Now or Never: Long-Term Care Strategy with Kosta Yepifantsev

Care Planning: Special Needs Trusts with Tyler Lannom

December 06, 2022 Kosta Yepifantsev Season 1 Episode 13
Now or Never: Long-Term Care Strategy with Kosta Yepifantsev
Care Planning: Special Needs Trusts with Tyler Lannom
Show Notes Transcript

Join Kosta and his guest: Tyler Lannom, Founder and Attorney at Lannom Law.

Tyler is a First Lieutenant in the Army Reserve Judge Advocate General’s Corps and served as an Assistant Public Defender, before turning his focus to elder law, veteran disability rights  and civil litigation.

Today we’re talking about Care Planning: Special Needs Trusts.

In this episode: What is a Special Needs Trust, who qualifies, if you need a Lawyer to create a Special Needs Trust and if there are any situations where a Special Needs Trust becomes a disadvantage to an individual or their family.

Watch this episode on YouTube:
https://www.youtube.com/watch?v=ZCeeJJmcmfA&t=228s

Find out more about Tyler Lannom and Lannom Law LLC:
https://www.lannomlaw.com/

Find out more about Kosta Yepifantsev:
http://kostayepifantsev.com/

Tyler Lannom:

When you boil it down to its core, a Special Needs Trust is implemented and executed to ensure that the individual's public benefits because the beneficiaries are usually disabled, that their benefits are not supplanted. They are supplemented and so it's a way to increase the quality of life to increase the care without invading or disqualifying them from public means tested programs.

Caroline Moore:

Welcome to Now or Never Long-Term Care Strategy with Kosta Yepifantsev a podcast for all those seeking answers and solutions in the long term care space. This podcast is designed to create resources, start conversations and bring awareness to the industry that will inevitably impact all Americans. Here's your host Kosta Yepifantsev

Kosta Yepifantsev:

Hey, y'all, this is Kosta and today I'm here with my guest Tyler Lannom, Founder and Attorney at Lannom Law. Tyler is a first lieutenant in the army reserve Judge Advocate General Corps and served as an assistant public defender before turning his focus to Elder Law, veteran disability rights and civil litigation. Today we're talking about care planning, special needs trusts. So Tyler, generally speaking, what is this special needs trusts? And how do they work? Yeah.

Tyler Lannom:

Oh, well, thanks for having me Kosta, Specail Need Planning - it's a huge passion of ours here at Lannom Law, and special needs planning, special needs trusts. What exactly is a special needs trust? Well, it's not a whole lot different from you know, your routine living trust, except for some very specific differences. Right? We have the grantor, I think it's good to go ahead and define the players here on on who is involved in a trust. And then before I answer that, you have a grantor who is signing a trust agreement, a document that is making this legal entity, this relationship between the trust beneficiary who is receiving the benefits from the trust, and the trustee, who is the custodian, and who is responsible for administering the trust for the benefit of the beneficiary. So that's what a trust is, and there's many different types of flavors. Today, we're talking about special needs trust. And what that is, when you boil it down to its core, a special needs trust is implemented and executed to ensure that the individual's public benefits because the beneficiaries are usually disabled, that their benefits are not supplanted. They are supplemented, and so it's a way to increase the quality of life to increase the care without invading or disqualifying them from public means tested programs.

Kosta Yepifantsev:

So let's say for example, someone is born with a disability. And typically individuals that are born with a disability have some type of access to Medicaid benefits that will provide some type of services like personal care, things like that. How does a special needs trust supplement the benefits that they may receive from Medicaid? How does that process work?

