- And good evening.

You've got More Than Money.

You've got Gene Dickison, your host, your personal financial advisor.

It's an honor to serve you this evening.

For the next half an hour, I'm all yours.

And half an hour sounds like a long time.

It really isn't.

Trust me, we're going to cover an awful lot of ground.

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

We take your e-mails, we bring some of them to air, and we give you as much information about what your friends, family, neighbors, what your cohorts, co-workers are thinking about, what financial challenges they're facing.

Because we guess, I think we're right, many of you are facing the exact same types of challenges and can learn a great deal from the answers that we provide to the folks who have sent us their personal questions.

And if you would like to have that same opportunity, we welcome that indeed, you send those to me directly, Gene, just as you see on the screen, Gene@askMTM.com, Gene@askMTM.com, we answer every single question directly back to you.

Unfortunately, we simply can't air all of the questions that we get.

And we're getting questions now from not just around the region but around the state and now multiple states, including a few from Southern California.

So pretty interesting, the reach that are More Than Money PBS show has, and we're happy to serve all of you in every way that we possibly can.

So could be investments, could be retirement, could be income taxes, or 401Ks or Roth IRA conversions, could be estate planning, executors, executrixes, using trusts or life insurance, could be businesses - how to start, run or liquidate a business, perhaps, if you've maximized its value.

All of those topics and so much more are all fair games.

After all, the name of the show is More Than Money, so we get some very, very interesting questions.

So let's make sure that we give you as many answers as we can during this show.

Let's go to our financial correspondent.

We welcome Alyssa Young.

Alyssa, good evening.

- Good evening.

- And we've got some very interesting questions today.

Why don't we start with our first?

- Sure.

I'm wondering how to use an annuity and Social Security to fund my retirement and gift my daughter $440,000 from my traditional IRA of $1.7 million.

The 440,000 would pay off her mortgage of 280,000 and a down payment of 160,000 on a home in Florida.

Her home in Pennsylvania is valued at approximately 850,000.

My total portfolio was a little more than $2 million as of December 2021.

My Roth and brokerage accounts total 304,000, plus the $101.7 million in the traditional IRA.

I would have my daughter will me her house if she predeceases me and my son would be contingent beneficiary.

I'm a widower as of 2014.

It is possible but not probable I will marry in the future.

I am 80 years old.

How do I structure the above and does your organization provide resources to help me address everything?

Taxes and gifting are of concern.

I'm a resident of Pennsylvania and Florida.

- Interesting indeed.

80 years old and still planning.

I love it.

I think it's fantastic, and trying to help others.

This scenario sounds quite logical, but I've got some concerns - maybe more than some concerns.

In order for him to net $440,000 for his daughter to pay off her current mortgage and have a down payment on a second home in Florida, he's going to need to withdraw considerably more than that from his IRA - considerably more, perhaps as much as $600,000.

I'm going to use that as a rough number.

And as a result, pay in income tax, 150, 160,000.

If he is aware of that, and if he looks at his overall financial picture, particularly on a cash flow basis, and has determined that he has excess cash flow, plenty of cash flow for as long into the future as he can project - for goodness' sakes, he's almost 80, he's still planning, he's still going strong - he would be wise, very wise to plan cash flow for an existence of 20 years or more into the future.

As long as he is confident that his cash flow will carry him that length of time or longer, then I think this is a very, very nice idea indeed.

It shifts a tremendous amount of money from his generation to the next generation.

That will be untaxed - he is a resident of Pennsylvania - untaxed for inheritance purposes at his passing.

That will save $25,000 or more in inheritance tax to his children.

So there's a little icing on the cake, so to speak.

It allows her to be then debt-free on her current home.

Not a bad idea at all for almost everyone.

And the down payment on the home in Florida - he mentions he is also a resident of both Pennsylvania and Florida.

I'm reading into his e-mail that he has the vision that they will be kind of co-residents in relatively similar spots in both states and have that relationship, that sounds fantastic to me.

If he is willing to make that kind of a huge move in terms of his IRA, I would suggest that he would also be wise thereafter, not in the same year, but the following year, and subsequently, to look very carefully at Roth conversions.

He would be taking a piece of what would remain in his IRA, $1,000,000 or so.

He must take his RMD, but above that he is eligible to convert some or all of that IRA.

Converting those dollars into Roth IRAs will likely be to his advantage, likely be to the family's advantage over a very long period of time, because his kids could then inherit the Roth IRA and not pay income tax on those assets as well, particularly if those assets - we pray he stays with us another 20 years, celebrates 100 years or more - those assets in a Roth conversion will have a long time to cook and grow tax sheltered and then be distributed perhaps even ten or 15 years after that in a tax free manner.

