And good evening.

You've got More Than Money.

You've got Gene Dickison, your host, your personal financial advisor at your service, honored to be so.

For the next half an hour, I'm at your service indeed.

For most of you, you're returning to us.

You have seen our show in the past.

We appreciate your loyalty.

We welcome you back.

Perhaps we've even answered one of your questions in a previous show.

Perhaps one of your questions will appear on tonight's show.

You are the heart of More Than Money.

It makes it so much fun to be able not just to share good information with our audience, but to answer specific questions from folks who are facing very, very real life, either challenges, or opportunities - that happens as well.

So it puts us in a wonderful, wonderful position.

If you are joining us for the very first time, we welcome you.

We think you'll find a couple of things to be true about our More Than Money time together.

Number one, it goes very fast.

You think, Oh, I got half an hour.

I'll settle in.

Maybe I'll go get a cup of coffee, check some emails, whatever.

Not likely a great idea, because it goes in a blink, certainly for me, and I think for a lot of you as well.

So it goes fast.

That's our first lesson.

Number two, if at any point at all you find yourself being entertained, even mildly entertained, I assure you it was purely by accident.

There is simply no intent on my part to make financial topics, which can be dry as dust, interesting or entertaining in any way, shape or form.

I hope they are, but don't be surprised if you find yourself...you smile just a little.

Just a little.

Not a lot.

Just a little.

So welcome.

If your questions are about income taxes, investments, about retirement, about 401(k)s, Roth IRAs, Roth IRA conversions - fascinating idea - wills and trust and powers of attorney and executors and executrixes - which sounds naughty but really isn't - or starting a business, running a business, liquidating a business, you've reached the right spot.

The way we work, you send us an email.

The name you see on the screen is how it's spelled.

We take your emails - many of them appear on air.

All of them are answered, all of them are answered by our team, and it is a team, for sure.

We have tons of experts that we can rely on and draw from their expertise to get you the information that you need.

Why don't we give you...?

Hmm.

Why don't we give you a demo?

Let's give you a demonstration of how this might work.

Let me introduce you this evening again to our financial correspondent, Megan.

Megan, good evening.

- Hi, Gene.

How are you?

- So let's give these folks a little demo.

Let's go to a question.

- OK.

Sounds good.

This first question says, I really enjoy your More Than Money Show on PBS39.

My two younger siblings and I are executors for our eldest sister's estate and, working with the estate attorney, are seeking a financial institution to establish a flower trust fund.

Our deceased sister requested that a trust be established in the amount of $8,000 to cover flowers for our parents' burial plot and her burial plot.

She listed two banks for establishing this trust.

However, neither bank will accommodate the estate's requests.

Several weeks ago, you mentioned that your company works with several trust companies.

Therefore, I'm interested if MTM can provide a recommendation to help us resolve this issue and thereby close out the estate.

Thank you in advance for your help.

- Oh, goodness.

You may have thanked us prematurely.

When we received this email, two things struck me.

Number one, what a wonderful thing - this young lady wanted to make sure that there were flowers on her parents' graves, her grave.

That's... As you and I have often done, we have walked through...

They were different cemeteries, but we have walked through cemeteries.

And it's nice to know people remember.

It's nice to know that there's attention, it's nice to know there's still caring and love around people who have passed to what we all pray is a far, far better place.

The second piece of it was the $8,000 piece.

$8,000 to supply flowers for a very long time.

Seems like a pretty substantial sum of money.

Sadly, $8,000.

In the world of trust companies is simply too small an amount for a trust company to legitimately, credibly, accept into their service.

Trust companies have a certain... Well, they certainly have legal obligations and professional obligations to the trust that would absolutely preclude them from accepting a trust of this size.

The fees alone would likely eat the trust up in a fairly short period of time, not months...or weeks or months, but certainly in years.

I don't know that it lasts ten years.

If it did, then the money has gone predominantly to trust fees.

So, the sad conclusion we have drawn is that a trust company simply is not a viable option for the intent of this estate.

We had considered... ..recommending that these folks contact the church affiliated with the cemetery where these graves, these plots, are located.

We've made a couple phone calls to churches that we're familiar with, and they indicated that that put them in a very difficult position as well.

Similar kinds of challenges.

They don't have high trust fees, but they're also not a trust.

They're not a trust company.

In many cases, folks have made contributions to those churches, the flower fund.

But it's not exactly the same thing.

And in the couple of conversations we had, neither church was comfortable that they would be able to fulfill the wishes or the instructions in this young lady's will.

