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Re: Why aren't annuities better than investment drawdowns?

If one is really worried about longevity, it is hard to argue against paying an additional premium for the inflation rider. The nominal annuity market is much larger than the inflation-indexed one. It is difficult for an investor to calculate the actuarial value of annuities, so he does not know wh...
by bsteiner
Thu Aug 21, 2014 11:34 am
 
Forum: Investing - Theory, News & General
Topic: Why aren't annuities better than investment drawdowns?
Replies: 46
Views: 2769

How to finance major home improvements

If you were making major home improvements, would you finance them with a home equity line of credit at 0.75% under prime (currently 2.5%), a 15-year fixed rate mortgage at about 3%, or a 30-year fixed rate mortgage at about 4%? Either of the fixed rate mortgages would initially be at a higher rate ...
by bsteiner
Wed Aug 20, 2014 6:48 pm
 
Forum: Personal Finance (Not Investing)
Topic: How to finance major home improvements
Replies: 24
Views: 1501

Re: How to best pay for a second home?

I think Pentagon Federal http://www.penfed.org has the same mortgage rates for vacation homes as for primary residences. As of now, 15 year fixed is 3% plus a 1% fee (or 3.25% without the 1% fee) and 30 year fixed is 3.875% plus a 1% fee (or 4.125% without the 1% fee).
by bsteiner
Wed Aug 20, 2014 5:26 pm
 
Forum: Personal Finance (Not Investing)
Topic: How to best pay for a second home?
Replies: 8
Views: 762

Re: Roth Conversion - Old Age

They would have to weigh using their bank account to pay the tax on the conversion against him deferring Social Security to age 70 and using the bank account to make up the shortfall in income until then.
by bsteiner
Tue Aug 19, 2014 3:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth Conversion - Old Age
Replies: 31
Views: 1158

Re: "Robin Williams' estate plan: Good, but not great"

Wills of celebrities are useful for providing lessons. We don't know very much about Robin Williams' estate plan, just the two insurance trusts that are in the public record: the 1990 trust, http://amradaronline.files.wordpress.com/2014/08/robin-williams-will-docs.pdf and the 2009 trust, https://amr...
by bsteiner
Mon Aug 18, 2014 10:45 pm
 
Forum: Investing - Theory, News & General
Topic: "Robin Williams' estate plan: Good, but not great"
Replies: 4
Views: 1721

Re: change from trustee/successor trustee to CO-trustees

Read the trusts. They should provide for successor trustees, or say who can name co-trustees and successor trustees. In the case of the irrevocable trust, if no one has the power to name co-trustees or successor trustees, then you'll have to go to court. That's what happened with Robin Williams' ins...
by bsteiner
Sun Aug 17, 2014 10:51 am
 
Forum: Personal Finance (Not Investing)
Topic: change from trustee/successor trustee to CO-trustees
Replies: 9
Views: 745

Re: Looking for advice on creating a Will

...I don't have a lot of good experience with lawyers in Philadelphia, the city where I live. And I anticipate that if I walk into some highly recommended lawyers office in Philly they won't consider me worth their time for less than $3K-$5K. That's a lot of money to me!... ... The key issues are (...
by bsteiner
Sun Aug 17, 2014 10:40 am
 
Forum: Personal Finance (Not Investing)
Topic: Looking for advice on creating a Will
Replies: 39
Views: 2381

Re: Looking for advice on creating a Will

...I don't have a lot of good experience with lawyers in Philadelphia, the city where I live. And I anticipate that if I walk into some highly recommended lawyers office in Philly they won't consider me worth their time for less than $3K-$5K. That's a lot of money to me!... Philadelphia is a large ...
by bsteiner
Sat Aug 16, 2014 10:55 pm
 
Forum: Personal Finance (Not Investing)
Topic: Looking for advice on creating a Will
Replies: 39
Views: 2381

Re: Finding witnesses for a trust document

...what states required witnesses to the signing of a trust? That sounds a little strange to me, which is why I made the leap from witnesses to will, not to trust. Florida requires two witnesses for a revocable trust. Probating a Will in Florida is not particularly difficult, expensive or burdensom...
by bsteiner
Sat Aug 16, 2014 10:21 pm
 
Forum: Personal Finance (Not Investing)
Topic: Finding witnesses for a trust document
Replies: 31
Views: 1235

Re: Smartest way to fund new car purchase?

