October 8, 2025 • 38 mins
Chuck Zodda and Marc Fandetti discuss the unofficial jobs numbers are in and it's rough out there. Businesses are already feeling shutdown pain. Todd Lutsky joins the show for Ask Todd. This week, Todd explains when it makes sense to and not to gift assets.
Mark as Played
Transcript
Episode Transcript
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Speaker 1 (00:03):
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(01:08):
Zada and Mark Fandetti.
Speaker 2 (01:13):
Chuck and Mark with you here today, and we kick
things off with a piece from the Wall Street Journal.
It's titled the Unofficial Jobs Numbers are In and it's
rough out there, and there are a couple different pieces
that I want to talk about with this. The first is, yes,
we don't get a new jobs report every month right
(01:33):
now while the government shut down continues. This means that
every bank and private equity firm out there is trying
to come out with their alternative numbers of hey, here's
how many jobs were created in the month of September. Now, look,
we did this kind of as an exercise on our
(01:54):
Friday show just because look, we had, you know, a
day where there's supposed to be a job report, and
so Mike and I both like conveniently, we're like, hey,
let's feed this into you know, an AI and see
what it says job growth would have been. And we
did just to illustrate like the process by which you know,
people in businesses in the FED try to figure this out.
They've got their existing models. They say, Okay, let's plug
(02:16):
in some inputs and here's where we think it is. Ultimately,
I think the world could use way fewer people releasing
their unofficial jobs numbers because they all do have different methodologies,
they all do have different models, they all have different
inputs and things like that, and so all of them saying, hey,
(02:38):
here's how many jobs were added for this month. Well
what have your models said in like previous months, like
we've never talked about them, and so trying to use
these numbers as a stand in for the jobs report.
I think it's quite honestly, like just kind of not
where we need to be going. It's it's just enough
is enough. I don't need to know that. You know,
Carlisle Group thought there were fourteen thousand jobs created for
(03:00):
the month, and Goldman Sachs thought there were you know
x number. Hey, let's just look at the other data
that's out there, and when we finally get jobs reports
coming back out, we'll deal with them then. But until
then we can report on Hey, the you know ADP
survey actually showed this or indeed shows this level of hiring,
or paycheck shows this level of hiring, because those are
(03:22):
actual data sets about you know, hey, we're tracking this
and we're measuring this. Not well, we estimate that the
government jobs report would have showed blank. I don't need
someone telling me what they think the government jobs report
would have showed. I don't think that's useful to anyone.
Speaker 3 (03:40):
Yeah, I'm not I haven't done it myself, but I'm
sure many people do use data from other sources to
fit a so called model and come up with a
way to estimate payrolls changes. Sure, the problem is the
relationships among Like with any fitting exercise, you always asked,
do I have the right variables trying to explain or
forecast the variable of interest? And are the relationships stable?
(04:04):
We know the answer to those questions are no, because
no one has come up with a good way of
forecasting payrolls to this point. It's not like people haven't
been trying, so it's probably very hard to do chat, right.
Speaker 2 (04:15):
I Mean, the only thing that I would be interested in,
quite honestly, is if like three billionaires went out and said, Hey,
we're gonna spend a boatload of money coming up with
three distinct ways to try to you know, interview and
survey people, and we're gonna spend a bunch of cash
doing this, and we're gonna try to, you know, figure
out what's happening. Okay, I'd be interested in that, because
(04:38):
that's not just trying to look at different data inputs
coming in. That's trying to actually like create some kind
of survey and spend a boatload of money doing so.
I'd be interested in that. Beyond that, Hey, I'm looking
at the Indeed Jobs Posting Index, which is something, by
the way, that we talk about quite often. It shows
that in the last ten days from September twenty third
(05:00):
through October third, the number of job openings declined by
about one percent on Indeed. Okay, that's something that I
can just say exists as is. I don't have to think,
go and extrapolate that and say why all that means
the hiring decreased by No, it's it's okay to just
talk about data sets as well.
Speaker 3 (05:20):
It's okay for us. It's not okay for a serious
researcher though, they'd have to You have to go to
your boss with something. You have to say, updated my
model last month, and here's where I think payrolls would
fall with a certain amount of confidence. I mean, it's
okay for us, but.
Speaker 2 (05:31):
Sure, you know, but I don't. I don't think that
that research that they're doing is valuable to disseminate to
the public because the public's not going to understand what
it means.
Speaker 3 (05:41):
If a hedge fund and they put considerable resources, lots
of PhDs into working on problems, is if they came
up with a good way to forecast payrolls with less
error than say the Preble, they wouldn't be telling us
they You would not be exactly you and I wouldn't
know about it.
Speaker 2 (05:55):
We talk about this a lot. Actually, it's one of
my dietary We talk about the sources of alpha in markets.
It is private information, not material, non public information, which
is you know, obviously illegal to trade on, but private information.
A model that you've built that you don't share with
(06:16):
anyone because it estimates, you know, the the jobs report better,
a model that you've built that shows how you know,
the amount of rain in Saskatchewan impacts soybean prices coming
out of Iowa, like the These are the things that hey,
if you actually have something that works, you don't tell
people about it. And so you know, all of these
(06:40):
reports of well so and so estimates the job growth
was this and that, Well, if if they really thought
this gave them an edge they wouldn't be telling you.
There's a whole bunch of things.
Speaker 3 (06:52):
So you know, there's no I wouldn't, we wouldn't.
Speaker 2 (06:54):
There's a whole bunch And and this is also like
when you see different things that are reported in the press.
Oh so and so thinks that markets are going to
do this and that why would they be telling you?
There are two reasons why they're telling you. Number one
is it doesn't matter to their performance. Number two is
it does and they've already pre positioned themselves.
