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by bsteiner
Thu May 21, 2015 2:00 pm
Forum: Personal Finance (Not Investing)
Topic: Whole life or term life?
Replies: 20
Views: 1042

Re: Whole life or term life?

If inflation is 2%, then 4% after inflation is 6%. At 6%, $250 a month for 30 years will be about $250,000. If he buys the term insurance he can also invest the $250 a month (actually $206 since he'll have to pay for the term insurance), so if he dies while the policy in effects his beneficiaries wi...
by bsteiner
Wed May 20, 2015 12:27 pm
Forum: Personal Finance (Not Investing)
Topic: Maryland Income Tax Ruling
Replies: 3
Views: 507

Re: Maryland Income Tax Ruling

Maryland allowed a credit for taxes payable to other states, up to a pro rata portion of the Maryland tax. For example, suppose you live in Maryland and your income is $200,000, of which $100,000 was earned in another state, and you paid $8,000 to the other state, you could claim a credit against yo...
by bsteiner
Wed May 20, 2015 11:04 am
Forum: Investing - Help with Personal Investments
Topic: No heirs. Suggestions for Setting up a Charitable Legacy?
Replies: 6
Views: 569

Re: No heirs. Suggestions for Setting up a Charitable Legacy?

The simplest way, if their favorite charity runs an endowment fund, is to leave the money to the charity with a direction that the charity use the income but not the principal. If their favorite charity doesn't run an endowment fund, or if they're not comfortable ceding control to the charity,they c...
by bsteiner
Wed May 20, 2015 8:21 am
Forum: Personal Finance (Not Investing)
Topic: Estate Tax (WA State)
Replies: 9
Views: 634

Re: Estate Tax (WA State)

Washington State has a state estate tax with a lower exempt amount than the Federal, and it allows a state-only QTIP election. So a common estate plan for a couple in Washington State more concerned about the state than the Federal estate tax is for each spouse's Will to provide as follows if he/she...
by bsteiner
Mon May 18, 2015 1:37 pm
Forum: Personal Finance (Not Investing)
Topic: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities
Replies: 41
Views: 3291

Re: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities

... Roughly 1/3 of people surrender very early on and get almost nothing back which greatly helps the insurance company. These contracts are front loaded to the extreme. Another 1/3 surrender before they even break even especially when you consider inflation. A small percentage keep it long enough ...
by bsteiner
Mon May 18, 2015 1:11 pm
Forum: Personal Finance (Not Investing)
Topic: Establishing Revocable Trust vs Will
Replies: 42
Views: 3813

Re: Establishing Revocable Trust vs Will

... I'm in CA and my understanding is trusts are frequently recommended to avoid probate because that can be very expensive here especially if one owns a home. Maybe the the pour over will is something specific to CA? ... The original poster isn't in California, but for what it's worth, Professor D...
by bsteiner
Sun May 17, 2015 7:20 pm
Forum: Investing - Help with Personal Investments
Topic: Retirement and wealth management fees
Replies: 28
Views: 2543

Re: Retirement and wealth management fees

For those assets and fees, I'd consider an off shore trust. ... It's up to the client, but the net worth of most clients who create offshore asset protection trusts is many times that of the original poster. The WSJ article said $500,000 minimum. I assume this would mean liquid assets and would not...
by bsteiner
Sun May 17, 2015 6:04 pm
Forum: Investing - Help with Personal Investments
Topic: Retirement and wealth management fees
Replies: 28
Views: 2543

Re: Retirement and wealth management fees

sawhorse wrote:For those assets and fees, I'd consider an off shore trust. ...


