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Re: Estate Planning & investing

...do people ever say in their Wills, "I want Joe to be my Trustee, but I want him to invest the money under the direction of X financial adviser?" ... A problem could arise if Joe, as trustee, didn't think it was advisable to invest the money under X's direction. ...Could you have a Trus...
by bsteiner
Sun Sep 14, 2014 5:56 pm
 
Forum: Personal Finance (Not Investing)
Topic: Estate Planning & investing
Replies: 10
Views: 999

Re: Roth Question

I'm not familiar with a lawyer or accountant by the name of Clark Howard in the IRA arena. Who is he? The advantage of the Roth is that it lets you in effect make a larger contribution. In a 33 1/3% tax bracket, a $17,500 Roth 401(k) contribution is equivalent to a $26,250 traditional 401(k) contrib...
by bsteiner
Sun Sep 14, 2014 9:45 am
 
Forum: Investing - Help with Personal Investments
Topic: Roth Question
Replies: 10
Views: 1080

Re: Estate Executor

I’ve been named the executor of an estate that’s worth about $17 million (the exclusion has been used). It’s comprised of $9.5m in investments and cash, $5.1 in IRAs, $300k in life insurance and $2m (I’m guessing here) in real estate. There is no debt and three heirs. And the estate is in Californi...
by bsteiner
Sun Sep 14, 2014 8:40 am
 
Forum: Personal Finance (Not Investing)
Topic: Estate Executor
Replies: 7
Views: 1058

Re: Ethics of Multi-Generational Tax Optimization

I am 77 and don't see any likelihood that I will ever be in a lower tax bracket than my heirs. But if I were in a lower bracket than what I expect the heirs to be in, I would be glad to do Roth conversions for their eventual benefit.... The Roth conversion may still make sense if your bracket is hi...
by bsteiner
Sun Sep 14, 2014 12:20 am
 
Forum: Personal Finance (Not Investing)
Topic: Ethics of Multi-Generational Tax Optimization
Replies: 23
Views: 1784

Re: Inherited tIRA-benefits to liquidating?

You raise an interesting point. At a constant tax rate, it's beneficial to keep money in an IRA as long as possible, since the income and gains on "your share" of the IRA are tax-free. However, since you can't convert an inherited IRA to a Roth, there may be a point where, if you're in a l...
by bsteiner
Sat Sep 13, 2014 11:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: Inherited tIRA-benefits to liquidating?
Replies: 14
Views: 855

Re: The Annuity Puzzlement

...I am a few years out from retirement withdrawals, but I reasonably plan to annuitize some of my funds, perhaps through a charitable remainder trust (which tend to have a lower payout rate than a commercial annuity but meets my bequest motives). A charitable remainder trust is a trust that provid...
by bsteiner
Sat Sep 13, 2014 11:33 pm
 
Forum: Investing - Theory, News & General
Topic: The Annuity Puzzlement
Replies: 67
Views: 4160

Re: Revocable trust

I am finding out that each state has different laws governing the handling of revocable trusts. I am in Florida and the State legislature keeps changing the rules which means, to most lawyers, that these legal documents are out of date and need to be updated. :dollar So the main question is: What i...
by bsteiner
Sat Sep 13, 2014 11:06 pm
 
Forum: Personal Consumer Issues
Topic: Revocable trust
Replies: 13
Views: 1028

Re: Estate Planning & investing

...Are there Bogleheads for hire? Yes. ...How much can you really dictate from the grave how these things are managed? ... As much or as little as you want. Upon the surviving spouse's death, our clients usually leave their estates to their children in separate trusts for their benefit. They usuall...
by bsteiner
Sat Sep 13, 2014 10:09 pm
 
Forum: Personal Finance (Not Investing)
Topic: Estate Planning & investing
Replies: 10
Views: 999

Re: Ethics of Multi-Generational Tax Optimization

The conversion is for his benefit. Unless he has large medical expense deductions, or he's leaving his IRA to charity, he can't ever spend any of his IRA benefits without paying income tax on the amounts he withdraws. He (or you as his agent) should consider converting to the extent he can convert a...
by bsteiner
Sat Sep 13, 2014 9:46 pm
 
Forum: Personal Finance (Not Investing)
Topic: Ethics of Multi-Generational Tax Optimization
Replies: 23
Views: 1784

Re: "Why 97% of People Don't Use 529 College Savings Plans."

