And good evening.

You've got More Than Money, you've got Gene Dickison, your host, your personal financial advisor, happy to be with you this evening, sharing everything that we've got to offer for the next half an hour, to be at your service.

If you're a loyal viewer of More Than Money, you know how this works.

We answer your questions on air, you send those to us by e-mail, gene@askmtm.com, just like it's spelled right there, gene@askmtm.com.

We answer every single question directly back to you, and we pick some of those questions to air for sharing purposes with our entire audience.

And we thank you all for your questions.

You are fascinating people with fascinating lives.

And as much as we talk often about investments and about income taxes and about retirement and estate planning, all the typical building blocks of a financial life, you ask questions that bring all these things together in very interesting ways, and we thank you for trusting us and allowing us to serve you at that level.

Happy, happy to do it.

It's a fascinating world that we find ourselves in, in some cases fascinatingly wonderful, in some cases fascinatingly frightening.

So, when we talk about fear, there are two anagrams that are tossed around.

FOMO.

A lot of folks know what that is.

I was not one of those until a year or so ago and one of my friends clued me in.

FOMO, fear of missing out, people who...

The idea they're missing out on something causes them real stress, real anxiety, real agita.

And that's a real serious fear, fear of missing out.

Maybe it's the cryptocurrency craze.

We're missing out.

Everyone else is going to be millionaires and we're missing out.

That could be your fear.

I personally, personally have the fear that... Not lots of folks know the anagram.

FOBI.

Fear of being included.

In my office, in the More Than Money world headquarters, everyone knows that the very best meetings as far as Gene is concerned are the ones he's not invited to.

So, FOBI, fear of being included.

There are things that are worthy of being fearful, fear of being included with inflation, high inflation rates, fear of being included in the category of I've run out of money, fear of being included in gosh, I may end up in the poorhouse.

These are reasonable issues to be concerned about.

But the word fear is a dreadful foundation for a good financial plan.

Fear is a dreadful foundation.

Any heightened emotion that drives your financial decisions almost certainly will drive them off rail, off track, off where they should be progressing.

So, in our world, in our More Than Money world, if you find yourself wishing to step out on the ledge, so to speak, we fully encourage you to stop by our office, because our ledges are only about 14 inches off the ground.

And the mulch is nice and thick.

You might twist an ankle, at worst.

But for the most part, we prefer to talk you in off the ledge, and we do that by giving you sound information about topics far and wide that will impact you, which is what brings me beautifully to the introduction once again, welcoming back to More Than Money our financial correspondent, Megan.

Megan, where do we start this evening?

- Hi, Gene.

Our first comment this morning is actually a financial tip that I think a lot of people might be unaware of that I wanted to share and get your thoughts on.

It says a spouse beneficiary who is under age 59 and a half and wants to retain the death exception to the 10% early distribution penalty must keep the inherited amount in a beneficiary account.

What comments do you have on that, Gene?

- It's a very good tip, and even though it's a mouthful, it is a very important piece of information for folks in a very specific situation.

It is not uncommon, I am sad to say, for a spouse to pass away leaving an IRA to a younger spouse, typically forties or fifties, under age 59 and a half.

That's the key number here.

In many, many cases, even with financial advisors who are not terribly well informed, a spouse inherits an IRA from their deceased spouse and the advisor or the banker or the individual does some reading and says, a spouse can inherit that IRA and comingle it with their own IRA as if it had always been theirs and there's no harm, there's no foul, there's no tax, there's no angst.

The reality is that will work if the surviving spouse is aged 59 and a half or older, but it is a bad piece of advice, as this tip outlines, for spouses that are under 59 and a half.

Here's why.

If you have an IRA, your own or one that you've inherited from a spouse, that you've comingled and you're under 59 and a half and you need income, Uncle Sam will tax the income that you take out of that IRA.

That you expected.

But they will also take out a 10% early withdrawal penalty.

You're saying, Wait a second, this was money saved for my protection.

The answer is that is true, but IRA money is designed to be left at least until age 59 and a half or older.

There is an exception.

It's the inherited IRA.

Now, most folks are aware that inherited IRAs that go from parents to children are treated with a different set of rules.

What they may not be aware of is this tip, which is a spouse can accept the IRA and keep it as an inherited IRA for the express purpose of taking income from that inherited IRA and not paying a penalty.

Paying the tax?

Of course.

Not paying a penalty.

Let's use a simple example.

If we are taking $40,000 a year out of the IRA for the surviving spouse to pay bills, we are saving 4,000 a year in penalties by keeping the IRA as an inherited IRA.