Tyler Lannom:

Well, you're absolutely right Costa, you know, lots of lots of individuals, lots of Americans are disabled from birth, that could be Down syndrome, cerebral palsy, a cognitive neurodegenerative disease that allows them to receive Medicaid essentially, from birth could be a genetic heart defect, those types of things. And so they're receiving medicaid benefits from birth. And as they reach 18 years of age and become a legal adult, they have other benefits that they are then privy to, such as Supplemental Security Income, SSI, in addition to their Medicaid, their health care costs. And so what I mean by supplement is, when these individuals traverse childhood, and they enter into adulthood, we want to ensure because these people are largely may not be able to enter the workforce with those types of disabilities that we've just outlined. And so right, what we want to do is ensure that they remain able to receive their health care benefits through Medicaid, that they're able to receive their supplemental security income to live. And so what this special needs trust is utilized for is is to if they were going to inherit, let's say assets from Mom or Dad, let's let's make it let's talk about just accounts for a moment. Let's say there's$200,000 that was gonna go to John, who's the disabled individual with cerebral palsy and in this instance, we want to ensure that that money does not flow out right to John once he becomes an adult, because that would disqualify and certainly could have the risk of depriving him of those means tested benefits which are quite critical for his life, especially when his parents you know, age and would become older. And so this this special needs for us also knows commonly now as a supplemental needs, right He is the recipient of that $200,000 $500,000, whatever the asset is, that's going to be transferred to the trust. And, and that asset is then thereafter used for John. Okay, to supplement those benefits, what could it be used to supplement? A variety? I think we'll probably get to momentarily but a better variety of things from medical cost to entertainment vacation

Kosta Yepifantsev:

to hoping to pay for their mortgage, maybe or something like that, or their rent, like you said, absolutely. So can you set up a special needs trust for somebody over the age of 18? Like, let's just say, for example, somebody's perfectly healthy right? Now, we're going to talk a little bit about the common scenarios, but I just want to, I want to hammer down on this. So let's say that somebody turns 18 years old. Okay, let's just say they're 30. And they get into an accident of some kind, some or they have some kind of catastrophic medical event. Can you set up a special needs trust after this event occurs?

Tyler Lannom:

Okay, so your questions really, really two here? First question is, can you set up as a special needs trust after an individual turns? 18? Absolutely. Okay, that can be done when the children are still minors, but very commonly at our firm, you know, parents or guardians are coming to us with adult children. And then they're finally taking action, realizing we need to have an estate plan in place for our adult child. And so, you know, the fact that they're that they're an adult does not, does not deprive a third party from setting up that trust for their benefit. Now, your second question is, what if they're an adult they are, they were not disabled, okay, within their 30 years old. There, they have an inner they have an interstate rat wreck, they have no vehicular accident, and there's severe back injuries, paraplegia, something like that, and they are the recipient of a large personal injury settlement, let's say a million dollars, for instance, that's commonly what we come across working in conjunction with personal injury lawyers and other entities that interplay with special needs. And so that individual, then, okay is looking at a lifetime of care, okay, and so they're wanting to receive Medicaid eligibility, likely this individual may not be able to walk again, okay, if he's paralyzed, and so he's been there after looking at Supplemental Security Income, okay, which is not based on work credits. And so there are two types of trust. I think this is good. Before we move on to the next section, I probably should have mentioned that, at the outset, there is a third party special needs trusts, which is set up by a third party, usually, that could be a parent, it could be a friend, a sibling, for the beneficiary of the trust, the situation that we're talking about the individual has been injured, and they have money that is theirs. It's not a third parties that, you know, in this case, John, who was in this vehicular accident, is actually the recipient himself of this personal injury lawsuit. Okay. And so there is something called a self settled trust a first party special needs trust, that's, that's basically implemented under Section 1396 of the code, okay, without going too far into the weeds. It's what allows us to do this. And so the individual can settle can set up this trust themselves, or their conservator, parent or guardian can set it up, they just have to have the legal right to use those assets that are John's in this instance, for himself. And so in the case that we just outlined with this car crash, this wreck, the individual could then thereafter set up this first party special needs trust, the money could go directly to do this trust. It's also known as the Medicaid payback trust, but he then thereafter could immediately be eligible for public benefits. The only main difference is, for the listeners, those first party trust. They're also known as Medicaid payback trust, because one of the caveats is when those assets go to the trust, okay, thereafter, the beneficiary can immediately receive those public benefits. The residual beneficiary, when that initial beneficiary passes away, has to be Medicaid, typically, okay, I'm licensed in Tennessee, that's certainly how our trusts are going to be regulated. And that's typically the way it's regulated federally across the United States. And so there is going to be a payback provision based on what Medicaid and those government benefits have paid out over the duration of that individual's life.

