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Re: Paying my parents a salary not to touch their nest egg

It doesn't require moving money from family member to family member to do that. It just requires communication. It does require moving money, though, to benefit from the parents' lower federal income tax rate. For qualified dividends and capital gains, the OP may pay tax at a 23.8% rate (20% capita...
by Eric
Wed Nov 26, 2014 5:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: Paying my parents a salary not to touch their nest egg
Replies: 50
Views: 4304

misunderstanding (?), cont'd

As a variation on the OP's plan, reducing some of the risks described in my post above, he might make gifts to his parents in trust. The trust may be designed so that its income is taxable to his parents (sometimes called a "678 trust," after the relevant section of the Internal Revenue Co...
by Eric
Wed Nov 26, 2014 4:08 pm
 
Forum: Personal Finance (Not Investing)
Topic: Paying my parents a salary not to touch their nest egg
Replies: 50
Views: 4304

misunderstanding?

I think some posters may be misunderstanding the original poster's proposal. He is not suggesting that his parents give him all their money in exchange for his promise to make annual payments to them. Rather, he wants to give them $40,000 a year so that they can keep their money rather than spend it...
by Eric
Wed Nov 26, 2014 4:02 pm
 
Forum: Personal Finance (Not Investing)
Topic: Paying my parents a salary not to touch their nest egg
Replies: 50
Views: 4304

Re: Quicken 2015 for Mac released

2) Investment accounts are a wet hot mess, feels like the junky Mint interface, no real ability to easily record transactions etc. I see on Quicken's website that "explicit lot assignments" are not yet supported. Does this mean that Quicken Mac 2015 doesn't support specific share ID? 4) N...
by Eric
Fri Aug 22, 2014 6:17 am
 
Forum: Personal Consumer Issues
Topic: Quicken 2015 for Mac released
Replies: 27
Views: 3333

Re: Weird Estate Tax Result if My Wife and I Die Together

For those who like citations, see Revenue Ruling 79-303 . Headnote: "A husband and wife who were residents of Texas owned an insurance policy on the life of one of the spouses as community property. Their designation of a child as beneficiary of the policy was revocable prior to death. They die...
by Eric
Thu Jul 17, 2014 9:43 pm
 
Forum: Personal Finance (Not Investing)
Topic: Weird Estate Tax Result if My Wife and I Die Together
Replies: 12
Views: 1050

Re: Weird Estate Tax Result if My Wife and I Die Together

If the policy is community property (very likely) and you and your wife die together, then half the proceeds should count against your estate tax exemption and half against hers. Unless I'm misunderstanding the facts, that avoids the problem you're concerned about. But one other issue you should dis...
by Eric
Thu Jul 17, 2014 9:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: Weird Estate Tax Result if My Wife and I Die Together
Replies: 12
Views: 1050

Re: Inherited IRAs not exempt from bankruptcy

We have also been agreeing swimmingly in several technical / law-geek PMs on this subject, from which we have spared our fellow Bogleheads. :D I did want to clarify a prior post of mine here, though, as I expressed something in an ambiguous way. There is a controversy in many states as to whether a ...
by Eric
Thu Jun 12, 2014 11:51 pm
 
Forum: Investing - Theory, News & General
Topic: Inherited IRAs not exempt from bankruptcy
Replies: 27
Views: 2396

Re: Inherited IRAs not exempt from bankruptcy

You don't need any other information to "interpret the Court's decision." The Court held that Inherited IRAs may not be excluded from the bankruptcy estate under 522(b)(3)(C) (and the identical 522(d)(12). That's all. If you find cases holding that Inherited IRAs may be excluded under oth...
by Eric
Thu Jun 12, 2014 10:19 pm
 
Forum: Investing - Theory, News & General
Topic: Inherited IRAs not exempt from bankruptcy
Replies: 27
Views: 2396

Re: Inherited IRAs not exempt from bankruptcy

See this paragraph from the cert petition: In enacting the "retirement funds" exemption, Congress sought to "expand the protection for tax-favored retirement plans or arrangements that may not already be protected under * * * state or federal law." In order to ensure that the exe...
by Eric
Thu Jun 12, 2014 9:35 pm
 
Forum: Investing - Theory, News & General
Topic: Inherited IRAs not exempt from bankruptcy
Replies: 27
Views: 2396

Re: Inherited IRAs not exempt from bankruptcy

The question presented in the cert petition (page 2) only dealt with 522(b)(3)(C). I assume petitioner's counsel didn't think (A) applied. In which case we come full circle, and I provisionally retract my concession. ;-) Let's go back to the beginning. I said earlier that under (b)(1), you can pick...
by Eric
Thu Jun 12, 2014 9:20 pm
 