0% interest on car loans at Pentagon Federal Credit Union http://www.penfed.org.
by bsteiner
Sat Aug 16, 2014 8:48 pm
 
Forum: Personal Finance (Not Investing)
Topic: Smartest way to fund new car purchase?
Replies: 20
Views: 1438

Re: Reticient sibling [Dispute over execution of trust]

If the trustees can't satisfy the beneficiaries, the trustees can file a formal accounting in court. If a beneficiary objects, the court will resolve the matter. This can be expensive.
by bsteiner
Tue Aug 12, 2014 11:08 pm
 
Forum: Personal Finance (Not Investing)
Topic: Reticient sibling [Dispute over execution of trust]
Replies: 31
Views: 2944

Re: Advice: Remodel of kitchen, bath, and basement?

Get a good architect.
by bsteiner
Mon Aug 04, 2014 4:54 pm
 
Forum: Personal Consumer Issues
Topic: Advice: Remodel of kitchen, bath, and basement?
Replies: 30
Views: 1407

Re: 1.49% 36 mo car loan offer - take it or pay cash?

Zero interest if you buy the car through Pentagon Federal's buying service: https://www.penfed.org/PenFed-Car-Buying-Service/.
by bsteiner
Sat Aug 02, 2014 10:27 pm
 
Forum: Personal Consumer Issues
Topic: 1.49% 36 mo car loan offer - take it or pay cash?
Replies: 13
Views: 1121

Re: 2nd marriage: SS, legal marriage vs commitment ceremony?

ourbrooks wrote:...it may be the case that holding a religious marriage ceremony has no civil consequences unless a state document, such as a marriage license, is filled.


That varies from state to state: http://www.courts.state.ny.us/reporter/ ... _50684.htm
by bsteiner
Sat Aug 02, 2014 8:55 pm
 
Forum: Personal Finance (Not Investing)
Topic: 2nd marriage: SS, legal marriage vs commitment ceremony?
Replies: 16
Views: 1385

Re: POLL: Wills vs. Living Trusts

Revocable trusts make sense in some cases, and in some states. However, they're overhyped and oversold, and for most people in most states are unnecessary and tend to be a distraction. Like any tool in the toolbox, we'll use it where it's appropriate, which is some but not most of the time. Asking ...
by bsteiner
Fri Aug 01, 2014 6:05 pm
 
Forum: Personal Finance (Not Investing)
Topic: POLL: Wills vs. Living Trusts
Replies: 35
Views: 3102

Re: Trust for Daughter

What states do you, your ex-husband and your daughter live in? There are state tax issues that affect trust taxation. One thought is the suggestion for a corporate trustee had to do with trying to minimize these taxes. Bsteiner, Thanks for your insight. I will bring these issues up with my ex-husba...
by bsteiner
Fri Aug 01, 2014 3:19 pm
 
Forum: Investing - Help with Personal Investments
Topic: Trust for Daughter
Replies: 13
Views: 1047

Re: Trust for Daughter

...The document is written that she gets the following: 1. Net income from the taxable account paid in quarterly installments. 2. Yearly RMD's from the retirement accounts. 3. Trustees can expend amounts of principal as necessary for support, maintenance and medical care, 4. Right to withdrawal 5% ...
by bsteiner
Fri Aug 01, 2014 2:11 pm
 
Forum: Investing - Help with Personal Investments
Topic: Trust for Daughter
Replies: 13
Views: 1047