Kosta Yepifantsev:

And so essentially, what that means just so that I can put it somewhat in layman's terms is the beneficiary has full access to the trust and has access as long as it's set up this way and also has access to Medicaid benefits once the beneficiary passes away. Whatever is spent on his care through Medicaid, the individual who inherits the trust, I guess you could say, or the money in the trust, has to pay back Medicaid before they can gain access to that money. If anything's left,

Tyler Lannom:

you got to cost it. That's right. Okay. So this basically, the state entity, Medicaid is going to is going to receive their share first, and then the residual beneficiaries, let's say siblings in this instance, or his maybe his children would then receive the remainder.

Kosta Yepifantsev:

So not to get too technical. But why would everybody not just opt for a third party trust then?

Tyler Lannom:

Well, so let's let's use this example. Again, I want to stay here. I think it'll be good listeners. So why would John in this instance, basically have to use a self settled first party trust? Well, right, because he wasn't just, you know, he didn't have this disability, this disability mom, or this is without mom or dad's money. This was his silly I see, first party, it's self settled. And so I see, though, a parent, a conservator, a guardian can also set up this first party D for a trust, it's whose money is the assets that were actually the beneficiaries. And so the government through that legislation allowed this played out over time through policy that, you know, Congressional legislation had to occur that, okay, we need to allow these folks to also receive means tested benefits, but that's the reason. Okay, we can kind of go on further there. But third party trust, you do have some asset protection, because there is not a Medicaid payback provision.

Kosta Yepifantsev:

I see. I see. So we're going to talk about common scenarios, and we may have covered a lot of them already in this discussion. So you're gonna have to fill in the blanks after this last question. What if you are a child of someone that is disabled, so let's just say for example, you know, your mother or father who's 70 years old, is disabled and requires care. D would you set up a special needs trust for that individual?

Tyler Lannom:

Well, that is a scenario. And we can stay there for a moment. Part of this is, you know, our firm, myself and my law partner, we but we have a Master of Laws in Elder Law and Estate Planning, special needs planning really is a subsection of Elder Law, right? The scenarios that we just spoke about were primarily for we spoke about an individual who's disabled from birth, we talked about a young adult who was in who was disabled in young adulthood. And now we're talking about the intersection of when a special needs trust would be used for the elderly. The situation that you've just outlined cost is what a child set up a special needs trust for their parents, for their parent, and they could certainly, if the child also is doing quite well, and they have assets to actually fund that trust for for their parent, they can certainly do that. Or they could simply just supplement their care from their personal assets. What is more common is a community spouse. Okay, let's say in this instance, we have Susan and Alex and Susan has had a severe stroke coupled with significant dementia. And she, she's, but she's living in this state for quite some time. And John's worried that if he pre deceases her, you know that their assets are going to deprive her of her current Medicaid benefits and that she may not have enough assets to live on. Oftentimes, a spouse can set up a special needs trust in their last will and testament that would allow this entity to be created if they pre deceased, this institutional spouse. And so you've got the spousal assets, right, that are not going to have to be spent down and actually can be utilized to to supplement their elderly spouses benefits for the remainder of their life. We often see it with spouses, not as often from a lineal descendant. Yes.

Kosta Yepifantsev:

And would there be a look back period on those assets? A five year look back period like Medicaid requires in most states,

Tyler Lannom:

I'm so glad you're asking this question, because this is such a misconception really, in the space, you know, the internet's a wonderful thing legals are great as well. When it comes to elder law, you really have to have someone that works in these areas. So when we're setting up a trust agreement, and let's assume real property or other assets thereafter are moved to this to it to a trust okay. And then Sarah or Susan goes and applies for for Medicaid. There's lookback periods in all states, okay. And certainly inside of Tennessee, there's a 60 month look back period, and they will look at assets that were conveyed from the marital estate from that institutional spouses name Where did they go and if they go to a trust, it's no different, there's going to be a look back period that could create disqualification. What is often used in that instance is if Susan needs to achieve health care is always the most important thing on our farm, we're always protection, we're looking at protecting families protecting, you know, protecting well protecting their loved ones at the but the first 50 meter target is we want to achieve their health care and make sure that their quality of life is paramount. And so we need to make sure that that's being done. And there is very similar to the first party dress cost of that same legislation 1396 of the US Code that implemented that D for a first party trust it allow what's called a Miller trust, okay, a qualified income trust for folks that need public public benefits now, okay, without disqualification. And that instance, we basically, let's assume, Susan, she's got a brokerage account, or she has, you know, a significant pension coming in that is disqualifying her from receiving 10 care benefits here in Tennessee, okay, which is, which is our state Medicaid program. Essentially, you can move those assets that x excess income to a qualified income trust, which is essentially it operates very similarly to split into a special needs for us that would allow Susan to apply for and achieve her her Medicaid immediately. Again, what's the caveat? There's going to be a Medicaid payback provision,

Kosta Yepifantsev:

that payback provision gets over time. So yeah, are there any other common scenarios that we haven't discussed that you encounter as you're setting up these trusts?

Tyler Lannom:

Just briefly summarize them again, you're interviewing a lawyer. So I hope the listeners are able to follow it. Oh, absolutely. To know how it operates, but the cost corner is our you know, to recap, oftentimes either for minor children, more commonly, we see lots of parents that are that are coming to us for their own estate planning, and then utilizing a special needs trust for their adult children who may not have a it could be a serious disability, like what we described earlier, Down syndrome, paraplegia cerebral palsy, all of those things that congenital congenital heart defect, it could also be that maybe they are working, but they're, they're significantly autistic, they're in public, they're in Section Eight housing. Sure, they made us not be there very irresponsible, as long as they meet the criteria from the Social Security Administration, that they're disabled, okay. And they're, if they're receiving some types of benefits from the government, we don't want to shut those off in the future. And so it's prudent to set up a trust for the benefit of that beneficiary. Other scenarios, though, what we just outline, lots of married couples, as they go through the aging process and their aging in place. Oftentimes, we may have have a husband or wife come to us in tears that their spouse, you know, their dementia is progressing, what can we do, we're looking at asset protection, we're looking at folks like yourself Kosta, that that are in the long term care space to help her here immediately. But then we're looking at the future. And oftentimes a special needs trust is prudent in and in the spouse's estate plan.

Kosta Yepifantsev:

So there's a lot of different trusts out there, and I'm sure we can get into it, but we just don't have the time. So but I would like to know, with regards to a special needs trust, what would you identify specifically as the unique benefits? Yeah,

Tyler Lannom:

preservation of quality of life, that's really what it comes down to. There are wonderful innovators again, you know, in the long term care planning space that are doing a great job of, of making sure that our society is fair and equitable. What special needs trust allow is the deterioration and erosion of wealth and assets that allows those assets to be kept to supplement again, those government benefits. And as we become an aging population, those are being used more and more often. So from a policy perspective, it makes sense to have extra assets to assist those those benefits. And it's also helpful for the family. So that's really the unique benefits of them.

Kosta Yepifantsev:

Absolutely. So who qualifies for a special needs trust? And this question, I think, will be very interesting. I'm curious to hear what you have to say. Do you need a lawyer to set up this type of trust?

Tyler Lannom:

Well, I think that this the second question first, do you need a lawyer? And I'm just going to say, Yes, you do. And here's why. I believe you know, we're going into this an unprecedented age of technological advancement and software in the internet age and the free flow of information and it's amazing, and there are going to be some type of commodities and law, okay, that are going to be more accessible to the general public. This is not one of them, as the listeners have probably picked up on just in our conversation, why do you actually need a lawyer though, to execute? Now? Can you go on to trust your wills.com LegalZoom some other type of software or find a trust agreement somewhere a piece of paper a document to assign? Yes, you can. The problem is you are really when you retain an elder lawyer or an estate planner to execute and draft your special needs for us. Number one, they need to be proficient and understand the intricacies of Medicaid primarily.

Kosta Yepifantsev:

And it's so complicated.

