Good evening.

You've got more than money.

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

A pleasure to be with you.

As many of you know, we are very blessed.

We are able to continue to bring you great information week after week.

And it's all because of you.

You make the show popular.

You make the show, get some ratings.

You make the show interesting because we answer your questions.

And I'm here to tell you your lives are far more interesting than any dry, boring lecture I might give on.

On the pros and cons of the Ross Perot and.

I would fall asleep.

You would fall asleep.

No one could operate heavy equipment watching the show.

That's how dreadful it is.

That's what most financial shows truly are.

They're just someone either droning on and on about something that you probably are not that interested in, or they're trying to sell you something.

And we are neither of those.

We are focused blessedly so on all the information that you share with us with your emails.

Fascinating.

Absolutely fascinating.

It is an honor to serve you in that way.

So if you have seen our show before, if you're part of our loyal Legion, gosh, you already know all that stuff.

If you're just joining us for the very first time, you might be going, wait a second, I want to be part of this whole relevant thing.

I would like to have a really specific answers to my questions.

All you have to do is ask.

It's free for the asking, as they say.

Send me an email, Gene at ask MTM dot com.

Just like on the screen and ask m t and com and your questions will be answered.

We have an entire team.

A lot of folks go.

How does he answer every single question?

I don't know.

Don't be so silly.

He's I got a business.

I got a team we delegate and by the way, the answers you get from my team probably better than the ones I would give you.

They're that good.

And every single question.

Silly ones, hard ones, the ones that that that require research.

We do all of that and then Megan picks some of those brings into the air and we answer them as best we can sometimes accurately more than more often than not makes.

What the heck?

Let's just give them a demo.

How does this work?

Show me the first question.

I'd say we have a pretty good success ratio for the answers.

This one says, I have been in a committed long term relationship for 14 plus years.

My partner does not want to marry and believes he is taking care of me legally and financially.

Should he precede me in death.

He is a loving and generous partner and I do trust him.

But I know his arrangements are designed to protect himself while trying to look out for me.

At the same time, we are both retired.

We both have our own annuities and IRAs, traditional and Roth, and we serve as partial beneficiaries on these investments.

He is siblings, no children.

Well, I have children and grandchildren.

His personal property, including a valuable home, is in a revocable trust.

With me as sole beneficiary.

I am not on the deed of our home.

However, my questions related to the trust.

What happens after he passes and what tax consequences will I be dealing with once ownership of the House passes?

To me?

Is this still inherited property?

And how will long term capital gains work?

I already know that the property taxes will be adjusted based on the home's value at the time of transfer.

But what other financial or legal issues do I need to be prepared for?

Assuming, of course, that I outlive him?

Thank you.

Well, thank you very much.

These kinds of questions are becoming far more common.

I think in my parents day, my parents generation, the idea that there were second marriages or second relation ships, in this case 14 years pretty much qualifies as a marriage in my book.

Long term relationships, kind of in the second half of someone's life, I don't know that that was very common.

I think now, goodness, it's very common and in some cases it's quite joyous, quite miraculous, amazing and terrific.

So I pray that all of that is true of your relationship and your words about your significant other are very kind and very generous as well.

The key word here that your the gentlemen involved may or may not fully understand is revocable.

A revocable trust can be sometimes called revocable because it can be revoked, it can be changed.

And you may or may not know that that has been changed.

He may or may not inform you that that has been changed, though the title to this home, the deed to this home is in his name.

It is in a trust that tomorrow he could set it up to go somewhere else.

It may very possible, Very likely.

In fact, based on your description of your relationship, that he does not understand that that revoke ability puts you in a very precarious situation if everything unfolds exactly as you understand it, you're the beneficiary of the trust at his passing.

The home goes to you.

I don't read that that way.

I will circle back to that.

I think there is a different way to interpret that.

But if indeed it goes to you, then all the other issues that you're asking about are very straightforward.

You get a stepped up basis in the home if it's worth half a million dollars and he paid 100 at his passing, is it is yours at a cost basis of 500?

You could sell it the next day and pay no tax whatsoever.

So it's simply not a problem.

Long term capital gains would not kick in until after the property.

Appreciate it after his passing.

So it was 500th the day he passed away.

You live in it for ten years, decide to sell it and it's now worth 700.

The capital gains is 700.

But of course, if you have lived in it as your primary residence for that period of time, actually it could be shorter.

But let's say it's ten years and you've lived there.

Then you get a a get out of jail free card.

You could sell your primary residence for up to 250,000 a profit and pay no capital gains at all.

All of that is very doable.

All of that is very understandable.

What are the other legal issues you should be aware of?