So not a bad idea at all.

My only caveat - it's an important one - is that this gentleman be absolutely committed, absolutely convinced and confident that his cash flow will carry him through age 100 plus without needing these assets.

Without needing these assets.

And he already mentioned it, naming himself as the beneficiary or the inheritor of these properties, should his daughter predecease him.

Make sure that you are working with a trusted, experienced estate planning attorney so that you can coordinate the estate plans, not just of yourself, but your daughter's and your son's.

There are a lot of moving parts here.

Make sure you're dealing with someone that you trust that has the entire picture, the big picture, not just your numbers, but the overall picture for the family.

Very interesting indeed.

Alyssa, what's next?

- This one says, I've been watching your show on PBS and thank you for all the great information.

I have a question about Social Security survivor benefits.

My husband passed away suddenly in August 2020 when he was 68 and nine months old.

At the time I was 58 years and two months and I did not submit for survivor benefits as I had read that I could not prior to age 60.

This year I have turned 60 and I have a few questions about the process.

Number one, should I apply for Social Security survivor benefits now?

Number two, will collecting these benefits be affected in any way by my salary earnings as I currently work full time?

And number three, if I collect the benefits now, will they affect my benefits when I start collecting?

My full retirement age is 67.

I appreciate your time and help with this matter.

- Well, you're quite welcome.

This... Social Security questions are challenging.

So many folks, too many folks think that Social Security is just you sign up, they send you a check.

And there's really not a lot going on that you would have to make decisions about.

It's almost the exact inverse of that.

There's a tremendous amount, particularly in the case of survivor benefits, disability benefits, spousal benefits.

There are tremendous variations between certain strategies that will get you either, in all probability, a higher pay-out or a lower pay-out.

And we keep very clear about the fact that when we make these decisions, we are playing probabilities.

We are not guaranteeing that you will get even a dollar more than you would have in any other tactical approach.

Because the real unknown, the variable in Social Security planning that is unknowable is how long will you be with us?

So you could plan beautifully for a strategy that will benefit you tremendously for a long, long life.

And then someone has other plans for you and your life is quite short and the plan didn't work out, or vice versa.

You could maybe pessimistically plan that you're not going to be around very long, and 30 years from now regret that decision.

So we must be... ..cognizant of the fact that the best laid plans of mice and men can sometimes go astray.

But we still need to make the best, most informed decision for you.

Easiest question that you ask us is will taking survivor benefits negatively affect your Social Security benefits?

And the answer is no.

No, survivor benefits are based on your husband's earnings history.

Your benefits are based on yours.

I'll use very simple numbers.

If you were to accept survivor benefits today, I'm picking a number, it's 1000 bucks a month, you do that right on through your normal retirement age, and your benefit at that point is $2,000 a month, you would then switch over, you would elect your own benefit.

One would replace the other, you get the higher amount.

So no, it does not affect your benefits, your personal benefits at all.

You are quite right.

60 is the youngest age you can collect Social Security survivor benefits as a spouse.

If you had had minor children, they would have collected earlier.

And so this now consideration that you're looking at is very, very important.

There are circumstances where benefits can be reduced if your income is too high.

It is incredibly important that you make sure that you are clear about what benefits you might receive.

Best way to do that is to go to the Social Security website, establish your own account, and get a printout of exactly what your benefits, either survivor or your personal benefits, both, will be at certain ages, certain points in time.

Second very important piece of...or step of action that you take is to consult with a Social Security expert that you trust.

Our More Than Money team happens to have exactly that.

He is an incredible person with tremendous knowledge about Social Security, having been active as a professional in that field for 40 plus years.

Very, very knowledgeable indeed.

And being able to interpret the options is very, very important.

Equally important will be to make sure that you're looking carefully at your personal cash flow.

Taking Social Security can certainly add to your cash flow, and if it's a requirement, "Hey, I need that money to be able to pay bills," then the answer is obvious.

You certainly go ahead and take it.

But the key is to provide the best possible outcome for you personally at this stage.

So make sure you're analyzing your cash flow.

What incomes do you have coming in?

What expenses do you have going out?

Making sure that you're covering that to the greatest extent that you possibly can over the balance of the remainder of your life.

And goodness, once you've got all of those variables kind of factored out, make the best decision for you, the one that fits you the best.