Re: Trust for Daughter

...My ex-husband & I have been divorced for many years but still remain on very good terms. He was diagnosed approx. 3 years ago with a terminal, degenerative brain disorder similar to Lou Gehrig's disease. Our only child, a 22-year old daughter will inherit his entire estate. He wants to set u...
by bsteiner
Fri Aug 01, 2014 12:25 pm
 
Forum: Investing - Help with Personal Investments
Topic: Trust for Daughter
Replies: 13
Views: 1047

Re: I don't think I can afford to die in Pennsylvania

Pennsylvania has an inheritance tax rather than an estate tax. It's somewhat complicated, but essentially there's no tax on transfers to spouses, a 4.5% tax on transfers to children, and a 15% tax on transfers to unrelated persons. Life insurance payable to a beneficiary is exempt. In considering th...
by bsteiner
Wed Jul 30, 2014 11:33 am
 
Forum: Personal Finance (Not Investing)
Topic: I don't think I can afford to die in Pennsylvania
Replies: 35
Views: 3328

Re: POLL: Wills vs. Living Trusts

Revocable trusts make sense in some cases, and in some states. However, they're overhyped and oversold, and for most people in most states are unnecessary and tend to be a distraction. Like any tool in the toolbox, we'll use it where it's appropriate, which is some but not most of the time. Asking w...
by bsteiner
Tue Jul 29, 2014 9:04 am
 
Forum: Personal Finance (Not Investing)
Topic: POLL: Wills vs. Living Trusts
Replies: 35
Views: 3102

Re: Is tax deferment overvalued?

I do prefer Roths in the break-even situation, because of the risk reduction. Tax rates may either rise or fall, but if your money is growing tax-free, the change in rates won't affect you. In addition, you reduce the risk of having to move money to a taxable account from RMDs you don't need. Have ...
by bsteiner
Mon Jul 28, 2014 10:28 pm
 
Forum: Personal Finance (Not Investing)
Topic: Is tax deferment overvalued?
Replies: 20
Views: 2483

Re: Tips for incorpating a charity

The Form 1023 to apply for exempt status is a good deal of work. Any law firm with a tax and trusts and estates practice should be able to do it, since we do them when people set up foundations. However, the IRS just released a much simpler Form 1023-EZ that smaller charitable organizations can use....
by bsteiner
Mon Jul 28, 2014 10:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: Tips for incorpating a charity
Replies: 10
Views: 522

Re: Nanny/Household Employee Payroll Company

p_qrs_t wrote:
Calm Man wrote:... When we had nannies many years ago, that was the time when some woman nominated to be the US Attorney general turned out to be gaming the system. It would have been funny if it wasn't so sad. I don't remember her name.


Zoe Baird


I knew her, but it was long before that.
by bsteiner
Mon Jul 28, 2014 10:12 pm
 
Forum: Personal Finance (Not Investing)
Topic: Nanny/Household Employee Payroll Company
Replies: 8
Views: 590

Re: Girlfriend moving in, lots of student loan debt

... PA does have a common law marriage, if established before 1/1/2005. A relative of mine lived with her boyfriend for 15 years . Neither wanted to get married nor have kids. She lived at his place and spent an enormous amount of effort improving the house. When it came time to break up, they came...
by bsteiner
Sun Jul 27, 2014 7:46 pm
 
Forum: Personal Finance (Not Investing)
Topic: Girlfriend moving in, lots of student loan debt
Replies: 69
Views: 8731

Re: Is tax deferment overvalued?