Rather capability.

It is revocable.

And and let's assume, I think, a reasonable assumption he doesn't understand that or it was not his intent.

His intent was to make it as clear as possible, then creating either a life estate for you where you have the legal right to stay in that home for as long as you live, or a direct bequest to you in his will or a irrevocable trust would be the best.

Knowing, giving you the knowledge that you're covered, you're in good shape.

You don't have to worry.

I am very concerned that if this trust was written professionally done well-intentioned by the attorney to protect your significant other, that it may very well be that you don't inherit the house at all.

The trust may very well give you the right to live there for a period of time, perhaps even your lifetime.

But you may not inherit the house at all, which means you have no capital gains to worry about.

You have no proceeds to worry about.

You'll have no asset.

And I don't know that you understood that.

I don't know that he understood that 14 years is a long time.

Sounds very respectful.

Sit with attorneys together.

I think you'll work this out rather easily.

Interesting.

Couple little wrinkles, Max, Does our next question have wrinkles?

It might, but I think it's a little more straightforward.

This one says, I enjoy your show as you combine humor with a great educational program for your viewers.

Recently, your program covered the topic of heirs filing a disclaimer for an inheritance from an estate and need more information on the correct way of doing this.

Please email or call if someone is available to discuss with me.

Thank you.

Well, it sounds like there's some urgency here, and I know that this has already been taken care of.

Bottom line for us, first of all, combined humor.

Some folks would argue that great educational no one would argue that.

Please, let's let's see who we're talking about here.

Thank you.

You're very kind.

A disclaimer is is a topic that rarely comes up.

It is a mechanism, legal mechanism, whereby a person can say no thank you to an inheritance.

That might give you a hint as to why it rarely comes up.

Because the circumstances under which a person would say, No, thank you to, in essence, free money, free real estate, free assets, free stocks are rare, are rare in most cases.

Here's some free stuff.

Thank you.

I'll take that.

Gladly.

That's probably.

goodness.

I was going to say 90% plus.

I'm thinking 98% plus of the situations we see.

The inheritance is welcome.

The inheritance is useful.

That makes sense.

There are certain circumstances.

One that comes to mind is, is this.

Let's say that we have an individual who has done very, very well for him or herself.

They have accumulated a very substantial estate themselves and they have children, perhaps even grandchildren.

And they are the beneficiary.

They are designed to inherit property from someone almost always in the family, someone who cares about them and their family.

So the will might very well say, I leave a $100,000 to Jean if he predeceased, as it would go to his children.

My disclaimer would be I don't want another chunk of money added to an estate that's going to be taxed income tax.

Perhaps it's going to be taxed.

Inheritance tax, perhaps.

Death tax, perhaps.

I would rather have it drop to another generation.

And by the way, that's the only option.

A disclaimer does not say, I don't want it.

Send it here.

That's not the option.

Disclaimer says, I don't want it.

Send it where the will decides where the will describes it should go.

If I'm unavailable and unavailable is gosh can can be for many, many reasons death, disability, etc..

But in this case the unavailable is I don't want it.

Thank you.

But no.

And then it would drop.

So the mechanisms, it's got to be done very carefully.

It has to be done in a very timely fashion.

It cannot be done retroactively.

It is my understanding that if you have taken a check, put it in your account, it's a done deal.

There's no disclaiming there's no retrofitting that action.

So if you are indeed in a position where a disclaimer needs to be or should be, or at the very least should be explored, then make sure that you have solid legal representation, trusted, experienced estate planning attorney that can give you that guidance as not only whether you should or should not, but the mechanics to follow to to the letter so that you're not inadvertently causing the very damage that you're trying to avoid.

Excellent question.

Brief, but lots of packed.

Packed with lots of power.

Speaking of power, what power may I bring to the next question, young lady?

Let's find out.

We have some parents trying to help their kids.

Says I enjoy your show on PBS.

This is my question.

Our son is 54 years old and has had some financial difficulties.

He has suffered from depression for many years.

We have paid his bills a considerable amount, probably approaching $100,000.

He is divorced and shares custody of his only child, a daughter.

We have two children and three grandchildren.

We have a will and our son daughter and the three grandchildren will be the only heirs when the final distribution of our assets is made, our son and daughter will receive equal amounts.

We are in the process of making our daughter in charge of our son's distribution.

We are also making our daughter in charge of his daughter's distribution.

What I would like to do is remove $100,000 from our son's share of the final distribution and give it to his daughter.

Our granddaughter.

A trust, perhaps.

What would you suggest we do this or how would you suggest we do this, Jean?

Thanks.

