And good evening.

You've got more than money.

You've got Gene DICKERSON, your host, your personal financial adviser.

Happy to be with you.

Happier than you might actually know.

This is maybe a little peek behind the scenes of a television show production.

But in our world, in the more than money world, we are incredibly blessed to be able to serve so very many of you.

And apparently a fair number of our PBS affiliates systems throughout the country have been sharing the show.

We're getting inquiries from California and throughout the south, up and down the Eastern seaboard.

Lots down near Philadelphia and beyond Delaware.

Lot, I think we're up to about eight or nine different states that we've had inquiries.

It is an absolute pleasure.

And and just so you don't think that, gosh, he's just the nicest guy.

Well, that part is true.

But in general, all the advantage to us, the advantage to the entire more than money team is that your participation, your excitement, your willingness, your your energy and asking the questions about that, that that have real value in your life, have made us.

I have said it so many times the most relevant show on television, financial show on television, because we are we are relating our answers directly back to you to what's most relevant for you.

But we are having the opportunity to have the maximum impact.

And as many of you have determined, you may be a little further along in life.

You may be young in life, but you may just have lots of wisdom that one of the greatest things that you can have in terms of your personal life is the ability to make an impact, the ability to have worked at that significant, the ability to have work that serves.

And you give us that ability every single time we come into the studio to do another more than one show.

I cannot thank you enough.

It is fantastic.

The fact that our reach has been so broad and growing is very satisfying.

And I hope that you appreciate not just our willingness to give you good information, but our willingness to do it with a smile that doesn't everything in the world doesn't have to be grim and serious.

Even serious questions can have a little lightness to them.

What I consider humor.

You may not, but at least we're making the effort.

Speaking of making the effort, the young lady makes the effort every single show that we do.

Megan, where do we start?

Thanks, Jeanne.

Our first question tonight says, My parents bought me a traditional IRA annuity from one of the big three insurance companies about 40 years ago.

It pays 3.5% annually on annuity purchases and allows for a yearly tax deduction on contributions.

I am now 60 years old and this annuity is scheduled to annuitize in November of this year.

To date, I have about 163,000 balance still being compounded at 3.5%.

I feel that I'm losing money due to recent record inflation and think there must be a better investment option or options.

I am single.

Currently planning on working to age 67 with a modest salary.

My mortgage is paid off and I also have a tiny pension that I have not yet taken payments from yet and that I think will only pay enough for monthly groceries.

Can you give me some good advice?

I have an appointment in mid-February to see my agent and don't want to go in Clueless.

I enjoy your show and I'm confident I'm talking to the right person.

Thank you.

I'm going to say you're very kind and we will give you our very, very best.

This is a very interesting situation because there is a tax deduction for the contributions that tells me that this is an I.R.A.

annuity, an annuity that is held under the umbrella of an IRA.

That's how you get the tax deduction.

That means that none of this money has been taxed.

That's an important consideration when we talk about the next term that we all have to be very clear on annuities zation.

It's a mouthful.

Annuities zation annuities zation is a mechanism that many annuities either offer or require.

In this case I'm hopeful it's only an issue of offer, but many annuities offer this as a solution to what you and I would call the running out of money.

Before I run out of time problem challenge.

Many people say the worst thing I can think of is running out of money before I run out of time.

Annuities, patients says I'm going to take this $163,000 and I'm going to send you a monthly check for as long as you live.

It could be three years.

It could be 30 years, it could be three weeks, it could be 40 or 50 years.

It doesn't matter.

The annuity company is guaranteeing, based on their ability to pay, based on the annuity company's financial strength.

They are guaranteeing you a set monthly amount for the rest of your life.

This is particularly inappropriate for this gentleman.

He is 60.

He is planning on working until he is 67.

He does not need the income now.

This income, by the way, would be taxable 100% because it's coming out of an IRA.

There would be no penalty because he is above age 59 and a half, but it's taxable income at a time when he's still working and likely packed on top of his current income may be pushing him into a higher bracket, maybe pushing him into a bracket that just I think the technical term is stinks.

So this is unlikely to be in his best interest.

So an annuity zation is something that if it is at all possible, he must avoid meeting with the agent.

The representative of the company is a very good first step.

Being very clear we do not want to annuitize is a very good second step.

It may be necessary to leave this annuity before this annuity zation takes effect.

At this stage of the game that's a high priority because it is an IRA.

This money can be moved to goodness almost any kind of investment that this gentleman can think of.