It's up to the client, but the net worth of most clients who create offshore asset protection trusts is many times that of the original poster.
by bsteiner
Sun May 17, 2015 7:43 am
Forum: Personal Finance (Not Investing)
Topic: Establishing Revocable Trust vs Will
Replies: 42
Views: 3813

Re: Establishing Revocable Trust vs Will

... We came out with a proposal to put all our assets in a revocable trust, which would split in half when the first spouse died. This is to minimize federal estate taxes. With your plentiful assets at a relatively young age, the odds are good that when one of you dies, your estate could be worth o...
by bsteiner
Sat May 16, 2015 10:09 pm
Forum: Personal Finance (Not Investing)
Topic: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities
Replies: 41
Views: 3291

Re: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities

... The 1.59% fee assumption on investments doesn't apply to Bogleheads who view personal finance as a hobby and who take the time and energy needed to understand and live by the Bogleheads philosophy. This isn't the typical American though. Even many who COULD manage their own personal finances st...
by bsteiner
Sat May 16, 2015 8:10 pm
Forum: Personal Finance (Not Investing)
Topic: Establishing Revocable Trust vs Will
Replies: 42
Views: 3813

Re: Establishing Revocable Trust vs Will

...We are late 30's w/2 children under 5 so we are primarily concerned about taking care of them should one/both of us die. We met with a recommended lawyer yesterday, but I just can't shake the feeling I was sold a bill of goods, similar to other threads in here where people met with life insuranc...
by bsteiner
Tue May 12, 2015 10:51 am
Forum: Investing - Help with Personal Investments
Topic: Trust help received K-1 but no cash
Replies: 49
Views: 6041

Re: Trust help received K-1 but no cash

If the trustees have discretion as to distributions, the trustees should consider all of the facts and circumstances, including income taxes, in deciding upon distributions. However, they should file correct tax returns reflecting the distributions they in fact made. Some accountants are knowledgeab...
by bsteiner
Sun May 10, 2015 9:54 pm
Forum: Personal Finance (Not Investing)
Topic: Career Change - Lawyerish
Replies: 9
Views: 1133

Re: Career Change - Lawyerish

... I graduated from law school three years ago in the middle of my class at a top 30 ranked law school. ... Since moving to our HCOL city, I’ve taken inventory of my most prominent attributes, most successful experiences, and dreams. ... I believe that I essentially have three options moving forwa...
by bsteiner
Sun May 10, 2015 9:17 am
Forum: Investing - Help with Personal Investments
Topic: Thinking ahead about how to do Social Security
Replies: 29
Views: 2250

Re: Thinking ahead about how to do Social Security

... 4. A separate set of questions would be if it makes sense or not to convert part of 401k to Roth over time? I would assume this is a CPA question for sure? Is that accurate? Yes, this is the sort of thing for which a CPA would be helpful. In many cases, it makes sense to do conversions in the p...
by bsteiner
Sat May 09, 2015 9:26 pm
Forum: Personal Finance (Not Investing)
Topic: Vanguard Variable Annuity
Replies: 24
Views: 1996

Re: Vanguard Variable Annuity

mindboggling, You may want to consider this scenario if have no income need coming from the annuity and you want to pass it on to heirs. You could exchange it for a SPIA and use a portion of the income to pay the premium for life insurance. The other portion would be used to pay any income taxes ow...
by bsteiner
Sat May 09, 2015 8:37 pm
Forum: Personal Finance (Not Investing)
Topic: 401K, IRAs, roth IRA - into trust?
Replies: 5
Views: 600

Re: 401K, IRAs, roth IRA - into trust?

You could improve on this by simply leaving your IRA to your nieces and nephews and the charities, without running it through a revocable trust.

Since the charities are tax-exempt, you might consider leaving the IRA to the charities and an equal value of other assets to your nieces and nephews.
by bsteiner
Sat May 09, 2015 8:22 pm
Forum: Investing - Theory, News & General
Topic: The Case FOR the Roth 401k
Replies: 46
Views: 4145

Re: The Case FOR the Roth 401k

... The Case FOR the Roth 401k is: ... The Roth 401K results in a greater amount invested (in practice). Investing $18,000 post-tax is worth more than investing $18,000 pre-tax (and then owing the taxes.) ... Having Roth funds avoids RMDs. Roth funds are more valuable than traditional funds because...
by bsteiner
Sat May 09, 2015 8:16 pm
Forum: Investing - Theory, News & General
Topic: Stop contributions to retirement accts due to future RMDs
Replies: 77
Views: 5355