Speaker 4 (07:16):
You know.
Speaker 2 (07:17):
You think about the hedge fund guys who go on
you know, CNBC and Bloomberg and say, well, you know what,
we think this could happen, and then at the end
it's hey, you know they disclose that they have a
longer short position in whatever it might be right and
this is fine, you know, we say so I think.
I think ultimately, when we're looking at the jobs numbers,
(07:39):
I do not have a proprietary model to you know,
project where the job's numbers are going to be. But
I look at a bunch of different indicators and say, yeah,
this means something good, this means something bad. If I
get a bunch of things pointing good or bad. Okay,
that just you know gives me a little confidence in
one direction. And I think for ninety nine point nine
(07:59):
percent of US that's fine.
Speaker 3 (08:02):
Depends on what you need the data for.
Speaker 2 (08:04):
From ninety nine point nine percent of US mark.
Speaker 3 (08:07):
It's fine, yes, fine for this show.
Speaker 2 (08:09):
For the point one percent that needs you know. For
the point one percent that needs you know something more
because their job depends on it, it's not fine, and
they can go and do their own work. But I
just I don't think we need every bank saying well,
this is what the job's report would have showed this month.
Speaker 3 (08:26):
I understand why they're doing that, though part of it
is the PhDs in the background, who need to demonstrate
that they're adding value. So they run to their boss
and say, I did a forecast using the variables that
we normally use, and you can publish this because it's
vague enough that we're not giving away our secret sauce.
You could argue that they're trying to perform a public service,
(08:47):
or you could argue more skeptically, and we should be
skeptical that they're taught that they're doing something to boost
their so called book. Like you said, it's like when
a manager says, I like gold right now. It's because
they own a ton of it and they want you
to pile in and they can pass the the the
the bag along to the greater fool. That's a bad
example to smirch gold. I'm just I just came up
(09:09):
with a hot assay class.
Speaker 1 (09:10):
That's all.
Speaker 2 (09:10):
No, I get what your skepticism is warranted. To take
a quick break. When we return, we'll talk about whether
we're starting to see any impacts nationwide in the economy
from the ongoing government shutdown.
Speaker 1 (09:24):
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Speaker 2 (10:28):
A couple different pieces in the Wall Street Journal. One title,
the shutdown is already squeezing these businesses. The second one
much easier just to get through thin air traffic staffing
spurs delays at US airports. This, by the way, the
air traffic control and TSA issue is the one that
eventually ended up ending the twenty eighteen shutdown as we
started to see delays stacking up. And look, once you see,
(10:52):
you know, things becoming visible to a broad portion of
the US population. Generally, the federal government says, okay, like
we don't really like this, Like let's figure this out
and get back to work. But in terms of the
businesses that are you know, being impacted by the shutdown
right now, a couple different interesting cases that you can
(11:14):
talk about here. Number one, you've got a medical device
company in California that just as an example, they had
to postpone a spin off because the regulators who would
approve the spinoff aren't working right now. They're not essential personnel,
so they can't go through their spin off. There, you've
got another company here that is and a bunch of
(11:38):
electricians that are a government contractor they cannot they're not
having their new government contract signed because the people that
sign said contract are non essential personnel, and so they're
trying to keep their staff employed while they wait for
that new contract. So you've got kind of these sporadic
(11:58):
areas where there's a very real and significant impact. This
despite the fact that I think, quite honestly, for the
vast majority of us out there, like, quite honestly, I
get up and I go to work just like I
do any other day, and I don't really see anything different.
But for probably anywhere between three and five million Americans
(12:23):
out there, including you know, some of you that are listening,
you're probably dealing with anything from you know, minor inconveniences
to major disruptions because you may be employed in the
federal government or in a tangentially related company, and as such,
you've got some real disruptions and questions about Hey, you know,
am I going to get paid in a week or so.
(12:44):
Is this going to, you know, cause me to miss
a mortgage payment or a rent payment. These are very
real questions, and so I know that for a lot
of us, you know, most of you listening are not
government contractors. You're not you know, seeing this impact you
on a daily basis. You're getting to the point now
as this drags into its eighth day where there are
(13:04):
against several million people in the United States that on
the verge of having their livelihoods impacted if they haven't
been already.
Speaker 3 (13:12):
Like it or not, and I don't like it, but
this is not about editorializing. The government drives a lot
of economic activity. It's an important stabilizer. It's a source
of sustenance for millions, as you say, of Americans. And
as much as for ideological reasons, I don't mind the
government shut down once in a while. This particular shutdown
is not about the deficit or cutting spending. It's over policy,
(13:34):
so that ain't gonna Fiscal reforms are not going to
come of this. I would say, hold their feet to
the fire if they were. It seems just disruptive and
unnecessary at this point, and it will have an impact
on the economy. It'll probably be a blip and it'll
be made up for when the government reopens. It just
infuses chaos into too many processes with no prospect of
(13:57):
any kind of long run payoff unfortunately.
Speaker 2 (14:00):
Yeah, and again we're now into the eighth day here
of this shutdown. If you look at the online betting
portals that allow people to wager on this, you're now
the length that we are up to is about twenty
three twenty four days that are being bet on. That's
kind of the longer point it is.
Speaker 3 (14:21):
The longer drags on, the less likely it will get resolved.
Speaker 2 (14:24):
According to these Yeah, I think quite honestly, there are
two dates that you're looking at on this. The first
is a week from now. The next government payroll is
the night of the fourteenth, and so, hey, do you
want a resolution so that those workers are being paid
on schedule so by next you know, Wednesday, is one
that we'd be looking at. And the next one is
(14:45):
end of the month when you have a second missed
payroll for government workers that you potentially be looking at.