Forum: Investing - Theory, News & General
Topic: Inherited IRAs not exempt from bankruptcy
Replies: 27
Views: 2396

Re: Inherited IRAs not exempt from bankruptcy

But "retirement funds" isn't the only operative provision, so I'm still puzzled by this result. The case deals with 11 U.S.C. § 522(b) . Subsection (b)(1) says that a debtor can protect property listed in subsection (b)(2) (the federal bankruptcy exemptions) or (b)(3) (the state exemptions...
by Eric
Thu Jun 12, 2014 8:20 pm
 
Forum: Investing - Theory, News & General
Topic: Inherited IRAs not exempt from bankruptcy
Replies: 27
Views: 2396

Re: Inherited IRAs not exempt from bankruptcy

No, that's incorrect. See page 2, footnote 1, of the opinion. I'll cop to being partially incorrect. ;-) You do in fact get to choose between federal and state exemptions, as I stated. However, the Court ruled against the debtors even though they chose the state exemption. That's a surprising resul...
by Eric
Thu Jun 12, 2014 7:46 pm
 
Forum: Investing - Theory, News & General
Topic: Inherited IRAs not exempt from bankruptcy
Replies: 27
Views: 2396

Re: Inherited IRAs not exempt from bankruptcy

the amount in the inherited IRA was ~$300,000. How much was spent in legal fees by the petitioners (Clark and his wife) to avoid having that amount included in the bankruptcy estate? Should the debtors care? If they lose, they're spending the creditors' money. If they win, it's still better to keep...
by Eric
Thu Jun 12, 2014 5:46 pm
 
Forum: Investing - Theory, News & General
Topic: Inherited IRAs not exempt from bankruptcy
Replies: 27
Views: 2396

Re: Inherited IRAs not exempt from bankruptcy

Generally, a bankrupt debtor may elect one of two exemption schemes. With some exceptions, she may claim either the exemptions allowed by federal law or the exemptions allowed by state law. I haven't reviewed the opinion yet, but I assume it affects only those debtors who are claiming the federal ex...
by Eric
Thu Jun 12, 2014 5:40 pm
 
Forum: Investing - Theory, News & General
Topic: Inherited IRAs not exempt from bankruptcy
Replies: 27
Views: 2396

Re: Why Avoid Long-Term Bonds?

grok87 wrote:extra interest rate risk


Depends on your time horizon. If by risk you mean "standard deviation of one-year returns," then yes. But if I'm investing for a 20-year term I'm more concerned with the standard deviation of 20-year returns.
by Eric
Mon Jun 02, 2014 6:46 am
 
Forum: Investing - Theory, News & General
Topic: Why Avoid Long-Term Bonds?
Replies: 67
Views: 6624

Re: Why Avoid Long-Term Bonds?

First, I think myself and the previous posters should by now be immunized from the 'aren't you betting?' fighting words ( :happy ) because we've clearly stated: yes. 'Never bet' is a nice clear concept, but not realistic IMO. It's a matter of degree. No fighting words intended. :wink: As I mentione...
by Eric
Fri May 30, 2014 3:18 pm
 
Forum: Investing - Theory, News & General
Topic: Why Avoid Long-Term Bonds?
Replies: 67
Views: 6624

Re: Why Avoid Long-Term Bonds?

it seems to me market timing the real yield of TIPS might be considered differently than say timing the stock market or nominal bond yields. Especially if one were to say they'd rather (for say a 30 yr investment horizon) buy 5yr TIP's at negative real yield now and hope to once again achieve 'norm...
by Eric
Fri May 30, 2014 1:00 pm
 
Forum: Investing - Theory, News & General
Topic: Why Avoid Long-Term Bonds?
Replies: 67
Views: 6624

Re: Why Avoid Long-Term Bonds?

I like the idea of buying 30 year TIPs to match retirement liabilities but I'm not willing to buy them at 0% real yield or negative real yield. I don't necessarily disagree, but this is market-timing. I don't mean that as a criticism, just an observation. It's like saying you're not willing to buy ...
by Eric
Tue May 27, 2014 5:43 pm
 
Forum: Investing - Theory, News & General
Topic: Why Avoid Long-Term Bonds?
Replies: 67
Views: 6624

Re: Why Avoid Long-Term Bonds?