Tyler Lannom:

Oh, so I'm continuing to learn every day as a practitioner. Okay, I know, it's a lot and it changes, it changes. So I would just say they need to ensure that they're looking at Nayla the National Academy of Elder Law attorneys, does your attorney do this commonly do your research, do your due diligence, and make sure that you're using a planner that understands these things? The second thing is they understand other players in the space? Who are the healthcare agencies that are that are reputable? Who are the the CPAs that do tax returns for trust, they're going to have a network of people to help your loved ones and leverage that. Okay. So yes, you do need a lawyer to do this. But And

Kosta Yepifantsev:

can I ask real quick before you before you go on? What happens? And I'd like for you to speak to the, to the people that watch this show that don't live in Tennessee? Let's just say for example, they watched this episode, and they reach out to your firm, but they live in Michigan, or Colorado. What would happen during that transaction? I mean, would you be able to point them in to the direction of someone in their state that focuses on elder law, and you said that they need to be proficient? And we've talked to a lot of attorneys that specialize in elder law, a lot of financial advisors that specialize in estate planning. What is proficient? What does proficiency mean to you?

Tyler Lannom:

Well, that's a that's a good question constant. And does it mean that they have to have an alphabet soup by their name? Not necessarily at all, but go on their website? Okay. Yeah, I would say certainly, first off, if they reach out to our farm, we're in a network, okay, we can reach out to our colleagues in Nayla wealth Council and other groups that we're in to assist them in finding someone that we believe is proficient. But what that really means is that this is a this is a practice area that they focus on, okay. It's very, very different than what the lion's share of attorneys do. This is not litigation. This is not what most lawyers do day to day. And so they need to make sure they have someone basically that does this routinely in their practice. That's what proficient is someone who's in this space, who's consistently learning and is practicing routinely. And that is one of the things that these annual and biannual seminars that comes up, there's lots of lawyers that are starting to dabble in trusts and estates. And it can be very, very costly for them. There's there is lots of liability here. And so they need to understand that

Kosta Yepifantsev:

you would be astounded how many people tell me that there is a alternative to the five year look back period? For not Well, look back period in general, some are small, some lasts. There's three years, there's Yeah, two years, but astounded as we're having these conversations. How many people say that are attorneys that are in estate planning that say, Well, no, there is a vehicle that you can use to actually get outside of this look back period and receive services immediately. And up until this point, and I'm sure a lot of people are watching the show. I had no idea that that was a thing. It's so proficiency, like you were saying, I think you have to almost be a steward of your profession and constantly be learning and going to those conferences like you're describing three questions. Number one, if you could give me a range of how much a special needs trust would cost to set up. I'd like to know how a special needs trust is typically funded. And then lastly, I want to know how the funds can be spent.

Tyler Lannom:

First question on pricing? That's a good question. And it varies pretty largely because firms are strictly that service oriented. They're going to walk them through that draft and through the signing of the trust and handed out and the funding and everything else is going to fall on to that client which is fine. That's just how some firms do it. And they need to get out and then handle the rest of kind of putting the rest of the plan together. And then other firms will assist them with achieving their public benefits doing the Medicaid application, helping them achieve self security doing the appeal process being there for them quarterly and helping them through the care process and kind of being that intermediary between the firm the client and these other agencies be that the state be that a nursing home or a community based health care organization. And so the range could be anywhere from $2,500 to$10,000. And some firms will kind of give a sliding scale approach on on how much involvement Do you want your counselor to be your advocate to be? And allow them to make that financial investment on what they would like to do.

Kosta Yepifantsev:

So let me ask you is a special needs trust a revocable trust, but more importantly, what does that even mean?