Re: Stop contributions to retirement accts due to future RMDs

At a constant tax bracket, it would make sense to continue contributing to retirement accounts and to convert to a Roth (which is essentially the same thing). For example, suppose you're in the 30% bracket and you and your beneficiaries will always be in the 30% bracket. You have a choice whether to...
by bsteiner
Thu May 07, 2015 9:31 pm
Forum: Personal Finance (Not Investing)
Topic: Tax LLM: worth it?
Replies: 19
Views: 1536

Re: Tax LLM: worth it?

Folks, with the exception of the US Tax Court (sorry, no jury) IRS Chief Counsel staff attorneys do not appear on behalf of the government in Article III courts (federal district, circuit and so on) or non-Article III courts (bankruptcy). In civil matters, attorneys for the Tax Division of the Just...
by bsteiner
Tue May 05, 2015 3:57 pm
Forum: Personal Finance (Not Investing)
Topic: Testamentary Trust Beneficiary Designation
Replies: 8
Views: 431

Re: Testamentary Trust Beneficiary Designation

It's almost always for IRA benefits. It's generally not a good idea to earmark nonretirement assets. The trusts that receive the retirement benefits can be either in the Will or in a separate trust instrument. It's essentially a matter of style. We generally put them in the Will, so as not to have t...
by bsteiner
Tue May 05, 2015 2:36 pm
Forum: Personal Finance (Not Investing)
Topic: Testamentary Trust Beneficiary Designation
Replies: 8
Views: 431

Re: Testamentary Trust Beneficiary Designation

flyingbison has correctly quoted what's on Vanguard's website. The instructions to their form also say that if the Will creates more than one trust, you have to specify which one is the beneficiary. It would be difficult to leave IRA benefits to testamentary trusts without creating a customized bene...
by bsteiner
Tue May 05, 2015 2:26 pm
Forum: Personal Finance (Not Investing)
Topic: Worried about quirky house/estate/inheritance/tax issue
Replies: 7
Views: 864

Re: Worried about quirky house/estate/inheritance/tax issue

Your wife's uncle's interest will be included in his estate for estate tax purposes, and his estate and beneficiaries will get a new basis equal to the estate tax value in his estate. If your wife and her sister give their interests to their uncle (assuming they're able to do so), they'll be making ...
by bsteiner
Tue May 05, 2015 2:15 pm
Forum: Personal Finance (Not Investing)
Topic: Testamentary Trust Beneficiary Designation
Replies: 8
Views: 431

Re: Testamentary Trust Beneficiary Designation

I've had designations of testamentary trusts accepted by Vanguard, Fidelity and Schwab on many occasions. Most of our clients name testamentary trusts for their children or grandchildren as beneficiaries (or as contingent beneficiaries after the spouse) of their retirement benefits. Can you provide ...
by bsteiner
Tue May 05, 2015 1:55 pm
Forum: Personal Finance (Not Investing)
Topic: What happens to mortgage when house is willed to non-spouse?
Replies: 22
Views: 2155

Re: What happens to mortgage when house is willed to non-spouse?

Would the exception in 12 U.S.C. § 1701j-3(d)(3) (transfers by devise) in the Garn St. Germain Act apply: https://www.law.cornell.edu/uscode/text/12/1701j-3? LOL, you can't believe how many times I quote this section. Unfortunately I don't see an exception for an unrelated party who isn't a joint t...
by bsteiner
Tue May 05, 2015 1:22 pm
Forum: Personal Finance (Not Investing)
Topic: Worried about quirky house/estate/inheritance/tax issue
Replies: 7
Views: 864

Re: Worried about quirky house/estate/inheritance/tax issue

There's nothing unique about New York in this regard. It's possible, but highly unlikely, that your wife's grandmother would have left your mother-in-law's share to her estate. It's more likely that your wife's grandmother left your mother-in-law's share to your wife and sister-in-law. It's possible...
by bsteiner
Tue May 05, 2015 8:03 am
Forum: Personal Finance (Not Investing)
Topic: What happens to mortgage when house is willed to non-spouse?
Replies: 22
Views: 2155

Re: What happens to mortgage when house is willed to non-spouse?

