April 10, 2025 • 24 mins
On this edition of Ask KT and Suze Anything, we’ll revisit an episode where Suze answered questions about why you need an IRA, what to do with inherited cash, trusts and so much more!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Robert (00:30):
April 10th, 2025. Welcome to the Women and Money podcast,
as well as everyone smart enough to listen. Robert, the
producer here.
Suze and KT have decided to take some time off,
and Suze wanted me to tell you that she knows
you've been equipped with the right actions to take and
not take right now, so she feels that she can
(00:52):
attend to family matters.
So today we're going to revisit part of an Ask
KT and Suze Anything episode from last year, and we're
gonna jump right in with KT asking a question from Marlene.
Take it away, KT.
KT (01:08):
Suze, I'm 75 and very comfortable. I understand I can
gift my 50-year-old son $17,000. He has big student loans,
and I need a tax deduction.
Can I pay his bill and take the deduction, or
(01:29):
should I transfer money from my IRA to my Roth IRA?
Suze (01:34):
That's actually a complicated one. You thought that was a
really easy question, didn't you?
KT (01:39):
No, I think the the first part might be pretty easy.
Suze (01:42):
Yeah, the first part...
KT (01:44):
If there's one part, then you can answer that.
Suze (01:46):
I can answer both, but it's not as simple as
one might think.
You can absolutely gift your son or anybody you want
and as many people a year that you want.
Currently
$18,000 a year.
However, it's not taxable to them and it's not a
(02:08):
tax write off to you on any level. The fact
that he has big student loans is a very, very
different question that where you say, but I need a
tax deduction, and can I pay his bills and take
a tax deduction? No, you cannot do that.
(02:30):
I don't want you to confuse the two, however.
Because if you're very comfortable, does it make you uncomfortable
when you see your son suffering under a lot of
student loans at the age of 50? What must that
make him feel like, cause probably most of his friends
(02:54):
don't have student loans anymore. So the question isn't, can
you pay that bill.
And get a tax deduction. The question is, can you
pay that bill and still be incredibly comfortable at the
age of 75.
(03:16):
And take that burden off of your son's back.
And would that make him happier? Would that help him
in any way? And if the answer to that is yes,
it would, then that's probably what you should do, however.
(03:37):
If it won't help him, if on some level he's
kind of a don't take this the wrong way, Marlene,
but he's kind of like a financial loser. He's just,
you know, not really doing the things he should be
doing and maybe still living at home with you, whatever
it may be. KT just gave me a look, everybody,
but it's me, so it's, it's true. There are many
(03:58):
kids that are financial losers, KT. There just are anyway.
Then would you just be wasting that money if you
were to pay off his bills, and would it just
have gone to waste on some level? You and you
alone have to decide that. As far as transferring your
(04:18):
money from your IRA to a Roth IRA, you are
the age of 75. You have required minimum distributions that
are coming out of your traditional IRA.
So just remember you have to take your RMDs before
(04:39):
you can convert any money to a Roth IRA at
the age of 75. Does it make sense to do it?
I'm not sure it does or it doesn't, but you
might want to contact your CPA and see what he
or she says. All right, KT KT.
I have a question for you.
(05:01):
You know the question I'm going to ask you. Why
does it bother you when I simply say maybe he's
a financial loser? Why does that bother you?
KT (05:11):
Well, because that first answer.
It was so nice to take the burden off his back.
Would it make him happier? Would it make you happier?
And then bam, you flip the coin and say, on
the other hand, your son may be a real financial flake.
Suze (05:27):
Yeah.
KT (05:28):
Right?
Suze (05:28):
So what's wrong with that?
KT (05:29):
Well, nothing's wrong with it, but it was so nice
in the beginning. I was so happy. I was happy
for her and him.
Suze (05:36):
If that had been true.
KT (05:37):
Well, let's hope, let's hope the part A
is the truth not part B? I hope the answer.
Suze (05:46):
I hope that Marlene has the courage to stand in
her own truth, no matter which one of those things
it happens to be, because she's OK no matter what.
Next question,
KT (05:58):
OK, this is from Peggy.
Suze (06:00):
Let's see if I can upset KT again. All right.
KT (06:03):
This thing she says embarrassed. Hi, Suze and KT.