...I concur with your question. Not so much for the need or lack of need to take RMDs. Rather, the conversion of equity taxation rates to ordinary income. I am battling that right now in that I have a whole bunch of gains in a variable annuity from stock funds that are going to come out one day as ...
by bsteiner
Sun Jul 27, 2014 1:38 pm
 
Forum: Personal Finance (Not Investing)
Topic: Is tax deferment overvalued?
Replies: 20
Views: 2483

Re: Vanguard quietly adds longevity annuities

...Are you [nisiprius]disappointed because the payment amounts aren't close enough to actuarially fair (you didn't actually provide any data to evaluate that proposition), or simply because you wished that they offered payments that were fully inflation adjusting from annuitization date onwards? Th...
by bsteiner
Sat Jul 26, 2014 10:05 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard quietly adds longevity annuities
Replies: 85
Views: 6784

Re: Help! Term Life through an Irrevocable Life Insurance Tr

...Thanks for your response. Though helpful in many ways, I didn't follow all your points. - You mentioned that "Federal exempt amount is $5,340,000 (indexed), and portability has been made permanent" -- couldn't that change in the future just like it was about to in 2011? - Though I curr...
by bsteiner
Sat Jul 26, 2014 9:51 pm
 
Forum: Personal Finance (Not Investing)
Topic: Help! Term Life through an Irrevocable Life Insurance Trust
Replies: 11
Views: 731

Re: Redepositing unnecessary RMD's from 401K

Under Internal Revenue Code Section 402(c)(3)(B), the Internal Revenue Service has discretion to waive the 60-day requirement "where the failure to waive such requirement would be against equity or good conscience, including casualty, disaster, or other events beyond the reasonable control of t...
by bsteiner
Sat Jul 26, 2014 9:15 pm
 
Forum: Personal Finance (Not Investing)
Topic: Redepositing unnecessary RMD's from 401K
Replies: 5
Views: 854

Re: Do you have State Farm Emergency Road Service?

Liberty Mutual has this as well. I think they use the same towing services that AAA uses when they get a call.
by bsteiner
Fri Jul 25, 2014 2:46 pm
 
Forum: Personal Consumer Issues
Topic: Do you have State Farm Emergency Road Service?
Replies: 4
Views: 468

Re: How to set up a trust

I have been reading about setting up a trust so that after death (wife & I), assets go into a trust for the benefit of (adult) child. This is primarily for asset protection. I assume the trust after death must be an irrevocable trust... Even if you make it revocable, if after you die you revoke...
by bsteiner
Thu Jul 24, 2014 11:16 pm
 
Forum: Personal Finance (Not Investing)
Topic: How to set up a trust
Replies: 11
Views: 1872

Re: Help! Term Life through an Irrevocable Life Insurance Tr

bsteiner wrote: There's virtually nothing to administer while the insured is living. Can you go into a little more detail about this? I fired my lawyer and ended my trust because my lawyer's annual fees for administering the trust kept creeping up. And no, I don't believe he ever really reviewed th...
by bsteiner
Thu Jul 24, 2014 4:31 pm
 
Forum: Personal Finance (Not Investing)
Topic: Help! Term Life through an Irrevocable Life Insurance Trust
Replies: 11
Views: 731

Re: Estate Trustee requests I "waive presentation of account

Most estates and trusts are settled informally, by receipt and release (waiver). The executor or trustee gives the beneficiaries sufficient information to satisfy the beneficiaries, and the beneficiaries sign receipts and releases (waivers). This avoids the expense of a formal accounting. Sometimes ...
by bsteiner
Thu Jul 24, 2014 3:59 pm
 
Forum: Personal Finance (Not Investing)
Topic: Estate Trustee requests I "waive presentation of accounting"
Replies: 10
Views: 1361

Re: How does gift/estate tax indexation work?