One significant difference is that insurance companies and pension funds managers don't care much if the dollars they pay have lost much of their value due to inflation since their contracts usually just have to pay out dollars that are not inflation adjusted. For individuals, especially in the acc...
by Eric
Tue May 27, 2014 4:40 pm
 
Forum: Investing - Theory, News & General
Topic: Why Avoid Long-Term Bonds?
Replies: 67
Views: 6624

Re: Why Avoid Long-Term Bonds?

For an interesting counterpoint, see these posts by John Norstad. Sample passages: we're investing for our retirement. This money we're saving isn't going to be spent tomorrow or next year or even 5 or 10 years from now - it's going to spent 10-70 years from now! . . . In this respect we are quite s...
by Eric
Tue May 27, 2014 10:05 am
 
Forum: Investing - Theory, News & General
Topic: Why Avoid Long-Term Bonds?
Replies: 67
Views: 6624

Re: Need signature guarantee in Japan

Vanguard requires them if you change the form of ownership on a transfer from another broker or are putting your shares into trust. I can't speak to your specific examples, but in some cases Vanguard will waive the signature guarantee requirement if you use Vanguard's voice verification system. See...
by Eric
Wed Apr 23, 2014 1:57 pm
 
Forum: Personal Finance (Not Investing)
Topic: Need signature guarantee in Japan
Replies: 24
Views: 1685

Re: Life Insurance Primary and Secondary Beneficiaries

None of the 3 lawyers so far mentioned this aspect. Thank you. You're welcome. In fairness, it may be that the other lawyers didn't mention these issues because they know more about your situation than I do. For example, if it's clear that your husband will have plenty of exemption to spare, they m...
by Eric
Tue Apr 22, 2014 8:31 am
 
Forum: Personal Finance (Not Investing)
Topic: Life Insurance Primary and Secondary Beneficiaries
Replies: 35
Views: 1597

Re: Life Insurance Primary and Secondary Beneficiaries

A few general thoughts, by no means comprehensive: 1. If the life insurance is community property, that raises additional issues. Texas law generally allows the named owner of a community property policy to dispose of the entire death benefit. However, the disposition is subject to equitable review ...
by Eric
Mon Apr 21, 2014 5:57 pm
 
Forum: Personal Finance (Not Investing)
Topic: Life Insurance Primary and Secondary Beneficiaries
Replies: 35
Views: 1597

Re: Question about Probate cost

P.S. Just because they are statutory doesn't mean you have to pay them. :) Yes. I don't practice in California, but have also heard that some California lawyers will accept a lesser fee. For example, a quick Google search turned up this : Most attorneys charge the "statutory fee" for hand...
by Eric
Mon Apr 21, 2014 3:38 pm
 
Forum: Personal Finance (Not Investing)
Topic: Question about Probate cost
Replies: 17
Views: 1227

Re: my review of my HSA with Saturna brokerage

Good news. Saturna emailed back and said that "the transfer charge only applies for transfers. We currently do not charge for mailing checks or closing accounts."
by Eric
Mon Apr 21, 2014 11:48 am
 
Forum: Investing - Theory, News & General
Topic: my review of my HSA with Saturna brokerage
Replies: 33
Views: 6906

Re: my review of my HSA with Saturna brokerage

mikep wrote:I believe that fee is for a trustee to trustee transfer. Does it apply to a direct rollover?


Good question, and worth asking Saturna (though I prefer trustee-to-trustee transfers). I just sent them an email and will report any answer I get next week.
by Eric
Fri Apr 18, 2014 5:54 pm
 
Forum: Investing - Theory, News & General
Topic: my review of my HSA with Saturna brokerage
Replies: 33
Views: 6906

Re: my review of my HSA with Saturna brokerage

Note the $75 "account transfer out" fee. (See the table at the bottom of page 3 of this PDF.) I was planning to sign up, but that fee gives me pause. If I run into problems, I'd like to be able to leave without paying a significant penalty.
by Eric
Fri Apr 18, 2014 11:18 am
 
Forum: Investing - Theory, News & General
Topic: my review of my HSA with Saturna brokerage
Replies: 33
Views: 6906

Re: making your own will or trust

sscritic, I know you like cites (as do I). If you're interested in the "widow's election" issue, here's an outline that discusses relevant cases. See page 12 of the outline (page 18 of the PDF).
by Eric
Wed Apr 16, 2014 3:59 pm
 
Forum: Personal Finance (Not Investing)
Topic: making your own will or trust
Replies: 29
Views: 2186

Re: making your own will or trust

She gets 3/4 of course! Yes, I think that's the result in my example. But is that what the person intended? Did he mean for his wife to get/have 3/4 of the funds, or just to keep her half? Assume the funds were titled solely in his own name. you can't leave what is not yours to give No, you can't l...
by Eric
Wed Apr 16, 2014 3:51 pm
 