529 plans don't work well for people who expect to pay estate tax. They use up the annual exclusion. If you have a taxable estate, you can give the student $14,000 a year ($28,000 for a married couple with gift-splitting) and also pay for college (or pay for tuition for a grandchild).
by bsteiner
Wed Sep 10, 2014 11:01 pm
 
Forum: Investing - Theory, News & General
Topic: "Why 97% of People Don't Use 529 College Savings Plans."
Replies: 110
Views: 10159

Re: contingent beneficiary for life insurance

Almost no one in New Jersey would create a revocable trust. Probating a Will in New Jersey couldn't be simpler. It takes about an hour. The court clerks will fill out the forms for you. The filing fee is a few hundred dollars. After the Will is probated, you won't have to deal with the court unless ...
by bsteiner
Wed Sep 10, 2014 10:20 pm
 
Forum: Personal Finance (Not Investing)
Topic: contingent beneficiary for life insurance
Replies: 8
Views: 564

Re: Anyone use Legal Zoom for LivingTrust?

There are separate issues going on, each of which should be considered separately. 1. Does a living trust make sense in a given case? Yes in some cases and in some states, but not in most cases in most states. It would be helpful to know in what state the person lives in, and if there's some particu...
by bsteiner
Wed Sep 10, 2014 10:05 pm
 
Forum: Personal Finance (Not Investing)
Topic: Anyone use Legal Zoom for LivingTrust?
Replies: 75
Views: 4772

Re: Professional indemnity insurance

alwaysonit wrote:...I've been given professional tax advice that I'm not 100% sure about and don't want it to come back and bite me in 30 years....


Many issues in the tax law are far from 100% certain.
by bsteiner
Wed Sep 10, 2014 9:46 pm
 
Forum: Personal Finance (Not Investing)
Topic: Professional indemnity insurance
Replies: 4
Views: 287

Re: Do I invest or pay higher mortgage downpayment?

There's a tax arbitrage. The interest you pay on the mortgage is deductible, while the earnings on "your share" of the 401(k) are tax-free.
by bsteiner
Mon Sep 08, 2014 11:07 pm
 
Forum: Investing - Help with Personal Investments
Topic: Do I invest or pay higher mortgage downpayment?
Replies: 55
Views: 3220

Re: Where to place trust assets?

bsteiner wrote: .... In deciding which assets go where, they'll consider...... income taxes, estate taxes, ...., based on the circumstances at the time. How does income taxes and estate taxes affect where to place assets? I am looking for guidelines on how a person determines where to place assets....
by bsteiner
Sun Sep 07, 2014 2:29 pm
 
Forum: Personal Finance (Not Investing)
Topic: Where to place trust assets?
Replies: 6
Views: 841

Re: Help with Assessing Trust Investment choices

... my brother and I are the beneficiaries of a small trust setup by my mom before her death last year. The trust pays out half of the money in about 3 years, and pays out the remainder in 8 years.We have the power to vote to remove the trustees if we want to. ... ...my preferences alone carry litt...
by bsteiner
Sat Sep 06, 2014 9:34 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help with Assessing Trust Investment choices
Replies: 6
Views: 419

Re: Asset Protection: Inherited IRA in Trust vs. Umbrella po

I question whether a Conduit Trust would really provide much protection. Even if the assets are protected, they could just get a judgment on all assets coming out. Bruce Steiner checks in here from time to time, this is one of his areas of expertise. He would know if there is really any mechanisms ...
by bsteiner
Sat Sep 06, 2014 9:21 pm
 
Forum: Personal Finance (Not Investing)
Topic: Asset Protection: Inherited IRA in Trust vs. Umbrella policy
Replies: 9
Views: 599

Re: How do I report income held in a joint account?

In some states a joint account belongs to the joint owners in proportion to their contributions, while in other states it belongs to them equally. You'll have to check to see which way it works in the applicable state.
by bsteiner
Sat Sep 06, 2014 9:10 pm
 
Forum: Personal Finance (Not Investing)
Topic: How do I report income held in a joint account?
Replies: 7
Views: 527

Re: Where to place trust assets?

