And good evening.

You've got more than money.

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

It's a pleasure to serve you this evening.

If you are a loyal viewer of more than money, you know exactly how this works.

We set you at the center of our show.

We do everything around you.

You are the the reason that our show exists.

And you are the reason that we lay claim, rightfully so, to being the most relevant financial show.

Without a doubt, on television today, wherever you may find financial shows, I understand there's some big names out there.

I understand that they are in many cases, they offer good information.

They have great content, not always, but in many cases.

But are they the most relevant?

They cannot claim that because they don't place you at the heart of the show.

They have producers and directors.

They're over there trying to research, hey, what topic do we want to talk about today?

Hey what's hot?

It's a 24 over seven news cycle.

It's got to be sparkly and breaking news.

And the reality is, most of our lives are not like that.

Most of our lives are filled with love and family.

Dreams and aspirations.

The American dream, perhaps for a young person starting out, or the American dream of retirement for folks who have worked very hard throughout their lives.

And, goodness, that's that's what we focus on.

If I were laying claim to being most relevant because I have the direct pipeline to the relevancy gods, that's silliness.

That makes no sense whatsoever.

But I have the direct pipeline to you.

You send us your emails to Gene at ask mtm dot com.

We answer every single email back to you.

You send us emails and you tell us what things are concerning you today, what pieces of retirement are challenging?

What pieces of starting out are challenging?

How do you make gifts to families so that you can have a real impact, a generational impact, really, something of value rather than here's another toy that will go away.

And we're not about the going away part.

We're going we're all about answering questions that make a real difference, a lasting difference in your life.

And hopefully if you're, if you're just joining us, you're already picking up on that.

You're picking up on the sense that this is different.

This is all about us.

It's all about me.

And me in this case is you.

So if you, will allow me the indulgence, we'll jump right in and we'll start showing you immediately how we can serve you.

Perhaps in a future show.

By answering our very first question this evening.

Meg's Gene, our first question tonight says, I loaned my son $30,000 to buy a home in 2012.

It was a good time to buy.

And his house, which he bought for $135,000, is now worth $270,000.

It was a good buy.

And he can also extend in time and add to the value.

I made it clear at the time that this was a loan and he doesn't dispute that.

He said that it's unfair to ask for repayment ten years later and said I should have given him more notice, and that his freelance business has dried up in the last five years.

He also told me the five year window has closed.

What does that mean, a five year window?

I wasn't aware there was a statute of limitations on a loan to a family member.

We've mostly gotten along, but he has always had a short fuze.

I have a stepdaughter from my second marriage.

Her father, my husband passed in his 50s of a heart attack.

And while this may be a terrible thing to say, I feel closer to her than I do to my own son.

He is 42 and should honor his debts.

He has been to see me twice in the last six months and calls once in a blue moon.

My stepdaughter lives close by and helps with computer issues, and we've really built a relationship.

I love my house, but it needs upgrading.

If I didn't have my dog and my stepdaughter, I would have a very lonely life.

My house is worth about $320,000, and there's $40,000 left on the mortgage.

I feel like I was tricked into lending my son money.

It hurts because I did everything for him when he was growing up, and maybe that was my mistake.

What can I do?

I don't have a lot of savings.

I live off a modest pension and social security.

Thank you for any advice.

First of all, bless you.

Bless you for trying your very best.

Sometimes, when we try our very best, we, we achieve great victories.

And, and the results are, are very satisfying.

And sometimes we don't, and they aren't.

And this is one of those cases.

If I had a, a magic formula for, inserting some, decency into your son, I would gladly share it to you.

I would gladly give it to you.

I would share it with everyone because you are not alone.

Whether it's a child, a grandchild, a brother or sister, a family member loaning money to family, loaning money in general is is a challenging, path to follow.

Loaning money to family is so fraught with these kinds of risks that our show last week with, Halloween theme and scariness and that we should be playing vampire and werewolf sounds over the scariness of lending money to family.

This result is not only not common, it is far more common than not.

So let's look at the reality of this.

Your son has tricked you.

I wouldn't disagree with that at all.

I have stronger words than that.

Your son has largely walked away from your relationship.

I mean, in some ways, perhaps in more ways than I know, this might be a blessing.

I don't expect this will be the last time he'll return to the well and and look for assistance.

You allowed him to increase his net worth?

Gosh, if he's been paying down his mortgage for 12 years off of 135,000 our house, he should owe something under $70,000.

He's got a 270,000 house.