So I am in that uncomfortable, awkward position of being able to say, sadly, we don't have what I would consider to be an effective answer to your question.

One of the reasons why I selected this question to be aired is the hope that many of you out there, you have tremendous... We have a wonderful audience, smartest on the planet, and experienced.

..that.

perhaps one of you, multiples of you, have a solution to a question that we don't have a solution to.

So if you have a recommendation that you might make to this young lady about how to handle this relatively small sum of money, to be able to provide flowers in perpetuity, so to speak, please let us know.

Gene@AskMTM.com would work wonderfully and we would appreciate your assistance.

Sometimes we don't have the answers.

Megan, hopefully I can answer the very next question.

So let's move on.

- OK.

This next question says, If a person has a traditional IRA account and a rollover IRA account, may they take the total of the RMD required by each account from either of the accounts?

Or do they have to take an RMD from each account?

Thank you for your help.

- This is a very common question.

It is not unusual for taxpayers to have two or three or four different IRAs.

I can think of reasons why you might have two or three or four.

In this case, it's a traditional IRA and a rollover IRA.

Rollovers are typically established when folks leave the employment of a company.

They had a 401(k), a 401(b), some type of retirement plan.

They roll that money into an IRA rollover and now they have two individual IRAs.

They might have taken some of their IRA money and used it to fund an annuity, for example - that might be a third IRA.

So there are reasons to have multiple IRAs.

The question is... ..goodness, largely ignored.

Not of any great interest to anyone who's currently under about age 72.

It's 72 when your required minimum distributions start.

That's when folks start to really get interested in what are the rules.

We don't want to break the rules.

We don't want to get into a pickle with the IRS.

So we start looking carefully at these things.

I think you're going to like the answer.

I think you're going to like the fact that the IRS doesn't care, in this particular set of circumstances, whether you take some from each of the accounts or whether you take all of it from one of the accounts.

Let me use a simple example.

You have a $100,000 IRA.

You have a $50,000 IRA rollover.

Your initial RMD, the first year RMD, is going to be approximately, it's not going to be exactly, It's going to be approximately $6,500.

Do you have to take from both?

We already figured out - no.

If you identified one asset, perhaps, that you're not that happy with... For example, right now, bonds, in my opinion, most bonds are going to do very poorly over the next year or two or longer.

So if you had an account that had a bond fund in it that you're saying, I would just be happy to not have that anyway, you can take the entire 6,500 from the one account.

Your RMD is satisfied.

The IRS is happy.

Life is grand.

Now, let me make very, very clear one piece of caution.

If you have two retirement plans, one of which is an IRA and one of which is a 401(k), specifically a 401(k), the rules that we just discussed do not apply.

You must take your RMD individually from the IRA and the 401(k).

So, multiple IRAs - easy peasy, lemon squeezy.

If you have a 401(k) in there, the IRS says you must take an RMD from the 401(k) and then address the RMDs from your IRAs.

And just to make it a little more complex... Huh!

It is the IRS.

Don't be surprised.

..if you have a 401(k) that you just heard me say you're aged 72, you have a 401(k), you have to take money out of your 401(k) for your RMDs - not if you're still working.

Ten years ago, we would never have even addressed that issue, because the vast majority of folks at age 72 had been retired for years, decades, perhaps.

But in this economy, so many jobs unfilled, so many people at 72 feeling like they're 52, having a ball, liking to work.

If you are in a 401(k), you're still employed and you're still making contributions to the 401(k), you do not have to take an RMD.

So again, using simple numbers, I have $100,000 in my IRA, I have $500,000 in my 401(k), I'm still working.

I'm still contributing, the only RMD you must take is on the smaller IRA and it would be about 4,500 bucks.

Not too shabby.

Speaking of not too shabby, Ms Megan, what's next?

- Are you saying I'm not too shabby?

That's kind of... - Not too shabby.

- That's good.

This question says I received a 1099-R from my 401(k) rollover for $874,000.

Since they sent me a check, is there something I'll get from my IRA to counter, so the IRS isn't looking for taxes on that?

- Oh, this is a very, very good question.

And it's a question that if you don't know the answer to, it can be very upsetting.

This situation is incredibly common.

Individual moves money from a 401(k) to an IRA.

As far as the 401(k) is concerned, the IRS requires them to issue a 1099-R 1099, to the taxpayer in the amount of 800,000 plus, 870,000, whatever the number is.