It's not clear whether in your case the credit shelter gets the estate tax exempt amount (presently $5,340,000) in any event, or only to the extent your spouse disclaims. But for this purpose we can assume that some amount will pass to your spouse, either outright or in a marital (QTIP) trust, and s...
by bsteiner
Sat Sep 06, 2014 9:07 pm
 
Forum: Personal Finance (Not Investing)
Topic: Where to place trust assets?
Replies: 6
Views: 841

Re: Trust for disabled grandson

...I was thinking about a case where two parents might buy a second-to-die policy to fund a child's SNT. ... We asked what the return rate for the second-to-die policy would be. The longer the second of one us would live, the lower the rate of return:... The policyholders collectively will receive ...
by bsteiner
Wed Sep 03, 2014 10:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: Trust for disabled grandson
Replies: 27
Views: 2086

Re: Anyone use Legal Zoom for LivingTrust?

I'd regard using any canned legal software to set up a trust as essentially the same as using a pair of pliers to extract my own tooth if it were in pain. I might need a filling, might need an extraction, might need a root canal, or might need to do nothing at the moment. That's why dentists exist....
by bsteiner
Wed Sep 03, 2014 10:37 pm
 
Forum: Personal Finance (Not Investing)
Topic: Anyone use Legal Zoom for LivingTrust?
Replies: 75
Views: 4772

Re: Checklist of info to have on elderly parent?

As I have been there, done that, I can assure you the most frustrating of all: the "Power of Attorney". Right at the top of any checklist is that sacrosanct document most estate planning attorneys tout as the ultimate estate planning tool. Pardon my cynicism, it's seldom worth the price o...
by bsteiner
Tue Sep 02, 2014 11:19 pm
 
Forum: Personal Finance (Not Investing)
Topic: Checklist of info to have on elderly parent?
Replies: 16
Views: 1480

Re: Anyone use Legal Zoom for LivingTrust?

...I review many trust agreements a year. Most "lawyer prepared" trust agreements are based on a common template with the necessary names and property inserted.... I would hope that's not the case. The dispositive terms can vary from one client to another. I read somewhere that some attor...
by bsteiner
Tue Sep 02, 2014 10:55 pm
 
Forum: Personal Finance (Not Investing)
Topic: Anyone use Legal Zoom for LivingTrust?
Replies: 75
Views: 4772

Re: Variable annuity 100k in fees help (UPDATE)

My financial advisor also mentioned that long-term capital gains may disappear in the next few years and that could throw a wrench in my plan. What do you Bogleheads think? It's unlikely that the tax on long-term capital gains will completely disappear, although rates might change up or down. If yo...
by bsteiner
Tue Sep 02, 2014 10:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: Variable annuity 100k in fees help (UPDATE)
Replies: 45
Views: 3112

Re: Alzheimer's and Prenup

If you and he own the houses jointly with right of survivorship, or as tenants by the entirety (a special form of joint ownership by a husband and wife in some states), if he dies before you and he sell the houses, the houses will be yours. Whether he (or someone acting on his behalf) can force a sa...
by bsteiner
Mon Sep 01, 2014 9:13 pm
 
Forum: Personal Finance (Not Investing)
Topic: Alzheimer's and Prenup
Replies: 20
Views: 2968

Re: Trust for disabled grandson

One thing she may not be aware of is that the grandson as an adult should qualify for SSDI "child" benefits off her social security employment record so one of the best things she can do is to continue to build work credits so as to increase his future benefit. I'd be wary about putting i...
by bsteiner
Mon Sep 01, 2014 12:07 am
 
Forum: Investing - Help with Personal Investments
Topic: Trust for disabled grandson
Replies: 27
Views: 2086

Re: Trust for disabled grandson

It's complicated when you're creating a special needs trust with the special needs person's own money (such as with the proceeds of a personal injury or medical malpractice settlement). In those cases, Medicaid gets paid back out of the trust when the person dies (to the extent the trust still has m...
by bsteiner
Sun Aug 31, 2014 11:47 pm
 
Forum: Investing - Help with Personal Investments
Topic: Trust for disabled grandson
Replies: 27
Views: 2086

Re: Do my in-laws need a will?