Speaker 5 (14:52):
Again.
Speaker 2 (14:52):
The last shutdown that we had it was the longest
that we've seen, that was thirty four days at the
end of end of twenty eighteen, and ultimately what drove
it was, Hey, you had a bunch of TSA workers
and a bunch of air traffic controllers that said, no,
we're not showing up if we're not getting paid, and
you know, combination of hey, like, we need to get
(15:14):
paid because there are bills that we have to pay
and the other pieces no, like we're not just going
to you know, go along with this is basically what
they said. So that's when you saw the resolution there
to this point. In terms of the you know, the
broader economic impact from you know, these these businesses that
can't go through their normal operations, the estimates that we
(15:35):
see are anywhere from around point one two point two
percent per week. I tend to err on the lower
side of that based on you know, the estimates that
I've seen, so GDP for every week this shutdown goes
on would typically be reduced by about point one percent,
which given the clip that you know, the estimates have
Q three growing at, wouldn't be enough to inherently, you know,
(15:56):
throw the US into a recession on its own. But
you know, with some of the other questions that are
out there on the labor market and other pieces. It
could result in, you know, more of a slow down
if you know, some of this marginal demand ends up
causing non government related companies to then you know, and
you know, laying off workers and things like that as well.
Speaker 3 (16:18):
So they'll be make up spending. Suppose this lasted for
I don't know, worst case sixty ninety days, Sure they'll
be makeup spending in the first quarter. So they'll be
a boost to GDP. It'll just swing in the opposite direction.
You've got rebates from accelerate. Rebates may not be the
right term, but there are tax breaks that will be
a front end loaded as I understand it. For the
(16:39):
most recent tax bill. It is hitting in the first quarter. Yes,
Fed stimulus. The Fed has been easing policy. They started
easing policy. It'll now be a few quarters by.
Speaker 2 (16:48):
The day in the first quarter.
Speaker 3 (16:49):
Rolls around, So you have multiple sources of demand stimulus
hitting in the first quarter. Well, of course, everything in
my life comes back to the FED and are they
doing the right thing? And in this I want criticize them.
I'll just point out that this makes things a little
extra challenging. You've got multiple sources pushing demand up and
sources pushing pushing policy, sources pushing labor supply down. At
(17:12):
the same time, this creates inflationary pressure. Is my little
observation about the timing of all this stuff.
Speaker 2 (17:20):
The other piece that you know, like I struggle to
look at, like, let's say this, Let's say this does
go on longer. Let's say it's forty five sixty days. Yes,
you've got that makeup spending that happens on the back
end once the government workers get paid out. But what
if the loss of demand created by them not spending
in the interim results in non government employment dropping because
(17:42):
companies say, maybe, you know, hey, like we've seen a
drop in demand for you know, you example, you run
a I don't know, a coffee shop near Logan Airport
and you go through, you know, three four weeks of
week demand, you say, hey, Sally, Jim, don't in you know,
two days next week, and then that causes you know,
(18:04):
a ripple effect from there and things along those lines.
Are those things that happen as this goes on longer.
Maybe we've never seen one that long. I still think
the most likely thing is a resolution either next week
or end of October. I have a hard time seeing
this dragging into November.
Speaker 6 (18:22):
But.
Speaker 2 (18:24):
I've been known to be wrong occasionally, hopefully not too often,
but occasionally it can happen.
Speaker 3 (18:30):
Yeah, who's gonna flinch. I don't know that's that's political,
but it depends on whose pain point is reached first.
Speaker 2 (18:39):
So this is this is again kind of where we
are in terms of the economic impacts to this point. Broadly,
there's not much there, but obviously if you are employed
by the federal government or in an adjacent business, you
could personally be seeing some significant disruptions that have you
a little bit nervous about where things go from here.
But the broader economic impact estimated to be around point
(19:03):
one percent of GDP for every week that this goes on.
And we'll just have to see how things develop from
here as we go and whether we get a resolution
in the next week or two, We'll just have to
wait and see on that. Right now, let's take a
quick break. When we come back, we've got Wall Street watch,
(19:24):
and then Todd Lutsky from Cushing and Dolan joined us
for Ask Todd. Get your estate planning questions ready for Todd.
Speaker 1 (19:44):
Like us on Facebook and follow us on Twitter at
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 at what's moving market so far
today right here on the Financial Exchange Radio Network.
Speaker 4 (20:03):
Well after the SMP five hundred snapped its seven day
winning street, markets today are in positive territory as the
government shutdown continues into its second week. Right now, the
Dow is up by about a quarter percent, or one
hundred and six points, SMP five hundreds up four tenths
of one percent, or twenty nine points higher, Nasdaq up
seven tenths of one percent or one hundred and sixty
(20:25):
three points. For US two thousand is also up four
tenths of one percent ten Your Treasure reeled down one
basis point at four point one one one percent, and
crude oil up just over one percent higher today training
sixty two dollars and forty eight cents a barrel. Well
after it's two and a half percent loss yesterday, Oracle
(20:45):
shares a rebounding about one percent today. Oracle's recent pullback
was driven by a report by The Information saying the
company's margins from its cloud business were weaker than analysts
were forecasting, and that Oracle is losing money on some
of its deals to rent out in Nvidia chips. Meanwhile,
Equifax shares are rising over two percent after the company
(21:06):
said it would cut prices for mortgage scores. This comes
after fair Isaac last week said it would sell credit
scores directly to mortgage lenders bypassing credit bureaus like Equifax. Elsewhere,
Tesla unveiled stripped down versions of its best selling SUV
and Sedan. However, the lower prices don't quite cover the
recently expired seventy five hundred EV tax credit. The standard
(21:31):
Model three costs about thirty seven thousand dollars, while these
Standard Model Y costs about forty thousand dollars. Tesla stock
is edging higher. Ast Space Mobile announced to deal with
Verizon to provide its customers will sell service from Space
beginning in twenty twenty six, sending that stock up eight percent,
Verizon down modestly, and third quarter earning season kicks off
(21:53):
tomorrow morning with PEPSI and Delta ahead of the opening bell.