Would the exception in 12 U.S.C. § 1701j-3(d)(3) (transfers by devise) in the Garn St. Germain Act apply: https://www.law.cornell.edu/uscode/text/12/1701j-3?
by bsteiner
Mon May 04, 2015 5:01 pm
Forum: Personal Consumer Issues
Topic: Truecar -- isn't this just a car buying scam?
Replies: 123
Views: 8205

Re: Truecar -- isn't this just a car buying scam?

... The dealers pay Truecar 300 bucks if they sell a car to a Truecar customer. ... I bought a car (a common make and model) about a year ago through PenFed's buying service, which is TrueCar under a different name. The process was relatively smooth. My guess is that TrueCar rebates some of the $30...
by bsteiner
Sun May 03, 2015 7:50 am
Forum: Personal Finance (Not Investing)
Topic: Real Estate Joint Ownership in England
Replies: 9
Views: 456

Re: Real Estate Joint Ownership in England

... You need to think carefully about all kinds of eventualities: ... - they die (and the will doesn't leave it to you, but to a partner or some third party, or they die intestate-- they will need to have an English will) .... We've had at least three estates of U.S. citizens living in the U.S. who...
by bsteiner
Sun May 03, 2015 7:39 am
Forum: Personal Finance (Not Investing)
Topic: Deciding on an Executor
Replies: 9
Views: 691

Re: Deciding on an Executor

... We will each be the other's executor but we need to name an executor if something happens to both of us. ... our children are now in their mid and late 20s so we think that with this update we should name one or both of them as the successor trustee. For people with more than one child, how did...
by bsteiner
Sat May 02, 2015 9:49 pm
Forum: Investing - Theory, News & General
Topic: How to advise clients
Replies: 18
Views: 1747

Re: How to advise clients

...I did ask earlier how likely it would be that a CPA would also be a practicing attorney with specialization in trusts and estates. .... Some of our tax and trusts and estates lawyers had previously been accountants, but one can just as easily go to law school and work in tax or trusts and estate...
by bsteiner
Sat May 02, 2015 9:24 pm
Forum: Personal Finance (Not Investing)
Topic: Which of these 6 mortgages seem good?
Replies: 40
Views: 3719

Re: Which of these 6 mortgages seem good?

PenFed also has a 15/15 year mortgage, with a fixed rate for the first 15 years, and then it adjusts once after 15 years. As of now, it's 2.875% plus 1.25 points (1 point of which they call an origination fee).
by bsteiner
Fri May 01, 2015 4:37 pm
Forum: Personal Finance (Not Investing)
Topic: Choosing a Personal Rep (Executor) for Living Trust
Replies: 21
Views: 1169

Re: Choosing a Personal Rep (Executor) for Living Trust

My FIL and his brother used the services of a Personal Fiduciary Representative. He was Co-Trustee with a Bank. Dealing with the Bank was pretty difficult. Frankly unless you have a good sized Trust (in today's dollars I'd say that would be $5+M) they don't care that much because they're not making...
by bsteiner
Fri May 01, 2015 3:32 pm
Forum: Personal Finance (Not Investing)
Topic: Choosing a Personal Rep (Executor) for Living Trust
Replies: 21
Views: 1169

Re: Choosing a Personal Rep (Executor) for Living Trust

... About ten years ago I set up a living trust ... Why? Do you live in a state where probating a Will is difficult? Or was there some other special reason for creating a living trust? ... Many trusts, for tax reasons, state that the income and corpus can be used for "health, education mainten...
by bsteiner
Wed Apr 29, 2015 2:51 pm
Forum: Personal Finance (Not Investing)
Topic: Guidance About New Spouse's IRS Issues
Replies: 47
Views: 2791

Re: Guideance About New Spouse's IRS Issues

There are some tax attorneys who are also enrolled agents. I would get one of those. While you may(new Spouse) not on the hook it is still nice to have this behind you. Get help. An enrolled agent is permitted to practice before the IRS in the same way as a lawyer. Since lawyers are already permitt...
by bsteiner
Wed Apr 29, 2015 2:36 pm
Forum: Personal Finance (Not Investing)
Topic: revising a living trust vs. new one..
Replies: 8
Views: 637

Re: revising a living trust vs. new one..

kwan2 wrote:...I suppose all those w/o a trust, then have incapacity planning in a will, or do they just not cover that situation? ...