That's that that this gentleman believes is appropriate and useful for him because it does not have to stay inside the annuity.

Many annuities, if you leave them, you have to pay a lot of tax.

This is an IRA.

So you could go to another annuity, but you don't have to.

You could go into any IRA that you wish you could be very conservative.

Bank CDs get four and a half, 5%.

You can be very aggressive and invest in individual stocks and and pray every day that they don't go to zero.

But maybe they make an awful lot of money or anywhere in between.

This is incredibly important that you do this.

Your concern about getting only three and a half percent.

Very understandable under the circumstances that we face today with inflation.

What is fascinating to me is that you've been getting three and a half percent for 40 years.

The inflation rates probably been right around 3% for those 40 years.

You've exceeded inflation.

But not by very much.

This has been a good investment.

It certainly allowed you to save a fair amount of money.

It has not been a great investment.

So don't feel remorse about leaving this behind.

Make sure that you're getting counsel from a financial adviser that you trust.

Make that move from the current situation out before they annuitize your contract, at which point you have no more options.

You are locked in for the rest of your life.

Make sure that you hustle and get this done.

It's in your best interest making a good start.

Interesting question.

Not one that we see typically.

Is our next question a little more typical?

I'm not sure this one seems pretty unique to it's an estate planning issue.

My wife and I are 70 years old.

We've been renting a single family row house to our son since 2009.

At or near a fair market value.

We are considering gifting the house to him during 2024.

We are aware of the gift tax return required and required recognition of the gain on the sale.

However, we are not sure of the amounts to use for the gift return and for the capital gain.

For conversation sake, the cost basis of the property will be about 120 K and we plan to sell the property to him for an amount just over the cost basis, perhaps 125 K to avoid IRS scrutiny and give to that amount the fair market value of the property based on an actual appraisal in 2021 is approximately 180 k. Today is our gift amount 180 K or 125 K for the gift tax return purposes.

We believe the gain would be 125 less.

120.

I'm sure we are missing some other financial considerations, but we're looking forward to your advice and comments.

Thank you.

you're very kind.

Let's start with you're mixing apples and kumquats.

I was going to say apples and oranges, but everybody uses that.

You're you're mixing a rutabaga and tomatoes.

You're talking about a gift.

You're talking about a sale.

These two things are very, very different.

And they will be treated very, very differently.

If I'm interpreting your e-mail correctly, I'm going out on a limb here.

I may not be correct, but hopefully you'll circle back and make sure that we're on the right page.

It sounds like you're selling the home, but you're gifting the difference between what you're selling it for and what it's actually worth.

So let's use the 120 that you paid your cost basis as as a real number and the 180 as a valid number for the current market value.

Tip of the hat to you.

You have been renting at fair market value.

That's very important for you personally.

That keeps you on the right side of the IRS.

Many folks rent to their children at below market values.

The rent should be 1200.

We charge them 400.

The IRS says you can charge whatever you want.

You must pay tax on the 1200.

You avoided that problem by charging him fair market value.

Fantastic.

Absolutely fantastic.

Now, if the idea is that you will, quote unquote, sell it to him for 125, indeed, you've got a 5000 gain that you will report to the IRS.

Your gift, however, will be based on the 180.

And as a result, you'll need to file a gift tax return.

So what big deal.

One page, one signature cost nothing.

Your gifting abilities are almost done.

They're not unlimited.

But for a married couple.

25 billion.

And this is 180,000.

You're well within the limits.

You have nothing to worry about.

You just have to file the right paperwork.

My gut says that you're really not selling it.

My gut says you're gifting it to your son.

The reality, then, will be his cost basis in the home will be your cost basis.

120 His.

Your gift reported to the IRS will be 180.

You will pay no tax.

He will pay no tax.

This is not nearly as complicated as as it kind of sounded like at first blush.

I think you're on solid ground.

Just make sure that for tax purposes, income tax purposes, that that gift tax return is filed.

And again, it's one page, very simply done.

Either have it done professionally or if you use some form of of guided software, they will generally ask you the appropriate questions.

Indeed.

But well done.

And a blessing to you.

Blessing to your son.

Outstanding makes outstanding is a is a word we like to use for all of our questions and answers.

Do we have that chance for this next one?

I think so.

We have another house question.

It asks What's the best way to leave our paid off house to our children once we pass?

A couple of years ago, we signed it over to our daughter, whom is to take care of things.

When we pass, we have lifetime rights.

Since then she is going through a divorce and her ex would like to get a share.

I don't think that's possible as a veteran.

