3: going on and how we can legally protect ourselves.
Speaker 2: I had a story on right before you came on
Speaker 2: about a research that shows that money can't buy happiness.
Speaker 2: Would you agree with that?
Speaker 3: Absolutely, money can't buy happiness. And you know, on a weekend,
Speaker 3: I love to see young families enjoying, you know, our
Speaker 3: national parks and our state parks and things that are
Speaker 3: not breaking the bank. But while money can't buy happiness,
Speaker 3: money problems make everything a problem. You know, when you
Speaker 3: have a terrible money problem and you have bills that
Speaker 3: you're unable to pay. Everything in your life is going
Speaker 3: to be colored by that. So we need to save more.
Speaker 3: We need to stop buying garbage. You know, when I
Speaker 3: was a young person, my clothes were beautiful, but my
Speaker 3: credit card debt was again up to my eyeballs. I would,
Speaker 3: you know, be lying in bed at night thinking, oh,
Speaker 3: maybe I have seventy five dollars in open credit on
Speaker 3: this master card. Yeah, I think I'm going to go
Speaker 3: to Bloomingdale's tomorrow and get a new blouse or something.
Speaker 3: I was completely out of my mind thinking I needed
Speaker 3: all of these clones. If we can just simplify our
Speaker 3: lives and say we don't need all of this junk,
Speaker 3: we can start saving some money, and then it's a
Speaker 3: positive momentum.
Speaker 2: Some people are obsessed with spending money, though, aren't they.
Speaker 3: I think I'm safe to throw my mother under the
Speaker 3: bus here because she's sound asleep at three am in
Speaker 3: New York. But my mother lives on these shopping channels
Speaker 3: and she I can't go and visit her without having
Speaker 3: to walk over Amazon boxes. She is absolutely addicted to shopping.
Speaker 3: And I think it's a high for some people to
Speaker 3: just keep getting more stuff, more junk. And you know,
Speaker 3: I listen to my kids friends and there's no end
Speaker 3: to what they tell their parents they want. And I
Speaker 3: think it's very important as parents for our kids to
Speaker 3: hear the words no, it's not easy. It's easier to
Speaker 3: give in and buy these kids whatever they're asking for,
Speaker 3: but we're not doing ourselves any favors, and we're certainly
Speaker 3: not doing them any favors. People learn best when they
Speaker 3: want something, and you know, we need to teach the kids.
Speaker 2: What do we need to do for asset protection?
Speaker 3: So I think we need to think in terms of
Speaker 3: legally protecting assets. Eighty percent of Americans over the age
Speaker 3: of sixty five own their own homes. So whether we
Speaker 3: have a home, a multi family home, a condo, a
Speaker 3: co op, in my opinion, we are bonkers to leave
Speaker 3: that asset in our own names. We want to think
Speaker 3: in terms of liability protection. We want to think about
Speaker 3: an LLC, limited liasability partnership, an S corporation, or a trust.
Speaker 3: You know, Oliver Wendelholmes said, don't put your trust in money,
Speaker 3: but put your money in a trust. A trust has
Speaker 3: been around since Henry the eighth and it's what any
Speaker 3: smart person does with their assets to shield themselves from
Speaker 3: legal liabilities, to protect the kids from capital gains taxes.
Speaker 3: If I bought the house for fifty thousand dollars in
Speaker 3: nineteen seventy eight and it's now worth six hundred and
Speaker 3: fifty thousand dollars, there are capital gains to be reckoned
Speaker 3: with their unless the asset is properly dealt with. And
Speaker 3: in my opinion, it's not a question of whether or
Speaker 3: not someone needs a trust, it's a question of what
Speaker 3: type of trust do they need. So there are dozens
Speaker 3: of different types of trust depending upon your personal and
Speaker 3: family situation. A federal law saying that if the trust
Speaker 3: is properly drafted as what's called an asset protection trust,
Speaker 3: and the property is in that trust for five years,
Speaker 3: it will be rendered invisible in the event that we
Speaker 3: have a long term care need later on, and forty
Speaker 3: percent of us, you know, we're living longer, but the
Speaker 3: corollary to that is we're living to ages where we
Speaker 3: may need help with the cranky functions of daily living, feeding, bathing, dressing, toileting.
Speaker 3: It comes as a shock to people that Medicare and
Speaker 3: the Medicare supplement don't cover that type of care when
Speaker 3: we leave a hospital. Medicare in the supplement will cover
Speaker 3: only up to one hundred games when we need care
Speaker 3: beyond that, the costs in the US are staggering. In
Speaker 3: the New York metro area where I am, it's sixteen
Speaker 3: thousand a month if we need to be in a
Speaker 3: long term care facility following that first hundred days. So
Speaker 3: we definitely want to inform ourselves about the different types
Speaker 3: of trusts that are out there.
Speaker 2: Most people don't even have a month's worth of that
Speaker 2: put away in the bank.
Speaker 3: You're one hundred percent correct, So what is the starting point?