Most people dispose of their assets at death by Will, and if they want to provide for disability, give someone a power of attorney.
by bsteiner
Wed Apr 29, 2015 1:13 pm
Forum: Personal Finance (Not Investing)
Topic: Tax LLM: worth it?
Replies: 19
Views: 1536

Re: Tax LLM: worth it?

I went to the LL.M. program in taxation at NYU full-time in the year following law school. While I had taken several tax courses in law school, I still learned a great deal in the tax program. It was the most intense year I ever had. The majority of the tax and trusts and estates lawyers at every fi...
by bsteiner
Mon Apr 27, 2015 9:12 pm
Forum: Personal Finance (Not Investing)
Topic: non-US citizen spouse TIN and WILLS and TRUST questions
Replies: 5
Views: 649

Re: non-US citizen spouse TIN and WILLS and TRUST questions

International estate planning comes up fairly often. A QDOT defers the estate tax until the spouse's death. However, if you don't have more than the exempt amount (presently $5,430,000), you don't need a QDOT. Your entire estate will be covered by your $5,430,000 exempt amount. Probating a Will won'...
by bsteiner
Sun Apr 26, 2015 6:54 pm
Forum: Personal Finance (Not Investing)
Topic: Preparing for the Minimum Required Distribution
Replies: 41
Views: 3158

Re: Preparing for the Minimum Required Distribution

... there is also a potential game changer to consider. The current administration's budget calls for legislation to place ALL non spouse beneficiaries (with few exceptions) under the 5 year rule. So instead of your kids stretching an inherited TIRA for 25 or more years, the IRA would have to be dr...
by bsteiner
Sun Apr 26, 2015 6:47 pm
Forum: Personal Finance (Not Investing)
Topic: Cost to setup a Living Trust?
Replies: 29
Views: 2216

Re: Cost to setup a Living Trust?

See Professor David Horton's recent article in the Georgetown Law Journal on probate in California: http://papers.ssrn.com/sol3/papers.cfm? ... id=2480719. He examined all of the estates in one county in a single year.
by bsteiner
Sun Apr 26, 2015 1:55 pm
Forum: Personal Finance (Not Investing)
Topic: (Living) Irrevocable Trusts 101 - Answers and Questions
Replies: 17
Views: 1504

Re: (Living) Irrevocable Trusts 101 - Answers and Questions

... For those whose taxable estates are at or nearing the Federal maximum, the trade off between removing assets from the Taxable Estate v. leaving the asset in the Taxable Estate for a step-up in basis at death favors gifting now. -- Federal estate tax rate = 40% on amount over the maximum exclusi...
by bsteiner
Sun Apr 26, 2015 10:58 am
Forum: Personal Finance (Not Investing)
Topic: (Living) Irrevocable Trusts 101 - Answers and Questions
Replies: 17
Views: 1504

Re: (Living) Irrevocable Trusts 101 - Answers and Questions

We create far more irrevocable trusts than revocable trusts. We create revocable trusts where it makes sense in a given case, or where someone insists on it. Many of our clients have or expect to have taxable estates and want to make gifts during lifetime. They often make the gifts in trust rather t...
by bsteiner
Sun Apr 26, 2015 7:08 am
Forum: Personal Finance (Not Investing)
Topic: (Living) Irrevocable Trusts 101 - Answers and Questions
Replies: 17
Views: 1504