I'm Tucker Silva and that is Walstree.
Speaker 5 (22:00):
Watch.
Speaker 1 (22:02):
This is ask Todd on the Financial Exchange Radio Network.
If you have an existing estate plan or in the
market for one. Todd Letsky is here to answer your
questions and help you plan for a 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.
(22:23):
Visit Cushingdolan dot com. Now here's Todd Lutsky ask Problems.
Speaker 2 (22:29):
We're now joined by Todd Lutsky from Cushing and Dolan.
It's your chance to ask Todd your estate planning questions.
That's why the segment is named Ask Todd. Phone lines
wide open right now at eight eight eight to zero
five two two six three, So get calling early and
often to make sure you've got a chance to ask
Todd your estate planning questions. That number is eight eight
(22:52):
eight to zero five two two six three. Remember we
can only get through two to three of these, so
make sure that you get your calls in again. Eight
eight eight two zero five two two six three. That
is the number to call to ask Todd your state
planning questions, live on air. Mister Lutsky, how are you
doing today?
Speaker 5 (23:12):
I am doing great? How about you doing well.
Speaker 2 (23:15):
Do you know what's green and lightweight?
Speaker 5 (23:17):
Green and lightweight?
Speaker 2 (23:19):
Yeah? No, like green.
Speaker 5 (23:21):
Yeah, that's true, that would be true.
Speaker 2 (23:24):
Todd, want to talk to you a little bit about
gifting as part of an estate planning strategy. Okay, A
lot of times we talk about the perils of gifting assets.
Speaker 5 (23:34):
There's plenty.
Speaker 2 (23:34):
I want to be optimistic today. Yeah, when can gifting
actually fit into an estate plan and what tools are
needed in order to make it as effective as it
can possibly be.
Speaker 5 (23:48):
So i'd say gifting when you're there's there's so many
things entwined in that question that people don't even realize
how many issues you just brought up. But gifting can
make sense.
Speaker 2 (23:58):
We do have a time limit.
Speaker 5 (23:59):
There's a lot to think about. You're absolutely right. So
one I think you got to look at the size
of your state, right, sure do I you know? Right
now with the federal exemption come January one being fifteen
million dollars each if you're married, So now you can
shelter thirty million dollars without doing any gifting at all
from mistate taxes. So that kind of eliminates the need
(24:20):
for a lot of people to say I need to
gift away assets to what to save federal death taxes. Right,
that takes a lot of people off the table. I
don't need to because I'm under that. Well, if I'm
under that, then I only want to gift away assets
because I have what a Massachusetts let's say, or your state,
but a Massachusetts estate tax that I have to worry about.
(24:42):
Why do I worry about that? Because that's over. If
I'm married, I can only shelter four million dollars in
assets with the same basic estate planning that can shelter
thirty million dollars federally. Okay, well, maybe I should start
thinking about gifting away some assets to save massachue use
It's taxes. Oh but hold the horses. Why because what
(25:04):
am I going to give away? Well, I don't want
to give away anything with a very low cost basis,
which translates into a large built in capital gain associated
with that asset. Why. Well, if I give away any
of those assets like stock portfolios, like real estate that
(25:24):
I've rented over the years and maybe depreciated it to zero,
or even a vacation home that just has grown in
value over the years, if I give that away, then
what am I saving oh, well, Massachusetts is about ten
twelve percent on average for the estate tax. Okay, well,
I'll lower my estate and save ten twelve percent. But
(25:47):
I've given away an asset that has a built in
gain associated with it, which will be taxed at almost
thirty percent, not factoring in depreciation recapture. Well, I don't
want to give away something to save ten percent, but
trap thirty percent tax capital gains tax doesn't make sense.
So there's a lot to think about in what you're giving. Now,
(26:10):
if I have cash, that's different. Okay, well, cash is cash.
I can give that away and it won't hurt me
as much. Remember, there's no gift tax in the state,
but there's a federal gift tax if you exceed the
present interest exclusion of nineteen thousand dollars per year per person.
So those are freebies and you can just give those away.
And as you might imagine, we are limited in time.
(26:32):
But there's also how do we gifted? Do we use
gifting trusts to?
Speaker 1 (26:35):
You know?
Speaker 5 (26:36):
So many things to think about, Chuck, But I'm glad
you at least, you know, sort of sparked that curiosity
for people.
Speaker 2 (26:44):
Talking with Todd Lotski from Kushingan Dolan. We still got
a little bit of room on the phone line, so
get calling at eight eight eight to zero five two
two six three so you can ask Todd your estate
planning questions. The number again is eight eight eight to
zero five to two sixty three. Let's take a quick
break here, and when we come back, we are going
(27:04):
to get right to your questions with Todd Lotsky. That
phone number one more time eight eight eight two zero
five two two six three.
Speaker 1 (27:13):
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 (27:33):
All right, right to your calls with Tod Letsky. First up,
we got Dan in PbD. Dan, you're on with Todd.
Speaker 7 (27:41):
Good morning, Todd. I have a revocable trust right now? Okay,
if I switched to an irrevocable trust the two thousand,
two million dollar exemption, What does zecho, do I get
an exemption for that two million if I put it
(28:02):
in that irrevocable trust.
