October 9, 2024 • 37 mins
Chuck Zodda and Marc Fandetti discuss the potential economic impact of the back-to-back hurricanes hitting Florida. What happens to Google if they are forced to breakup? Todd Lutsky joins the show to share his insight on naming beneficiaries in your IRA. Todd also takes calls from listeners about their estate planning needs.
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Episode Transcript
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Speaker 1 (00:01):
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(01:08):
He's The Financial Exchange with Chuck Zada and Mark Vandetti.
Speaker 2 (01:13):
Midweek. Here on the Financial Exchange is Chuck, Mark and
Tucker with you, and our top story today is Hurricane
Milton continuing to bear down on the west coast of
Florida and the potential economic impact. Obviously, look, we can
talk at a personal level just how horrible this is
likely going to be for a number of people on
the West coast of Florida, but our show focuses on
(01:36):
the business impact. So we're you know, clearly going to
leave you know, our thoughts and prayers with the people
that are down there, either stuck down there or who
have chosen to ride out the storm. And you know,
certainly we hope for the best and that things, you know,
are again as as there's as little disruption as possible
(01:57):
is basically what we're hoping for. But this is going
to be a tough one. But in a story from
Barons this morning, we have some further proof that, Hey,
a lot of times if you want to get the
update on what's coming down the road, just listening to
the Financial Exchange, a couple of weeks before, and you'll
have Baron's articles, you know, a couple of weeks in advance,
(02:18):
because this is all about, Hey, the October Jobs Report
is going to be impacted by Hurricane Helen and now
by Hurricane Milton. And we've been talking about this for
a couple of weeks. Where the data collection period for
the October Jobs Report is October six through twelfth, and
so already, look, you've got Helene where if you know
anyone in the mountains of the Carolinas, I've got a
(02:41):
couple of folks that are in the Ashville area. I
know someone else down in Greenville, South Carolina, and you
know they're still trying to figure out how to get
power and water on a consistent basis to these areas.
You are not going to get accurate counts of jobs there,
very clearly. And now with Milton making landfall right in
the middle of this period, you've got two storms that
(03:01):
are going to be completely disruptive to the October jobs data,
probably the November jobs data as well. And so I'm
now at the point where, in order to kind of
get you know, an accurate picture of jobs from the
jobs report, you're probably looking at the December, January, and
February jobs data, which means we might not actually know
(03:22):
what the jobs market really looks like, at least from
the government jobs data until March.
Speaker 3 (03:30):
Yeah, it's a good reminder, Chuck, that you should always
look at long term smooth averages of this stuff. This
is just an extreme example of how even the littlest blip,
and this is far from a little blip, but even
a little disruption to somebody's life can interfere with the
accuracy with which you complete a survey, the timeliness with
(03:53):
which you submit that survey to the authorities that they're
trying to collect the data. Imagine trying to as an
employ lawyer when your business is and we've all experienced
this year and in uh, what do we Southern New England,
in Middle New England whatever, we call this a little
slice of heaven we occupy. We've all experienced floods.
Speaker 2 (04:13):
Middle New England is the term I've never heard before.
Speaker 3 (04:15):
But it sounds like Tolkien, something Tolkien would invent.
Speaker 2 (04:18):
I'm from Middle Earth and I'm here to help you
with from spells.
Speaker 3 (04:22):
I'm from Middle New England.
Speaker 2 (04:23):
Get the hell out of highway economics. To you, good
people of Earth.
Speaker 3 (04:27):
Okay, your fruitcake wizard anyways. Yeah, so those of us
in middle New England have experienced this in the past
couple decades. We all know somebody with a business that's
been flooded. We saw it happen along the Connecticut River, right,
that was earlier this year.
Speaker 2 (04:41):
I mean, you talked to anyone up like the Vermont
in New Hampshire riage in the last two years, and
they've had all kinds of flooding.
Speaker 3 (04:47):
So I mention those employers trying to complete it. Or
household who gets the household survey. I've never actually known
anyone that does, but they allegedly survey under twenty thousand
households every month.
Speaker 2 (04:56):
I would love to get surveyed. Yeah, it's that kind
of hi one survey. You know, you always have one
of those calls where you know you're on the phone
with someone, Hey, please fill out a brief survey afterwards. No, no, click,
I'm not going to do that. This is if if
the Bureau of Labor Statistics actually called me.
Speaker 3 (05:13):
Oh, they would rue the day they called you. Okay,
mister Ziddath, thank you, that's that's that's really all we needed.
Speaker 2 (05:19):
No, but let me tell you about how many hours
I worked on Tuesday, just so you know. But yeah,
this is going to be hugely disruptive to survey collection,
and so you're going to have you know, probably a
significant drop just in you know, the percentage of respondents
that are actually getting their surveys back. On top of that,
the ones that are returning them might be indicating things
(05:39):
that are different from how they normally would because there
are some people who might say, look, I've I've had
to file for unemployment because the place that I work
was destroyed by you know, uh, flooding in North Carolina,
and so I'm on unemployment temporarily and I'm hoping to
get my job back in a month or two. But
like the these are the things that are going to
(06:00):
make it really hard to determine, not just over again
one month, because remember, you then have to deal with
the resolution of these impacts going forward. So as an example,
if someone says, hey, I'm you know, marking myself is
temporarily unemployed, Well, when they get that job back, you know,
because the place is fixed up and it reopens, they
(06:20):
now say, okay, I and I know that this isn't
they don't survey the same people over and over, but
they still target you know, same geographic areas who are
likely going through the same things. And so as such,
you might have something where, look, the October jobs report,
I don't know, like it could show anywhere from like
two hundred thousand jobs created to two hundred thousand jobs lost,
(06:42):
and I wouldn't be surprised, Like that's that's how wide
I think the band is it?
Speaker 1 (06:45):
This?
Speaker 3 (06:46):
Yeah, we sometimes talk about those error bands because it
is a sample. We will be testing the limits probably
of those in the upcoming samples.
Speaker 2 (06:53):
Yeah, but then in the subsequent months, in you know,
November and December, you might end up with, hey, look there,
you know, three hundred and fifty or four hundred thousand
jobs created because a bunch of people who previously said
they were unemployed are now saying that they're working, and
that throws off all of this as well. It's something
that you have to pay attention to, and so you
(07:16):
might not have any meaningful signal from the jobs report
for the rest of the year, like for the remainder
of the fourth quarter. It could be something where you're
just well, we don't know if this means anything, and
we're gonna have to rely on other indicators for the
next few months in order to figure out what's going on.
I did make the point mark that one of the
(07:37):
things that we will be getting this month that will,
you know, give us a little bit more information than
if this had been happening, you know, a month before
or month after, is we're going right into the middle
of earning season, and so we're gonna be hearing from
companies directly about what they're seeing in the broader economy
and how they're adjusting their earnings projections and things like that,
and so I do think that can at least give
(07:59):
us some clarity in the short term, not on the
overall state of the economy. But remember with the market,
the reason why we care about the economy is because
it feeds into how stocks potentially perform in terms of
the overall amount of economic growth. Well, if you're hearing
right from the companies, it kind of cuts out the
middle man a little bit. I know, they always try
to sell you on whatever, but look, it still is
(08:20):
something where because you're going to be getting this earnings
data at the same time that we are lacking jobs.
Data doesn't make up for it, but at least, you know,
helps to cover some of that.
Speaker 3 (08:31):
I think, yeah, there could be more attention paid to
first hand accounts as a result of this, to clarify,
to confirm or disconfirm some of the unusually noisy, so
to speak, signals that we're getting from what we know
will be highly in perfect surveys.
Speaker 2 (08:46):
In terms of the potential damage to the West Florida
coast and even look through you know, Inland, where they're
expected to get twelve to eighteen inches of rain all
along I four in that area. The projections that we
are seeing, according to Jeffreys, is that you could see
in the worst case scenarios, potentially one hundred and seventy
(09:08):
five billion dollars in insurance losses and somewhere you know,
conservatively in the fifty to seventy billion dollar range. So
this is likely going to be one of the most
expensive storms ever to go through that area, not through
that area, through you know, anywhere in the United States.
And as such, for a region that is already beset
(09:32):
by the problem of hey, we've got insurance that are
either pulling out of the area or jacking premiums through
the roof in order to cover massive losses from the
last several years. This is not going to make the
problem any better for homeowners that are trying to figure
out how they can get insurance throughout Florida in the southeast.