Re: Irrevocable Trusts 101 - Answers and Questions

I thought most of us had revocable Living Trusts. Some people do, but most don't. They're common in California for reasons specific to California. They make sense in some cases and in some states. However, for most people there's no reason to create one. In any event, that's not relevant to the ori...
by bsteiner
Fri Apr 24, 2015 9:05 am
Forum: Personal Finance (Not Investing)
Topic: Estate Planning with IRAs and 401Ks
Replies: 3
Views: 566

Re: Estate Planning with IRAs and 401Ks

I know Ed well. I've been on panels with him, I've written for his Newsletter, and I'm a technical editor for his Newsletter. His books and materials are good, and he's an excellent speaker. As to Matahari's example, it's not clear, especially in light of the plan documents rule that the Supreme Cou...
by bsteiner
Thu Apr 23, 2015 11:15 am
Forum: Personal Finance (Not Investing)
Topic: hire a trust advocate to deal with a trustee bank?
Replies: 5
Views: 443

Re: hire a trust advocate to deal with a trustee bank?

A trusts and estates lawyer should be able to deal with the bank. A good trusts and estates lawyer will probably have contacts at the trust departments of the larger banks and trust companies, and will have a sense as to what corporate trustees typically do under similar circumstances. It would help...
by bsteiner
Thu Apr 23, 2015 10:36 am
Forum: Personal Finance (Not Investing)
Topic: Leave an IRA through a Trust?
Replies: 17
Views: 1460

Re: Leave an IRA through a Trust?

Our clients generally provide for their children in separate trusts for their benefit rather than outright. The same reasons for this apply in the case of retirement benefits as for other assets. There are some special rules governing trusts that receive IRA benefits. Here is an article that I wrote...
by bsteiner
Tue Apr 21, 2015 9:21 pm
Forum: Personal Finance (Not Investing)
Topic: Estate Planning - what details does the attorney need?
Replies: 13
Views: 1409

Re: Estate Planning - what details does the attorney need?

It would be almost impossible for a lawyer to take on a client without knowing the client's name and address. Your name and address are probably public information anyway. We need to know your date of birth since some estate planning matters depend on your age. We don't usually need the client's soc...
by bsteiner
Tue Apr 21, 2015 6:12 pm
Forum: Personal Finance (Not Investing)
Topic: Estate Planning - what details does the attorney need?
Replies: 13
Views: 1409

Re: Estate Planning - what details does the attorney need?

The details are (i) first, the players (names and dates of birth of the clients, their children, grandchildren, etc., and their spouses, and what they do, how they're doing, etc.), (ii) second, the assets (approximate description and value, which are his, which are hers, which are joint, which are r...
by bsteiner
Sun Apr 19, 2015 4:27 pm
Forum: Personal Finance (Not Investing)
Topic: Preparing for the Minimum Required Distribution
Replies: 41
Views: 3158

Re: Preparing for the Minimum Required Distribution

Roth conversions often add substantial value, especially if you can convert at a tax rate less, than, equal to, or not too much higher than the tax rate that would otherwise apply to the distributions, and if you have other money with which to pay the tax on the conversion. However, the original pos...
by bsteiner
Sat Apr 18, 2015 8:41 pm
Forum: Investing - Help with Personal Investments
Topic: what to do about variable annuities?
Replies: 16
Views: 1620

Re: what to do about variable annuities?

If you move #1 to a Vanguard annuity, there's a tradeoff. The advantage is that you'll defer the tax, but the disadvantages are that you'll incur an additional 0.5% or so a year in costs, and all of the future income and gains will become ordinary income, and won't get a basis step-up at death. Some...
by bsteiner
Sat Apr 18, 2015 8:20 pm
Forum: Personal Finance (Not Investing)
Topic: Will or Trust for 98 year old?
Replies: 20
Views: 1597

Re: Will or Trust for 98 year old?

While there's some overlap, estate planning and elder law are different areas of law. Elder law deals mainly with Medicaid planning and guardianships. This sounds more like a traditional estate planning matter, which would be pretty much the same regardless of her age. It's often hard to estimate th...

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