What makes this an even better process is that once the surviving spouse turns 59 and a half, he or she can convert that to their very own IRA and they're right back on the standard rules for IRAs.

So, a brief tip from Megan but an important one for everyone out there who may find themselves in that tragic situation where they have lost their spouse and now they need to rely on that inherited money for their day-to-day bills.

Make sure you're dealing with an advisor, whether your personal financial advisor or someone online, someone at a brokerage house that's giving you counsel, make sure that you maintain that in the inherited IRA and keep all of your options open.

Megan, a great way to start.

Let's turn to a viewer question, please.

- Sure.

Our first question tonight says, I am a fond follower of your weekly radio show as well as your PBS show.

My question to you is about opening a new account.

I would like to add a supplement account, hopefully with your firm.

I'm currently 63 and currently in a company IRA account.

The owner matches 3%.

Currently, I have 4% of biweekly pay going into the fund through the investor.

Is there a way that I can open a new account with you, progressive funds, and send you on a biweekly basis 100%...?

I'm sorry.

Can I send you, on a biweekly basis, a $100 personal check for investment opportunities?

Or what do you suggest as a supplement investment?

I know it's not a lot of money, but it's a start.

- Well, first of all, I'm really glad that the end of that question brought me to where I wanted to start, which is before you decide... By the way, lots of complimentary words.

Fascinating.

Thank you.

Wonderful, and we're much appreciative.

But as much as you appreciate us and we appreciate you, we may not be the right people for you to be turning to first.

And here's why.

Your retirement plan has some significant advantages.

Your employer matching nearly 100%, that's fabulous.

It's free money.

That's outstanding.

I don't expect, however, that you're maximizing - translation, putting as much into the retirement plan as you are permitted.

You're putting enough in that you're getting your match.

That's fantastic.

But my guess is that the limitations on that plan would allow you to put more.

And my guess is, if you personally are picking the investment choices, my guess is that in this employer retirement plan, you could add $100 additional every two weeks and you could select some pretty aggressive investments to accept that $100 contribution.

These are my assumptions.

Now, to be fair, is it possible that this plan doesn't permit that?

Sure.

If that is the case, is it possible to set up another account?

The answer's of course.

Is it possible to add money on a regular basis the way you suggest?

Of course.

Is it possible to select aggressive investments?

Of course.

Al of those things are possible.

But you may find...

I suspect that you will find that adding that money to your investment plan could give you a tax deduction.

That would be cool, saving the taxes on another approximately $2,400 a year.

Tax sheltering... You're not paying tax on anything until you take that money out.

And, to be fair, simplicity.

Keeping things...simple, for lack of a better word, is often a very, very good idea.

So my recommendation, talk to the folks who run your retirement plan at work.

If the things that I suspect are true, start there, and then our relationship will come back full circle.

Perhaps in a few years, when you decide to retire, you might consider taking that retirement money and rolling it into an IRA and having a financial advisor assist you in managing it.

But for the time being, for the moment, I would encourage you, if possible, put that money in your retirement plan that you currently have.

A very interesting question.

And again, thank you for the kind words.

Very, very nice.

Megan, next, please.

- This question says, I saw your last show with a question on wills and executor handling of estate and fees involved.

I checked on PA statutes, and it showed accepted range of fee charges, 5% on first 100K of estate value, 3% on next 100K of value etc.

There was a note that assets with named beneficiaries such as 401(k), life insurance, checking and savings accounts are not included in calculating executor fees.

Is this correct?

Also, do you provide will and estate planning services as well as acting as an executor for a small estate?

I already have a financial advisor with Wells Fargo, but I'm not locked into this relationship.

Thank you for your help.

- Ah.

Let's start with the last piece of the e-mail first.

Do we act as attorney?

No.

Not licenced, not permitted.

In my opinion, probably a conflict of interest if we were.

Bottom line is the answer's no.

Do we have partners that we work with in the legal profession that provide all of those kinds of services?

The answer is of course we do.

Do we act as executors?

Again, the answer is no.

Again, in my opinion we're not the best choice by far, not likely, if ever, the right choice.

And, again in my opinion a potential for conflict of interest.

Not necessary.

Lots of other ways to solve that problem in a much more appropriate way for you.

Now let's go back to the executor and legal fees.

Yes indeed, there have been guidelines around forever about what kind of percentage fees might be charged by either an executor and/or an attorney.

In some cases, by the way, the attorney is the executor.

So is it possible that he or she would be charging a fee for being the attorney and a fee for being the executor?

The answer is it's possible.

I would find that annoying, but it's possible.

And is it also possible that a number of attorneys, a large number of attorneys in the estate field, are now not charging by percentage at all, they are charging by the hour?

