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Richard Albert Luthmann
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Richard Luthmann’s Answers

485 total


  • My mother is 87 and $200 over the medicaid limit she needs a home aid. I am her daughter and I am blind. Can I set up a trust

    The trust is meant to be able to allow her to apply for medicaid so we can afford a home health aid. When my mother passes is the state entitled to use the income left in the trust to reimburse medicaid? What happens to the money in the trust?

    Richard’s Answer

    Talk to an elder law attorney right away about a pooled income trust. It is a way to reduce income and qualify for medicaid and it may be a fit for you.

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  • I am a beneficiary of an irrevocable trust governed by NJ. My sister, a childless old woman, is a co-trustee with absolute

    discretion and no mandatory distributions. She wrote me and my children out of her will because she disapproves of my lifestyle (far more frugal than hers). I presume she disapproves because I adopted the religious traditions of our forefathers an...

    Richard’s Answer

    I would speak with an attorney right away. The discretionary standard places the highest burden on a would-be challenge. In order for friction or hostility between the beneficiary and trustee to form the basis for removal, there must be a demonstration that the relationship will interfere materially with the administration of the trust or is likely to do so. There still may be a basis for removal, but the trust would have to be examined.

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  • Do I have to pay taxes on the money my sugar daddy give me?

    I am a sugar baby and I currently live in London (uk). My sugar daddy want to give me 4k per month. Do I have to pay taxes? Or are they considerd a gift? And What is the best way to receive the money?

    Richard’s Answer

    Are you a US Citizen? What is your relationship with "Sugar Daddy"? Are the payments for services rendered or are they gifts based upon affection? There are many potential issues here.

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  • A co-trustee of an irrevocable trust became senile. The surviving trustee did not install the successor trustees named in the

    trust agreement. As a beneficiary, I only found out about this five years later when the senile co-trustee died. I asked the trustee to install successors but he did not respond to my letters. 2 months later, I wrote to both of the people named as...

    Richard’s Answer

    You should bring a copy of the trust to a lawyer to review. You should hire the lawyer to make formal demands upon the trustees and if they are still unresponsive, you can have the lawyer bring a petition for an accounting and related relief.

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  • My family's share of my mother's estate gets poured into a trust with no mandatory distributions in my lifetime. A disclaimer

    (as Mom's will allows) would give my children mandatory distributions during my lifetime as they reach specified ages. My mother must have left over $600,000 because I was told that a NJ estate tax return has to be filed, and under $5 million beca...

    Richard’s Answer

    The disclaimer usually does not affect the tax liability of the estate, but I would hire a lawyer to review the specific situation because disclaimers are irrevocable once made and must be done within 9 months of the date of death.

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  • I live abroad. As a beneficiary of an originally irrevocable trust governed by NJ, I want to remove a trustee for failure to

    provide account statement printouts. Trust established 18 years ago, only found out about it recently. I first requested statements 10 days ago saying the brokerage firm holding the trust told me they're available online, so I demanded that trus...

    Richard’s Answer

    You should hire a lawyer. You will not need to fly in for every court appearance.

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  • TAX SALES?

    I am interested in obtaining inexpensive investment property in Jersey City. I heard that I can buy tax sales meaning that if someone doesn't pay their taxes on a property, the city can sell it to someone else. Do I need a lawyer to do this? Is...

    Richard’s Answer

    Municipalities have the power to conduct tax sales on delinquent properties. However, if you are new to this area, I would find a seasoned real estate lawyer to help you because there are a multitude of issues involved.

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  • In NJ, is trustee personally required to save old account printouts indefinitely if beneficiaries haven't yet seen them?

    I'm a beneficiary of a trust established as irrevocable 18 years ago, only found out about it recently. I asked trustee for accounting; her lawyer wrote it will take time; old statements might not be available. Brokerage firm holding trust told me...

    Richard’s Answer

    A trustee may be called to account and the burden is upon the trustee to be able to make an accounting. You should have an attorney review the trust to see what the language says and make a formal demand if necessary.

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  • Is trustee in NJ required to give account printouts right away when a beneficiary requests them? I'm a beneficiary of a trust

    established as irrevocable 18 years ago, only found out about it recently. I asked the trustee for first accounting; her lawyer wrote that it will take time. I replied itemized accounting takes time, but brokerage firm that holds trust told me tr...

    Richard’s Answer

    The trustee is usually required to give an informal accounting to beneficiaries within a reasonable period of time, but it depends on what the trust language says.

    If the trustee is not responsive, you should hire a lawyer to make a formal demand and, if needed, bring a proceeding to compel an accounting.

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  • My father granted an irrevocable trust, my children and I are beneficiaries. The trustee gave me notice of a deposit subject to

    gift tax about 34 days ago, and I the trust document gives me 60 days to demand a withdrawal. She did not give notice to my children over 18, not even my married children. She did not ask me for my children's addresses. Does the 60 day limit for ...

    Richard’s Answer

    You received a Crummey notice named for the famous tax case of Crummey v. Commissioner, 397 F.2d 82 (9th Cir. 1968). The case involves IRC § 2503(b), which provides that the allowable gift tax annual exclusion applies only to gifts in which the donee has a “present interest,” as opposed to a “future interest.” The issue was whether certain gifts to an irrevocable trust constituted a present interest that would allow the gifts to qualify for the annual gift tax exclusion. The court held that, rather than the existence of a present interest in the property turning on the beneficiaries’ actual enjoyment of the property, the determination should rest on their right to enjoy the property.
    The Crummey case has come to stand for the principle that a beneficiary’s right to withdraw assets gifted to a trust for a limited period of time creates a present interest in such assets that qualifies the gift for the gift tax annual exclusion ($14,000).
    I would speak with your father and/or his attorney about the intent of their planning. Usually, the Crummey gifts are intended to be left alone.

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