Speaking of good decisions that fit best, what's our next challenge, Alyssa?

- This one starts, my husband and I really enjoy watching your show and the accurate advice and information you give to help people.

My question is what steps must we take to allow our only child, a son, to acquire our house tax free in Ocean City, New Jersey?

Must we complete a living, revocable trust?

We have purchased Suze Orman's must have documents.

We believe you may have referenced these in a past show with some hesitation as to their necessity for the trust option.

Is this true?

We know her trust contains an incapacity clause.

Is this something we need?

We would like to avoid probate, if possible.

We also don't want him to have to pay a step up in cost.

Is this possible as well?

Is it advisable to add him to our house deed?

If so, what are the steps necessary to accomplish that?

Some additional information.

We will be selling our primary home in Pennsylvania in three years and living part time in New Jersey and part time in California, where our son resides.

He is 35 years old and married.

I look forward to your response and thank you so much for your time.

- Tonight must be the night of challenging questions.

Lots of different moving parts.

Goodness.

Pray for me.

This is an interesting scenario.

Let's start with, sadly, the elephant in the room.

Suze Orman, not a fan.

Haven't been a fan.

Been aware of her work for decades.

Not a fan.

That's not really relevant to the question.

The question is, would a Suze Orman recommended Living Trust be an advantage here, a disadvantage or neutral?

In my opinion, depending on my understanding of your objectives, it is no advantage.

At best, it is a neutral and at worst it could be a very serious disadvantage over time.

We don't know ages here.

We don't know the ages of the folks who own the homes.

I'm picking a number out of thin air and say they're both 68 years old.

We don't know the ages of the individuals involved, the sons.

I'm going to pick a number and say one's 33, one's 35, just to give you some context for why I'm making the recommendations that I am.

If the home that they would like to have their son acquire is in New Jersey, is currently a second home, then pretty simple to add his name to the deed in what's called joint tenants with rights of survivor.

JTWORS.

Joint Tenants with Rights of Survivor.

The idea there is the two of them, mother, father and son, are all three of them are now on the deed.

As one passes, the surviving two, assuming there are a surviving two, inherit all of the property, and at the second passing, the survivor of the owners inherits the property directly, inherits the property without going through probate.

So one of your major objectives is absolutely taken care of.

The idea that there is a stepped up basis may or may not be important, because I'm not clear that you have a good understanding of what a stepped up basis is.

A stepped up basis is a good thing!

It is not something your son would pay.

It is something your son would benefit from.

Avoiding probate and acquiring a stepped up basis are two things that do not fit.

They do not fit.

Now, they may not need to fit.

If it is your intention that your son will use this New Jersey home as his primary residence, they don't need to fit.

Avoiding probate is wonderful and the stepped up basis is not terribly relevant.

If it's an investment property for your son, never really intending to live there, and at your passing it will wish to be sold, then this is not a good process for you.

You have gone down the wrong path.

This... ...inclination to a do it yourself project, buying a package of documents from Suze Orman or anyone - there are dozens of places online that you can go and do your own legal documents - in this particular case, in most cases, I think is a very misguided idea.

I think it is very much pennywise and pound foolish and the opportunity to theoretically solve one problem while unknowingly creating another problem kind of off air, so to speak, off camera, is very, very real.

I don't think that's in your best interest.

Selling your home in Pennsylvania should be very straightforward.

You are allowed to profit up to $500,000 on the sale of a primary residence and pay no income tax.

That's a very interesting idea, because if you then make your New Jersey home the primary residence, you may end up finding out down the road... You've got to make it primary residence for at least two years.

If you get favorable tax treatment for selling that property at that point, you might very well want to sell it, of a fashion, to your son, getting yourselves off the deed, maybe retaining a life estate so that you have access to it for the rest of your lives.

But putting your son in position where he already owns the property, it's not even included in your estate.

As you can see, lots of interesting possibilities.

The key is to figure out what best fits you.

I absolutely am convinced already that the idea that you would live in New Jersey, be close to one son, have a home in California where you'll be close to another son, that's a gloriously fine plan.

I wish you great luck.

And of course, if you need assistance unpacking this, just reach back out to us and we will assist in any way that we are able.

One of the ways that we are able to assist is our PBS39 show.

Being able to come on air on a regular basis, semi weekly, semi-regularly and answer questions and be available to you is such an important piece of the puzzle.

We are in a very unsettled time.

I don't need to tell you that.

Energy prices through the roof, inflation not seen in 50 years, supply chain disruptions, baby formula that can't be gotten, conflicts in the Ukraine.