Suze (06:07):
That's what I do to Katy all the time.
KT (06:09):
I've been watching and listening for over 10 years, but
I'm getting ready now for retirement in the next 2 years.
What is the purpose of moving my 401k and 403B
into an IRA? I feel so knowledgeable because of you,
but I am embarrassed to say I don't quite know
(06:30):
how to retire. Did she, did she know you have
a book on this?
Suze (06:35):
I am so tempted to say, KT. I know we
normally wait till the end of the Ask KT and
Suze Anything podcast for your quizzy.
But guess what? Pop quizzy, KT.
KT (06:52):
Right now?
Suze (06:52):
Right now.
KT (06:53):
On this?
Suze (06:54):
On this question, everybody, how would you answer this question?
Why have I for years been saying to most of
you that once you decide to retire, you should look into,
if you have a traditional 401k or 403B or even
(07:15):
a Roth 401k or a Roth 403B, look at transferring
it or rolling it to an IRA or a Roth IRA.
Why KT?
KT (07:29):
Well, when you, when you transfer the traditional into your Roth...
Suze (07:35):
No, you would transfer a traditional 401k to a traditional IRA.
It's got to go from pre-tax to pre-tax or she's
gonna pay taxes on everything.
KT (07:46):
But if it's a Roth,
Suze (07:48):
No, don't get confused.
KT (07:50):
I don't know.
Suze (07:53):
No, that's it? You just don't know.
KT (07:59):
Well, if she's retiring...
Suze (08:01):
Wait, let's pretend it's you. You have money in a 401k.
You've been working. You haven't ever paid taxes on that money,
and now you have a choice of leaving it right
there if you want, or taking it and putting it
in Fidelity or Schwab in an IRA rollover.
(08:23):
I have been telling everybody to do that.
Why have I been telling everybody to do that? You
should see your face.
KT (08:31):
Well, because when you get close to retirement, your tax, um,
your tax liability is a lot less than when you're
working and earning money. OK, why?
Suze (08:43):
You really don't know?
KT (08:45):
No.
Suze (08:46):
Obviously, all right.
Everybody, especially Peggy, and thank you for this question, quizzy.
If you have your money at a 401k or a 403B,
which is usually a nonprofit KT, it is with your employer.
And normally a 401k plan or a 403b plan only
(09:09):
has a specific number of investments, and most of those
investments consist of only.
The company stock that maybe you're working for, but mutual funds,
maybe they have a variety of mutual funds, but that's it.
(09:31):
When you transfer it and put it into an IRA.
Now you can buy exchange traded funds, individual stocks. You
could buy certificates of deposits. You could buy treasuries. You
could buy so many different things, and you could probably
even buy the exact same things that the 401k is
(09:55):
invested in.
So the reason that I tell everybody to transfer it
when you leave is so that you can have more
diversification as you get older. Maybe you're gonna want to
put money into individual bonds.
You can't buy individual bonds within a 401k or 403B.
(10:17):
You can only buy bond funds, and everybody knows I
hate bond funds. So therefore I hope, Peggy, that has
answered your question, however.
Let's say you have a sizable sum of money within
the 401K or 403B. Let's just say that's true.
(10:39):
And you're comfortable with your investments. You feel secure there.
And now you don't want to transfer it because maybe
you have to cash it out even though in most
cases you won't have to. But let's just say you did.
And now you have $800,000 of cash sitting at a
discount brokerage firm like Fidelity or Schwab, and now you
(11:01):
have to invest it and you don't have a clue
how to do that, so you're scared to death.
If that's the situation, then hey, leave it in the
401k or the 403b.
Do I get a ding ding ding on that?
KT (11:17):
Ding ding ding ding ding ding ding. That was good, right?
Suze (11:21):
Did you learn?
KT (11:22):
Well, I didn't realize that the reason, the biggest reason
is that you have a great deal of choice and diversification.
Suze (11:30):
That's the only reason, girlfriend. All right, next question.
KT (11:34):
OK, this is a great this.
I read this question and I'm thinking to myself, wow,
what would I do? What would Suze do?
Suze (11:42):
What would Suze do?
KT (11:44):
Good morning Suze...