Forum: Personal Finance (Not Investing)
Topic: making your own will or trust
Replies: 29
Views: 2186

Re: making your own will or trust

Just wondering, could you elaborate on the "significant problems"? I don't often comment on these threads, as anything I say will seem self-interested. (I say "seem" because anyone who might use Nolo wouldn't hire me anyway. I work at a large law firm and handle large estates.) ...
by Eric
Wed Apr 16, 2014 3:24 pm
 
Forum: Personal Finance (Not Investing)
Topic: making your own will or trust
Replies: 29
Views: 2186

Re: making your own will or trust

[Deleted. My post here originally referred to an older thread in which I discussed this issue. I decided to repost and incorporate my prior comments from that old thread below.]
by Eric
Wed Apr 16, 2014 2:41 pm
 
Forum: Personal Finance (Not Investing)
Topic: making your own will or trust
Replies: 29
Views: 2186

Re: my review of my HSA with Saturna brokerage

Thanks for the helpful info.
by Eric
Wed Apr 02, 2014 10:00 pm
 
Forum: Investing - Theory, News & General
Topic: my review of my HSA with Saturna brokerage
Replies: 33
Views: 6906

Re: my review of my HSA with Saturna brokerage

Could you check on VTSAX, VTIAX, VBTLX, and FSTVX? Thanks!

(These are the Admiral shares of Vanguard's Total Stock Market, Total International, and Total Bond Market funds, and the Advantage shares of Fidelity's Spartan Total Market Index fund.)
by Eric
Wed Apr 02, 2014 6:57 am
 
Forum: Investing - Theory, News & General
Topic: my review of my HSA with Saturna brokerage
Replies: 33
Views: 6906

Re: ILIT for term life insurance?

Compare two figures: 1. The cost of $1 million of insurance (over 20 years) plus an ILIT. 2. The cost of $1.11 million of insurance (over 20 years). If your assumptions are correct, both approaches should net your beneficiaries the same amount. (90% of $1.11 million equals $1 million, rounded.) I su...
by Eric
Sat Mar 29, 2014 4:04 pm
 
Forum: Personal Finance (Not Investing)
Topic: ILIT for term life insurance? [Irrevocable Life Ins. Trust]
Replies: 11
Views: 683

Re: Medigap Plan G vs Plan F?

I see some value in a zero-deductible option, as a safeguard against future mental impairment. If the deductible is zero, I can follow a simple rule: I shouldn't have to pay anything at the doctor's office. (This assumes that Plan F does in fact cover all charges.) If the deductible is more than zer...
by Eric
Tue Mar 04, 2014 5:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: Medigap Plan G vs Plan F?
Replies: 60
Views: 8268

Re: Overseas investor interested in US real estate

Third, get your legal affairs in order. [snip] Much of this is based on tax laws of the home country of the client. And also consider the tax laws of the U.S., including the federal estate tax. The federal estate tax exemption for nonresident aliens is only $60,000 (unless your home country has neg...
by Eric
Tue Mar 04, 2014 3:50 pm
 
Forum: Personal Finance (Not Investing)
Topic: Overseas investor interested in US real estate
Replies: 14
Views: 801

Re: The Estate lawyer cost us big

Eric: I may have missed whether this was a Revocable Trust, but the dwelling and other items were not in the Trust. That required it to be probated which would otherwise not have been a requirement. Something is always "not in the Trust." OK, maybe everything is there for a brief period o...
by Eric
Mon Feb 24, 2014 9:17 pm
 
Forum: Personal Finance (Not Investing)
Topic: The Estate lawyer cost us big
Replies: 109
Views: 9789

Re: The Estate lawyer cost us big

Nowizard wrote:One way to avoid this in the future is to have assets in a Revocable Trust.


The deceased had a revocable trust, and it sounds like he had most of his assets in the trust. So this thread does not show that at all.
by Eric
Mon Feb 24, 2014 1:15 pm
 
Forum: Personal Finance (Not Investing)
Topic: The Estate lawyer cost us big
Replies: 109
Views: 9789

Re: The Estate lawyer cost us big

taking Bru, at his word, there was one piece of real estate, some minor personal property, and various stocks and mutual funds. And taking Bru at his word, the attorneys spent 200 hours dealing with that, and the work descriptions themselves don't seem improper. So what did the 200 hours entail? Le...
by Eric
Sun Feb 23, 2014 11:41 pm
 
Forum: Personal Finance (Not Investing)
Topic: The Estate lawyer cost us big
Replies: 109
Views: 9789