And it looks like, as this taxpayer is looking at it, it looks like, Ah, I got to put that on my tax return someplace.

Shouldn't I have a piece of paper from the IRA.

that we rolled it to show that one offsets the other?

And the answer is no.

The answer is in almost every case you don't need that piece of paper.

And it's for two reasons.

The first is mechanical.

When you opened the IRA and when they received the amount of money that was rolled over and it matched up to your 1099-R, you already had an account statement.

You have that deposit shown on your monthly statement.

So, if the IRS were to ask, you have the 1099-R, saying money came out, 870,000 came out, you have your account statement showing that you have an IRA where $870,811.17 went in, exactly the same amount.

Life is grand.

You have no worries.

There's a second reason.

Unbeknownst to many, many people, and I say, I'm being honest, they don't ask the question.

There may not really be a great reason to ask the question, but the reality ism every single thing you do in your IRA world, whether it's a 401(k) rollover, a contribution or withdrawal, every single thing you do is reported to the federal government.

One of the reasons why IRAs are required to have custodians, meaning you can't hold your IRA money in your own hands, under your own direct control - you must have an intermediary, a financial custodian... One of the reasons that was established by the IRS when IRAs became part of our existence 50 years ago was so that the federal government, particularly the IRS, could get reports.

The government knows exactly what you have in your IRA.

The government knows exactly that you rolled your $870,000 over into an IRA.

The government knows exactly when you turn 72.

They know exactly what your RMDs are.

They already know all this.

It's all in their database.

So when you're reporting these things and you're concerned about, Gosh, I've got to be able to demonstrate to... No, you don't.

They already know.

So one of the logical next questions would be then, Why am I required to put it on the tax return at all if they already know?

Well, I have a theory.

It's just a theory.

It's a personal opinion.

It doesn't mean it's correct.

It probably is.

I think that the IRS is simply making sure, testing you, so to speak, to see if the numbers that you're reporting are the same numbers that they already know to be facts, because some folks, not really paying attention or maybe not thinking too much ahead, might think... 870?

What if I put down 780?

Yeah, they'd be none the wiser, and I'd save the tax.

No, they will be the wiser.

Not unlike deciding that that candy bar can go into your pocket.

Yeah, there are cameras watching you everywhere.

The IRS is watching from 100 different directions.

So for lots of folks who say, I'm worried that Big Brother is watching us is going to become reality... Too late.

Already happening.

So long-winded answer to a very important question.

If you're in the business of retiring and rolling money over, the IRS knows.

Report it accurately, you should be on sound footing.

Speaking of sound footing, Ms, Megan.

- Hi.

Well, we are on a IRA roll right now with these IRA questions.

So sorry for being punny.

I couldn't help myself.

This one says... For an inherited IRA, my wife received in 2016 and for which she is required to take, and is taking, RMDs.

I'm wondering if she will be required to take the IRA down to $0 within ten years?

Or is that a rule that came into play after the year that she inherited it?

- Oh, my goodness.

Inherited IRAs.

You want to talk about a brain buster and a head scratcher and lots of other things.

They can be really challenging for folks.

And the rules change, which is what this email actually references...

Prior to January 1st of 2020, someone inherited an IRA - in this case, his wife - they could choose to take distributions, required minimum distributions over their lifetime.

There were a couple of wrinkles to the rule.

I don't need to go into it in detail unless you have concerns.

If you do, send me an email, Gene@AskMTV.com.

But the previous rules are you can take it over your lifetime, so assume they got 100,000 bucks.

The old rule says, You're 50 years old, your life expectancy is, I'm picking a number, 40 years - you can take out a small amount per year over 40 years.

Starting on January 1st of 2020, starting meaning folks who passed, who became deceased after January 1st of 2020 and then thereafter left an IRA to a beneficiary, created an inherited IRA scenario, the new rule says you can't do it over 40 years.

You've got a ten year window that you must take all the money out within that ten years.

It can be instantaneously.

I'll take it all out today.

It can be on the 364th day of the 10th year and take it all out.

It can be 1/10 a year for ten years.

It can be any combination of those - as long as by the end of the 10th year, the account is empty.

See the difference?

Life expectancy - drag it out, stretch it out for many, many years - that's likely...

It was likely, for many people.

a very advantageous thing to do.

Now, ten years, kind of come hell or high water.

Now, in this case, the real question is, does the rule change for his wife?

And the answer is no.

She is grandmothered?