Suze (11:46):
Wait, one of my favorite things, right, is that sometimes
we'd be in a restaurant, everybody, or even a bookstore,
and I'd be standing in line to get a book
and people would be in front of me and they
had my book in their hand or on an airplane.
And I would hear them talking like they'd usually be
(12:08):
with a friend and they would always say, What do
you think Suze would do? What would Suze do?
KT (12:16):
Well, here's a good one.
Suze (12:18):
And then KT I would lean over and I go, Well,
I'll tell you what I would do, and they'd always
go "Ahh!"
KT (12:24):
Yeah, that's her it's it's her. All right, ready? This
is from Pat, and Pat said, Good morning, Suze.
Suze (12:30):
It is.
KT (12:31):
Here's our question. What should a person do when they
find a large amount of money in the home of
loved ones who have passed?
Will the bank question a large deposit? I think the
bank would be the safest place. Now what would Suze do?
Suze (12:52):
Well, Suze, as many of you may know, actually read
a lot of these questions, and I wrote this person
back and I said, How much is a large sum
of money?
KT (13:06):
Did they tell you?
Suze (13:06):
Yes, and they wrote back and they said,
$200,000.
KT (13:13):
Someone stashed cash.
Suze (13:15):
Her father didn't really believe in debt. He didn't really
believe in banks, and little by little he would take
his paycheck and everything, and he would just stash it
in the house in cash. Wow. And now she has
found it.
So the question is what would Suze do?
(13:41):
First of all, you have to realize that $200,000 is
a lot of money.
And if you just let it sit there in cash,
you're missing out on about $10,000 a year currently in interest.
That's number one.
But number 2, the very first thing I would do
(14:04):
is if you have a lawyer
that was settling the estate for your father. Maybe he
had a home that needed to go through probate or whatever.
I would first consult with him or her and ask
for their opinion. Chances are what they are going to
(14:25):
tell you to do.
And if you don't have one, you might want to
find one and just consult with them, but would be
to find a bank, either the bank that your father
was dealing with, but maybe he didn't have a bank,
but maybe you have a bank where you have connections
(14:47):
with that bank.
Because if you ever deposit $10,000 or more at one time,
they're going to report it.
And they're gonna report it because that's a lot of
money if you deposit $200,000 at one time, oh, there
are gonna be a whole lot of questions, so you
(15:11):
should take the death certificate, his will or trust, showing
everybody that you're the beneficiary.
Of everything and that you found this money while getting
your father's house in order to sell or whatever reason
you were looking through this stuff.
(15:32):
And just come clean now. Maybe they'll make you pay
taxes on it. You never know. Maybe they'll say, oh, OK,
cause he never had a bank account or whatever. They'll
understand that and they'll just let you have it.
Right, but it should probably be if you go to
(15:53):
a bank that you open up an account not in
your name but in the estate of your father, so
it sits in that account.
So then it becomes part of the estate. That is
a very simplistic thing of what Suze would do. All right, KT,
(16:15):
next question.
KT (16:16):
All right, this is from Lou. Suze, should we include
our rental property that is paid for in our living trust?
The property provides us an additional monthly income of $2,550.
Suze (16:32):
One has nothing to do with the other.
KT (16:34):
Listen to this. We were not going to include our
primary home in the living trust.
Suze (16:40):
Then why the heck do you even have a living trust?
KT (16:42):
We are both 70 plus years old. So explain to
Lou about why there's a trust.
Suze (16:49):
The main reason that you want a trust.
Is so that your home, your rental property, things that
really don't have a transfer of title like a life
insurance policy, you have a beneficiary of that doesn't go
through probate. Your retirement accounts has a beneficiary doesn't go
(17:10):
through probate, right, and I'm not a fan, by the
way of having a trust be a beneficiary of a
retirement account, as I have told you many times, but
it's very difficult with a home.
The main way you avoid probate with a home is
you own the home, enjoying tenancy with right of survivorship,
but then when the person you left it to dies,
(17:32):
it doesn't go through probate.
And remember when a home goes through probate, it's not
how much you owe on the home, it's how much
it's worth. So for instance, if you have a $500,000
home and you still owe $250,000 on that home, all
$500,000 is going to go through probate, and depending on
(17:56):
what state you're in, probate can be really, really expensive,
so Lou.