It would be helpful to know what state they're in, and the size of the estate. Depending on the size of his estate, and the state estate tax (if any), they might want to divide their assets so that his share (up to the Federal estate tax exempt amount, which is currently $5,340,000, or up to the sta...
by bsteiner
Sun Aug 31, 2014 12:20 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do my in-laws need a will?
Replies: 26
Views: 1842

Re: NYC [Visit to New York City]

The subway and bus fare is $2.50 ($1.25 if you're over age 65: http://web.mta.info/nyct/fare/rfindex.htm). Transfers within two hours from bus to subway, subway to bus, or bus to bus, are free. Or you can get a 7-day unlimited pass for $30: http://web.mta.info/nyct/fare/FaresatAGlance.htm.
by bsteiner
Sun Aug 31, 2014 12:09 pm
 
Forum: Personal Consumer Issues
Topic: NYC [Visit to New York City]
Replies: 45
Views: 2054

Re: How much money is too much for the 3 fund port?

The fund can also roll the bonds. For example, if the fund buys bonds that mature in 5 years, then a year later when they've become 4-year bonds, the fund can sell them and buy 5-year bonds. If interest rates stay the same, and if 5-year bonds yield more than 4-year bonds, the now 4-year bonds will ...
by bsteiner
Sun Aug 31, 2014 10:56 am
 
Forum: Investing - Help with Personal Investments
Topic: How much money is too much for the 3 fund port?
Replies: 15
Views: 1647

Re: When is a trust worth it for an inheritance?

After the person has died and you receive your inheritance, it's too late. The inheritance will be included in your estate (or you'll be making a taxable gift, or both), and it will be subject to your creditors (at least initially). The solution is for the person to revise his/her Will to leave your...
by bsteiner
Sat Aug 30, 2014 8:37 pm
 
Forum: Personal Finance (Not Investing)
Topic: When is a trust worth it for an inheritance?
Replies: 3
Views: 934

Re: NYC: How to find a good fee only financial advisor?

...I guess the closest for what my Mom is looking for is 'Estate & Generational Planning Issues'? wished they had a category for Elder law For estate and generational planning, she should consult with a trusts and estates lawyer. Elder law is largely Medicaid planning. If that's what she needs,...
by bsteiner
Sat Aug 30, 2014 8:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: NYC: How to find a good fee only financial advisor?
Replies: 6
Views: 660

Re: NYC [Visit to New York City]

Half price Broadway theatre tickets at the TKTS kiosk.
by bsteiner
Sat Aug 30, 2014 8:18 pm
 
Forum: Personal Consumer Issues
Topic: NYC [Visit to New York City]
Replies: 45
Views: 2054

Re: When, if ever, should an annuity be used in retirement p

...I've gone to a few 'seminars,' ostensibly sales presentations , where it seems the pitch is to sell an annuity to the gathered ... If you go to the free dinner seminar, and you're the one who buys the annuity, the living trust, the timeshare, or the bridge, not only did you pay for your free din...
by bsteiner
Thu Aug 28, 2014 9:29 pm
 
Forum: Investing - Help with Personal Investments
Topic: When, if ever, should an annuity be used in retirement plans
Replies: 32
Views: 2367

Re: Inheritance to be held in expensive trust for ~10 years

prudent wrote:Am I the only one who is shocked that there is a 1.75% fee to disburse funds? I don't think I have ever heard of such a thing.


Yes, in addition to the annual commissions (fees), trustees are often entitled a an additional commission on distributions of principal. It's 1% in New York.
by bsteiner
Wed Aug 27, 2014 9:41 pm
 
Forum: Personal Finance (Not Investing)
Topic: Inheritance to be held in expensive trust for ~10 years
Replies: 36
Views: 4302

Re: How to find a lawyer for estate planning?

Don't call the bar association. Don't look in the yellow pages. Don't look at the elder law listings (that might be helpful for Medicaid planning, but not for estate planning). Don't start with Google. Ask around, as you would if you were looking for a doctor, dentist, plumber, auto mechanic, etc. A...
by bsteiner
Wed Aug 27, 2014 9:35 pm
 
Forum: Personal Finance (Not Investing)
Topic: How to find a lawyer for estate planning?
Replies: 16
Views: 771

Problems posting replies today

Today, when I've tried to post a reply in a thread, it kicks me back and asks me to log in again. This keeps happening, and I haven't been able to post any replies today. I'll try tonight from another computer.
by bsteiner
Wed Aug 27, 2014 5:55 pm
 
Forum: Forum Issues and Administration
Topic: Problems posting replies today
Replies: 2
Views: 207

Re: Roth conversion from traditional IRA

Here is an article I wrote on this for the April 2013 issue of Trusts & Estates that will give you the concepts: http://www.kkwc.com/library_cat/uf_Roth ... r_ATRA.pdf.
by bsteiner
Tue Aug 26, 2014 11:11 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth conversion from traditional IRA
Replies: 9
Views: 653

Re: Roth Conversion during an economic downturn

Lynette wrote:...I've decided not to do conversions at the moment as my accountants tell me there is no tax advantage to me.....


