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Re: Are the tax rules the same if a foreigner inherits a 401

The main issue is whether the beneficiary's home country recognizes the status of the retirement plan or IRA. If it doesn't, then the income and gains within the plan or IRA might be currently taxable. The U.S.-UK treaty is helpful in this regard, but it only applies in the case of UK beneficiaries ...
by bsteiner
Mon Sep 22, 2014 11:01 pm
 
Forum: Personal Finance (Not Investing)
Topic: Are the tax rules the same if a foreigner inherits a 401K?
Replies: 2
Views: 161

Re: Trust Company Fees

...I wonder if anyone regards the following fee schedule for a regional pooled trust as reasonable/unreasonable: ... Funded trust: .75 (management fee to the organization), .9 to the bank (Trustee, fiduciary responsibility) The managing group specializes in special needs. What is attractive is that...
by bsteiner
Mon Sep 22, 2014 10:50 pm
 
Forum: Personal Finance (Not Investing)
Topic: Trust Company Fees
Replies: 20
Views: 1243

Re: Creating a permanent legacy?

bsteiner, Great intro., but I think the OP is asking about trusts that last multiple generations or forever beyond the grantor. Can you speak a bit about dynasty trusts or point us in the direction of the basics, i.e. articles or books? Any suggestions on corporate trustees would be useful as well....
by bsteiner
Mon Sep 22, 2014 10:05 am
 
Forum: Investing - Theory, News & General
Topic: Creating a permanent legacy?
Replies: 46
Views: 3145

Re: Need urgent help for 85 y.o. parents just moved to Vangu

Have they given any thought to what they want after neither of them is living? Since there seems to be some question as to your brother's ability to manage his affairs, have your parents considered how much control, if any, your brother should have over his share after neither of your parents is liv...
by bsteiner
Sun Sep 21, 2014 5:08 pm
 
Forum: Investing - Help with Personal Investments
Topic: Need urgent help for 85 y.o. parents just moved to Vanguard
Replies: 65
Views: 3742

Re: Creating a permanent legacy?

Lawyers and trust companies often show how a sum of money can grow over the years, especially if the trust is set up in a state where trusts can last for a very long time (or forever), and if you allocate your GST exemption (equal to the Federal exempt amount) to the trust. In about half the states,...
by bsteiner
Sun Sep 21, 2014 9:28 am
 
Forum: Investing - Theory, News & General
Topic: Creating a permanent legacy?
Replies: 46
Views: 3145

Re: Are trusts implicitly divided in community property stat

The formula is more complicated than it would otherwise be because the original poster is in California, where revocable trusts are commonly used, and since it's a community property state, both spouses can combine their assets into a single revocable trust. In a common law state, the Will would say...
by bsteiner
Sat Sep 20, 2014 10:31 pm
 
Forum: Personal Finance (Not Investing)
Topic: Are trusts implicitly divided in community property states?
Replies: 5
Views: 579

Re: Medicaid, irrevocable trusts & income limits

In some states, you're not disqualified from Medicaid for having too much income, though you have to use the income toward your care. An older person might put assets into what's called an "income only trust," in which the person receives the income, but not the principal, from the trust. ...
by bsteiner
Sat Sep 20, 2014 10:21 pm
 
Forum: Personal Finance (Not Investing)
Topic: Medicaid, irrevocable trusts & income limits
Replies: 10
Views: 755

Re: Are SPIA's fairly priced? - A quick and dirty analysis

The analysis depends on what you assume for life expectancy, and what interest rate you use. If I were comparing the choice between an annuity and a lump sum, I would probably use a higher interest rate, to reflect the fact that the annuity is not readily marketable.
by bsteiner
Fri Sep 19, 2014 2:53 pm
 
Forum: Investing - Theory, News & General
Topic: Are SPIA's fairly priced? - A quick and dirty analysis
Replies: 75
Views: 3427

Re: How to Contact IRS to suspend tax levy on paycheck

...My son was just served with a tax levy on his wages for 1099s he may not have correctly filed 6 to 9 years ago. He hired an attorney to help him at $ 500 and hour and the attorney says all he gets is a "busy signal" when trying to contact the IRS agent who is in charge of this levy. .....
by bsteiner
Fri Sep 19, 2014 12:07 am
 
Forum: Personal Finance (Not Investing)
Topic: How to Contact IRS to suspend tax levy on paycheck
Replies: 25
Views: 1747

Re: IRS Relents! Notice 2014-54 permits Basis Isolation

Notwithstanding this, unless you can get the money out in the near future, or you can do a backdoor Roth, contributing after-tax money to a plan or IRA turns the investment income and gains on it into ordinary income, much like an annuity.
by bsteiner
Thu Sep 18, 2014 10:50 pm
 
Forum: Personal Finance (Not Investing)
Topic: IRS Relents! Notice 2014-54 permits Basis Isolation
Replies: 26
Views: 3071

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: 1035

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: 1116

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: 1108

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: 1823

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: 883

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: 95
Views: 5910

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: 1049

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: 1035

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: 1823

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: 10493

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: 4862

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: 288

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: 3277

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: 842

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: 600

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: 529

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: 842

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: 2091

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: 4862

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: 1483

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: 4862

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: 3126

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: 2971

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: 2091

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: 2091

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: 1849

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: 2058

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: 1652

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: 935

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: 665

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: 2058

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: 2374

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: 4304

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: 772

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: 214

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: 225
Views: 18562
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