Tyler Lannom:

Well, that's a very good question. What I think I should define what a revocable trust is many, many people. That's what they know. They read that online, they know people at church or at work that have revocable trust your mom and dad have a living trust. Okay, those are synonymous a revocable living trust, okay, now the players don't change, right? Anytime we have a trust agreement, we've got a grantor who's making the trust. Sometimes they're the same person as the trustee. That's the custodian of the trust assets. And then you have trust beneficiaries, a revocable trust it usually okay, the Grand Tours and the trustee are the same. It's revocable meaning the client can amend the trust, they can revoke it, they can add to it, they can change the trust terms, they can change trust beneficiaries, they can amend it and so that's why it is revocable. Now, it also is very different from a tax perspective. Okay. During the Grand Tours lifetimes, okay, it is going to be it is usually going to be taxed through their social security number. Okay. And so there's not going to be a separate tax ID number, a separate tax return. Now special needs trust. What is that? It is it is an irrevocable trust, irrevocable trust, as we say here in the south, okay. Okay. It's very different from a revocable trust, okay, when the trust agreement is executed, all right, this conceptual bucket, if for the listeners, you're gonna put the lid on it, and it becomes irrevocable upon the execution of that agreement, largely, okay. Third party trust, they can keep certain powers like changing trustees and those things. But why does it have to be irrevocable? Because the trust beneficiary, okay? They are not the trustee, they are not the grantor okay? And the trust, okay, is outside of their taxable estate, okay, they are not their assets, they do not have control over those assets. And and again, does assets are used to supplement their public benefits. And so this special needs trust has a separate tax ID number and a tax return will go up annually. It's taxed as a pass through entity earnings that are distributed out to beneficiaries are deducted from those earnings. And that's kind of, in a nutshell how the taxable side works. I'm certainly not a CPA, but that's in general, how trusts are taxed. They have their own tax brackets, but that's why it's era but irrevocable, okay, that's, that's why and this guy's

Kosta Yepifantsev:

I see. And so once you take the that money out of the trust, and you pass it along to a beneficiary, does the beneficiary have to pay taxes on that money?

Tyler Lannom:

I'm really glad you, you just asked that because what I need to make very clear to the listeners is that's one of the most important things to understand for the trustees. And many people choose a family member, which is fine or a layperson to be that successor trustee for this special needs trust. And that comes with many pitfalls as opposed to a revocable trust, okay, which is much easier to administer, they have to be proficient on the health care needs of the beneficiary and their public benefits, making sure that they're staying in line with the Social Security Administration and other federal guidelines. distributions can never be made directly to address beneficiary a special needs trust beneficiary. Why Supplemental Security Income, SSI and Social Security, they will see that will they will deduct their income there might come it could it could take it in depending on what the distribution is. It could just disqualify them for a period of time. Sure. So I think I should define what are those distributions use for

Kosta Yepifantsev:

please do so.

Tyler Lannom:

Is there if there is real estate that has been moved to the trust? And that's a whole separate question if like say a home for the special needs trust beneficiary, okay, maybe that they are paying the mortgage note or they're paying their rent, if they're in a if they're in an apartment or condo. That would be

Kosta Yepifantsev:

would it be used for let's just say for example, they received services through an agency a few hours a day, and when that agency sends an invoice, they invoice the trust or let's just say they invoice the client and that Trust pays that bill. Would that be a scenario?

Tyler Lannom:

Absolutely. And that's actually the probably the most important benefit it's going to be paid for by the trust is supplementing their health care costs. If they've got Go ahead, gosta

Kosta Yepifantsev:

Oh, no, I was just I was going to ask you about medical bills. But typically, if this person is enrolled in Medicaid, they wouldn't have any any medical out of pocket medical bills. But I guess technically, if they wanted to opt for like, a higher quality medication that's not covered by Medicaid, they would be able to use the funds inside the trust to pay for that for that medication. Correct.

Tyler Lannom:

It's absolutely that there are medications that fall outside the scope sometimes of what Medicaid or Medicare will pay for oftentimes, they're using those trust assets to pay for an extra sitter, okay, at the end, the nursing home or their health care home, just extra care, extra entertainment, they're also memory care that may not be paid for through Medicaid, physical therapy that may not be covered, once Medicaid is is received, there's there's a host of benefits that can increase that beneficiary's quality of life, that those trust assets otherwise, okay, would have have to be would have to been basically spent before the individual would have been able to achieve those those benefits. Are there

Kosta Yepifantsev:

any situations where a special needs trust becomes a disadvantage to an individual or their family?