The list goes on and on and on.

And one of the most valuable services, in my opinion, having done this for a very, very long time, one of the most valuable services a financial advisor can provide to their clients is to be available, is to communicate, is to continue to share good ideas and support throughout challenging times.

It's one of the reasons why we're here.

So, Alyssa, let's serve another one of our viewers.

Our next question, please.

- Sure.

This woman thanks you for all the information in your newsletters as well as on this Tuesday TV program.

She says, my question is about the status of the ownership of my bank accounts, checking and savings, after my demise.

I am an 83-year-old widow, for 23 years now, and ten years ago established a trust with my daughter as contingent owner.

I have three bank accounts and for more than 15 years they have been listed/titled in both my name and my daughter's.

The bank accounts are not in the trust.

I've made inquiries at the banks and was told that the assets would be passed on to my daughter without any question.

Can you advise if there will be any inheritance requirements for my daughter from the state of Pennsylvania?

- Very, very good.

Not an uncommon situation.

I think the trust piece is a little less common.

Not as many people have a living trust, which is what she is describing, as have their either son or daughter on their bank accounts with them.

So let's address this situation.

I'm using very simple numbers.

If the accounts total 100,000, this young lady is on the account, of course, her daughter is on the account as well.

If they are on the account as co owners - it sounds like they are, I'll circle back to how it might be slightly different, but if they are on the account as co owners, then what they have is at her passing, half of the account is in mom's estate.

The other half of the account is assumed, is presumed by the authorities, taxing authorities as already being owned by the daughter.

When you add a child to your accounts, yes, you're giving them the ability to write checks.

There's other ways to do that.

Yes, you're giving them the ability to review the accounts.

There's other ways to do that.

But you are also giving them legally, not just technically, legally, half the value of the accounts.

At your passing, kind of a good deal.

Half of that, 50,000 of the 100, no estate tax at all.

The balance is taxed at, currently in Pennsylvania, 4.5% percent.

So on 50,000, what, about 21,000...?

I'm sorry, 2,100 bucks?

So not a bad gig.

The risk, of course, is that during your lifetime, if a child who has ownership interest in those accounts were sadly inclined to do so, they could abscond with some of your money.

Now, is there a better way to do it?

In my opinion, there may be.

Bank accounts can be set up with what are called payable on death designations.

POD.

Very much like beneficiary designations in an IRA.

You control them until the very end of your life, and then they go automatically to, in this case, her daughter.

Hopefully that puts some peace of mind to this lovely 83-year-old.

Alyssa, do we have a short one?

- Sure.

This one says, I purchased a Pennsylvania municipal bond fund with Vanguard last September with the idea of parking some cash for about 5 to 7 years.

It looked like a safe investment as it pretty consistently returned four or 5% the last ten years, but it has lost about 10% since.

Any idea what gives?

I'm leaning on just leaving it there, hoping it comes back.

Any thoughts?

- Any thoughts?

Of course I have thoughts.

Sky is blue.

Roses are... No, I'm kidding.

Yes.

This is not unusual.

It is shocking to many people, particularly, we have gone through decades where the bond market has been incredibly stable because interest rates were stable and they actually were easing their ways lower, which made bonds more and more valuable.

That bottomed out about 18 months ago.

We had a change of administration, we had a change of economy, and now we're seeing interest rates rise, in some cases dramatically.

Existing bonds, when interest rates rise, their values drop.

Because if I have a bond I want you to buy that pays 2% and you could buy a brand-new bond that pays 3%, why would you buy my bond?

Well, in this case, the answer is I wouldn't.

The value of those bonds has dropped 10%.

In our opinion, we think those bond prices are going to go even lower and they're going to go lower over a longer period of time, probably two years or more.

In this case, sir, if you can stomach watching those values kind of melt away for a couple of years, if you're willing to wait five, it is very possible they will reconstitute by the end of five.

For the vast majority of our viewers, though, if you have a large chunk of your investment portfolio in bonds and you haven't yet made adjustments, translation moved out of bonds, you probably should.

Speaking of you probably should, you probably should stick with us week by week.

We give as much information as we possibly can to those of you that send us your e-mails, Gene@askMTM.com works very, very well indeed.

We answer every single question back to you.

Some of those will appear on future shows, and that gives us great pleasure indeed to not only share those questions, but share the answers and help as many people as we can.

Folks, thanks for spending part of your evening with us.

We hope you'll do that every single week when we return right here on More Than Money.

Goodnight.