And the grandfather rule says that the process that she is following can continue.

And the new rules only apply after someone has passed January 1st of 2020.

I think that's good news.

I think that's probably beneficial.

Now, for some of you.

you're thinking, Now, wait a second.

If I'm 50, yeah, I get it that I want to stretch it way out, because I'm not retired yet.

But gosh, in ten years, I'm retired.

Am I stuck with taking it out over 40 years?

No.

Keep in mind that the rules that we're discussing here are RMDs, required minimum distributions.

The IRS permits, and has always permitted, you to take out as much more as you wish.

If the RMD over 40 years is - I'm using simple numbers - it was a $200,000 IRA over 40 years, we're taking $4,000 a year out.

Got it.

Ten years in, you decide to retire.

Can you take more?

The answer is of course.

You can take as much as 100% of the balance in the IRA.

So it's an interesting set of rules.

You got to play by the rules.

Inherited IRAs are tricky.

If you inherit an IRA, don't leave it to chance.

Don't make this a do it yourself project.

Probably not in your best interest.

Make sure that you contact a professional you trust to assist you.

Speaking of someone I trust... Megs.

- Well, that was nice.

I trust you, too.

This question says, I'm 65 and retired.

I have Social Security, a small pension and a TSP retirement account that I don't plan on touching until I am 72 years old.

I recently inherited close to $400,000 after taxes from the sale of my parents' house.

I will pay off my daughter's school loan of $100,000.

I don't own a house and I'm content renting in a "62 and older" apartment building.

I don't have debt and I don't need to make lots of money.

I thought maybe to put the remainder money in a high yield savings account in my daughter's name.

What online institution would you recommend, or would you recommend something else?

- Gosh.

Got me thinking.

First of all, what a wonderful instinct.

He wants to help.

He wants to help his daughter.

It's just... Gosh, what a wonderful instinct.

Paying off her student loan.

Perfect idea.

It's a great idea.

Still leaves you 300,000.

What I would recommend is something a little different, perhaps.

You mention a high yield account in her name.

I would recommend that you not do that.

I would recommend that you take that 300,000.

A high yield account is fine.

There are a number of online, not brick and mortar institutions, that are paying reasonable rates of return.

There are some brick and mortars that are paying reasonable rates of return.

You might even want to do some tax deferral, maybe look at a tax deferred fixed annuity.

They are paying reasonable rates - 3%, 3.25 % per year.

So there are some options.

I would suggest...

I would encourage you keep the money in your own name for the moment.

For the moment.

Paying off your daughter's student debt in a block has got to lift a tremendous weight off her shoulders.

That's a wonderful, wonderful thing.

As you look forward, taking a bit of a breath relative to your future, it sounds like you've got your ducks in a row.

I'm impressed.

You've thought through this even up to age 72.

You might want to consider a couple of things that will protect your daughter in maybe creative ways.

One, perhaps long term care insurance.

Long term care costs are devastating.

And if you are in a position where right now you're very financially sound, you give away this big block of money, and then, sadly, you lose your health, that cost could be tremendous.

You might consider exchanging part of that 300,000 that's left for a hybrid long term care policy that might provide you with $400,000 or $500,000 worth of benefits.

It's one idea.

A second idea might be using the cash flow off of this 300,000 to fund the premium on a life insurance contract.

You may find that you might, in over a number of years, hopefully many, many years before you depart, create an estate that's dramatically higher than what you're currently looking at and give your daughter some future financial stability that would be exponentially higher than simply putting her name on a high yield account at the moment.

In addition, having some dollars, 300,000 plus, that you can use on an perhaps annual basis to supplement your daughter's income, making annual gifts, might very well end up making some real impact on her life.

And finally, if she has children or plans to have children, you might find that using some of that to provide for the education of her children might be even more appreciated than giving the money to her directly.

So we've given you a number of ideas that are kind of outside the box, certainly outside the easy, simple thought of simply putting the money into a bank account and putting her name on it.

Gaining some advantages in many different areas.

I think you may find those to be to your benefit.

To your benefit, however, might very well be that we answer your questions right here on More Than Money.

Send us your questions.

Retirement questions, 401(k)s, executor questions, estate questions, business questions, tax questions.

Send those to us.

We answer every single question back to you.

One of our team will make sure that you get the information you need.

And perhaps if you are really, really excited and fortunate, you'll see your question on air in a future show.

Folks, thanks for being part of our show.

Hopefully we'll see you next time right here on More Than Money.

Good night.