The lifetime exemption for the gift/estate tax is now $10.68 million (for a couple) and is indexed to inflation. I am not sure how this works. Suppose that, while living, a couple funds a trust for their descendants with $10.68 million and thus fully uses up their lifetime exemption. Then some year...
by bsteiner
Thu Jul 24, 2014 3:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: How does gift/estate tax indexation work?
Replies: 6
Views: 411

Re: Help! Term Life through an Irrevocable Life Insurance Tr

The insurance trust isn't as important now that the Federal exempt amount is $5,340,000 (indexed), and portabilty has been made permanent. If the estate is taxable (greater than $10.68MM) is an ILIT a good option? Is there a better estate tax avoidance strategy? He said he's 37, and that they don't...
by bsteiner
Thu Jul 24, 2014 2:26 pm
 
Forum: Personal Finance (Not Investing)
Topic: Help! Term Life through an Irrevocable Life Insurance Trust
Replies: 11
Views: 731

Re: Help! Term Life through an Irrevocable Life Insurance Tr

The insurance trust isn't as important now that the Federal exempt amount is $5,340,000 (indexed), and portabilty has been made permanent. If you die young, the insurance will replace the income you would have earned, and it's less likely that your spouse will have a taxable estate. Nevertheless, so...
by bsteiner
Thu Jul 24, 2014 1:53 pm
 
Forum: Personal Finance (Not Investing)
Topic: Help! Term Life through an Irrevocable Life Insurance Trust
Replies: 11
Views: 731

Re: Inheritance taxes for beneficiary

By way of background for those not familiar with New Jersey, New Jersey has an inheritance tax, with rates of 15% to 16% on transfers to unrelated persons. If he were to leave his assets to you (in his Will) in trust rather than outright (which he might want to do and you might want him to do in any...
by bsteiner
Wed Jul 23, 2014 7:16 pm
 
Forum: Personal Finance (Not Investing)
Topic: Inheritance taxes for beneficiary
Replies: 3
Views: 592

Re: Intimidated by Trustee and Investment Advisor

As others have pointed out, as to any accounts already in your name (which would presumably be the ones under your social security number), you can move those accounts to another financial institution of your choice, and you can invest them any way you want. The trustees have to account to you for w...
by bsteiner
Wed Jul 23, 2014 6:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: Intimidated by Trustee and Investment Advisor
Replies: 32
Views: 3926

Re: How to set up a trust

How do I set up a trust so that (after death), when my child inherits the assets: a. assets remain in a trust, protected from lawsuits, bankruptcy, claims in divorce b. I would assume child would get dividends and interest from the trust, to minimize trust taxes c. minimum expenses (it would pain m...
by bsteiner
Tue Jul 22, 2014 6:14 pm
 
Forum: Personal Finance (Not Investing)
Topic: How to set up a trust
Replies: 11
Views: 1872

Re: Establishing a dementia trust

If all you want is someone to take over when needed, you don't need a trust. A power of attorney is sufficient. If you trust the agent, the power of attorney can be effective immediately, so you don't need any doctor certifications. If you want to protect against someone swindling you, you can creat...
by bsteiner
Tue Jul 22, 2014 3:37 pm
 
Forum: Personal Finance (Not Investing)
Topic: Establishing a dementia trust
Replies: 8
Views: 823

Re: Spouse to assume or inherit IRA?

...LadyGeek, in a PM explained to me that these terms, assume and inherit, are not IRS terms. Looking at Pub. 590 I believe this to be true: (quotes from http://www.irs.gov/pub/irs-prior/p590--2013.pdf , pages 18 and 21) assume the same as "rolling it over into your own IRA"? inherit the ...
by bsteiner
Mon Jul 21, 2014 10:46 am
 
Forum: Investing - Help with Personal Investments
Topic: Spouse to assume or inherit IRA?
Replies: 10
Views: 1409

Re: RMDs on Vanguard Inherited IRA

...Does this darned table change periodically so that it might actually change next year? The tables will probably change from time to time as life expectancies increase. However, since the increase in life expectancy is slow and gradual, they won't change very often. Since the tables haven't chang...
by bsteiner
Sat Jul 19, 2014 9:55 pm
 
Forum: Personal Finance (Not Investing)
Topic: RMDs on Vanguard Inherited IRA
Replies: 21
Views: 1092

Re: Corporate inversions and TSM

The shareholders may have gain under Section 367 in any event: http://www.martindale.com/corporate-law ... 134206.htm.
by bsteiner
Fri Jul 18, 2014 11:48 am
 
Forum: Investing - Theory, News & General
Topic: Corporate inversions and TSM
Replies: 3
Views: 387

Re: 15 year mortgage or a 30 year & Invest?