So an estate that has large dollar amounts but very simple mechanisms could be passed with a very small fee.

Let me give you an example.

Let's use $2 million as an example, make it very, very, very simple.

One million is in a joint investment account, one million is in an IRA.

The person who is the joint owner of the first is also the beneficiary of the second.

So when the decedent passes, the ownership of both of those accounts is instantly sent to the beneficiary.

So, what would be the purpose of charging 5%, 1%, anything on that type of estate?

There's still some work to be done.

A lot of attorneys, again, will charge by the hour and it'll end up being a few hundred, a few thousand dollars but a very small number.

Additionally, executors often - not always - are family members, trusted friends, confidants, and many of them choose to waive their fee.

They do not accept a fee.

That's not always the case, but in many cases you'll find that is true.

Now, your question about are the beneficiary assets, beneficiary-designated assets - life insurance, IRAs, annuities etc - normally excluded from the fee calculation?

If we are doing this on a 5% plus or minus basis, the answer is yes, they should be.

It will depend on the legal firm involved and it will depend on the executor.

It will also of course depend on the legal documents, the estate planning documents provided by the decedent as to whether or not all those things are included for fee calculation purposes.

So we have a number of moving parts, all of which are negotiable, by the way.

Any attorney that would turn to a client and say, This is the standard fee, should be fired on the spot.

That's a pretty bold statement, but in my experience that's an absolute fact.

If they say, Non-negotiable, it's the standard fee, fire them.

There are a lot of quality, experienced estate planning attorneys that will give you a far better answer than, It's the standard fee, it's what I have to charge you, because it simply isn't the case.

Short question, lots of moving parts.

And, goodness, when you're asking these questions, it's because something has happened in your life that may only ever happen once or twice in your entire existence, someone you care about has passed away or you're trying to plan for caring for the people you love by putting them in a solid position when you pass away.

This is not an everyday occurrence, so if there are concerns, if there are confusions, gosh, that's completely understandable.

Absolutely understandable.

If you are dealing with either a legal advisor or a financial advisor who has, in my case, 780 years of experience - there's a life's great mystery - we have had the opportunity... You are gaining the advantage of us having the opportunity to have helped hundreds of people.

So we give you that context, that background, that experience, in situations that you may only face once or twice in your life.

And hopefully my answers give you some framework that you can start selecting the right people to represent either you or the estate that you represent.

Very interesting.

Very, very useful.

Megan, what's our next question?

- This next e-mail is a little long and it has a couple of questions in it, if you want to get your notepad and pen ready.

It says, Per your excellent advice, I have reviewed beneficiaries with banks, IRAs, life insurance and brokerage accounts so the eventual cash portion of inheritance has been addressed and will avoid probate.

I have increased yearly gifting to my kids and grandkids to further reduce my estate and avoid PA's 4.5% inheritance tax.

Now I'm interested in reducing it further by gifting collectables, workshop power tools and other such items that would otherwise be counted in PA's estimate of my estate.

Can I make this transfer with a simple letter itemizing the items being gifted?

I was asked to do this when I helped my son buy his first house, a letter saying that part of his down payment was a gift from us.

Do I need to estimate the value?

How do transfers of collectables and such factor into the 16,000, 32,000 gifting permit without documentation or the higher limit that does require an extra IRS form?

Do I need the gifts notarized?

And finally, does the gift have to leave the premises?

I watched one of your shows, where you mentioned you like detail in the question, so I guess I'm looking for detail in my answer.

I hope that planning will save a lot of heartache and confusion later with my heirs.

Thank you so much.

- Ah, well, goodness!

Yes, I do like detail in the questions, because it allows us to give you very specific answers.

And it seems - my hat's off to you - you have done a lot already.

You have put many of the fundamentals of sound estate planning already in place, and now we're polishing, now we're fine-tuning.

To the extent that you have significant collectables or personal property that you wish to make sure are not included in your estate, what you are suggesting in terms of making those gifts now is perfectly appropriate.

The mechanics of what you must do in order for you to be comfortable will vary from person to person.

We have had numerous circumstances where - we'll use power tools as an example - someone had a hobby, they bought a lot of power tools.

In reality, if they were auctioned off at a home auction, the entire workshop might bring a couple of thousand dollars.

This is typically handled by an arm around somebody's shoulder to say, Son, when I'm gone, my power tools are yours.

Just that simple.

If we're talking about I have a shop, my tools are very specialized, at auction they might bring $40,000 or $50,000, then I think your approach to make it more formal makes a great deal of sense.

Do I think you need to go into any great lengths of significant appraisals, spending a great deal of money formalizing it?