Tyler Lannom:

Well, that's an interesting scenario, I would start off by saying there shouldn't be if the practitioner has been thoughtful, and they've analyzed, you know, the client who their client is, and when and whether that trust is going to be a prudent decision, it's always going to be to be useful. Are there scenarios and when it can be dis be a disadvantage? Well, if if the if the lawyer or the family and the client don't do a good job in determining who's going to be that successor trustee, there could be misuse of funds, incompetence? Fraud, I mean, those types of things, a lot of choosing a trustee, regardless of an estate plan is one of the most important decisions that the client and attorney need to make. And so that can be a disadvantage. If there's not, you know, going to be a significant amount of money funded to the trust, if we're talking about money, and maybe less than $100,000 an ABLE account can be used, or maybe they use that asset instead of going through in the state planet and the cost, okay, the admitted cost and, and the administration of administering a trust just the time and energy and work involved there. Maybe that money can be spent on something else for that beneficiary. And so they're made. So if one is being used prudently, it should always benefit. There's not a lot of downside, but sometimes they're set up when they maybe they shouldn't have been if that answers your question. Yeah,

Kosta Yepifantsev:

so human behavior is essentially the got it. What is that fault? Before we wrap up, I want to ask, so you said a trust has their own special needs trust has their own tax ID number. And it's used as pass through income to help pay bills, like the mortgage services, things like that for the for the beneficiary? Are you taxed on the money that's in a trust? And if you are, is it taxed as income is taxed as capital gains? And expand on

Tyler Lannom:

that? Yeah. And so so first off, that's why it's really important to us as the state planners, we always have a network that we that we lean on, and it's important for Russia, right? Because we understand that the tax code and how and how it operates, but it's those things are out there that we need to make sure on the tack when the tax return goes up, that that's done correctly, to make sure that taxable events are low. But yes, when distributions come out of the out of the trust, those are taxed as income, those are not gonna be on the on the on the trust tax return. When it comes to capital gains, how interest is going to pay capital gains tax? That's where good accounting comes in. That's what I'll say. Good. I like that things can be though. Absolutely.

Kosta Yepifantsev:

Okay. So we always like to end the show with a call to action. What's your best advice for someone entering the long term care industry as a patient, a caregiver, or an industry professional?

Tyler Lannom:

That's a great question. This is the industry you know, and right today, you're interviewing someone from the legal space which we all we all enter the long term care space from different vantage points. And so I'll say this too, is to the clientele and the demographic that we reach. And folks, if there's someone in your family that you believe is going to need long term care service services. So I guess I'm going to speak from the patient out output, do not put off the estate plan, okay, your lawyer is a critical piece of the puzzle, they have relationships that are going to intersect on every area from achieving your, your loved ones benefits to protecting assets, and to leading you in the right direction and to making that point of contact with your health care provider. And so we say this every week awesome. But my main advice is for patients is and their families is do not delay. Don't Don't be scared of it. It's actually a really powerful thing that you're doing taking control of your long term care. So take action.

Kosta Yepifantsev:

Absolutely. And so from an industry professional standpoint, do you have any advice for other legal experts that are specializing in elder law?

Tyler Lannom:

Well, I would say on attorneys that are coming up into this space, there's a great need. It's a wonderfully rewarding area. The incline is very steep. And that's that's not a bad thing. But people need to understand that we're really dealing with very, very serious moments in people's lives, that that sometimes can get quite complex. And so the learning curve is higher than other areas, but it's wonderfully rewarding and young attorneys should be entering the space but just be prepared to get heavily involved.

Caroline Moore:

Thank you for joining us on this episode of Now or Never Long-Term Care Strategy with Kosta Yepifantsev. If you enjoyed listening and you wanna hear more make sure you subscribe on Apple podcast Spotify or wherever you find your Podcasts, leave us a review or better yet share this episode with a friend. Now or Never Long-Term Care Strategy is a Kosta Yepifantsev production. Today’s episode was written and produced by Morgan Franklin. Want to find out more about Kosta? Visit us at kostayepifantsev.com

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