How do 15-year and 30-year compare to adjustable rate?
by bsteiner
Fri Jul 18, 2014 11:45 am
 
Forum: Personal Finance (Not Investing)
Topic: 15 year mortgage or a 30 year & Invest?
Replies: 34
Views: 3624

Re: Is this a Vanguard quirk? [Adding beneficiaries to accou

I believe that beneficiary designations avoid probate, while passing an estate by will does not. So this policy could cost both time and money. Another problem is that beneficiary updates are often not timely and might not be updated before the second death. That might happen more often than simult...
by bsteiner
Wed Jul 16, 2014 8:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: Is this a Vanguard quirk? [Adding beneficiaries to account]
Replies: 36
Views: 3813

Re: Inherited a promissory note--what to do?

...There is nothing quick about probating an estate, at least in Pennsylvania where I'm in the middle of settling my Mom's. One of the required steps in probating an estate is to advertise the fact in two local newspapers; this starts a one-year timeout for all claims against the estate. If the exe...
by bsteiner
Wed Jul 16, 2014 6:56 pm
 
Forum: Personal Finance (Not Investing)
Topic: Inherited a promissory note--what to do?
Replies: 22
Views: 2457

Re: Another reason I am my own advisor

...Since turning 55, I have noticed a big spike in the number of dinner invitations I receive from brokers and insurance agencies for presentations meant to scare retirees into turning over their 401ks to the sponsor of the seminar. ... If you go to the free dinner seminar, and you're the one who b...
by bsteiner
Wed Jul 16, 2014 9:19 am
 
Forum: Investing - Help with Personal Investments
Topic: Another reason I am my own advisor
Replies: 15
Views: 3804

Re: Any benefits of a low cost Vanguard Annuity?

You've described the tradeoff. The annuity provides deferral, but you incur additional expenses and your investment income and gains become ordinary income, with no basis step-up at death. You might run some numbers, making some reasonable assumptions as to investment returns and taxes. Another choi...
by bsteiner
Tue Jul 15, 2014 9:07 am
 
Forum: Investing - Help with Personal Investments
Topic: Any benefits of a low cost Vanguard Annuity?
Replies: 3
Views: 622

Re: Placement/Title of Assets between husband and wife trust

There are reasons to create revocable trusts in some cases. However, the Federal estate tax is not one of them. Revocable trusts do not save (or cost) any estate taxes. You can include in a revocable trust the same dispositive provisions that you would otherwise include in a Will, or vice versa. Bef...
by bsteiner
Mon Jul 14, 2014 5:11 pm
 
Forum: Personal Finance (Not Investing)
Topic: Placement/Title of Assets between husband and wife trusts
Replies: 1
Views: 412

Re: Estate planning book?

This is a routine matter. He can leave his estate to her in trust, with one or more of his children (or whomever he wants) as trustee(s).
by bsteiner
Mon Jul 14, 2014 9:11 am
 
Forum: Personal Finance (Not Investing)
Topic: Estate planning book?
Replies: 12
Views: 1257

Re: Generational estate planning

The trust isn't "officially in [your] name." It's a trust for the benefit of you and your issue (descendants) that you'll effectively control. Like the old Ivory soap commercials that said that Ivory soap was 99 and 44/100% pure, you can have 99 and 44/100% control, without the trust being...
by bsteiner
Sun Jul 13, 2014 6:38 pm
 
Forum: Personal Finance (Not Investing)
Topic: Generational estate planning
Replies: 3
Views: 776
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