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Page 14 THE SAUGUS ADVOCATE – FRIDAY, FEBRUARY 24, 2023 THE SOUNDS | FROM PAGE 13 “Ron said he has enjoyed a-lot WHY IRREVOCABLE TRUSTS ARE MOST OFTEN A BETTER CHOICE OVER LEGAL LIFE ESTATES B y placing your home, rental property or other assets into an irrevocable trust, the fi ve year look back period will begin. Five years later, the assets in the irrevocable Trust will not be countable for MassHealth eligibility purposes. Furthermore, not only is probate avoided upon the Settlor’s death (i.e. the creator of the trust), but probate would also be avoided if a child/ benefi ciary were to die prior to the Settlor (i.e. parent). The predeceased child’s children or even grandchildren would become a beneficiary of the trust and that child’s benefi cial interest in the trust would escape the probate process. If that child leaves minor children behind, the trustee would follow the terms of the trust and pay for items such as medical expenses, educational expenses, house expenses, etc. If, on the other hand, a parent chooses to deed the home or rental property to his or her children directly, while reserving a life estate, and one of the children were to predecease the parent, that child’s remainder interest in that property would be part of his or her probate estate. As estate planners, we try to avoid the probate process whenever possible for many reasons, such as cost and time delays. This could present a problem many years down the road if no one takes steps to probate the estate of the predeceased child. Furthermore, in a legal life estate situation, the parent would need the consent of the child who has a remainder interest in the property in order to sell the property. With an irrevocable trust, the child has no current ownership interest. The trustee is free to sell the real estate any time without the consent of the child. If the trust is drafted as a grantor-type trust, the capital gain exclusion of $500,000 on the sale of the principal residence will still be aff orded to the Settlor of the trust. If it was rental property that was sold, the entire capital gain would still be reported by the Settlor on his or her tax return. The children would not be reporting any of the capital gains transactions on their own of tent camping. Karen spent many years as a Cub Scout Den Mother. She worked at Oaklandvale School, a shop called ‘Lady Grace’ and was front desk Customer Service Representative at ‘Partner’s in Rehabilitation.’ (These were all Saugus Businesses.) “Ron and Karen are seen in tax returns. The trust would actually fi le a tax return as a grantor-type trust and then issue a grantor letter to the Settlor (also referred to as a Grantor). With a legal life estate, the capital gain on the sale of a home or rental property would have to be allocated to the parent who reserved the life estate and the children who are the remaindermen. The computation for IRS purposes is based on the Book Aleph table and the IRS Section 7520 interest rates. For MassHealth purposes, at least for now, the computation is based upon the Social Security POMS tables. Hopefully, MassHealth will agree to use the IRS tables as the IRS tables are much more favorable to the life tenant if the home were to be sold, for example, as less of the net sales proceeds will be placed back on the table for the life tenant only to be included as a countable asset for MassHealth eligibility purposes. With an irrevocable trust, if the home or rental property is sold and converted to cash, the cash is safe inside the irrevocable trust. There is no risk of the trust assets becoming countable. If the parent decides to serve as trustee and there is a trust provision allowing for use and occupancy of any real estate held in trust, then any real estate abatement off ered by the city or town will remain intact. It will not be lost due to placing the home into trust. The trust must be absolutely clear that there can be no principal distributions to the Settlor under any circumstances and that the Trustee must strictly adhere to the terms of the trust and comply with each and every fiduciary duty owed to the remaindermen of the Trust. many places together participating in, and supporting events. Many of the same events where years ago they were volunteers and Leaders. I asked this humble couple what a few of their secrets were for their marriage success and if they had any words of advice for Newlyweds. They gave these tips that they themselves do: • “listening to each other • “Never go to bed angry • “respect each of their wishes “Thankyou “Wishing you many more happy years together! “Yours Truly, “The Sketch Artist” Another “Zoom” session on Cliftondale Wednesday Precinct 2 Town Meeting Member Joe Vecchione has scheduled another public informational meeting and public feedback session for his proposed zoning of Cliftondale Square for Wednesday (March 1) via Zoom videoconferencing. This one is set for 7:30 p.m. Here are some excerpts from an email Joe put out earlier this week: “Thank you all who attended last month’s session regarding the article I intend to put forth in this year’s ATM to create a zoning overlay for Cliftondale Square in order to incentivize and provide the required fl exibility needed to realistically revitalize Cliftondale Square. This overlay is a result of 8 years of work studying multiple reports procured over 40 years, a yearlong eff ort with the Cliftondale Revitalization Committee, attending Main Streets America conferences, and studying the square day in and day out. As a