You enabled him to have a net worth increase over these years of $200,000, perhaps as much as a quarter of $1 million.

And his response is, yeah, you missed the five year window, which he made up, which doesn't exist in reality except in his reality and his reality, sadly, doesn't respect you, doesn't include you, shows up, rarely calls in the blue moon.

Now, having said all that, that's hard to hear.

I understand, I apologize, kind of, somebody somebody's got to say somebody is going to be truthful.

But having said all that, you have two things going for you that have nothing to do with your son and in my opinion, should allow you, I should encourage you, but this should allow you to simply say, I made a mistake, write it off and never think about it again.

In many cases, when I get this story, it's from someone who is all alone.

They tried to help somebody.

They turned their back on them.

Their son turned their back on them and they are alone, lonely, destitute.

This is a problem.

That's not your situation.

You are blessed.

Blessed with a stepdaughter who is kind and caring and compassionate and close and involved in your life, and helps you not be lonely.

That's fantastic.

And and bless her for doing that.

Tremendous, tremendous respect to her.

Second thing you have going for you is something that you may not have acknowledged.

And that's it.

You have tremendous equity in your home, 320,000 home you owe 40.

Borrowing money against your home many years ago would have meant you go to the bank, you borrow a bunch of money, you get a very high mortgage payment.

You have a modest pension and Social Security.

Maybe you can make the payments, maybe you can't.

Maybe the stress is just nasty.

That didn't seem to help much.

A reverse mortgage is something you should explore and reverse mortgage allows you to borrow money against the equity in your home.

You can pay off your current mortgage.

You can have dollars available for doing renovations and repairs to your home.

You might even have money left over that you can have for an emergency fund.

And yet you have no monthly payments.

You have no obligation to repay this money while you're still in the home.

Now, this is just a hint, just the shadow of the pros and cons of a reverse mortgage.

You need to do the exploration.

You need to work with a trusted, experienced reverse mortgage expert.

Go through all the counseling that is required, and find out what, if any, of the, the advantages of a reverse mortgage helps you put your home in good order, give yourself financial peace of mind, and allows you to let go of this issue that will never be resolved appropriately from your son's standpoint, and you just have to let it go.

Gain more peace of mind, deepen your relationship with your stepdaughter.

And from someone who's, in a, about the same age group, I'm guessing I would also strongly encourage you to broaden your social network.

This idea of of of your stepdaughter and your dog being the only reasons you're not lonely, you're making a poor choice there.

And there is a choice.

You could choose to attend a church and develop relationships.

You could choose to volunteer and develop relationships.

You could choose a part time job that you would find fun and I recently met a young lady who works part time as a greeter at a zoo.

Loves animals joyous every time she walks through the gate.

Perhaps that's something you should think about.

Expose yourself to a wider sphere of wonderful people.

98% of the people I meet are fantasy tastic.

Yeah, there's 2% or so that are bummers.

But bottom line for you is put this behind you.

Explore reverse mortgage, appreciate your stepdaughter, broaden your social connections so that you're not lonely.

Maybe even become a dog walker if you really like dogs.

Pays well and it's a lot of fun.

It was a lot I hope I helped Meg.

Can we help somebody else?

I think so this one definitely starts off sad, but, I hope we can help them.

This one says my dad was a client of yours.

He passed away in August of 2023.

My mom passed away in January of 2024.

My siblings and I have inherited a few traditional IRAs and a few Roth IRAs from each of them.

I know we have to take the distributions within ten years.

My my main question is where do we put this money once we take the distributions?

I know taxes cannot be avoided, but I want to know what is the smartest course of action in order to minimize tax implications on these withdrawals.

Thank you.

Well thank you.

You do me the great honor of of, approaching us, who served your dad and your mom?

Our condolences, of course.

Very, very difficult.

It's very, very difficult.

It's been 30.

It will soon be 35 years since I lost my dad.

20, 21 years since I lost my mom.

I still think about him, miss him every single day.

It's almost silly for me to think that I'm now the head of the family.

The head of that family line, at any rate, head of the family.

That's a goofy phrase.

Patriarch, goofy phrase.

It doesn't seem appropriate because in my head, I'm still way too young for that.

So I understand that this is.

It's a very challenging time.

Now, your question really has a couple different implications.

Even though it's very brief.

First of all, as minimizing taxes and you and your siblings getting these accounts, IRAs and Roth IRAs, as inheritance is, let's address the second part first.

Each of you will receive these IRAs as as inherited IRAs for for each of yourselves.

So let's assume there are three of you.