First of all, bless you.

One of the reasons why this email is important is because there are so many families that are faced with some very action on this theme.

Children in this case, one of which seemingly doing very well, are handling everything as as you would pray.

And one is struggling, struggling in this case, depression.

For other folks struggling, it could be any.

An entire laundry list of reasons why young people, 54 young people are struggling.

I'm going to give you some very specific answers, but I want to circle back for a moment to something that Megan said just before she read the email.

Parents helping kids.

We have seen recently quite a trend for parents who are reaching out to us in an effort to in some way, shape or form better help their kids.

They want to help their kids and now they want to understand.

Are there tactics, strategies, actions they can take that will better help their kids?

I am so impressed by this.

I'm so impressed by that trend.

Apparently, we are attracting parents wishing to help kids that I mean, maybe we should start a website just for that.

I'm so pleased that we can be of service to help families in any way, shape or form.

But particularly in this case, I may have mentioned in recent shows about an organization I'm I'm threatening to form called Triple H, Happy, healthy.

For those of us who only have 30 or 40 more good years left, hit that 100 year mark.

Yes.

Sprint through that finish line.

Happy and healthy.

100.

These are folks who are in a maybe a separate club, but parents helping kids.

Good for you.

Bless you all.

Your son at 54 has demonstrated that he is not capable for a litany of reasons to handle his own money.

I think personally, it is a mistake to name your daughter as the trustee for his money.

And here's why.

Young man comes to her.

Two years from now, hey, I'm going to take a trip to Europe, she says, appropriately not.

No, that's not what this money is for.

It's for your financial security, it's for your retirement, etc.. You're just doing that because you're being mean.

You're my sister and you're being mean.

You have set them up to be adversaries.

I know not your intention, and I know that in your mind, who's the most trustworthy person you know, your daughter, of course.

That's probably not in his best interest.

It's probably not in her best interests.

There are companies as corporations, excuse me, that are structured to provide exactly that service to be trustees.

You may wish to have your daughter be a co trustee.

She can work with a company together to protect your son over the years.

But what happens if your daughter is the trustee and she passes away before your son?

If you have a trust company, one that will be around for decades and decades.

You have a reasonable confidence that your son is going to be well protected.

The money for your granddaughter certainly will go into a trust.

I think having your daughter as trustee of that block of money works perfectly well.

She's her aunt.

Hopefully they have a nice relationship and it will be relatively brief because likely you will want to distribute that when she becomes of age, whether that's 21, 25, 30, some reasonably short period of time that could work out well.

But I, I encourage you, working with a trusted, experienced attorney, working where they a a reliable long term solution for your trust needs like a trust company, I think will better serve your son, your daughter and your entire family.

Megs, who can we serve next?

Our next e-mail says I'm 57 and single have $300,000 in a41k and about $12,000 in savings in different accounts.

I owe $93,000 on a house and have 20,000 in credit card debt.

I make about $100,000 per year wondering, should I consolidate my savings?

Should I pay off my credit card with the savings and then rebuild the savings?

I'm working on paying off the credit card, but I have terrible spending habits.

I really don't want to work until I'm 67.

What advice do you have for me?

Should I hire a financial planner?

Well, you don't want to be working when you're 67.

And the good news is that that's probably going to be true.

You'll probably be working when you're 77, maybe 87, when you start with actually.

You ended with my apologies.

I have terrible spending habits.

There is nothing here that will fix terrible spending habits.

Nothing.

Whatever actions you might take, whatever recommendations I give you that you might take will be a Band-Aid on a gusher.

A Band-Aid.

And yet you will still bleed to death because you will continue to make the bad mistakes that are causing your veins to explode in the first place.

So terrible spending habits cannot be overcome by, Hey, if I move this money here to there, won't that make it okay?

The answer is no, it's not likely.

And I'm not saying that to be harsh.

I'm saying that to be realistic, working on what the old phrase was, rearranging the deck chairs on the Titanic, Titanic might make it look pretty.

It's still going to go down.

We're not going to rearrange deck chairs.

We're going to fix the problem.

Should you work with a financial adviser?

In all likelihood, yes.

But I kind of fear for the adviser because you're 57 single.

You already understand you have terrible habits.

So having someone work with you on a budget might very well be able to turn you around.

You just might need that kind of accountability or you might just continue being a terrible spending person and just annoy the heck out of your financial adviser so that the whole thing may end up being a dog chasing its tail.

But at least try.

At least try if you are consistent with your spending habits, your savings will go up, your mortgage will go down, your credit cards will disappear.

If you are not, it doesn't matter.

So, yes, start with a financial adviser.