Speaker 3 (09:52):
Yeah, I mean not my area, but sure, hard to
argue with that. I'm thinking more about impact on to
your earlier point statistics like GDP. We talked about unemployment,
but no GDP per se, and there's no obvious immediate impact.
Because GDP measures the flow of goods and services, it'll
capture the response to that, it'll capture any immediate recovery
(10:16):
efforts or decrease in production. Thank god, there's no Uh.
It seems little crass to point it out because human
lives are at stake. But it's not going to hit
a manufacturing center or a major port, which could cause
major supply disruptions and hit the economy with an inflationary
and a production shocked at the same time. That would
(10:38):
be bad news for our fight against inflation. But as
as far as the impacts on the micro residential market, yes,
it's hard to argue that there'll be anything but totally devastating.
Speaker 2 (10:49):
Yeah, it's something where the short term impacts are probably
pretty significantly negative. Longer term, you get all those relief
funds that end up flowing through there eventually, but that's
a process that can take years to fully play out.
It does in terms of, you know, all of the
rebuilding that you end up doing. Let's take a quick
break here. When we come back, let's talk a little
(11:10):
bit about the Google Ay, or Google as it's more
commonly referred to, DOJ saying hey, here's what we think
should happen as a result of you being found guilty
of anti competitive practices. We'll cover that when we return.
Speaker 1 (11:25):
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Speaker 2 (12:23):
Mark is Google your search engine of choice?
Speaker 3 (12:26):
Always?
Speaker 2 (12:26):
Yes, Tucker, what about you?
Speaker 5 (12:28):
Yeah?
Speaker 1 (12:28):
Yeah?
Speaker 2 (12:29):
Either of you ever use anything else?
Speaker 4 (12:31):
No?
Speaker 2 (12:31):
Try, try trying.
Speaker 3 (12:33):
It's okay.
Speaker 2 (12:33):
See you bing something?
Speaker 4 (12:35):
I tried duck duck go just out of curiosity.
Speaker 2 (12:38):
And if you're saying it in the past, did you
did you? Did Mark Mark bing something? Or did he
bong something? Binged bing bong binged binged? You can't bong something. No,
that's different.
Speaker 4 (12:51):
No, that's a very different.
Speaker 5 (12:52):
Got it?
Speaker 2 (12:53):
Anyways, Google, The DJ yesterday said a put fourth a
filing basically outline the remedies that they are proposing for
Google being found guilty of anti competitive practices, and I'll
quote here from the Wall Street Journal. The filing said
the government is considering a full range of tools to
restore competition, including structural changes to Google's business that would
(13:15):
prevent it from using products such as as Chrome Browser
or Andrite operating system to advantage Google's engine search. Google
responded in a blog post, of course they did it
in a blog post that the Justice Department's initial proposal
for reforming the search engine market is radical and sweeping.
It could have negative, unintended consequences for American innovation in
America's consumers. Let's talk about this just a little bit,
(13:39):
because if there's one place where I think it's hard
to make a case that Google is not a monopoly,
it's in search, where they control just a huge amount
of the market. And in such circumstances, you could actually
make a case that radical and sweeping change is exactly
what is needed in order to restore competition so that
you can get the innovation that has kind of been
(14:00):
lacking in search. I mean when we talk about search engines.
The reason why Google is the most popular search engine,
by the way, is because they actually competed and they won.
Back in the early two thousands. They weren't the first
company to do search. Y'all out there, you remember Alta
Vista and likeos and ask Jeeves, and I mean even
(14:23):
freaking Yahoo, which is still floating around as you know,
just a shell of what it used to be. These
were the big names in search in the nineties and
early two thousands, and then Google said, no, we've got
a better algorithm that helps you find the information that
you want. And people chose it. It wasn't that they
were forced upon it. That's what Googled it after in
order to keep people there by paying Apple sixteen billion
(14:44):
dollars a year to be the default search engine and
stuff like that. But people chose Google. Like, let's not
lose light of the fact that the reason why Google's
in the place it is today is because people really
liked it in the early two thousands.
Speaker 3 (14:56):
Yeah, I guess the argument is they use the profits
from that to secure an unfair advantage on certain platforms
relative to competitors and thus became a monopoly, right, Isn't
that is all?
Speaker 2 (15:08):
And I think look at like, look at your experience
with Google now, and how often do you, you know,
put something into Google and you're like, this isn't giving
me what I want? Like, these aren't the answers that
I'm I'm looking for on this and are you being facetious?
Speaker 3 (15:23):
Do you find that happens more frequently?
Speaker 5 (15:24):
I do, I, oh, you are.
Speaker 2 (15:25):
I find that I get all kinds of AI created
crap that gets returned in like the top three search results.
Now where in greated. It's not for important stuff, you know,
it's it's for dumb stuff. I'm like, oh, what are
the lyrics of this song mean? And I just get
the top articles like a, I, well, this song is
important because it's important. It's like, what the what the heck?
(15:48):
Like this is just stupid.
Speaker 3 (15:49):
So they've already been found to be a monopoly. Right,
that's in the past. We're not going to be able
to undo that question.
Speaker 2 (15:54):
Know what the appeal process is on that?
Speaker 6 (15:56):
I know.
Speaker 3 (15:56):
I think that's a fund I think that is a
finding of fact, and that is that responsibility resides with
lower courts. I think higher courts will determine whether or
not the remedy was too severe, Like if the judge
in this case in charge says, break it up, sure,
which is I guess the most severe thing you can do,
which is what the government wants. Well, so that fixed
(16:17):
the problem that you cited.
Speaker 2 (16:18):
So I don't know, and it's like, it's tough to
figure out. You think about why Google has the power
that it does, and it's just it's so normalized. Is
just what you do for search? I mean again, you
say I'm going to google something. You don't say I'm
going to search for something online. You literally say I'm
going to google it.
Speaker 3 (16:36):
I'm with you, but it's detractors. I don't agree with them.
But this is the argument it was apparently successful back
in August when they deemed it to be a monopoly.
Is that they secured that advantage through unfair, anti competitive means,
paying off Apple, paying off others to be the default.
You and I probably would have chosen it anyway, at
least I would have.
Speaker 2 (16:53):
But that's the argument so here and again, I've suggested
this before for Amazon, and I know that I'll say
this and people be like, well, what does that even mean?
I think it would be really really interesting to break
up Google's search business based on geography.
Speaker 3 (17:12):
Chuck, what does that even mean?
Speaker 2 (17:14):
Thank you, Mark, I'm glad you asked hold on, let
me google it. Here's what I mean by this. I'm
not saying, Okay, if you want to google something about
New England that you have to go to like the
New England search engine. But what I am saying is, look,
you know, Google knows where its revenue comes from and
where its users come from. Break it up based on
(17:35):
the geography of that, so that you have I don't know,
eight to ten Googles, mini Google's baby Googles, just like
the baby bells, you know back in the yay we
do with Standard Oil and AT and T do that
and then look, hey, you guys can compete to expand
your territory and try to attract users from other places places,
and we'll see who ends up being the best one,
and you'll have how to improve your product.
Speaker 6 (17:55):
To do so.
Speaker 3 (17:56):
Unlike with AT and T and Standard Oil, you can't
segment the customers by geography. So how would you prevent
me from hitting.
Speaker 2 (18:02):
I can, though, because I know where the revenue the
revenue is.
Speaker 3 (18:04):
Can you prevent me from No?
Speaker 2 (18:06):
I can't prevent you from going somewhere else. But this
is what I'm saying is, hey, one of those is
going to then have to innovate in order to be
the best one. Otherwise you'll just you know, keep using
you know, whatever, whatever one you're using before and you know, okay,
you've got ten Google, so it's Google New England Google,
you know, Southeast Google and Midwest and so on and
(18:27):
so forth. And those companies are going to have to
compete each other against each other in order to build
the best product to see who wins all that market share,
and in doing so you also open it up to
additional competition that's smaller that now is on the same
scale as these smaller mini Googles, And I just think
it would be interesting to see what happens there and
(18:49):
how it plays out.
Speaker 3 (18:50):
I guess the other remedy is if they don't go
with a rather, it seems pretty Dracronian to me. The
actual breakup is force them to share enough so that
others can and compete. That's being contemplated as well.
Speaker 2 (19:02):
Which if you're gonna do that, you might as well
just turn them into a regulated utility. And it's like, okay,
you know what are we doing here? Then then you're
definitely not getting any innovation. That feels worse to me.