Why did your accountants tell you that?
by bsteiner
Tue Aug 26, 2014 9:04 am
 
Forum: Investing - Help with Personal Investments
Topic: Roth Conversion during an economic downturn
Replies: 9
Views: 662

Re: I need "Ultra High Net Worth" investing advice please

...BSTEINER wrote a couple of articles on recent celebrity deaths and how their estate plans were suboptimal. Celebrity wasn't the issue; larger estates were. Here's the one I wrote on James Gandolfini's Will for Leimberg Information Services, Inc. (LISI), which was reprinted online with the consen...
by bsteiner
Sun Aug 24, 2014 2:24 pm
 
Forum: Investing - Help with Personal Investments
Topic: I need "Ultra High Net Worth" investing advice please
Replies: 215
Views: 15862

Re: I need "Ultra High Net Worth" investing advice please

You would save some income taxes if you moved to a state with no state income tax, but you would have to weigh that against where you want to live, where you want to raise your children, and where your friends and family live. The time to have done some tax and estate planning was before the sale. I...
by bsteiner
Sun Aug 24, 2014 2:11 pm
 
Forum: Investing - Help with Personal Investments
Topic: I need "Ultra High Net Worth" investing advice please
Replies: 215
Views: 15862

Re: I need "Ultra High Net Worth" investing advice please

Given the amount involved, the bank or trust company should be able to buy individual securities, so as to avoid a second layer of costs. However, they might want to invest some of the money in more exotic investments, since that's something that you couldn't otherwise easily do. Alternatively, you ...
by bsteiner
Sun Aug 24, 2014 1:55 pm
 
Forum: Investing - Help with Personal Investments
Topic: I need "Ultra High Net Worth" investing advice please
Replies: 215
Views: 15862

Re: Tax on house sell in trust

On the one hand, estates and trusts are often taxable at higher rates than individuals. On the other hand, estates and trusts can often deduct administration expenses on their income tax returns. Without knowing more about the situation, it's hard to know which way is better. The lawyer handling you...
by bsteiner
Sun Aug 24, 2014 8:01 am
 
Forum: Personal Finance (Not Investing)
Topic: Tax on house sell in trust
Replies: 7
Views: 1101

Re: Children Guardian

...We put everything into a trust and have a friend as executor (is that the right term?). Basically, he doles the money out to her as needed for care and keeping of the kids. We initially wanted very specific buckets based on income source and class, etc... But the lawyer advised us to keep it fle...
by bsteiner
Sun Aug 24, 2014 7:45 am
 
Forum: Personal Finance (Not Investing)
Topic: Children Guardian
Replies: 9
Views: 889

Re: Anyone have experience with Vaksman Law living trusts

What if my circumstances are fairly simple. One home,a vanguard acct and 2 kids leaving everything 50-50.....is everything really so complex or do attorneys just want $300 an hour for pretty basic documents? If it's really fairly simple (your children are adults, and your assets are sufficiently sm...
by bsteiner
Sat Aug 23, 2014 10:06 pm
 
Forum: Personal Finance (Not Investing)
Topic: Anyone have experience with Vaksman Law living trusts
Replies: 7
Views: 929

Re: Kitces - Think Twice about those Conversions

I know Michael Kitces and hold him in high regard. However, I don't agree with him on this. An IRA can continue for a very long time -- the lifetimes of the IRA owner and his/her spouse, followed by the life expectancies of the beneficiaries. I don't think it's possible to predict future income tax ...
by bsteiner
Sat Aug 23, 2014 9:42 pm
 
Forum: Investing - Theory, News & General
Topic: Kitces - Think Twice about those Conversions
Replies: 15
Views: 2976

Re: Children Guardian

...You probably want a living or testamentary (created by your will) trust to own the assets. They will be paid out of the trust by the trustees according to the instructions you provide, and if the guardian is not great with money, the guardian need not be one of the trustees. You want clear instr...
by bsteiner
Sat Aug 23, 2014 9:19 pm
 
Forum: Personal Finance (Not Investing)
Topic: Children Guardian
Replies: 9
Views: 889

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: 2970

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: 1684

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: 808
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