Speaker 5 (28:03):
Well, sure, it would depend on the type of irrevocable
trust that we do. So let me just ask you this.
Are you married?
Speaker 7 (28:11):
Well?
Speaker 6 (28:12):
I was?
Speaker 5 (28:12):
And do you do you have children?
Speaker 6 (28:16):
Yes? Three?
Speaker 5 (28:17):
Okay? So is the value of your estate way over
that two million dollar number or under it?
Speaker 7 (28:24):
No, it's over how much over I would say another two?
Speaker 5 (28:30):
All right? So you're at four million. Was there any
planning done when your wife passed?
Speaker 1 (28:36):
No?
Speaker 8 (28:36):
All right.
Speaker 5 (28:36):
So that's part of the problem, is the fact that
we weren't able to shelter anything on the first death.
Now with a four million dollar estate, just for everybody
else's edification as well as yours. If it was a
four million dollar estate and planning had been done, meaning
trusts were in place, like that revocable trust that you
mentioned that you have. Did your wife have one of
those when she passed? Or no?
Speaker 7 (28:58):
Yes she did?
Speaker 5 (28:59):
Oh okay, so you did have planning done. So now
you need to say how much of that four million
is sheltered in your wife's trust so that it's not
going to be taxed when you die? Do we know?
So let's assume that your wife's trust had roughly two
million dollars in it. Well, that two million dollars would
be sitting in now an irrevocable trust for the benefit
(29:21):
of you in what was called a remainder share, and
there would be no tax due when your wife died
because it was two million or less. And that two million,
no matter what it grows to, would not be taxable
in your estate when you pass. So if you pass tomorrow,
assuming my hypothetical fact pattern is accurate, you'd be worth
two million. If you're worth two million and you have
(29:44):
either the revocable trust that you are currently speaking about
or the newly created irrevocable trust, you'd still be able
to shelter your two million, thereby eliminating Massachusetts estate tax entirely. Now,
to your point, regardless of what your wife has done,
at least your two million probably should be put into
(30:08):
an irrevocable trust so that you can get it protected
from the cost of long term care at the same
time not giving up your two million dollar exemption, So
you will keep your two million dollar exemption to shelter
it for a state taxes. And you also might want
to get some guidance on thinking about your wife's trust
(30:28):
and see how you can change that to make it
also nursing home protected without creating an estate tax problem
for you. So you're on the right track. You absolutely
could get stuff done there and go ahead and make
that change. Folks. That was interesting because that's more about
(30:48):
estate planning. But some people do gifting to try and
reduce their estate for a state taxes. As Chuck had
asked me earlier. You know, gifting is not easy. There's
so many things, as we talked about it, whether they're
there as a gift tax and we have estate taxes
we have to consider. We have to consider income taxes
and basis. We have to consider if we want to
give away an asset and retain control over it, enjoy it.
(31:11):
So those are spousal lifetime access trusts, you know, do
we want to understand what owning assets jointly do from
even a medicaid perspective, a nursing home perspective. So so
much to think about when you're giving away assets. So
get the guide Learning about Making the Most of Gifting
Assets eight six six eight four eight five six nine
(31:33):
nine or Legal Exchange Show dot Com again eight six
six eight four eight five six nine nine or Legal
Exchange Show dot com to get your guy.
Speaker 2 (31:44):
Todd got another one for you here. Let's go to
Rick in Foulmouth. Rick, what's your question for Todd Alotski.
Speaker 8 (31:50):
Hey, good morning, Todd.
Speaker 5 (31:51):
How were you good?
Speaker 8 (31:53):
Hey Todd, about a year and a half ago, you
set up a near revocable trust for my wife and
I and did a great job.
Speaker 5 (31:59):
Well, thank you.
Speaker 8 (32:00):
We were talking about it the other day and she
her and I have a little misunderstanding on part of it.
And it's got to do with the savings account. Okay,
we put it in my name and you had gotten
me a SA duly day.
Speaker 5 (32:14):
We put it in your trust, not your name, that's correct,
it might trust. Okay, your trust got it?
Speaker 8 (32:19):
Now can I withdraw funds from that?
Speaker 5 (32:24):
So give me a let's use a number, like how
much is in there?
Speaker 8 (32:27):
Okay, it's like three hundred thousand.
Speaker 5 (32:29):
So you got three hundred thousand and basically a bank
account in the name of the trust. Correct.
Speaker 8 (32:33):
Correct, So you can.
Speaker 5 (32:34):
Invest that money anyway you want. If you don't like
the bank, you can put it in an investment account,
earn interest in dividends. Any interest and dividends that it earns,
you can take directly, so you can have it. And
let's say you went to a brokerage house, set it up,
invested it. You can take that money directly and put
it into your personal bank account, not the trust bank account,
(32:55):
anytime you want. It's the three hundred thousand dollars principle
that's protected and you can can't take it directly. There
is a way to get it in directly, but before
you start accessing it indirectly, I would tell you please
spend money that you have outside the trust first, like
IRA money either you or your wife, or any other
(33:16):
investments that you left outside the trust, because we never
put everything in right, so spend those first. Why because
those are at risk for the nursing home, whereas what's
in the trust is not. So if you do need
to access that money though, there is a way to
get it and certainly happy to help you with that.
You can give me a ring off air and we
can get you that information. So hopefully that helps clarify
(33:41):
your situation.
Speaker 2 (33:42):
Tod got another for you with Tony in Falmouth. Tony,
you are on with Tom Lunsky. Tony are you there,
lost Tony?
Speaker 6 (33:53):
Hello?
Speaker 5 (33:54):
Oh there's Tony.