My wife and I are entitled to VA benefits if we get too ill to stay at home.

Her lawyer said we should have put it in a trust.

What's your opinion on this, Jean?

goodness.

From one vet to another.

I wish you had consulted your attorney first.

Or if you did consult an attorney and this is the result.

You might want to circle back to that attorney and have a very serious discussion about being given what is obviously not the appropriate guidance.

Putting your daughter's name on the House deed accomplished very little save and the possibility that if you need long term care, you need to be in a in a facility that the house will not be exposed to.

Medicare.

Waivers.

Medicare leans.

So you may have gain that you have gained very little in the way of estate taxes.

There's no federal estate tax anyway.

State of Pennsylvania for a daughter is only four and a half percent.

So you've gained very little setting it up by giving it to her and then keeping the life estate.

The attorney that you mentioned in your last paragraph of we should have put it into a trust also sends just shivers down my spine that this is a bad scenario.

Should have put it in a trust.

A trust would have said the home is in the trust.

We still own it.

We own the trust.

It doesn't transfer to my daughter until we pass.

That would have been fine, would have given you a lot of protection and would not have exposed you to what I fear is a problem bigger than you think it is.

Your daughter is going through a divorce in the absence of anything else to the contrary, and I don't even know what that might be.

But in the absence of anything else to the contrary, this home is is an asset that your daughter has while she was married.

It is likely to be interpreted by the divorce courts that this is a marital asset, an asset acquired during the marriage and the soon to be ex once a share.

No surprise if it's a marital asset and there's a divorce settlement and and it never will be.

But let's assume 5050 for simple purposes.

He wants half the value of your house and has.

I pray.

I am totally off base on this, but I fear he has a legal right to it.

When we talk about parents putting the names of their children on the deeds to their home, we we try to be incredibly clear about what you are voluntarily doing.

You are making gifts.

That's fine.

But you are putting your children in a position where if there is a divorce, a bankruptcy, a lawsuit, that they own a portion of your house, in this case, they own your house.

Is it possible that part of that or the entire house could be lost?

And the answer is yes.

Yes.

Now, the fact that you have life rights is really important.

Let's assume for a moment that this is every bit as bad as I fear that it is.

And your soon to be ex son in law once half the value of your home, your daughter can perhaps get a mortgage.

Your daughter may end up having to sell the house to pay off her soon to be ex-husband.

You don't have to move.

If your life rights were done properly, if when the deed was transferred to your daughter, it was set up where you have life rights registered At the courthouse.

Filed at the courthouse.

Legally done.

It is an absolute legal right then for you to live there.

The home could be sold to a complete stranger and you still get to live there as long as you live.

So you've done a you've gone a significant step towards protecting yourself, a significant step towards protecting yourself.

But I fear that there's going to be some rough road ahead.

A make sure if this attorney that said you should have put it in a trust is is not already your new attorney or attorney.

Make sure that you consult with an attorney that you trust.

Dig into this now.

Do not wait.

Be proactive.

Try to head this off at the pass.

And hopefully, even if this isn't easily resolvable, it's resolved in some appropriate, respectful fashion and certainly in a way that protects you and your family.

Tough situation, because I don't I don't like answers like that.

Hopefully our next question lets me be way more positive.

I think you have a pretty good chance.

We do have a third house question, though, to round up this little mini series.

It says First, I have to let you know I really enjoy and appreciate the information from your show.

You gave advice to someone who wrote into the show about changing the title of their home after their husband passed.

My husband passed away eight years ago and his name is still on the title and deed.

How do I go about getting that changed and what are the benefits of changing it?

very good.

Bless you.

Yes, lots of folks are in this situation.

A spouse passes, their name is on the deed.

And because when a spouse passes, there's rarely a need for any substantial amount of estate work.

Spouses pass unlimited amounts.

Spouse to spouse.

There's no tax.

There's no Pennsylvania inheritance tax.

There's little or nothing net that that's required to be done relative to settling an estate.

So moving a name off of a deed, it's often talked about, often ignored or considered as not urgent, particularly in the early stages of the loss.

When you lost your husband that first year or two.

Very challenging, very difficult emotionally.

And so it's very common that attorneys, gosh, tax advisors, financial advisors, they don't kind of push issues very much.

So very common for a deceased mouse to be on the deed.

What would that mean if you were to pass away?

It would mean that your heirs will need to transfer the home from you and your deceased husband.

Now you deceased into the estate to be distributed, which means to death certificates going back in your case, eight years and making sure that all the legal requirements are checkbox.