Speaker 3 (19:12):
You know, I don't know, I would try yours because
we don't know.
Speaker 2 (19:18):
Yeah, look, the worst thing that happens is well everything,
but I don't know. This is why I'm not a regulator.
Speaker 3 (19:25):
But I think, Oh, they're winging it too, Chuck. Let's
not pretend they have any go ahead.
Speaker 2 (19:29):
It's true. Let's just get some more competition in the space.
Quick break Wall Street Watch and ask Todd our next.
Speaker 1 (19:41):
Like us on Facebook and follow us on Twitter. Act
TFE show. Breaking business news is always first right here
on the Financial Exchange Radio Network. Time now for Wall
Street Watch, a complete look and what's moving markets so
far today right here on the Financial Exchange Radio.
Speaker 4 (19:59):
Netw Following yesterday's winning day with a strong performance from
the tech sector, Marcus today are trading modestly higher as
investors look toward FED meeting minutes due out this afternoon
at two o'clock. At the moment, Dow was up by
about a quarter percent, or eighty four points. SMP five
hundred is up by ten points, and the NAZAC up
(20:20):
another quarter percent as well. Russell two thousand is up
nearly a third of a percent. Ten year Treasurealed is
flat at four point zero three percent, and crude oiled
down again today another two and a half percent, trading
just below seventy two dollars a barrel. Alphabet shares down
one and a half percent after the Justice Department submitted
a court filing yesterday that gave a federal court a
(20:42):
range of options, including setting restrictions or ordering a breakup
to Google to end what it called an unlawful monopoly
in search. Meanwhile, shares and Boeing down by three percent
after the planemaker withdrew a pay raise offer it had
made to striking factory workers, saying the union demands far
in excess of what can be accepted. Ratings firm SMP yesterday,
(21:06):
es tomated the strikes could cause Boeing one billion dollars
a month, and minor Rio Tinto agreed to buy Arcadium
for six point seven billion dollars. The deal will make
Rio one of the top producers of a key commodity
used in batteries for electric vehicles. Rio shares down by
one percent, while Arcadium stock is surging by thirty percent.
(21:30):
I'm Tucker Silvan, that's Wall Street Watch.
Speaker 1 (21:33):
This is asked Todd on the Financial Exchange Radio Network.
If you have an existing estate plan or in the
market for one, Todd Lutsky is here to answer your
questions and help you plan for later life. Ask Todd
is presented by Cushing and Dolan, serving Massachusetts and New
England for more than thirty five years, helping families with
a state and tax planning, Medicaid planning, and probate law.
(21:54):
Visit Cushingdolan dot com. Now here's Todd Lutsky.
Speaker 2 (22:00):
And we are now joined by mister Todd Lutsky from
the law firm of Cushing and Dolan. We call the
segment Ask Todd because it's your chance to ask Todd
your questions about your state plan. Phone number here eight
eight eight two zero five two two sixty three. That
is the studio line to uh get in line to
(22:22):
ask Todd your questions. UH again. Normally we can get
through two to three calls, so do get call on kids.
Last week we had four fourth person didn't get hurt
and it was very, very sad. So we we want
to make sure that we get to you if possible again.
Eight eight eight to zero five two two sixty three.
That is the number to call to speak now with
(22:43):
Todd Lutsky one more time. It is eight eight eight
to zero five two two six three. Mister Lotsky, How
are you today?
Speaker 5 (22:51):
I am never better? How how are you doing.
Speaker 2 (22:53):
Uh, tough day yesterday.
Speaker 5 (22:55):
Yeah, what happened?
Speaker 2 (22:55):
Got fired from the pasta factory.
Speaker 5 (22:57):
It's a pasta factory. Yeah.
Speaker 2 (22:59):
Why why is that made a focilly mistakes of silly mistakes? Yeah,
I get it. It was a tough day, but we're
bouncing back. Todd. Let's talk a little bit about naming
beneficiaries on iras specifically.
Speaker 5 (23:13):
Yeah, that's a.
Speaker 2 (23:15):
Niche topic, but I think there's some some meat in
this niche here.
Speaker 5 (23:19):
Oh yeah, a lot of meat.
Speaker 2 (23:21):
Historically, the guidance that I've heard on I rays and
naming beneficiaries has been name individuals as beneficiaries on irays,
don't name trusts or estates. Does that fit with kind
of what the historical pattern has been.
Speaker 7 (23:36):
Yeah, And I think starting with the historical pattern makes
a lot of sense because for a very very long time,
you know, the primary beneficiary rule of thumb, and even
today a lot the primary beneficiary rule of thumb is
surviving spouse. Yep, that's what you would go with, you know, generally,
(23:56):
and then over time, and it's been going on now
for a while. File that that if you've done your
estate plan and you still would name the surviving spouse
the primary beneficiary, but your contingent beneficiary might be your
family revocable trust. If you know, if you want to
(24:18):
ensure that the assets ultimately flow through a trust, and
when you would do that is is if you if
your revocable trust has language in it that says I
want to protect my children from future divorces and future creditors,
and you know, maybe they're not great with money or
(24:38):
whatever reason you're holding assets in the trust. Remember when
I say assets in the trust, all of your other
estate planning assets are in the trust.
Speaker 5 (24:45):
Already, but not your era.
Speaker 7 (24:47):
But let's say you have, you know, a million dollar IRA,
Well you might not want to say, you know, And
I've got my trust over here with another couple million
in of assets protected from my kids.
Speaker 5 (24:59):
I got a million dollar IRA not in there.
Speaker 7 (25:03):
Maybe I don't want to list the kids as the
contingent beneficiary because then it will what come out to
them directly over ten years. I get it, that's the
new rule. But the point is it's coming out to them,
not protected, not sheltered from creditors, not you know. And
so if you're saying, you know what, I really want
to make sure that those assets find their way to
(25:26):
the protection of the trust for the kids. Then the
contingent beneficiary should be the trust. Okay, So that's been
sort of the evolution, and that's for people who've done
revocable trust planning, never mind irrevocable trust.
Speaker 2 (25:39):
Talking with Todd Lutsky from the law firm of Cushing
and Dolan. If you've got a question that you'd like
to ask Todd during this segment here studio line is open.
It eight eight eight to zero five two two six three.
That number again is eight eight eight two zero five
two two sixty three. In order to chat with mister
Todd one more time, it's eight eight eight two zero
(26:03):
five two two six three. Todd, is there anything that
you can do in terms of beneficiaries or contingent beneficiaries
on iras that impacts how they're viewed from a medicaid
perspective where you're still kind of in a tough spot
with that, and there's not much you can do well.
It is a tough spot generally.
Speaker 7 (26:21):
But now with the Secure Act two point zero that
I believe came out in about twenty twenty two, seemingly
getting to be long ago. But you can name the
estate the beneficiary, but there's a lot of rules you
got to follow. You would generally do it only if
you're a married couple number one, and you'd kind of
(26:43):
want to be seventy three to do it. And then
by naming the estate the beneficiary, which is remember as
you said, the iras are assets I cannot protect in
advance from the nursing home generally, but if you qualify,
you can name the estate the benefit fishery, and then
you can protect these assets from nursing homes for the
(27:06):
surviving spouse. And the real key is without a five
year waiting period.
Speaker 2 (27:12):
Huge talking with Todd Lutsky from the law firm of
Cushing and Dolan. Again, if you've got a question for Todd,
studio line is open at eight eight eight to zero
five two two six three. Still have a little bit
of open space there on those lines, So please, if
you got a question for Todd, this is your chance
to ask him that question again. Eight eight eight to
zero five two two sixty three. We're gonna go to
(27:34):
a quick break here, but it's right to your questions
when we return. That number again is eight eight eight
to zero five two two sixty three.
Speaker 1 (27:43):
Ask Todd with Todd Lutsky every Wednesday at ten thirty
only here on the Financial Exchange Radio Network. You're listening
to Ask Todd with Todd Lutsky on the Financial Exchange
Radio Network.
Speaker 2 (28:02):
All right, Tod, we got callers lined up for you.
Let's get to them with Paul in Sandwich kicking things off. Paul,
you're on with Tom Lutsky.
Speaker 8 (28:09):
Hey, good morning, how are you?
Speaker 5 (28:10):
Good morning?
Speaker 8 (28:12):
Can you help me understand if I set up in
the irrevocable trust and the beneficiaries are my children who
are who are married?
Speaker 5 (28:22):
What you know?