Speaker 6 (33:55):
Yes, yes, Scott, thank you for your time. My sister
and I recently inherited our mother's condo and we've already
sold it and we're going to end up with roughly
two hundred thousand dollars each. And my question is is
this a taxable event?
Speaker 5 (34:12):
So when you say you inherited your mother's condo, she
did not need it to you folks while you were alive. Correct, well,
she was alive.
Speaker 6 (34:24):
She had it in her will that we would get it.
Speaker 5 (34:27):
Great, that's exactly what I want to hear. So if
if she died owning it, and then the deed went
from her at death or from her estate to you
and your sister, then you inherited the property and it
was not gifted to you during life, which is all
about this guide, right, don't just give things away. It
sounds like your mom did the right thing. She didn't
(34:49):
give it away, and so she passed away owning it.
Then you then it was included in her estate for
estate tax purposes, passed to the k kids. So if
the property at the date of your mom's death was
worth four hundred thousand dollars and you sell it for
four hundred thousand dollars, you kids will have gotten something
(35:11):
known as a step up in cost basis, which means
that your cost of that property is four hundred thousand
dollars even though you paid nothing for it. So now
if you sell it for four four hundred fair market
value minus four hundred thousand dollars stepped up cost basis
equals a capital gain of zero. And so their answer,
(35:35):
the long winded answer to your question, is no capital
gains tax on the sale. So hopefully that's helpful.
Speaker 2 (35:44):
Todd appreciate you joining us today. I know you gave
a bunch of information there on gifting and answered some
great questions from our listeners. There anything else on the
gifting side that you want to touch on. We got
about a minute or so still to go here.
Speaker 5 (35:59):
Yes, yes, I think back to you know, to Tony's
point is that the everything was done, you know, good
for the mother the way she did it, although the
one thing that maybe we could have improved on there
was I guess we're fortunate and happy that she didn't
end up in a nursing home, but you know, if
she did, then there might not have been any you know,
(36:20):
house left to get a step up. So people always say,
how come on, I put assets in an irrevocable trust,
I get a step up in basis, Well, I can
get the same step up by just dying owning it.
That's true, But why is there still a benefit. Why
do I mention that as a benefit with the irrevocable trust. Well,
because at least in the irrevocable trust, I know there
will be a house there to pass on to the family,
(36:43):
to get that step up in basis so they can
sell it with capital gains tax. Whereas here if unfortunately
Tony's mother, if she had gone into a nursing home,
you know, there could have been a very different outcome
because there may not have been that house, you know,
still there.
Speaker 2 (36:59):
Mister wank you thank you so much for joining us today.
We appreciate the time.
Speaker 5 (37:04):
Always a pleasure. Thank you.
Speaker 1 (37:06):
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Speaker 2 (37:36):
Buns to come in the second hour of our show,
including we're gonna be touching on gold and the recent
rally that has it north of four thousand dollars, an ounce,
talk a little bit about the housing market and what
we are seeing there, and then also can be continue
to touch on what we are seeing in Ai and
(37:56):
the spending boom there that is driving just a ton
of economic activity both in the United States and around
the globe. Quick break now, but our two it's coming
up in just a little bit.
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(01:08):
Zada and Mark Fandetti.
Speaker 2 (01:13):
Chuck and Mark with you here today, and we kick
things off with a piece from the Wall Street Journal.
It's titled the Unofficial Jobs Numbers are In and it's
rough out there, and there are a couple different pieces
that I want to talk about with this. The first is, yes,
we don't get a new jobs report every month right
(01:33):
now while the government shut down continues. This means that
every bank and private equity firm out there is trying
to come out with their alternative numbers of hey, here's
how many jobs were created in the month of September. Now, look,
we did this kind of as an exercise on our
(01:54):
Friday show just because look, we had, you know, a
day where there's supposed to be a job report, and
so Mike and I both like conveniently, we're like, hey,
let's feed this into you know, an AI and see
what it says job growth would have been. And we
did just to illustrate like the process by which you know,
people in businesses in the FED try to figure this out.
They've got their existing models. They say, Okay, let's plug
(02:16):
in some inputs and here's where we think it is. Ultimately,
I think the world could use way fewer people releasing
their unofficial jobs numbers because they all do have different methodologies,
they all do have different models, they all have different
inputs and things like that, and so all of them saying, hey,
(02:38):
here's how many jobs were added for this month. Well
what have your models said in like previous months, like
we've never talked about them, and so trying to use
these numbers as a stand in for the jobs report.
I think it's quite honestly, like just kind of not
where we need to be going. It's it's just enough
is enough. I don't need to know that. You know,
Carlisle Group thought there were fourteen thousand jobs created for
(03:00):
the month, and Goldman Sachs thought there were you know
x number. Hey, let's just look at the other data
that's out there, and when we finally get jobs reports
coming back out, we'll deal with them then. But until
then we can report on Hey, the you know ADP
survey actually showed this or indeed shows this level of hiring,
or paycheck shows this level of hiring, because those are
(03:22):
actual data sets about you know, hey, we're tracking this
and we're measuring this. Not well, we estimate that the
government jobs report would have showed blank. I don't need
someone telling me what they think the government jobs report
would have showed. I don't think that's useful to anyone.
Speaker 3 (03:40):
Yeah, I'm not I haven't done it myself, but I'm
sure many people do use data from other sources to
fit a so called model and come up with a
way to estimate payrolls changes. Sure, the problem is the
relationships among Like with any fitting exercise, you always asked,
do I have the right variables trying to explain or
forecast the variable of interest? And are the relationships stable?
(04:04):
We know the answer to those questions are no, because
no one has come up with a good way of
forecasting payrolls to this point. It's not like people haven't
been trying, so it's probably very hard to do chat, right.
