Retirement planning

[brutal]

To tag onto Foxtrots irrevocable trusts post, I strongly urge everyone to consider it, and to do it early.

If you own your home and require nursing home care, it gets very expensive. If you have to rely on Medicare/Medicaid to supplement the costs, they can and will take your home. Last I heard, the property has to have been in a Trust for 7 years prior to using those programs. Talk was that it was going up to 10 years. This also applies if you sell the home. Only by planning early can you protect your assets. My wifes parents put their home in a Living Trust before they passed. At the time the law said 3 years. Before that period passed it went to 5 years and the Trust was not grandfathered. Before the 5 year period passed it went to 7 years. My MIL passed during this time and my FIL needed to go into a nursing home. His car was already also in my wifes name too. Their home just made the grandfathering of the 7 year requirement by 1 month. The only way his bank assets were protected is that all money in the account was used to purchase items for my FIL's care. His life insurance was protected because my wife went to a family friend/funeral home owner and locked his life insurance in to cover his eventual funeral/burial costs (essentially making the funeral home the beneficiary of the insurance).

Additionally, each state and the feds love to take a huge inheritance tax cut of your assets/net worth. This can serverely reduce anything you hope to pass down to your kids. If a Trust owns those assets, and your kids are secondaries on the Trust until your death, inheritance tax doesn't apply as the Trust owns the items.

As Foxtrot always adds, this is just my personal advice and should not be construed as legal advice. Seek competent legal counselling for advice that will hold up in the courts.

My understanding is that Fed Inheritance tax kicks in at $5M and CO doesn't tax. Who here has those kinds of assets? Not me.

The advice I generally see does not recommend living trusts for those without dynasty assets, but I was not aware of the medicare thing.

[encorehunter]

My understanding is that Fed Inheritance tax kicks in at $5M and CO doesn't tax. Who here has those kinds of assets? Not me.

The advice I generally see does not recommend living trusts for those without dynasty assets, but I was not aware of the medicare thing.

Have you ever heard of the saying "Land rich, money poor." I have several ranching friends who almost lost their ranches or did loos a big part of them because of the inheritance tax. The properties had been in their family for generations, with a lot bb's of the land being purchased at $.10-.25 an acre. The drought made them sell off the cattle, then when their parents passed, there was little money to pay the taxes. The government taxes the land at current value. 10,000 acres to them could be worth $7.5 to $10 million easily.