You need to understand why do you have a trust.
What are your reasons for not having your home and
rental property within the trust. It doesn't affect your income
(18:16):
taxes on any level. It's the exact same as if
you have a trust like KT and I both have trusts.
And we pay the same income tax whether we had
a trust or we didn't have a trust. What happens, however,
is what happens to that money when something happens to us.
KT (18:36):
It sounds like Lou didn't understand that he could have
both of these in his trust. It sounds like he want,
he was trying to tell us he decided not to
put his primary home in it, but just the should
absolutely put as many assets as you have about the probate.
Suze (18:55):
It's about incapacity. If something were to happen to you
and you don't die, who pays your bills, Lou, who
writes your checks? Who makes sure that the mortgage and
the insurance and everything is paid.
That's why you want a trust that has an incapacity clause,
and for those of you who are asking.
(19:17):
The must-have docs are back on sale. All you have
to do is go to musthadocs.com, and you will find
them $2500 worth of state of the art documents for $99.
All right, KT, next question.
KT (19:35):
This is from Sarah Berg. I need to find dental
insurance soon due to
leaving my job. I know you love dental plans. Would
I want to have dental insurance and dental plan, or
just the dental plan? My teeth are in good shape,
but I'm 55, so who knows what's coming as far
as dental care needs.
Suze (19:56):
Well, I'll tell you what's coming, and Sarah,
KT (19:58):
I'll tell you tell you what's coming. We thousands of.
Dollars of dental work, but get the dental plan. Tell
her to get the...
Suze (20:08):
I would not be getting dental insurance if I were you.
I am not a fan of dental insurance unless you
work for a company that pays for it for you.
I and KT and Colo and all of our friends
and friends have something called a dental
savings plan, go to dental plans.com. Look at it. Normally
(20:33):
dental insurance could be $100 or $150 a month. Normally
they have high deductibles and waiting periods with a dental
savings plan. Maybe if it's just you, it will cost
you $150 a year.
And you can save anywhere from 10 to 60% on procedures,
(20:54):
no waiting period, and no max out of how much
you can use it. So again, dental plans.com. Next, KT.
KT (21:03):
OK, my final question, short and
sweet. Does the income I earn from interest or capital
gains from selling a stock held less than a year
count towards the 146,000 income before I have reduced Roth contributions?
(21:24):
That's from Wayne.
Suze (21:25):
Do you want another quizzy?
KT (21:27):
Well, all right, let me see. Hold on. All right, everybody,
let me see if I can redeem my lack of
knowledge here. So does the income I earn from interest
or capital gains from selling a stock held less than
a year count towards the 146 that I held less?
I think that the answer is whatever income you have
(21:49):
when you reach that limit, that's the limit. doesn't matter when.
Suze (21:52):
That's not the question.
The question is, if this person has held a stock
for less than a year, obviously it's outside of a
retirement account and they sell it.
Does that gain count
towards the calculation of income where the max is 146
(22:17):
for a single person.
KT (22:21):
Do you want me to answer it? I think it does.
I think it does. I think, yeah, all I know
is in in America, whatever money you make is your income, right?
Suze (22:33):
Not actually, however, but it is true when you sell
a stock that you have held for less than one year, Wayne,
that's taxed to you then as ordinary income.
Right, so yes, it counts towards your income, even if
it's a capital gain, the way they figure capital gains,
(22:56):
it gets figured in with your income and all of that.
So either way, it probably would, but definitely in this
situation it will count towards that $146,000 of modified adjusted
gross income. What are you eating?
KT (23:15):
It's a cough drop from my throat.
Suze (23:18):
Do you have a sore throat?
KT (23:19):
It's not sore, but it's a little dry.
Suze (23:21):
It's dry, huh?
KT (23:22):
Yeah, because I've been swimming in the ocean with Susie
every day till we got this bout of rain. But
like we better sign off. It's late. We're over our
limit here, everyone.
Suze (23:33):
Oh, actually, KT, we're the bosses, so we make the
limit be whatever we want it to be. However,
KT (23:41):
There's really only one thing that we want you to
remember when it comes to your money. What is that, KT?