Speaker 8 (28:25):
God forbid that the marriages don't last, But in this
day and age, a lot of marriages don't last. What
rights do the spouses or ex spouses have.
Speaker 7 (28:35):
So this is a great question because it applies, and
I want to answer it for a lot of listeners.
I'm going to expand the answer to include not only revocable,
not only irrevocable trust, which is what you asked for, Paul,
but revocable trust. So I don't care if you've done
revocable trust planning or you've done irrevocable trust planning. You know,
I always tell people, Yeah, you know, sheltering assets for
(28:58):
state taxes and probate avoidance. All that is is important,
but that's kind of the noise, right. The family behind
the estate plan is really why we're doing this, and
that is when you pass away, you can actually control
the assets as to how they get to the beneficiaries,
in this case protection from future divorces. And so you
(29:20):
put language in the document that does that and basically,
in a nutshell to answer your question is they will
have no right to the assets when the divorce comes.
So I'll just tell you how it works quickly. You
put language in that says if it said I divide
my assets equally to my kids and I give it
to them, well, then you can imagine that five years later,
(29:40):
after you're dead, when the divorce comes, whatever you gave
your children is now going to be gone. There is
going to be cut in half on a good day
subject to that divorce. And it does happen by not
giving it to them. And I'm going to sort of
put the pen back here into the trust bucket and
hold it. If you hold it in trust, you put
language in there it says things like, you know your
(30:02):
kids can be trustee, your kids can have the power
to appoint a disinterested trustee, and even remove and replace
the disinterested trustee. So no problem there. But language says
that when distributions come out, the only job the disinterested
trustee has is to authorize distributions to that kid or
(30:22):
to that to that kid's kids, your grandkids. And so
your child as general trustee is doing everything and the
disinterested trustee is doing very little. But you know, every
time the child says, you know, we're going on a
family vacation, We're taking a family trip. We need a car,
you know whatever, the disinterested trustee authorizes the distribution. Now,
(30:44):
the child, five years after your dead gets a divorce
and the surviving the soon to be ex spouse says,
I want half of what's in that trust we've been
taking money out of over the last five years. And
your child says, that's a really great idea, But you
got asked the disinterested trustee. Oh see how that works.
It's protected, and it's not just protected because the disinterested
(31:06):
trustee can say no. Think about it from an ownership perspective.
From an ownership perspective, the individual your child never owned
what's in that trust, So if they don't own it,
it's really not a marital asset to begin with, so
you simply tell the other side that it's not a
marital asset, so you know, no, it's not available. So
(31:28):
really provide some great protection and that can be in
a revocable trust or an irrevocable trust, because remember, once
you die, all trusts are irrevocable. Now, folks, speaking of that,
that's one way to protect assets.
Speaker 1 (31:44):
One of the.
Speaker 7 (31:44):
Assets that's tough to protect is an IRA. And that's
why we're doing a guide in this case to go
to Paul's situation. By naming the trust the beneficiary of
the IRA the trust at least then it would be
protected from these future divorces that I just discuss. So
naming the kid outright might not be the way to
go for everyone. In addition, folks that specifically want to
(32:08):
add nursing home protection to their estate planning and are married,
and there's a lot of other restrictions. You can learn
how to name your state the beneficiary of the IRA, which,
as Chucker mentioned earlier, is very much outside the norm.
It will avoid pro it will allow you to shelter
assets for these iras from the state taxes. It will
(32:30):
allow you to not have any adverse income taxes and
without a five year waiting period can protect it from
the nursing home. But you need a couple it with
a testament of trust. Get the guide, folks, learn how
to do it with your IRA eight six six eight
four eight five six ninety nine or Legal Exchange Show
dot com again eight six six eight four eight five
(32:54):
six nine nine or Legal Exchange Show dot com.
Speaker 2 (32:57):
Todd, I've got another caller for you here. Let's go
to Jerry in the hunt. Jerry, what is your question
for Todd?
Speaker 6 (33:04):
My question is I own a lot of real estate
and everything's in LLCs, so each individual warehouse or buildings
I own are in LLC. So now I'm at fifty
four years old, and now I get to get a trust,
every revarokable trust, some type of trust, a team together
that can put this together. Unfortunately, I'm either between ten
(33:27):
million dollars in real estate or over on the assessed values,
I could be up to tent sure. So I don't
know how to number one tax defer it some of
the situation that I have put everything in a trust
because I'm at fifty.
Speaker 9 (33:43):
Four years old now, and are you married sixty and.
Speaker 6 (33:45):
Sixty years I'm married, I have five kids, So I
really I've been listening to you guys for a while.
I really think that you're the right choice. I just
need a team of you know, tax lawyers and everybody
else they can put this together. Well, I don't know
nothing about it. I just know that I do real
estate and I collect rent.
Speaker 7 (34:05):
And that's I can tell you certainly that we have.
You know, pick, you needed a lawyer of some of
for sure, you need an estate planning attorney. With that
kind of an estate and married in five kids, so
who you pick up to you? But certainly one you
need one. Two, Yes, an estate plan to help you shelter.
And again, remember folks, the federal estate tax exemption is
(34:27):
going to drop to about seven million in a year
and a half or so, so you know ten million,
you're looking at fifty percent estate tax on the amount
over prefer federal and state. So there's a lot of
money right there. I love, Jerry, the fact that you
have iras. I'm sorry that you have LLC's in place
for your real estate, right that is really a great,
a great idea. But now you need to take the
(34:49):
shares of the LLC and put them into probably a
revocable trust, whether you can get away with a joint
or not. Would really need to sit down and learn
about the size of your estate, whether we need one
trust too. So we'd take the LLC shares, put them
in there. You would always be able to then, and
we put your other assets in there, and I will
look at your LLC's and see if there's a way
(35:10):
to you know, you know, sort of fine tune how
you own those a little bit. But yes, I think
in a state plan is in order to get your
shares in there, to get your other assets in there,
and then structure it to reduce really eliminate your federalist
attax completely and then significantly reduce your mass tax while
also providing for your family and maybe even within a
(35:31):
state this large, protecting those five kids from their future
divorces and creditors, et cetera.
Speaker 5 (35:36):
I would certainly want to do.
Speaker 2 (35:37):
That, Todd. I've got one more for you. Let's go
to Peter and Worcester. Peter, we've only got about a
minute and a half, so we got to speed run
this one a little bit. What's your question for Todd?
Speaker 9 (35:45):
All right, Todd, thanks for thinking the call. Hey, listen,
I set up trust about five years ago. I'm retired
state and boie.
Speaker 5 (35:55):
Is it an irrevocable trust.
Speaker 9 (35:57):
It's a it's a revocable trug.
Speaker 5 (35:59):
Go ahead.
Speaker 9 (36:00):
My two daughters A twenty three and twenty six, and
I'm looking at right now. Haven't looked at again. I
have a four to fifty seven with the state that
I started way back when in the eighties.
Speaker 5 (36:11):
Yep.
Speaker 9 (36:11):
There's probably about a million bucks in there. Yeah, and
that's going through.
Speaker 5 (36:15):
What's the question? Get right to the question. What's the question?
Speaker 9 (36:18):
Okay, here's here's what I want to do. I was
thinking about making my oldest daughter the trustee, and I
don't know if that's a good idea.
Speaker 5 (36:26):
Okay, well it can be when you you mean, when
are you married.
Speaker 9 (36:31):
I'm not divorced, So when you.
Speaker 7 (36:33):
Pass away, I don't want the trustee to be your daughter. Now,
you should be the trustee because it's a revocable trust.
And and then you could you when you die, you
certainly can have your daughter as trustee. That's not not
a problem. Ever, if, on the other hand, based on
as you get older, you want to do irrevocable trust planning,
it's also not a problem to have your daughter as trustee.
(36:55):
But you know you don't have to have a daughter
as trustee, so you need to think about that. So
if that's the question, no real problem there. Todd, thanks
so much for joining us today. We appreciate it.
Speaker 5 (37:05):
Thank you always a pleasure.
Speaker 1 (37:08):
This has been asked Todd on the Financial Exchange Radio network.
Ask Todd with Todd. Lutsky has been presented by Cushing
and Dolan, serving Massachusetts and New England for more than
thirty years, helping families with the state and tax planning,
Medicaid planning, and probate law. Call eight hundred and three
nine three four thousand and one or visit Cushingdolan dot com.