Each of the three of you will have your own IRA, your own, inherited IRA, own inherited Roth IRA.

So each of you will need to make your own decisions about how best to use those funds, how best to invest those funds, if at all, and and how best to, quote unquote, minimize the taxes.

So this is not this sounds like, this young lady was the executor.

This is not an executor decision.

It is a beneficiary decision.

You will make your own decision.

Your your siblings will make their own decisions.

Let me give you an example.

You may be in a very, very high tax bracket, and you may want to, reduce to the smallest number that you can, the amount you have to take out and pay tax on one of your siblings might be in a very low tax bracket, and it might be smart of them to take the money out as fast as they can so that they are paying almost nothing because they're in a very low bracket.

One of your siblings might need to take the money out, but might be participating in a 401 K plan, but not to the fullest extent available.

Might be putting 10,000 a year a year in when they are legally allowed to put 30,000 a year in.

And wouldn't it be wonderful if they could take a withdrawal from the inherited IRAs taxable, but put it into the 41K plan?

There's some mechanical, steps that need to be taken, but get it into the 41K plan tax deductible 20,000 comes out, 20,000 goes back in basically a wash.

Almost no income taxes.

And that's deferred now for years or decades.

So the differentials are significant.

There are no a generality in terms of reducing taxes on inherited IRAs or Roth IRAs.

It is literally case specific person by person, where they find themselves what their tax brackets are, what options they have available for other, tax sheltered accounts where they might be able to, navigate the funds into those accounts.

As you can see, lots of moving parts.

It's one of the reasons why your parents had financial advisors that can guide them through the strategic use of all these moving parts to end up coming out the other end with the best possible result for them.

That's what they wanted for you as well.

So trusted, experienced financial advisor make decisions based on your personal set of circumstances.

Each of you, you'll do just fine.

Makes do we have a fine question?

Next we do.

We might need a little bit more information from this person, but I think the general idea is, helpful to people.

It's asking if I roll whole life insurance policies over to a 501 C3 charity.

These policies were purchased in 1969 and 1975, respectfully.

What are my tax liabilities or options?

Thank you.

Well, goodness.

Our financial correspondent is, foreshadowing.

My response, quite appropriately so.

I must say, she has picked up a great deal being a financial correspondent.

Yes.

There's not nearly enough information here to give a specific answer, but in general, is it possible to gift whole life insurance policies?

For those of you who are not familiar with that term, a whole life policy generally has cash value.

It was intended to be kept for the whole of your life.

So if they were issued in 69 and 75, they were intended to be in existence, held by the policyholder until their passing.

So they were building up cash value, premiums every year, premiums generally fixed, and have, accumulated a fair amount of cash in addition to the cash.

There's also, of course, the death benefit.

And the death benefit says, hey, there might be $30,000 of cash, but when this insured person passes away, the death benefit is $150,000.

It's generally quite a bit larger than the cash value.

So what does that mean?

If we want to make a gift a 5 or 3 C, simply a nonprofit designation, it's simply it's any nonprofit.

What qualified nonprofit churches, synagogues, mosques, folds of honor laughing in my nightmare.

And goodness, the list goes on and on.

You guys all are familiar.

Many of you are familiar.

Most of you are familiar with wonderful organizations doing tremendous work.

I'm going to use as an example a church.

So this individual has or individuals have been attending a church for many years.

They they make a, a contribution, tithing perhaps.

And when they pass that, that goes away.

And the church has a kind of a gap to fill unless they wish to donate these life insurance policies.

So the contribution of the life insurance policy does two things.

Number one, it gives the church the control over the cash value.

And, let's assume there's 30,000 a piece that's 60,000 of assets that the church might put to good use.

Secondly, assuming again, 150,000 apiece and death benefit, when each of these folks pass, the church will collect about $300,000 to continue their good work.

That can be done with any nonprofit for, folks in that circumstance, if they were to contribute those both those policies, $30,000 of cash value is the the contribution that is the charitable deduction that might be available to them.

I say might in general, if it's 30,000, 60,000, it will be available.

It's much larger than the standard deduction.

But depending on the amount we don't know.

Megan was absolutely right.

We don't know the amount.

We don't know if you'll get a deduction.

The standard deduction might already take care of that.

We don't know what your tax bracket is.

We don't know how much you'll pay in taxes.

What we do know is that you'll be moving this out of your estate.

And you'll be helping a charity that apparently, or at least hopefully means a great deal to you.

So positive thing.