Speaker 2 (04:15):
I Mean, the only thing that I would be interested in,
quite honestly, is if like three billionaires went out and said, Hey,
we're gonna spend a boatload of money coming up with
three distinct ways to try to you know, interview and
survey people, and we're gonna spend a bunch of cash
doing this, and we're gonna try to, you know, figure
out what's happening. Okay, I'd be interested in that, because
(04:38):
that's not just trying to look at different data inputs
coming in. That's trying to actually like create some kind
of survey and spend a boatload of money doing so.
I'd be interested in that. Beyond that, Hey, I'm looking
at the Indeed Jobs Posting Index, which is something, by
the way, that we talk about quite often. It shows
that in the last ten days from September twenty third
(05:00):
through October third, the number of job openings declined by
about one percent on Indeed. Okay, that's something that I
can just say exists as is. I don't have to think,
go and extrapolate that and say why all that means
the hiring decreased by No, it's it's okay to just
talk about data sets as well.
Speaker 3 (05:20):
It's okay for us. It's not okay for a serious
researcher though, they'd have to You have to go to
your boss with something. You have to say, updated my
model last month, and here's where I think payrolls would
fall with a certain amount of confidence. I mean, it's
okay for us, but.
Speaker 2 (05:31):
Sure, you know, but I don't. I don't think that
that research that they're doing is valuable to disseminate to
the public because the public's not going to understand what
it means.
Speaker 3 (05:41):
If a hedge fund and they put considerable resources, lots
of PhDs into working on problems, is if they came
up with a good way to forecast payrolls with less
error than say the Preble, they wouldn't be telling us
they You would not be exactly you and I wouldn't
know about it.
Speaker 2 (05:55):
We talk about this a lot. Actually, it's one of
my dietary We talk about the sources of alpha in markets.
It is private information, not material, non public information, which
is you know, obviously illegal to trade on, but private information.
A model that you've built that you don't share with
(06:16):
anyone because it estimates, you know, the the jobs report better,
a model that you've built that shows how you know,
the amount of rain in Saskatchewan impacts soybean prices coming
out of Iowa, like the These are the things that hey,
if you actually have something that works, you don't tell
people about it. And so you know, all of these
(06:40):
reports of well so and so estimates the job growth
was this and that, Well, if if they really thought
this gave them an edge they wouldn't be telling you.
There's a whole bunch of things.
Speaker 3 (06:52):
So you know, there's no I wouldn't, we wouldn't.
Speaker 2 (06:54):
There's a whole bunch And and this is also like
when you see different things that are reported in the press.
Oh so and so thinks that markets are going to
do this and that why would they be telling you?
There are two reasons why they're telling you. Number one
is it doesn't matter to their performance. Number two is
it does and they've already pre positioned themselves.
Speaker 4 (07:16):
You know.
Speaker 2 (07:17):
You think about the hedge fund guys who go on
you know, CNBC and Bloomberg and say, well, you know what,
we think this could happen, and then at the end
it's hey, you know they disclose that they have a
longer short position in whatever it might be right and
this is fine, you know, we say so I think.
I think ultimately, when we're looking at the jobs numbers,
(07:39):
I do not have a proprietary model to you know,
project where the job's numbers are going to be. But
I look at a bunch of different indicators and say, yeah,
this means something good, this means something bad. If I
get a bunch of things pointing good or bad. Okay,
that just you know gives me a little confidence in
one direction. And I think for ninety nine point nine
(07:59):
percent of US that's fine.
Speaker 3 (08:02):
Depends on what you need the data for.
Speaker 2 (08:04):
From ninety nine point nine percent of US mark.
Speaker 3 (08:07):
It's fine, yes, fine for this show.
Speaker 2 (08:09):
For the point one percent that needs you know. For
the point one percent that needs you know something more
because their job depends on it, it's not fine, and
they can go and do their own work. But I
just I don't think we need every bank saying well,
this is what the job's report would have showed this month.
Speaker 3 (08:26):
I understand why they're doing that, though part of it
is the PhDs in the background, who need to demonstrate
that they're adding value. So they run to their boss
and say, I did a forecast using the variables that
we normally use, and you can publish this because it's
vague enough that we're not giving away our secret sauce.
You could argue that they're trying to perform a public service,
(08:47):
or you could argue more skeptically, and we should be
skeptical that they're taught that they're doing something to boost
their so called book. Like you said, it's like when
a manager says, I like gold right now. It's because
they own a ton of it and they want you
to pile in and they can pass the the the
the bag along to the greater fool. That's a bad
example to smirch gold. I'm just I just came up
(09:09):
with a hot assay class.
Speaker 1 (09:10):
That's all.
Speaker 2 (09:10):
No, I get what your skepticism is warranted. To take
a quick break. When we return, we'll talk about whether
we're starting to see any impacts nationwide in the economy
from the ongoing government shutdown.
Speaker 1 (09:24):
Text US six one seven three six two thirteen eighty five.