The views expressed in this segment are solely those of
(37:28):
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The Financial Exchange is produced by Money Matters Radio and
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(01:08):
He's The Financial Exchange with Chuck Zada and Mark Vandetti.
Speaker 2 (01:13):
Midweek. Here on the Financial Exchange is Chuck, Mark and
Tucker with you, and our top story today is Hurricane
Milton continuing to bear down on the west coast of
Florida and the potential economic impact. Obviously, look, we can
talk at a personal level just how horrible this is
likely going to be for a number of people on
the West coast of Florida, but our show focuses on
(01:36):
the business impact. So we're you know, clearly going to
leave you know, our thoughts and prayers with the people
that are down there, either stuck down there or who
have chosen to ride out the storm. And you know,
certainly we hope for the best and that things, you know,
are again as as there's as little disruption as possible
(01:57):
is basically what we're hoping for. But this is going
to be a tough one. But in a story from
Barons this morning, we have some further proof that, Hey,
a lot of times if you want to get the
update on what's coming down the road, just listening to
the Financial Exchange, a couple of weeks before, and you'll
have Baron's articles, you know, a couple of weeks in advance,
(02:18):
because this is all about, Hey, the October Jobs Report
is going to be impacted by Hurricane Helen and now
by Hurricane Milton. And we've been talking about this for
a couple of weeks. Where the data collection period for
the October Jobs Report is October six through twelfth, and
so already, look, you've got Helene where if you know
anyone in the mountains of the Carolinas, I've got a
(02:41):
couple of folks that are in the Ashville area. I
know someone else down in Greenville, South Carolina, and you
know they're still trying to figure out how to get
power and water on a consistent basis to these areas.
You are not going to get accurate counts of jobs there,
very clearly. And now with Milton making landfall right in
the middle of this period, you've got two storms that
(03:01):
are going to be completely disruptive to the October jobs data,
probably the November jobs data as well. And so I'm
now at the point where, in order to kind of
get you know, an accurate picture of jobs from the
jobs report, you're probably looking at the December, January, and
February jobs data, which means we might not actually know
(03:22):
what the jobs market really looks like, at least from
the government jobs data until March.
Speaker 3 (03:30):
Yeah, it's a good reminder, Chuck, that you should always
look at long term smooth averages of this stuff. This
is just an extreme example of how even the littlest blip,
and this is far from a little blip, but even
a little disruption to somebody's life can interfere with the
accuracy with which you complete a survey, the timeliness with
(03:53):
which you submit that survey to the authorities that they're
trying to collect the data. Imagine trying to as an
employ lawyer when your business is and we've all experienced
this year and in uh, what do we Southern New England,
in Middle New England whatever, we call this a little
slice of heaven we occupy. We've all experienced floods.
Speaker 2 (04:13):
Middle New England is the term I've never heard before.
Speaker 3 (04:15):
But it sounds like Tolkien, something Tolkien would invent.
Speaker 2 (04:18):
I'm from Middle Earth and I'm here to help you
with from spells.
Speaker 3 (04:22):
I'm from Middle New England.
Speaker 2 (04:23):
Get the hell out of highway economics. To you, good
people of Earth.
Speaker 3 (04:27):
Okay, your fruitcake wizard anyways. Yeah, so those of us
in middle New England have experienced this in the past
couple decades. We all know somebody with a business that's
been flooded. We saw it happen along the Connecticut River, right,
that was earlier this year.
Speaker 2 (04:41):
I mean, you talked to anyone up like the Vermont
in New Hampshire riage in the last two years, and
they've had all kinds of flooding.
Speaker 3 (04:47):
So I mention those employers trying to complete it. Or
household who gets the household survey. I've never actually known
anyone that does, but they allegedly survey under twenty thousand
households every month.
Speaker 2 (04:56):
I would love to get surveyed. Yeah, it's that kind
of hi one survey. You know, you always have one
of those calls where you know you're on the phone
with someone, Hey, please fill out a brief survey afterwards. No, no, click,
I'm not going to do that. This is if if
the Bureau of Labor Statistics actually called me.
Speaker 3 (05:13):
Oh, they would rue the day they called you. Okay,
mister Ziddath, thank you, that's that's that's really all we needed.
Speaker 2 (05:19):
No, but let me tell you about how many hours
I worked on Tuesday, just so you know. But yeah,
this is going to be hugely disruptive to survey collection,
and so you're going to have you know, probably a
significant drop just in you know, the percentage of respondents
that are actually getting their surveys back. On top of that,
the ones that are returning them might be indicating things
(05:39):
that are different from how they normally would because there
are some people who might say, look, I've I've had
to file for unemployment because the place that I work
was destroyed by you know, uh, flooding in North Carolina,
and so I'm on unemployment temporarily and I'm hoping to
get my job back in a month or two. But
like the these are the things that are going to
(06:00):
make it really hard to determine, not just over again
one month, because remember, you then have to deal with
the resolution of these impacts going forward. So as an example,
if someone says, hey, I'm you know, marking myself is
temporarily unemployed, Well, when they get that job back, you know,
because the place is fixed up and it reopens, they
(06:20):
now say, okay, I and I know that this isn't
they don't survey the same people over and over, but
they still target you know, same geographic areas who are
likely going through the same things. And so as such,
you might have something where, look, the October jobs report,
I don't know, like it could show anywhere from like
two hundred thousand jobs created to two hundred thousand jobs lost,
(06:42):
and I wouldn't be surprised, Like that's that's how wide
I think the band is it?
Speaker 1 (06:45):
This?
Speaker 3 (06:46):
Yeah, we sometimes talk about those error bands because it
is a sample. We will be testing the limits probably
of those in the upcoming samples.
Speaker 2 (06:53):
Yeah, but then in the subsequent months, in you know,
November and December, you might end up with, hey, look there,
you know, three hundred and fifty or four hundred thousand
jobs created because a bunch of people who previously said
they were unemployed are now saying that they're working, and
that throws off all of this as well. It's something
that you have to pay attention to, and so you
(07:16):
might not have any meaningful signal from the jobs report
for the rest of the year, like for the remainder
of the fourth quarter. It could be something where you're
just well, we don't know if this means anything, and
we're gonna have to rely on other indicators for the
next few months in order to figure out what's going on.
I did make the point mark that one of the
(07:37):
things that we will be getting this month that will,
you know, give us a little bit more information than
if this had been happening, you know, a month before
or month after, is we're going right into the middle
of earning season, and so we're gonna be hearing from
companies directly about what they're seeing in the broader economy
and how they're adjusting their earnings projections and things like that,
and so I do think that can at least give
(07:59):
us some clarity in the short term, not on the
overall state of the economy. But remember with the market,
the reason why we care about the economy is because
it feeds into how stocks potentially perform in terms of
the overall amount of economic growth. Well, if you're hearing
right from the companies, it kind of cuts out the
middle man a little bit. I know, they always try
to sell you on whatever, but look, it still is
(08:20):
something where because you're going to be getting this earnings
data at the same time that we are lacking jobs.
Data doesn't make up for it, but at least, you know,
helps to cover some of that.
Speaker 3 (08:31):
I think, yeah, there could be more attention paid to
first hand accounts as a result of this, to clarify,
to confirm or disconfirm some of the unusually noisy, so
to speak, signals that we're getting from what we know
will be highly in perfect surveys.
Speaker 2 (08:46):
In terms of the potential damage to the West Florida
coast and even look through you know, Inland, where they're
expected to get twelve to eighteen inches of rain all
along I four in that area. The projections that we
are seeing, according to Jeffreys, is that you could see
in the worst case scenarios, potentially one hundred and seventy
(09:08):
five billion dollars in insurance losses and somewhere you know,
conservatively in the fifty to seventy billion dollar range. So
this is likely going to be one of the most
expensive storms ever to go through that area, not through
that area, through you know, anywhere in the United States.
And as such, for a region that is already beset
(09:32):
by the problem of hey, we've got insurance that are
either pulling out of the area or jacking premiums through
the roof in order to cover massive losses from the
last several years. This is not going to make the
problem any better for homeowners that are trying to figure
out how they can get insurance throughout Florida in the southeast.
Speaker 3 (09:52):
Yeah, I mean not my area, but sure, hard to
argue with that. I'm thinking more about impact on to
your earlier point statistics like GDP. We talked about unemployment,
but no GDP per se, and there's no obvious immediate impact.
Because GDP measures the flow of goods and services, it'll
capture the response to that, it'll capture any immediate recovery
(10:16):
efforts or decrease in production. Thank god, there's no Uh.