People first, then money, then things, and if you follow
that guideline,
Suze (23:54):
and if you stay safe, you will be what? Unstoppable.
April 10th, 2025. Welcome to the Women and Money podcast,
as well as everyone smart enough to listen. Robert, the
producer here.
Suze and KT have decided to take some time off,
and Suze wanted me to tell you that she knows
you've been equipped with the right actions to take and
not take right now, so she feels that she can
(00:52):
attend to family matters.
So today we're going to revisit part of an Ask
KT and Suze Anything episode from last year, and we're
gonna jump right in with KT asking a question from Marlene.
Take it away, KT.
KT (01:08):
Suze, I'm 75 and very comfortable. I understand I can
gift my 50-year-old son $17,000. He has big student loans,
and I need a tax deduction.
Can I pay his bill and take the deduction, or
(01:29):
should I transfer money from my IRA to my Roth IRA?
Suze (01:34):
That's actually a complicated one. You thought that was a
really easy question, didn't you?
KT (01:39):
No, I think the the first part might be pretty easy.
Suze (01:42):
Yeah, the first part...
KT (01:44):
If there's one part, then you can answer that.
Suze (01:46):
I can answer both, but it's not as simple as
one might think.
You can absolutely gift your son or anybody you want
and as many people a year that you want.
Currently
$18,000 a year.
However, it's not taxable to them and it's not a
(02:08):
tax write off to you on any level. The fact
that he has big student loans is a very, very
different question that where you say, but I need a
tax deduction, and can I pay his bills and take
a tax deduction? No, you cannot do that.
(02:30):
I don't want you to confuse the two, however.
Because if you're very comfortable, does it make you uncomfortable
when you see your son suffering under a lot of
student loans at the age of 50? What must that
make him feel like, cause probably most of his friends
(02:54):
don't have student loans anymore. So the question isn't, can
you pay that bill.
And get a tax deduction. The question is, can you
pay that bill and still be incredibly comfortable at the
age of 75.
(03:16):
And take that burden off of your son's back.
And would that make him happier? Would that help him
in any way? And if the answer to that is yes,
it would, then that's probably what you should do, however.
(03:37):
If it won't help him, if on some level he's
kind of a don't take this the wrong way, Marlene,
but he's kind of like a financial loser. He's just,
you know, not really doing the things he should be
doing and maybe still living at home with you, whatever
it may be. KT just gave me a look, everybody,
but it's me, so it's, it's true. There are many
(03:58):
kids that are financial losers, KT. There just are anyway.
Then would you just be wasting that money if you
were to pay off his bills, and would it just
have gone to waste on some level? You and you
alone have to decide that. As far as transferring your
(04:18):
money from your IRA to a Roth IRA, you are
the age of 75. You have required minimum distributions that
are coming out of your traditional IRA.
So just remember you have to take your RMDs before
(04:39):
you can convert any money to a Roth IRA at
the age of 75. Does it make sense to do it?
I'm not sure it does or it doesn't, but you
might want to contact your CPA and see what he
or she says. All right, KT KT.
I have a question for you.
(05:01):
You know the question I'm going to ask you. Why
does it bother you when I simply say maybe he's
a financial loser? Why does that bother you?
KT (05:11):
Well, because that first answer.
It was so nice to take the burden off his back.
Would it make him happier? Would it make you happier?
And then bam, you flip the coin and say, on
the other hand, your son may be a real financial flake.
Suze (05:27):
Yeah.
KT (05:28):
Right?
Suze (05:28):
So what's wrong with that?
KT (05:29):
Well, nothing's wrong with it, but it was so nice
in the beginning. I was so happy. I was happy
for her and him.
Suze (05:36):
If that had been true.
KT (05:37):
Well, let's hope, let's hope the part A
is the truth not part B? I hope the answer.
Suze (05:46):
I hope that Marlene has the courage to stand in
her own truth, no matter which one of those things
it happens to be, because she's OK no matter what.
Next question,
KT (05:58):
OK, this is from Peggy.
Suze (06:00):
Let's see if I can upset KT again. All right.
KT (06:03):
This thing she says embarrassed. Hi, Suze and KT.
Suze (06:07):
That's what I do to Katy all the time.