So is that dreadful unnecessarily?

Could it be challenging?

Sure.

Do lots of folks, after a number of years, dispose of death certificate?

He's been gone eight years.

I don't think we need these anymore.

When in reality your executor might very well need that to be able to transfer the title to the home.

If you wish to clean all that up, make life for your executor much easier than yes.

Removing your husband's name from the deed is simply a matter of using either a title insurance company or an attorney.

And having that go from you and your husband to you alone, they will require a death certificate to confirm that he has passed, and it's very easily done.

A fairly small amount of money.

If you shop around, it should be done very inexpensively and then cleans it up for your executor.

Is it something that if you don't do it, you're a dreadful mom?

No, no, not even a little bit.

But if you do it, it does make life for your executor a little bit easier.

And most moms would like to do that.

Nice.

That was a little better.

How about we'll see if the next one's even better than that, Mags.

We'll see.

I think this one's definitely an opinion question.

It says we watch your show every week.

And thank you.

And Meghan for all the good lessons we have learned.

My mother, who passed away four years ago, left me a large envelope of important papers, such as birth certificates, death certificates, cemetery documents, marriage licenses, military records.

These documents are from her parents, brothers and my father.

Can you give me any good reason to keep all or any of these documents?

I feel kind of bad shredding them without knowing first.

Thank you for your help.

Goodness.

I'm the worst person to ask.

I really am.

I've collected documents, journals, diaries, land grants, estate documents, old letters, old books my entire life.

So the thought that all of this history would just be shredded or my heart kind of hurts a little bit, So I'm the worst person to ask.

Having said that, it is unlikely that much of this will have financial value or financial impact.

It is unlikely.

What is potentially more important is how the family might appreciate these documents.

So certainly I would offer them to someone in your family that may be into genealogy, maybe in the family history, may just be in the history and would enjoy those.

If they uniformly say no, then secondarily, I would go to maybe the local historical society.

There are lots of wonderful ones, particularly if you're in the state of Pennsylvania, lots of local historical societies that may appreciate these kind of documents and be able to use them in their in their programs.

In the absence of all of that, everybody says no thanks, no thanks, no thanks.

Many advisors are more than money.

Advisors happily do this for clients will go through documents to ensure or that there's no financial reason to keep the document.

So if you were in that scenario and you had a financial advisor that you trusted and you took them, this crate, this box, this file box of documents, they would go through one by one to make sure that before you shred anything, there's no real value there.

That's probably your last bet.

And then off it goes.

my heart hurts, Megs.

One more short one.

Our last question tonight says I'm 70 years old, semi-retired, and have been self-managed for 20 years in mutual funds only my Roth IRA account value is $200,000 and my home is paid off.

The age.

The idea of investing in stocks is inviting.

Do I need a financial planner for this?

Thank you.

Inviting.

That's that's a fascinating word relative to my retirement money.

It sounds like fun If if you're talking about excuse me, five grand, maybe ten out of 200,000, that you want to have some fun, some interest and and develop a a portfolio of individual stocks.

Okay.

Do you need a financial advisor?

Do that?

Heck no.

If you're interested in this, because it would be fun.

You like to research stocks, you like to be online, you like to kind of be in the game.

Track it on a daily basis.

No, you don't need a financial advisor.

Lots of companies offer online trading.

You can set up accounts very inexpensively.

Most of them charge no commissions whatsoever.

A firm we're very familiar with, Charles Schwab charges zero commissions.

So you can buy, sell the next day, keep for a year, selling a month.

You've got lots of opportunity there.

But do it with a very small amount of money.

Inviting is an interesting word.

It may become uninviting if you decide for your experience that investing in individual stocks is not as easy as it appears.

You have done well with mutual funds.

You've gotten tons of diversification.

That's not what you're doing in stocks.

So proceed carefully, use very small amounts of money and keep the rest of it on track for your retirement.

Fantastic.

Thank you so much.

Your questions are fantastic.

You allow us to serve you.

We we we treat that with with great respect and a little bit of lightheartedness, of course.

But hopefully you picked up a couple ideas.

You learned a little bit.

Lots of house house questions this week.

Maybe you've picked up something that applies to you or maybe your situation's a little different.

Jeanne had asked MTM dot com is the email address.

Send those questions to me.

We answer all those.

Our entire team is at your disposal.

Thank you so much.

It means the world to be able to serve you.

Hopefully you learned enough that you're going to want to return when we return next week for our very next edition of More than Money to.