It seems little crass to point it out because human
lives are at stake. But it's not going to hit
a manufacturing center or a major port, which could cause
major supply disruptions and hit the economy with an inflationary
and a production shocked at the same time. That would
(10:38):
be bad news for our fight against inflation. But as
as far as the impacts on the micro residential market, yes,
it's hard to argue that there'll be anything but totally devastating.
Speaker 2 (10:49):
Yeah, it's something where the short term impacts are probably
pretty significantly negative. Longer term, you get all those relief
funds that end up flowing through there eventually, but that's
a process that can take years to fully play out.
It does in terms of, you know, all of the
rebuilding that you end up doing. Let's take a quick
break here. When we come back, let's talk a little
(11:10):
bit about the Google Ay, or Google as it's more
commonly referred to, DOJ saying hey, here's what we think
should happen as a result of you being found guilty
of anti competitive practices. We'll cover that when we return.
Speaker 1 (11:25):
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(11:46):
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Speaker 4 (11:52):
This segment of The Financial Exchange is brought to you
in part by the US Virgin Islands Department of Tourism.
Speaker 2 (11:57):
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visit USBI dot com.
Speaker 2 (12:23):
Mark is Google your search engine of choice?
Speaker 3 (12:26):
Always?
Speaker 2 (12:26):
Yes, Tucker, what about you?
Speaker 5 (12:28):
Yeah?
Speaker 1 (12:28):
Yeah?
Speaker 2 (12:29):
Either of you ever use anything else?
Speaker 4 (12:31):
No?
Speaker 2 (12:31):
Try, try trying.
Speaker 3 (12:33):
It's okay.
Speaker 2 (12:33):
See you bing something?
Speaker 4 (12:35):
I tried duck duck go just out of curiosity.
Speaker 2 (12:38):
And if you're saying it in the past, did you
did you? Did Mark Mark bing something? Or did he
bong something? Binged bing bong binged binged? You can't bong something. No,
that's different.
Speaker 4 (12:51):
No, that's a very different.
Speaker 5 (12:52):
Got it?
Speaker 2 (12:53):
Anyways, Google, The DJ yesterday said a put fourth a
filing basically outline the remedies that they are proposing for
Google being found guilty of anti competitive practices, and I'll
quote here from the Wall Street Journal. The filing said
the government is considering a full range of tools to
restore competition, including structural changes to Google's business that would
(13:15):
prevent it from using products such as as Chrome Browser
or Andrite operating system to advantage Google's engine search. Google
responded in a blog post, of course they did it
in a blog post that the Justice Department's initial proposal
for reforming the search engine market is radical and sweeping.
It could have negative, unintended consequences for American innovation in
America's consumers. Let's talk about this just a little bit,
(13:39):
because if there's one place where I think it's hard
to make a case that Google is not a monopoly,
it's in search, where they control just a huge amount
of the market. And in such circumstances, you could actually
make a case that radical and sweeping change is exactly
what is needed in order to restore competition so that
you can get the innovation that has kind of been
(14:00):
lacking in search. I mean when we talk about search engines.
The reason why Google is the most popular search engine,
by the way, is because they actually competed and they won.
Back in the early two thousands. They weren't the first
company to do search. Y'all out there, you remember Alta
Vista and likeos and ask Jeeves, and I mean even
(14:23):
freaking Yahoo, which is still floating around as you know,
just a shell of what it used to be. These
were the big names in search in the nineties and
early two thousands, and then Google said, no, we've got
a better algorithm that helps you find the information that
you want. And people chose it. It wasn't that they
were forced upon it. That's what Googled it after in
order to keep people there by paying Apple sixteen billion
(14:44):
dollars a year to be the default search engine and
stuff like that. But people chose Google. Like, let's not
lose light of the fact that the reason why Google's
in the place it is today is because people really
liked it in the early two thousands.
Speaker 3 (14:56):
Yeah, I guess the argument is they use the profits
from that to secure an unfair advantage on certain platforms
relative to competitors and thus became a monopoly, right, Isn't
that is all?
Speaker 2 (15:08):
And I think look at like, look at your experience
with Google now, and how often do you, you know,
put something into Google and you're like, this isn't giving
me what I want? Like, these aren't the answers that
I'm I'm looking for on this and are you being facetious?
Speaker 3 (15:23):
Do you find that happens more frequently?
Speaker 5 (15:24):
I do, I, oh, you are.
Speaker 2 (15:25):
I find that I get all kinds of AI created
crap that gets returned in like the top three search results.
Now where in greated. It's not for important stuff, you know,
it's it's for dumb stuff. I'm like, oh, what are
the lyrics of this song mean? And I just get
the top articles like a, I, well, this song is
important because it's important. It's like, what the what the heck?
(15:48):
Like this is just stupid.
Speaker 3 (15:49):
So they've already been found to be a monopoly. Right,
that's in the past. We're not going to be able
to undo that question.
Speaker 2 (15:54):
Know what the appeal process is on that?
Speaker 6 (15:56):
I know.
Speaker 3 (15:56):
I think that's a fund I think that is a
finding of fact, and that is that responsibility resides with
lower courts. I think higher courts will determine whether or
not the remedy was too severe, Like if the judge
in this case in charge says, break it up, sure,
which is I guess the most severe thing you can do,
which is what the government wants. Well, so that fixed
(16:17):
the problem that you cited.
Speaker 2 (16:18):
So I don't know, and it's like, it's tough to
figure out. You think about why Google has the power
that it does, and it's just it's so normalized. Is
just what you do for search? I mean again, you
say I'm going to google something. You don't say I'm
going to search for something online. You literally say I'm
going to google it.
Speaker 3 (16:36):
I'm with you, but it's detractors. I don't agree with them.
But this is the argument it was apparently successful back
in August when they deemed it to be a monopoly.
Is that they secured that advantage through unfair, anti competitive means,
paying off Apple, paying off others to be the default.
You and I probably would have chosen it anyway, at
least I would have.
Speaker 2 (16:53):
But that's the argument so here and again, I've suggested
this before for Amazon, and I know that I'll say
this and people be like, well, what does that even mean?
I think it would be really really interesting to break
up Google's search business based on geography.
Speaker 3 (17:12):
Chuck, what does that even mean?
Speaker 2 (17:14):
Thank you, Mark, I'm glad you asked hold on, let
me google it. Here's what I mean by this. I'm
not saying, Okay, if you want to google something about
New England that you have to go to like the
New England search engine. But what I am saying is, look,
you know, Google knows where its revenue comes from and
where its users come from. Break it up based on
(17:35):
the geography of that, so that you have I don't know,
eight to ten Googles, mini Google's baby Googles, just like
the baby bells, you know back in the yay we
do with Standard Oil and AT and T do that
and then look, hey, you guys can compete to expand
your territory and try to attract users from other places places,
and we'll see who ends up being the best one,
and you'll have how to improve your product.
Speaker 6 (17:55):
To do so.
Speaker 3 (17:56):
Unlike with AT and T and Standard Oil, you can't
segment the customers by geography. So how would you prevent
me from hitting.
Speaker 2 (18:02):
I can, though, because I know where the revenue the
revenue is.
Speaker 3 (18:04):
Can you prevent me from No?
Speaker 2 (18:06):
I can't prevent you from going somewhere else. But this
is what I'm saying is, hey, one of those is
going to then have to innovate in order to be
the best one. Otherwise you'll just you know, keep using
you know, whatever, whatever one you're using before and you know, okay,
you've got ten Google, so it's Google New England Google,
you know, Southeast Google and Midwest and so on and
(18:27):
so forth. And those companies are going to have to
compete each other against each other in order to build
the best product to see who wins all that market share,
and in doing so you also open it up to
additional competition that's smaller that now is on the same
scale as these smaller mini Googles, And I just think
it would be interesting to see what happens there and
(18:49):
how it plays out.
Speaker 3 (18:50):
I guess the other remedy is if they don't go
with a rather, it seems pretty Dracronian to me. The
actual breakup is force them to share enough so that
others can and compete. That's being contemplated as well.
Speaker 2 (19:02):
Which if you're gonna do that, you might as well
just turn them into a regulated utility. And it's like, okay,
you know what are we doing here? Then then you're
definitely not getting any innovation. That feels worse to me.
Speaker 3 (19:12):
You know, I don't know, I would try yours because
we don't know.
Speaker 2 (19:18):
Yeah, look, the worst thing that happens is well everything,
but I don't know. This is why I'm not a regulator.
