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