Precinct 2 representative, an architect, and mostly, a resident of the area, I will do everything I can to get this passed come May as I want to see this neighborhood begin to turn around after decades of decline and inaction.” “From this meeting, given the ATM warrant closes on April 3rd, I will begin formalizing the fi nal draft of the overlay which will be available to you all to review well before the ATM. Additionally, I will be reaching out to you all throughout March to solicit your opinions, concerns, thoughts and insights ahead of the ATM. I want everyone to have a chance to ask questions and provide feedback ahead of the ATM. The last meeting yielded some great feedback, much of which I will incorporate. I hope many of you can attend on March 1st to give your constructive feedback. Instead of coming to the meeting saying ‘I don’t support this because’ — let’s work to make this something we can support through a collaborative eff ort. “As we approach Session 2, I did want to clarify a few misconceptions that I’ve seen get out there in recent weeks whether through the paper or social media. I’ll be happy to elaborate more on March 1st as well with more detail: “1. I am not proposing residential only development or simply want ‘low income housing’. Commercial use will be required on the ground fl oor and the housing component is not there just to be there. It is to provide fl exibility and economic viability to property owners looking to improve their property to provide a steady source of revenue in their development given the high demand for housing. Small scale, low rise infi ll development has become very popular, especially in Downtown Districts. I recently assisted on a three-story mixed use infi ll development in Downtown Melrose at 524-530 Main. See for yourself what we could potentially attract if we allow that fl exibility in our zoning to simply allow what we used to build: https://www.bergmeyer.com/ work/mixed-use-developmentat-524-530-main-street. This was not a developer funded project. It was the owner of a local construction company funding and constructing the project. “2. I’m not proposing ‘high rise, high density’ apartments. The maximum allowed stories by right will be 3 (no change to the current B-1 district or nearby Waterfront mixed-use district) in line with the scale of the rest of Cliftondale Square which is predominantly three story (including surrounding residences). This regulation also permits by code economically effi cient Type 5 wood frame construction which can be utilized in low rise, infi ll development of three stories or less and under 50 feet. In unique cases where there are dimensional issues on site based on dimensional regulations (setbacks, driveways, irregular plots) with a 4/5 vote, the BOS may grant a special permit allowing 4 stories, 50 feet, consistent with the amendments passed overwhelmingly by Town Meeting last May and still well within the context of Cliftondale Square as the heights of multistory buildings (including residential plots vary from 35-63 ft in height. The proposed density is 20 units per acre which is consistent town wide per Town Meeting’s vote last May. The current average density in Cliftondale is roughly 22 units per acre. As no property in Cliftondale is close to an acre, no development will actually contain 20 units. I have done a calculation of the total number of possible units in the proposed boundaries along with a calculation of what would realistically be developed and the overall potential impact from both a traffi c and congestion standpoint given the existing infrastructure and traffi c generation produced by small scale infill development would be negligible to what exists today. I think the benefi ts this overlay brings far outweigh the fear of compounded congestion which will likely not be a signifi cant factor here. I can provide specifi cs on March 1st. “3. I am not proposing a zero parking minimum and long term parkers will not be utilizing municipal lots, private lots or street parking to satisfy their minimum parking requirements. Long term parking for residents and employees will be required within any development calculated per unit and per employee / square footage depending on the use. The purpose and intent is to provide a realistic parking count that satisfi es long term parking for residents and employees while allowing for short term visitors and business patrons to park in municipal lots and on streets. The fi nal parking count is at the discretion of the Planning Board as is typical. For example, the Planning Board is requesting 5 more parking spots than required by the zoning bylaw at 180 Central given the context of the area. Parking needs to be approached on a case by case basis given the variation of property and existing conditions. “4. Please feel free to contact me prior or after March 1st with any comments, questions, or clarifi cations. I very much look forward to speaking with all of you and urge everyone to keep an open mind when it comes to the potential opportunities that exist in Cliftondale if we give it the fl exibility in needs to thrive People interested in the latest “Zoom” session can type into https://bergmeyer.zoom.us/ j/81492967217?pwd=RmRiVVhTNWs4QU12R2l4QSs1YVRBQT09 The meeting ID is 814 9296 7217. The Passcode is 666546. Or call Joe on his cell phone at: 781-520-9859. “Shout Outs” We didn’t receive any reader nominations for “shout outs” this week. And it is always a shame whenever that happens, because there are always worthy

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