Speaker 3 (19:25):
But I think, Oh, they're winging it too, Chuck. Let's
not pretend they have any go ahead.
Speaker 2 (19:29):
It's true. Let's just get some more competition in the space.
Quick break Wall Street Watch and ask Todd our next.
Speaker 1 (19:41):
Like us on Facebook and follow us on Twitter. Act
TFE show. Breaking business news is always first right here
on the Financial Exchange Radio Network. Time now for Wall
Street Watch, a complete look and what's moving markets so
far today right here on the Financial Exchange Radio.
Speaker 4 (19:59):
Netw Following yesterday's winning day with a strong performance from
the tech sector, Marcus today are trading modestly higher as
investors look toward FED meeting minutes due out this afternoon
at two o'clock. At the moment, Dow was up by
about a quarter percent, or eighty four points. SMP five
hundred is up by ten points, and the NAZAC up
(20:20):
another quarter percent as well. Russell two thousand is up
nearly a third of a percent. Ten year Treasurealed is
flat at four point zero three percent, and crude oiled
down again today another two and a half percent, trading
just below seventy two dollars a barrel. Alphabet shares down
one and a half percent after the Justice Department submitted
a court filing yesterday that gave a federal court a
(20:42):
range of options, including setting restrictions or ordering a breakup
to Google to end what it called an unlawful monopoly
in search. Meanwhile, shares and Boeing down by three percent
after the planemaker withdrew a pay raise offer it had
made to striking factory workers, saying the union demands far
in excess of what can be accepted. Ratings firm SMP yesterday,
(21:06):
es tomated the strikes could cause Boeing one billion dollars
a month, and minor Rio Tinto agreed to buy Arcadium
for six point seven billion dollars. The deal will make
Rio one of the top producers of a key commodity
used in batteries for electric vehicles. Rio shares down by
one percent, while Arcadium stock is surging by thirty percent.
(21:30):
I'm Tucker Silvan, that's Wall Street Watch.
Speaker 1 (21:33):
This is asked Todd on the Financial Exchange Radio Network.
If you have an existing estate plan or in the
market for one, Todd Lutsky is here to answer your
questions and help you plan for later life. Ask Todd
is presented by Cushing and Dolan, serving Massachusetts and New
England for more than thirty five years, helping families with
a state and tax planning, Medicaid planning, and probate law.
(21:54):
Visit Cushingdolan dot com. Now here's Todd Lutsky.
Speaker 2 (22:00):
And we are now joined by mister Todd Lutsky from
the law firm of Cushing and Dolan. We call the
segment Ask Todd because it's your chance to ask Todd
your questions about your state plan. Phone number here eight
eight eight two zero five two two sixty three. That
is the studio line to uh get in line to
(22:22):
ask Todd your questions. UH again. Normally we can get
through two to three calls, so do get call on kids.
Last week we had four fourth person didn't get hurt
and it was very, very sad. So we we want
to make sure that we get to you if possible again.
Eight eight eight to zero five two two sixty three.
That is the number to call to speak now with
(22:43):
Todd Lutsky one more time. It is eight eight eight
to zero five two two six three. Mister Lotsky, How
are you today?
Speaker 5 (22:51):
I am never better? How how are you doing.
Speaker 2 (22:53):
Uh, tough day yesterday.
Speaker 5 (22:55):
Yeah, what happened?
Speaker 2 (22:55):
Got fired from the pasta factory.
Speaker 5 (22:57):
It's a pasta factory. Yeah.
Speaker 2 (22:59):
Why why is that made a focilly mistakes of silly mistakes? Yeah,
I get it. It was a tough day, but we're
bouncing back. Todd. Let's talk a little bit about naming
beneficiaries on iras specifically.
Speaker 5 (23:13):
Yeah, that's a.
Speaker 2 (23:15):
Niche topic, but I think there's some some meat in
this niche here.
Speaker 5 (23:19):
Oh yeah, a lot of meat.
Speaker 2 (23:21):
Historically, the guidance that I've heard on I rays and
naming beneficiaries has been name individuals as beneficiaries on irays,
don't name trusts or estates. Does that fit with kind
of what the historical pattern has been.
Speaker 7 (23:36):
Yeah, And I think starting with the historical pattern makes
a lot of sense because for a very very long time,
you know, the primary beneficiary rule of thumb, and even
today a lot the primary beneficiary rule of thumb is
surviving spouse. Yep, that's what you would go with, you know, generally,
(23:56):
and then over time, and it's been going on now
for a while. File that that if you've done your
estate plan and you still would name the surviving spouse
the primary beneficiary, but your contingent beneficiary might be your
family revocable trust. If you know, if you want to
(24:18):
ensure that the assets ultimately flow through a trust, and
when you would do that is is if you if
your revocable trust has language in it that says I
want to protect my children from future divorces and future creditors,
and you know, maybe they're not great with money or
(24:38):
whatever reason you're holding assets in the trust. Remember when
I say assets in the trust, all of your other
estate planning assets are in the trust.
Speaker 5 (24:45):
Already, but not your era.
Speaker 7 (24:47):
But let's say you have, you know, a million dollar IRA,
Well you might not want to say, you know, And
I've got my trust over here with another couple million
in of assets protected from my kids.
Speaker 5 (24:59):
I got a million dollar IRA not in there.
Speaker 7 (25:03):
Maybe I don't want to list the kids as the
contingent beneficiary because then it will what come out to
them directly over ten years. I get it, that's the
new rule. But the point is it's coming out to them,
not protected, not sheltered from creditors, not you know. And
so if you're saying, you know what, I really want
to make sure that those assets find their way to
(25:26):
the protection of the trust for the kids. Then the
contingent beneficiary should be the trust. Okay, So that's been
sort of the evolution, and that's for people who've done
revocable trust planning, never mind irrevocable trust.
Speaker 2 (25:39):
Talking with Todd Lutsky from the law firm of Cushing
and Dolan. If you've got a question that you'd like
to ask Todd during this segment here studio line is open.
It eight eight eight to zero five two two six three.
That number again is eight eight eight two zero five
two two sixty three. In order to chat with mister
Todd one more time, it's eight eight eight two zero
(26:03):
five two two six three. Todd, is there anything that
you can do in terms of beneficiaries or contingent beneficiaries
on iras that impacts how they're viewed from a medicaid
perspective where you're still kind of in a tough spot
with that, and there's not much you can do well.
It is a tough spot generally.
Speaker 7 (26:21):
But now with the Secure Act two point zero that
I believe came out in about twenty twenty two, seemingly
getting to be long ago. But you can name the
estate the beneficiary, but there's a lot of rules you
got to follow. You would generally do it only if
you're a married couple number one, and you'd kind of
(26:43):
want to be seventy three to do it. And then
by naming the estate the beneficiary, which is remember as
you said, the iras are assets I cannot protect in
advance from the nursing home generally, but if you qualify,
you can name the estate the benefit fishery, and then
you can protect these assets from nursing homes for the
(27:06):
surviving spouse. And the real key is without a five
year waiting period.
Speaker 2 (27:12):
Huge talking with Todd Lutsky from the law firm of
Cushing and Dolan. Again, if you've got a question for Todd,
studio line is open at eight eight eight to zero
five two two six three. Still have a little bit
of open space there on those lines, So please, if
you got a question for Todd, this is your chance
to ask him that question again. Eight eight eight to
zero five two two sixty three. We're gonna go to
(27:34):
a quick break here, but it's right to your questions
when we return. That number again is eight eight eight
to zero five two two sixty three.
Speaker 1 (27:43):
Ask Todd with Todd Lutsky every Wednesday at ten thirty
only here on the Financial Exchange Radio Network. You're listening
to Ask Todd with Todd Lutsky on the Financial Exchange
Radio Network.
Speaker 2 (28:02):
All right, Tod, we got callers lined up for you.
Let's get to them with Paul in Sandwich kicking things off. Paul,
you're on with Tom Lutsky.
Speaker 8 (28:09):
Hey, good morning, how are you?
Speaker 5 (28:10):
Good morning?
Speaker 8 (28:12):
Can you help me understand if I set up in
the irrevocable trust and the beneficiaries are my children who
are who are married?
Speaker 5 (28:22):
What you know?
Speaker 8 (28:25):
God forbid that the marriages don't last, But in this
day and age, a lot of marriages don't last. What
rights do the spouses or ex spouses have.