Make sure you're working with a financial adviser who has experience with budgets.

Not all.

Do some financial advisers or more.

We invest money.

We don't really do budgets.

Some do budgets very, very well.

So make sure that you're very clear with whomever you interview who might become your financial adviser about the kind of things that have to be very high up on your list of priorities.

Should you invest money?

Sure.

Should should you pay down your bills?

Sure.

That's not number one.

Number one is should you get yourself and your spending under control and be more disciplined?

The answer is, of course.

And then 67 becomes a far more reasonable, doable, achievable goal.

And I pray for you that you do make those changes fundamental from the foundation up and retire happy and have a ball.

Because at 67, you'd still have 33 more years to be a member of the Triple H, happy, healthy 100 club.

Megs, we're on to something here.

We're going to start that club soon.

But first we're going to start answering our next question.

Sounds good.

That was good advice.

And I'm rooting for that person.

Me too.

This one says hello.

We are avid fans of your show.

We watch every week.

Great info.

We are married to seniors in our early seventies with low bills and credit card and good health.

Our portfolio is strong enough for our needs together.

Our life insurance policies are valued at 36 K. We've paid approximately 15 K into them.

Our cash value is approximately eight and a half k. We were thinking about surrendering the policies and investing the cash value and any future payments into something that has more positive results.

Our adult children don't really need needed either at the time of our passings.

Our portfolio will suffice both of us to the end.

Our question is, do you think this is a good consideration cashing in the insurance policies or are there some other possibilities that we should explore?

Please advise.

very interesting.

First of all, we've gotten a number of emails recently asking why do we include all those nice words?

Why not get right to the question?

It's simple.

I like hearing the nice words.

It's just that it's all about me.

Bottom line for you, this couple has some really nice options.

All of which are nice.

None of which are dreadful.

So all they need do is to sit with an adviser, particularly one who's very conversant in the mechanics of life insurance.

And there are a ton of those are not very common, but they're findable without a doubt.

Life insurance has a number of options as we get to later in our life that folks have never explored.

They've never had a reason to explore.

So why would they know about things that they've never had an interest?

Now they do.

So 36000 hours of death benefit.

If that tourism passed away today, gone, the kids get or the estate gets $36,000.

They have cash value currently of a little over 80 $500.

So one of the options that they could make is to pull that money out.

There will be no income tax on that distribution.

And here's why.

They have paid $15,000 in and they have cash value of 8500.

Sadly, that's been a pretty dreadful investment.

It's basically cut their premiums, the money they've invested in half.

That's not surprising.

Life insurance was never intended to be an investment.

Contrary to what you may hear on some of the radio ads or TV ads that you hear about people give up everything, give up your form and put everything in life insurance.

Those folks are selling you those because they make very high commissions, not because it's in your best interest.

Life insurance is to protect people that you care about.

You've already decided.

My kids don't need the money.

While that may be true, the real question is do you need the money?

Do you need this 80 $500 to supplement your income?

If the answer is not really, then I would suggest you look at option two, which is to leave the 8500s there.

Stop making premium payments.

Your insurance company will tell you what death benefit that 8500 will cover for the rest of your life.

So 36 might drop to $20,000.

You make no more premium payments.

The 8500 stays right where it is.

And at your passing, your family gets $20,000.

It's income tax free because it's life insurance.

And it might be useful to settle your estate or for burial expenses, those kinds of things.

Finally, can you take that money and roll it into an IRA?

It would be tax free rollover.

I'm sorry, not an IRA, an annuity.

The answer is, of course.

But again, that would be dependent on whether you need the income or not.

It does not sound like you do.

It does not sound like this is an income issue.

So I would strongly suspect it.

My recommendation would end up being keep the life insurance, reduce the amount of death benefit down to a point where the 8500 will cover it for the rest of your lives and then let it ride.

Speaking of letting it ride, maybe one of the worst Segways I've ever had on this show.

But it brings us to the resolution of our show.

I want to thank you for being part of this edition of More Than Money.

You make us the most relevant financial show on television because you invite us into your lives.

You invite us into the specifics of your concerns, the things that keep you awake at night, the things that cause you some agita, the folks or the things that cause you excitement that you want to accomplish or you want to help your family accomplish.

And you share those with us and you allow us to serve you.

And that's a tremendous, tremendous honor for us.

If you have a question you would like answered, send it to me Gene at Ask MTM dot com.

GENE at ask MTM dot com.

And one of my tremendous team will answer those back to you and maybe you'll see it on a future show.

Folks, thanks very much.

Hopefully you'll return next week.

When we're back in the studio for another edition of more than one.