Speaker 3: The starting point is look around your house and try
Speaker 3: and sell some of this junk that you don't need,
Speaker 3: you don't want, it doesn't fit you anymore. Try and
Speaker 3: generate a little cash that way, strap on your savings
Speaker 3: felt and really get into the habit of stretching your dollars,
Speaker 3: making do use recycle, and the minute you start saving
Speaker 3: some money, you have some good momentum in a positive direction.
Speaker 2: Tell us some stories that really just would be called
Speaker 2: horror stories.
Speaker 3: Unfortunately, there are so many horror stories, but you know
Speaker 3: the most typical one. Let me take a step back.
Speaker 3: You know, I'm talking about legal protections. Legal protection, Yeah,
Speaker 3: do you need a lawyer for all of this? I
Speaker 3: think you need a lawyer for some of it. You know,
Speaker 3: there are some documents you definitely don't need a lawyer for. So,
Speaker 3: as you mentioned in the intro, I was a sitting
Speaker 3: member of the New York State Legislature for fourteen years
Speaker 3: and was involved in the creation of our healthcare proxy law.
Speaker 3: A lawyer who charges you for a healthcare proxy, I
Speaker 3: think is a despicable character because in all fifty states,
Speaker 3: a healthcare proxy is designed to be user friendly. You
Speaker 3: can download it off my website, which I understand is
Speaker 3: now connected to your website. Folks can jump onto it.
Speaker 3: There are free legal documents. The things that you don't
Speaker 3: need a lawyer for you can download. But when it
Speaker 3: comes to protecting your home, I think you definitely need
Speaker 3: a lawyer, because, as I said, you can have twenty
Speaker 3: different types of trust. How do you know which one
Speaker 3: is right for you? But the overwhelming majority of the
Speaker 3: people I see get their legal information from friends, from neighbors,
Speaker 3: and it's often well intentioned but very misguided. And the
Speaker 3: prime example that comes to mind has to do with
Speaker 3: the primary residence. And there was a retired judge who
Speaker 3: should have known better, right because he was a lawyer
Speaker 3: by training, but he got some bad free legal advice,
Speaker 3: which was put the house in your daughter's name. They
Speaker 3: were very close, there were no trust issues. He didn't
Speaker 3: worry that she was going to turn him out onto
Speaker 3: the sidewalk. So he put the house in his daughter's
Speaker 3: name so that they would avoid having to progate his will,
Speaker 3: so that it would protect the house. He thought from
Speaker 3: his future possible nursing home stays, and he wanted to
Speaker 3: quote unquote keep things simple. But no one could have
Speaker 3: anticipated that his daughter, in her early thirties died in
Speaker 3: a car accident. Okay, so she was a very nice person.
Speaker 3: She didn't view the house as really hers even though
Speaker 3: it was in her name. So what did she die
Speaker 3: without having in place? She had no will in place,
Speaker 3: She had a lot of credit card debt, she didn't
Speaker 3: think she had any access. So without a will in place,
Speaker 3: in all fifty states, your state legislatures determine who gets
Speaker 3: your stuff. And in New York, where this case took place,
Speaker 3: the young woman who didn't have a will her heir
Speaker 3: at law. That's the person who takes in the absence
Speaker 3: of a will was her husband. So now Pop, who
Speaker 3: is the guy that bought the house way back when,
Speaker 3: is out of luck. The house now belongs to the
Speaker 3: son in law, and a couple of months after the funeral,
Speaker 3: the son in law said to Pop, I think it
Speaker 3: would be you know, a little less awkward if you
Speaker 3: made other living arrangements.
Speaker 2: Wow, basically threw him out.
Speaker 3: Huh, basically threw him out because he wanted to start
Speaker 3: dating again and he thought it was going to be
Speaker 3: very awkward bringing ladies to the house where you know,
Speaker 3: his dead wife's father was living. So the judge finally
Speaker 3: went to an attorney to try and get some advice,
Speaker 3: and that attorney was me, and there was absolutely nothing
Speaker 3: that he can do. And by the way, did he
Speaker 3: file a gift tax return way back when he gifted
Speaker 3: the house to his daughter, because at that time you
Speaker 3: could only give ten thousand dollars per person per year. So,
Speaker 3: you know, it's a sad story, but it's an example
Speaker 3: of the guy thought he knew it all and didn't
Speaker 3: properly inform himself.
Speaker 2: How much of it is just playing common sense?
Speaker 3: An Margaret, Yeah, I think a lot of it is
Speaker 3: common sense. I think. You know, in that case, at
Speaker 3: the end of the day, you have to step back
Speaker 3: and think about all of the things that could go wrong.
Speaker 3: Even if that daughter didn't die, if she was in
Speaker 3: a car accident, then her ownership of the house would
Speaker 3: have been on the table for the people who were
Speaker 3: suing her. The father lost his real estate property exemptions.
Speaker 3: He was a veteran and he received, you know, a
Speaker 3: well earned property tax credit for having served our country.
Speaker 3: That was gone. So is it common sense? I think
Speaker 3: that the advice is always take a beat before you
Speaker 3: sign anything, think of all of you know, the things
Speaker 3: that could go wrong, and ideally consult with an attorney
Speaker 3: who knows what they're talking about. And unfortunately, in my experience,
Speaker 3: not all of them do.
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