KT (06:09):
I've been watching and listening for over 10 years, but
I'm getting ready now for retirement in the next 2 years.
What is the purpose of moving my 401k and 403B
into an IRA? I feel so knowledgeable because of you,
but I am embarrassed to say I don't quite know
(06:30):
how to retire. Did she, did she know you have
a book on this?
Suze (06:35):
I am so tempted to say, KT. I know we
normally wait till the end of the Ask KT and
Suze Anything podcast for your quizzy.
But guess what? Pop quizzy, KT.
KT (06:52):
Right now?
Suze (06:52):
Right now.
KT (06:53):
On this?
Suze (06:54):
On this question, everybody, how would you answer this question?
Why have I for years been saying to most of
you that once you decide to retire, you should look into,
if you have a traditional 401k or 403B or even
(07:15):
a Roth 401k or a Roth 403B, look at transferring
it or rolling it to an IRA or a Roth IRA.
Why KT?
KT (07:29):
Well, when you, when you transfer the traditional into your Roth...
Suze (07:35):
No, you would transfer a traditional 401k to a traditional IRA.
It's got to go from pre-tax to pre-tax or she's
gonna pay taxes on everything.
KT (07:46):
But if it's a Roth,
Suze (07:48):
No, don't get confused.
KT (07:50):
I don't know.
Suze (07:53):
No, that's it? You just don't know.
KT (07:59):
Well, if she's retiring...
Suze (08:01):
Wait, let's pretend it's you. You have money in a 401k.
You've been working. You haven't ever paid taxes on that money,
and now you have a choice of leaving it right
there if you want, or taking it and putting it
in Fidelity or Schwab in an IRA rollover.
(08:23):
I have been telling everybody to do that.
Why have I been telling everybody to do that? You
should see your face.
KT (08:31):
Well, because when you get close to retirement, your tax, um,
your tax liability is a lot less than when you're
working and earning money. OK, why?
Suze (08:43):
You really don't know?
KT (08:45):
No.
Suze (08:46):
Obviously, all right.
Everybody, especially Peggy, and thank you for this question, quizzy.
If you have your money at a 401k or a 403B,
which is usually a nonprofit KT, it is with your employer.
And normally a 401k plan or a 403b plan only
(09:09):
has a specific number of investments, and most of those
investments consist of only.
The company stock that maybe you're working for, but mutual funds,
maybe they have a variety of mutual funds, but that's it.
(09:31):
When you transfer it and put it into an IRA.
Now you can buy exchange traded funds, individual stocks. You
could buy certificates of deposits. You could buy treasuries. You
could buy so many different things, and you could probably
even buy the exact same things that the 401k is
(09:55):
invested in.
So the reason that I tell everybody to transfer it
when you leave is so that you can have more
diversification as you get older. Maybe you're gonna want to
put money into individual bonds.
You can't buy individual bonds within a 401k or 403B.
(10:17):
You can only buy bond funds, and everybody knows I
hate bond funds. So therefore I hope, Peggy, that has
answered your question, however.
Let's say you have a sizable sum of money within
the 401K or 403B. Let's just say that's true.
(10:39):
And you're comfortable with your investments. You feel secure there.
And now you don't want to transfer it because maybe
you have to cash it out even though in most
cases you won't have to. But let's just say you did.
And now you have $800,000 of cash sitting at a
discount brokerage firm like Fidelity or Schwab, and now you
(11:01):
have to invest it and you don't have a clue
how to do that, so you're scared to death.
If that's the situation, then hey, leave it in the
401k or the 403b.
Do I get a ding ding ding on that?
KT (11:17):
Ding ding ding ding ding ding ding. That was good, right?
Suze (11:21):
Did you learn?
KT (11:22):
Well, I didn't realize that the reason, the biggest reason
is that you have a great deal of choice and diversification.
Suze (11:30):
That's the only reason, girlfriend. All right, next question.
KT (11:34):
OK, this is a great this.
I read this question and I'm thinking to myself, wow,
what would I do? What would Suze do?
Suze (11:42):
What would Suze do?
KT (11:44):
Good morning Suze...
Suze (11:46):
Wait, one of my favorite things, right, is that sometimes
we'd be in a restaurant, everybody, or even a bookstore,
and I'd be standing in line to get a book
and people would be in front of me and they
had my book in their hand or on an airplane.