I don't think so.

I think you can make the gift a simple letter.

I think that solves not so much the IRS problem as it does the family problem.

Hey, Dad said those tools are mine.

Hey, I actually think those are mine.

You want to solve that problem in advance.

And the fact that, currently, the estate tax exclusion, 23 million-plus dollars, is so very large, doing these gifts now I think is a very wise idea.

I think with recent tax proposals, looking to generate as much tax out of the American taxpayer as humanly possible, those numbers might very well change in the future.

You might end up finding yourself pinched.

I think a simple letter, I think a personal estimate of value, whether you do it under the annual exclusion limits, you and your wife can give 32,000 to each child, or whether you file the... And I never remember the form.

I think it's a 706 that goes with your tax return.

No, I should never have named the number, because my wife will tell me later how wrong I was.

Bottom line is you can address, We made all these gifts, and those go against our lifetime exclusion with one piece of paper filed with your tax return.

I think that provides you with a lot of protection, both for yourself and your family.

I think it will allow your beneficiaries to exclude from the Pennsylvania taxable estate a significant amount of property, depending of course on the valuations that you ascribe.

And does it have to leave the premises?

No, as long as it is clear that it can.

Son, I'm giving you all my tools.

And if tomorrow he comes and picks them up, you gave them to him.

So you can't put strings.

That's not a gift, that's not a completed gift, according to the rules.

So, the rules say it can stay there.

Son says, Thanks, Dad, this is great.

I don't have space for them now.

Can I keep them at your house?

The answer's, Sure.

But he can take them any time that he wants.

Megan, as we come closer to the end of the show, what's our next question, and do I have time to answer it?

- I hope so!

We'll see.

I'll read fast.

This one says, We have always looked forward to getting a tax refund.

We take 10% from our social security for federal income tax and always get it back when we file our taxes.

Now, with the IRS being even more incompetent than normal and the risk of our refund being stolen by hackers, we thought it would be a good idea to stop taking federal income tax from our social security and get more each month.

What do you think of this idea?

And thank you for all your help and guidance over the years.

It's good to know someone with 780 years of experience in the finance world.

- It is good to know somebody that's got that kind of experience, no matter how bogus the claim may be.

I understand the conundrum.

And I absolutely understand the concern.

And can the IRS be trusted?

The answer's no.

And I wish that the answer was more, it depends, sometimes yes, sometimes no.

But the answer's no.

We have reported in recent weeks that the IRS is now answering less than 3% of the calls that are made to it.

And the only folks that are getting through are the ones that are willing to sit on hold for an hour, an hour and a half, two hours.

And then the IRS is very clear, Whatever answer we give you may or may not be correct.

So the idea that the IRS is a partner with us, a liaison between us and us properly paying our taxes and getting our proper refunds back is, sadly, antiquated, currently inappropriate.

It's not the right way to view the IRS.

Sadly, because so much of the IRS is run by computers, people who have paid their taxes perfectly are, number one, not getting refunds and, number two, getting letters saying that they owe a tremendous amount of money on taxes that they don't owe.

And yet these letters are generated by computer, and of course if somebody tries to resolve that by calling, they sit on hold for an hour and a half or two hours.

So it is a dreadful scenario.

Am I a fan of what you have done in the past, being able to get a really nice refund, a couple of thousand bucks, a chunk rather than a couple of bucks a week?

I'm a big fan.

Not any more.

Not any more.

No.

Adjust your withholding, whether it be on social security, a pension, an IRA withholding distribution.

Whatever withholding you have currently arranged, adjust it so you get as close to your exact expected tax as you possibly can within all the guidelines and all the limits.

And if you're not 100% sure, make sure that you check with your financial advisor.

Whether he or she has 780 years of experience or not, they should be able to help you to zone in to make sure you're not paying a penalty next spring but you're also not risking that the IRS just simply puts you into the pot, where you're going to get your refund whenever they get around to it.

Excellent questions.

I can't thank all of you enough for being so willing, so generous in sharing your concerns, your questions with us, that we can share with our audience.

And hopefully for everyone out there, whether you're facing these exact concerns or not, hopefully you've learned a few things with our show this evening and hopefully you're going to want to learn more in the future.

Of course, one way to do that is to send us your e-mail questions, gene@askmtm.com.

And whatever the topic might be, we will do our very best to address it.

After all, the name of the show is More Than Money, so it's not always just about the money.

But what it always is about is you.

We try to put you at the very heart of everything that we bring to all of our audiences every single week, and hopefully we've done that.

Thank you for spending part of your evening with us.

We hope you'll return right back here next week, when we return with More Than Money.

Goodnight.