Re: The Estate lawyer cost us big

Based on the breakdown of fees I have seen nothing would be considered improper or unethical. In my opinion excessive but not anything that the Executor and law firm couldn't easily justify. You indicated that there are 200 hours of attorney time in that breakdown. Can you describe some of the larg...
by Eric
Sun Feb 23, 2014 11:24 pm
 
Forum: Personal Finance (Not Investing)
Topic: The Estate lawyer cost us big
Replies: 109
Views: 9789

Re: The Estate lawyer cost us big

I count four Boglehead attorneys in this thread with estate experience, and we each seem to have the same reaction: These facts don't add up. Now, they may not add up because the executor in question is in fact unethical. From the OP's posts, it seems that the executor is a reputable attorney from a...
by Eric
Sun Feb 23, 2014 11:01 pm
 
Forum: Personal Finance (Not Investing)
Topic: The Estate lawyer cost us big
Replies: 109
Views: 9789

Re: Dallas/Fort Worth Chapter

Yes, we have an active group. One of our admins approved requests a few days ago, but doesn't see anything pending now. Did you get the group emails this evening?
by Eric
Sat Feb 22, 2014 8:19 pm
 
Forum: Local Chapters and Bogleheads Community
Topic: Dallas/Fort Worth Chapter
Replies: 4
Views: 964

Re: The Estate lawyer cost us big

My father named my cousin as executor of his Estate. Why exactly he did it we aren't sure. This is the heart of the issue. If we knew your father's reasons for naming someone other than one of his adult children as executor, that might explain the expense. I know you don't know either, so I don't m...
by Eric
Sat Feb 22, 2014 11:58 am
 
Forum: Personal Finance (Not Investing)
Topic: The Estate lawyer cost us big
Replies: 109
Views: 9789

Re: Cloud file system for small business

I'll vouch whole-heartedly for Google Drive. Both my wife and I use it to sync nearly 100GB across three laptops, running both Windows and OS X. Both laptops have a local Google Drive client that instantly syncs any and all changes made on the local file systems. It's performed flawlessly for us. D...
by Eric
Thu Feb 20, 2014 9:50 pm
 
Forum: Personal Consumer Issues
Topic: Cloud file system for small business
Replies: 11
Views: 610

Re: Prenuptial Agreement

Consider a ranch owner in Texas who gets married. The income from running cattle on the ranch is community, but at the divorce the ranch belongs to the rancher. The rancher sells the ranch the day after the divorce for a $4 million profit. That belongs to the rancher. Now suppose the rancher sells ...
by Eric
Mon Feb 03, 2014 7:16 am
 
Forum: Personal Finance (Not Investing)
Topic: Prenuptial Agreement
Replies: 34
Views: 3849

Re: Prenuptial Agreement

What about short-term capital gains? For tax purposes, they're treated as nonqualified dividends. For these purposes, it shouldn't matter whether the gain is long or short. Though I suppose if someone generated very frequent short-term capital gains (e.g., a day-trader), the result might be differe...
by Eric
Sun Feb 02, 2014 4:28 pm
 
Forum: Personal Finance (Not Investing)
Topic: Prenuptial Agreement
Replies: 34
Views: 3849

Re: Prenuptial Agreement

Where is Eric when we need him? Thinking of the myriad ways a lawyer can get in trouble on the Internet. For example, if my firm represents Uncle's fiancée and I start offering even informal suggestions to Uncle . . . well, that would be awkward at best, and in some cases much worse. This scenario ...
by Eric
Sun Feb 02, 2014 3:51 pm
 
Forum: Personal Finance (Not Investing)
Topic: Prenuptial Agreement
Replies: 34
Views: 3849

Re: TAYLOR'S UPCOMING 90th BIRTHDAY

Happy birthday, Taylor! I have been deeply impressed by your honesty, warmth, and kindness since the Morningstar days. Thanks for all you do.
by Eric
Sat Jan 25, 2014 9:25 am
 
Forum: Local Chapters and Bogleheads Community
Topic: Taylor's 90th Birthday
Replies: 272
Views: 23088

Re: Please Help with Estate Planning

In my state, probate can be very simple (assuming a properly drafted will, harmonious family, etc.). I've seen people pay more for a funded revocable trust than they would have paid for a simple probate. And in many cases, the revocable trust does not actually succeed in avoiding probate. Revocable ...
by Eric
Thu Jan 23, 2014 10:02 am
 
Forum: Personal Finance (Not Investing)
Topic: Please Help with Estate Planning
Replies: 10
Views: 864
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