And I would hear them talking like they'd usually be
(12:08):
with a friend and they would always say, What do
you think Suze would do? What would Suze do?
KT (12:16):
Well, here's a good one.
Suze (12:18):
And then KT I would lean over and I go, Well,
I'll tell you what I would do, and they'd always
go "Ahh!"
KT (12:24):
Yeah, that's her it's it's her. All right, ready? This
is from Pat, and Pat said, Good morning, Suze.
Suze (12:30):
It is.
KT (12:31):
Here's our question. What should a person do when they
find a large amount of money in the home of
loved ones who have passed?
Will the bank question a large deposit? I think the
bank would be the safest place. Now what would Suze do?
Suze (12:52):
Well, Suze, as many of you may know, actually read
a lot of these questions, and I wrote this person
back and I said, How much is a large sum
of money?
KT (13:06):
Did they tell you?
Suze (13:06):
Yes, and they wrote back and they said,
$200,000.
KT (13:13):
Someone stashed cash.
Suze (13:15):
Her father didn't really believe in debt. He didn't really
believe in banks, and little by little he would take
his paycheck and everything, and he would just stash it
in the house in cash. Wow. And now she has
found it.
So the question is what would Suze do?
(13:41):
First of all, you have to realize that $200,000 is
a lot of money.
And if you just let it sit there in cash,
you're missing out on about $10,000 a year currently in interest.
That's number one.
But number 2, the very first thing I would do
(14:04):
is if you have a lawyer
that was settling the estate for your father. Maybe he
had a home that needed to go through probate or whatever.
I would first consult with him or her and ask
for their opinion. Chances are what they are going to
(14:25):
tell you to do.
And if you don't have one, you might want to
find one and just consult with them, but would be
to find a bank, either the bank that your father
was dealing with, but maybe he didn't have a bank,
but maybe you have a bank where you have connections
(14:47):
with that bank.
Because if you ever deposit $10,000 or more at one time,
they're going to report it.
And they're gonna report it because that's a lot of
money if you deposit $200,000 at one time, oh, there
are gonna be a whole lot of questions, so you
(15:11):
should take the death certificate, his will or trust, showing
everybody that you're the beneficiary.
Of everything and that you found this money while getting
your father's house in order to sell or whatever reason
you were looking through this stuff.
(15:32):
And just come clean now. Maybe they'll make you pay
taxes on it. You never know. Maybe they'll say, oh, OK,
cause he never had a bank account or whatever. They'll
understand that and they'll just let you have it.
Right, but it should probably be if you go to
(15:53):
a bank that you open up an account not in
your name but in the estate of your father, so
it sits in that account.
So then it becomes part of the estate. That is
a very simplistic thing of what Suze would do. All right, KT,
(16:15):
next question.
KT (16:16):
All right, this is from Lou. Suze, should we include
our rental property that is paid for in our living trust?
The property provides us an additional monthly income of $2,550.
Suze (16:32):
One has nothing to do with the other.
KT (16:34):
Listen to this. We were not going to include our
primary home in the living trust.
Suze (16:40):
Then why the heck do you even have a living trust?
KT (16:42):
We are both 70 plus years old. So explain to
Lou about why there's a trust.
Suze (16:49):
The main reason that you want a trust.
Is so that your home, your rental property, things that
really don't have a transfer of title like a life
insurance policy, you have a beneficiary of that doesn't go
through probate. Your retirement accounts has a beneficiary doesn't go
(17:10):
through probate, right, and I'm not a fan, by the
way of having a trust be a beneficiary of a
retirement account, as I have told you many times, but
it's very difficult with a home.
The main way you avoid probate with a home is
you own the home, enjoying tenancy with right of survivorship,
but then when the person you left it to dies,
(17:32):
it doesn't go through probate.
And remember when a home goes through probate, it's not
how much you owe on the home, it's how much
it's worth. So for instance, if you have a $500,000
home and you still owe $250,000 on that home, all
$500,000 is going to go through probate, and depending on
(17:56):
what state you're in, probate can be really, really expensive,
so Lou.
You need to understand why do you have a trust.