Almost certainly, worthy of sitting where they trusted experienced either estate plan.

My apologies.

Financial advisor who familiar with the tax side or a tax planner.

Either a tax preparer, enrolled agent, CPA, those types of professionals that can evaluate for you exactly what the impact would be almost to the dollar, and it would take less than an hour.

And you'll be totally confident that you'll know what the end result will be.

Good for you.

Great instincts.

Putting these, assets that have been, with you for many, many years to good to good use and with any luck at all benefiting, folks for generations to come.

Good for you.

Megs, good for us would be another question.

Well, that was a good segue, because this next question is, is wondering about those professionals you mentioned.

This one says we have an estimated investment amount of $900,000.

I hear you speak of a financial and a tax advisor.

Are they not one in the same?

Do I have to incur the expense of hiring both?

And if so, why?

Thanks so much for all your information that you provide.

Sadly, the answer is you may very well have to hire both.

Sadly, in spite of the fact that you have a very substantial investment account, the investment advisor community is not uniform in its ability to provide you with, tax planning and tax preparation.

A tax advisor looks at your, personal situation, not in general terms.

Your personal specific situation in detail.

Tax returns, projections, estimates, pro formas, estimated, what, quarterly contributions or tax payments?

There's a lot of moving parts on the tax side.

The investment side, 900,000 very substantial sum of money is equally, as challenging in terms of of moving parts, in terms of multiple moving parts.

Many financial advisors, even though that's the title they use, are really only investment advisors.

They are only interested in stocks, bonds, cash, mutual funds.

They have no, training, background or interest in the tax side of things.

In my opinion, that is a type of advisor that I would suggest you avoid and that that's a very strong opinion.

And you're saying, whoa, whoa, whoa.

I've been working with this investment advisor for many years.

He's made me a lot of money.

That's fine.

But the tax side of things, particularly when you have this much money, becomes such an important part of of determining what you get to keep that in the absence of having good tax counsel, particularly good counsel, that fits the investment strategies that you're using, you could end up making a lot of money and still be absolutely trashed.

And tax time.

And clearly that makes no sense whatsoever.

Now, having said all of that, there are many, many, many fine, experienced, trusted financial advisors who provide the tax planning and tax prep as well.

So you will likely, if you are diligent, find exactly that and find someone who will provide you with everything you need all rolled into one, all integrated.

So do not accept, the lesser of the services you need.

Make sure you seek financial advisors who can do exactly what you need on both sides and and bring all that in a comprehensive way to you.

Megs, one more, maybe.

Sounds good to me.

Our last question says I would like to know if it is better to transfer my house to my daughter's in my will without adding their names to the deed, or should I add their names to the deed?

So when I pass, the property goes to them, which has the least tax impact?

Thank you.

Goodness.

We get this question quite often.

It is not typically summarized with that last line, which is which is the least tax impact.

It usually has other considerations that are driving the question.

And so my my answer may be surprising or may be different than what you're expecting, which has the least tax impact can only be answered by asking another question which tax are you talking about?

If you transfer your home to your children, a gift deeded over at your passing, you don't own it.

So there is no estate tax?

Well, in some states where our show is visible, there is no estate tax anyway.

So you've saved nothing.

In state of Pennsylvania, for example, the estate tax for children 4.5%.

For homes worth $300,000, you save 14,000 bucks, 15,000 bucks.

Not a bad thing, but if you leave it to them in your will, they receive a stepped up basis.

So let's use the same 300,000 you paid 75,000 many years ago.

They cancel a 300,000 our house for 300,000 and pay no income tax.

There will be some estate tax.

Perhaps many states do not, so there may be zero.

And yet they could save income taxes at a very substantial rate.

The question really is what's best for you and your children and your children?

This is not a question that can be answered in isolation.

It's not mom thinking and then coming up with the right answer.

It's mom looking at the the totality of the family picture and seeing what best fits and, goodness, within an hour you can have those answers quite specifically.

Generally speaking, you don't get any answers that are worthy of, of use.

But with a little bit of counsel, you'll be just fine.

Speaking of just fine, it has been a fine opportunity to serve you this evening.

We hope that you've learned a lot.

If you have questions that have been raised for you, or maybe your questions are totally different, send those to us.

Gene at ask mtm dot com.

We have an entire team of financial advisors answering questions back to you.

We answer every single question, even the hard ones and some of those we pick to air on future shows to give you a flavor of what a financial advisor should be doing for you.

And one of the things we should be doing is returning next week, right here for another edition of More Than Money.

Good night.