Speaker 7 (28:35):
So this is a great question because it applies, and
I want to answer it for a lot of listeners.
I'm going to expand the answer to include not only revocable,
not only irrevocable trust, which is what you asked for, Paul,
but revocable trust. So I don't care if you've done
revocable trust planning or you've done irrevocable trust planning. You know,
I always tell people, Yeah, you know, sheltering assets for
(28:58):
state taxes and probate avoidance. All that is is important,
but that's kind of the noise, right. The family behind
the estate plan is really why we're doing this, and
that is when you pass away, you can actually control
the assets as to how they get to the beneficiaries,
in this case protection from future divorces. And so you
(29:20):
put language in the document that does that and basically,
in a nutshell to answer your question is they will
have no right to the assets when the divorce comes.
So I'll just tell you how it works quickly. You
put language in that says if it said I divide
my assets equally to my kids and I give it
to them, well, then you can imagine that five years later,
(29:40):
after you're dead, when the divorce comes, whatever you gave
your children is now going to be gone. There is
going to be cut in half on a good day
subject to that divorce. And it does happen by not
giving it to them. And I'm going to sort of
put the pen back here into the trust bucket and
hold it. If you hold it in trust, you put
language in there it says things like, you know your
(30:02):
kids can be trustee, your kids can have the power
to appoint a disinterested trustee, and even remove and replace
the disinterested trustee. So no problem there. But language says
that when distributions come out, the only job the disinterested
trustee has is to authorize distributions to that kid or
(30:22):
to that to that kid's kids, your grandkids. And so
your child as general trustee is doing everything and the
disinterested trustee is doing very little. But you know, every
time the child says, you know, we're going on a
family vacation, We're taking a family trip. We need a car,
you know whatever, the disinterested trustee authorizes the distribution. Now,
(30:44):
the child, five years after your dead gets a divorce
and the surviving the soon to be ex spouse says,
I want half of what's in that trust we've been
taking money out of over the last five years. And
your child says, that's a really great idea, But you
got asked the disinterested trustee. Oh see how that works.
It's protected, and it's not just protected because the disinterested
(31:06):
trustee can say no. Think about it from an ownership perspective.
From an ownership perspective, the individual your child never owned
what's in that trust, So if they don't own it,
it's really not a marital asset to begin with, so
you simply tell the other side that it's not a
marital asset, so you know, no, it's not available. So
(31:28):
really provide some great protection and that can be in
a revocable trust or an irrevocable trust, because remember, once
you die, all trusts are irrevocable. Now, folks, speaking of that,
that's one way to protect assets.
Speaker 1 (31:44):
One of the.
Speaker 7 (31:44):
Assets that's tough to protect is an IRA. And that's
why we're doing a guide in this case to go
to Paul's situation. By naming the trust the beneficiary of
the IRA the trust at least then it would be
protected from these future divorces that I just discuss. So
naming the kid outright might not be the way to
go for everyone. In addition, folks that specifically want to
(32:08):
add nursing home protection to their estate planning and are married,
and there's a lot of other restrictions. You can learn
how to name your state the beneficiary of the IRA, which,
as Chucker mentioned earlier, is very much outside the norm.
It will avoid pro it will allow you to shelter
assets for these iras from the state taxes. It will
(32:30):
allow you to not have any adverse income taxes and
without a five year waiting period can protect it from
the nursing home. But you need a couple it with
a testament of trust. Get the guide, folks, learn how
to do it with your IRA eight six six eight
four eight five six ninety nine or Legal Exchange Show
dot com again eight six six eight four eight five
(32:54):
six nine nine or Legal Exchange Show dot com.
Speaker 2 (32:57):
Todd, I've got another caller for you here. Let's go
to Jerry in the hunt. Jerry, what is your question
for Todd?
Speaker 6 (33:04):
My question is I own a lot of real estate
and everything's in LLCs, so each individual warehouse or buildings
I own are in LLC. So now I'm at fifty
four years old, and now I get to get a trust,
every revarokable trust, some type of trust, a team together
that can put this together. Unfortunately, I'm either between ten
(33:27):
million dollars in real estate or over on the assessed values,
I could be up to tent sure. So I don't
know how to number one tax defer it some of
the situation that I have put everything in a trust
because I'm at fifty.
Speaker 9 (33:43):
Four years old now, and are you married sixty and.
Speaker 6 (33:45):
Sixty years I'm married, I have five kids, So I
really I've been listening to you guys for a while.
I really think that you're the right choice. I just
need a team of you know, tax lawyers and everybody
else they can put this together. Well, I don't know
nothing about it. I just know that I do real
estate and I collect rent.
Speaker 7 (34:05):
And that's I can tell you certainly that we have.
You know, pick, you needed a lawyer of some of
for sure, you need an estate planning attorney. With that
kind of an estate and married in five kids, so
who you pick up to you? But certainly one you
need one. Two, Yes, an estate plan to help you shelter.
And again, remember folks, the federal estate tax exemption is
(34:27):
going to drop to about seven million in a year
and a half or so, so you know ten million,
you're looking at fifty percent estate tax on the amount
over prefer federal and state. So there's a lot of
money right there. I love, Jerry, the fact that you
have iras. I'm sorry that you have LLC's in place
for your real estate, right that is really a great,
a great idea. But now you need to take the
(34:49):
shares of the LLC and put them into probably a
revocable trust, whether you can get away with a joint
or not. Would really need to sit down and learn
about the size of your estate, whether we need one
trust too. So we'd take the LLC shares, put them
in there. You would always be able to then, and
we put your other assets in there, and I will
look at your LLC's and see if there's a way
(35:10):
to you know, you know, sort of fine tune how
you own those a little bit. But yes, I think
in a state plan is in order to get your
shares in there, to get your other assets in there,
and then structure it to reduce really eliminate your federalist
attax completely and then significantly reduce your mass tax while
also providing for your family and maybe even within a
(35:31):
state this large, protecting those five kids from their future
divorces and creditors, et cetera.
Speaker 5 (35:36):
I would certainly want to do.
Speaker 2 (35:37):
That, Todd. I've got one more for you. Let's go
to Peter and Worcester. Peter, we've only got about a
minute and a half, so we got to speed run
this one a little bit. What's your question for Todd?
Speaker 9 (35:45):
All right, Todd, thanks for thinking the call. Hey, listen,
I set up trust about five years ago. I'm retired
state and boie.
Speaker 5 (35:55):
Is it an irrevocable trust.
Speaker 9 (35:57):
It's a it's a revocable trug.
Speaker 5 (35:59):
Go ahead.
Speaker 9 (36:00):
My two daughters A twenty three and twenty six, and
I'm looking at right now. Haven't looked at again. I
have a four to fifty seven with the state that
I started way back when in the eighties.
Speaker 5 (36:11):
Yep.
Speaker 9 (36:11):
There's probably about a million bucks in there. Yeah, and
that's going through.
Speaker 5 (36:15):
What's the question? Get right to the question. What's the question?
Speaker 9 (36:18):
Okay, here's here's what I want to do. I was
thinking about making my oldest daughter the trustee, and I
don't know if that's a good idea.
Speaker 5 (36:26):
Okay, well it can be when you you mean, when
are you married.
Speaker 9 (36:31):
I'm not divorced, So when you.
Speaker 7 (36:33):
Pass away, I don't want the trustee to be your daughter. Now,
you should be the trustee because it's a revocable trust.
And and then you could you when you die, you
certainly can have your daughter as trustee. That's not not
a problem. Ever, if, on the other hand, based on
as you get older, you want to do irrevocable trust planning,
it's also not a problem to have your daughter as trustee.
(36:55):
But you know you don't have to have a daughter
as trustee, so you need to think about that. So
if that's the question, no real problem there. Todd, thanks
so much for joining us today. We appreciate it.
Speaker 5 (37:05):
Thank you always a pleasure.
Speaker 1 (37:08):
This has been asked Todd on the Financial Exchange Radio network.
Ask Todd with Todd. Lutsky has been presented by Cushing
and Dolan, serving Massachusetts and New England for more than
thirty years, helping families with the state and tax planning,
Medicaid planning, and probate law. Call eight hundred and three
nine three four thousand and one or visit Cushingdolan dot com.
The views expressed in this segment are solely those of
(37:28):
Cushing and Dolan Armstrong advisor. He does not provide any
legal or tax advice. Please consult with your legal or
tax advisor on such matters. Cushing and Armstrong do not
endorse each other and are not affiliated
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