What are your reasons for not having your home and
rental property within the trust. It doesn't affect your income
(18:16):
taxes on any level. It's the exact same as if
you have a trust like KT and I both have trusts.
And we pay the same income tax whether we had
a trust or we didn't have a trust. What happens, however,
is what happens to that money when something happens to us.
KT (18:36):
It sounds like Lou didn't understand that he could have
both of these in his trust. It sounds like he want,
he was trying to tell us he decided not to
put his primary home in it, but just the should
absolutely put as many assets as you have about the probate.
Suze (18:55):
It's about incapacity. If something were to happen to you
and you don't die, who pays your bills, Lou, who
writes your checks? Who makes sure that the mortgage and
the insurance and everything is paid.
That's why you want a trust that has an incapacity clause,
and for those of you who are asking.
(19:17):
The must-have docs are back on sale. All you have
to do is go to musthadocs.com, and you will find
them $2500 worth of state of the art documents for $99.
All right, KT, next question.
KT (19:35):
This is from Sarah Berg. I need to find dental
insurance soon due to
leaving my job. I know you love dental plans. Would
I want to have dental insurance and dental plan, or
just the dental plan? My teeth are in good shape,
but I'm 55, so who knows what's coming as far
as dental care needs.
Suze (19:56):
Well, I'll tell you what's coming, and Sarah,
KT (19:58):
I'll tell you tell you what's coming. We thousands of.
Dollars of dental work, but get the dental plan. Tell
her to get the...
Suze (20:08):
I would not be getting dental insurance if I were you.
I am not a fan of dental insurance unless you
work for a company that pays for it for you.
I and KT and Colo and all of our friends
and friends have something called a dental
savings plan, go to dental plans.com. Look at it. Normally
(20:33):
dental insurance could be $100 or $150 a month. Normally
they have high deductibles and waiting periods with a dental
savings plan. Maybe if it's just you, it will cost
you $150 a year.
And you can save anywhere from 10 to 60% on procedures,
(20:54):
no waiting period, and no max out of how much
you can use it. So again, dental plans.com. Next, KT.
KT (21:03):
OK, my final question, short and
sweet. Does the income I earn from interest or capital
gains from selling a stock held less than a year
count towards the 146,000 income before I have reduced Roth contributions?
(21:24):
That's from Wayne.
Suze (21:25):
Do you want another quizzy?
KT (21:27):
Well, all right, let me see. Hold on. All right, everybody,
let me see if I can redeem my lack of
knowledge here. So does the income I earn from interest
or capital gains from selling a stock held less than
a year count towards the 146 that I held less?
I think that the answer is whatever income you have
(21:49):
when you reach that limit, that's the limit. doesn't matter when.
Suze (21:52):
That's not the question.
The question is, if this person has held a stock
for less than a year, obviously it's outside of a
retirement account and they sell it.
Does that gain count
towards the calculation of income where the max is 146
(22:17):
for a single person.
KT (22:21):
Do you want me to answer it? I think it does.
I think it does. I think, yeah, all I know
is in in America, whatever money you make is your income, right?
Suze (22:33):
Not actually, however, but it is true when you sell
a stock that you have held for less than one year, Wayne,
that's taxed to you then as ordinary income.
Right, so yes, it counts towards your income, even if
it's a capital gain, the way they figure capital gains,
(22:56):
it gets figured in with your income and all of that.
So either way, it probably would, but definitely in this
situation it will count towards that $146,000 of modified adjusted
gross income. What are you eating?
KT (23:15):
It's a cough drop from my throat.
Suze (23:18):
Do you have a sore throat?
KT (23:19):
It's not sore, but it's a little dry.
Suze (23:21):
It's dry, huh?
KT (23:22):
Yeah, because I've been swimming in the ocean with Susie
every day till we got this bout of rain. But
like we better sign off. It's late. We're over our
limit here, everyone.
Suze (23:33):
Oh, actually, KT, we're the bosses, so we make the
limit be whatever we want it to be. However,
KT (23:41):
There's really only one thing that we want you to
remember when it comes to your money. What is that, KT?
People first, then money, then things, and if you follow
that guideline,
Suze (23:54):
and if you stay safe, you will be what? Unstoppable.
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