With your comments and questions about today's show, and let
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Speaker 4 (09:53):
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Speaker 2 (10:28):
A couple different pieces in the Wall Street Journal. One title,
the shutdown is already squeezing these businesses. The second one
much easier just to get through thin air traffic staffing
spurs delays at US airports. This, by the way, the
air traffic control and TSA issue is the one that
eventually ended up ending the twenty eighteen shutdown as we
started to see delays stacking up. And look, once you see,
(10:52):
you know, things becoming visible to a broad portion of
the US population. Generally, the federal government says, okay, like
we don't really like this, Like let's figure this out
and get back to work. But in terms of the
businesses that are you know, being impacted by the shutdown
right now, a couple different interesting cases that you can
(11:14):
talk about here. Number one, you've got a medical device
company in California that just as an example, they had
to postpone a spin off because the regulators who would
approve the spinoff aren't working right now. They're not essential personnel,
so they can't go through their spin off. There, you've
got another company here that is and a bunch of
(11:38):
electricians that are a government contractor they cannot they're not
having their new government contract signed because the people that
sign said contract are non essential personnel, and so they're
trying to keep their staff employed while they wait for
that new contract. So you've got kind of these sporadic
(11:58):
areas where there's a very real and significant impact. This
despite the fact that I think, quite honestly, for the
vast majority of us out there, like, quite honestly, I
get up and I go to work just like I
do any other day, and I don't really see anything different.
But for probably anywhere between three and five million Americans
(12:23):
out there, including you know, some of you that are listening,
you're probably dealing with anything from you know, minor inconveniences
to major disruptions because you may be employed in the
federal government or in a tangentially related company, and as such,
you've got some real disruptions and questions about Hey, you know,
am I going to get paid in a week or so.
(12:44):
Is this going to, you know, cause me to miss
a mortgage payment or a rent payment. These are very
real questions, and so I know that for a lot
of us, you know, most of you listening are not
government contractors. You're not you know, seeing this impact you
on a daily basis. You're getting to the point now
as this drags into its eighth day where there are
(13:04):
against several million people in the United States that on
the verge of having their livelihoods impacted if they haven't
been already.
Speaker 3 (13:12):
Like it or not, and I don't like it, but
this is not about editorializing. The government drives a lot
of economic activity. It's an important stabilizer. It's a source
of sustenance for millions, as you say, of Americans. And
as much as for ideological reasons, I don't mind the
government shut down once in a while. This particular shutdown
is not about the deficit or cutting spending. It's over policy,
(13:34):
so that ain't gonna Fiscal reforms are not going to
come of this. I would say, hold their feet to
the fire if they were. It seems just disruptive and
unnecessary at this point, and it will have an impact
on the economy. It'll probably be a blip and it'll
be made up for when the government reopens. It just
infuses chaos into too many processes with no prospect of
(13:57):
any kind of long run payoff unfortunately.
Speaker 2 (14:00):
Yeah, and again we're now into the eighth day here
of this shutdown. If you look at the online betting
portals that allow people to wager on this, you're now
the length that we are up to is about twenty
three twenty four days that are being bet on. That's
kind of the longer point it is.
Speaker 3 (14:21):
The longer drags on, the less likely it will get resolved.
Speaker 2 (14:24):
According to these Yeah, I think quite honestly, there are
two dates that you're looking at on this. The first
is a week from now. The next government payroll is
the night of the fourteenth, and so, hey, do you
want a resolution so that those workers are being paid
on schedule so by next you know, Wednesday, is one
that we'd be looking at. And the next one is
(14:45):
end of the month when you have a second missed
payroll for government workers that you potentially be looking at.
Speaker 5 (14:52):
Again.
Speaker 2 (14:52):
The last shutdown that we had it was the longest
that we've seen, that was thirty four days at the
end of end of twenty eighteen, and ultimately what drove
it was, Hey, you had a bunch of TSA workers
and a bunch of air traffic controllers that said, no,
we're not showing up if we're not getting paid, and
you know, combination of hey, like, we need to get
(15:14):
paid because there are bills that we have to pay
and the other pieces no, like we're not just going
to you know, go along with this is basically what
they said. So that's when you saw the resolution there
to this point. In terms of the you know, the
broader economic impact from you know, these these businesses that
can't go through their normal operations, the estimates that we
(15:35):
see are anywhere from around point one two point two
percent per week. I tend to err on the lower
side of that based on you know, the estimates that
I've seen, so GDP for every week this shutdown goes
on would typically be reduced by about point one percent,
which given the clip that you know, the estimates have
Q three growing at, wouldn't be enough to inherently, you know,
(15:56):
throw the US into a recession on its own. But
you know, with some of the other questions that are
out there on the labor market and other pieces. It
could result in, you know, more of a slow down
if you know, some of this marginal demand ends up
causing non government related companies to then you know, and
you know, laying off workers and things like that as well.
Speaker 3 (16:18):
So they'll be make up spending. Suppose this lasted for
I don't know, worst case sixty ninety days, Sure they'll
be makeup spending in the first quarter. So they'll be
a boost to GDP. It'll just swing in the opposite direction.
You've got rebates from accelerate. Rebates may not be the
right term, but there are tax breaks that will be
a front end loaded as I understand it. For the
(16:39):
most recent tax bill. It is hitting in the first quarter. Yes,
Fed stimulus. The Fed has been easing policy. They started
easing policy. It'll now be a few quarters by.
Speaker 2 (16:48):
The day in the first quarter.
Speaker 3 (16:49):
Rolls around, So you have multiple sources of demand stimulus
hitting in the first quarter. Well, of course, everything in
my life comes back to the FED and are they
doing the right thing? And in this I want criticize them.
I'll just point out that this makes things a little
extra challenging. You've got multiple sources pushing demand up and
sources pushing pushing policy, sources pushing labor supply down. At
(17:12):
the same time, this creates inflationary pressure. Is my little
observation about the timing of all this stuff.
Speaker 2 (17:20):
The other piece that you know, like I struggle to
look at, like, let's say this, Let's say this does
go on longer. Let's say it's forty five sixty days. Yes,
you've got that makeup spending that happens on the back
end once the government workers get paid out. But what
if the loss of demand created by them not spending
in the interim results in non government employment dropping because
(17:42):
companies say, maybe, you know, hey, like we've seen a
drop in demand for you know, you example, you run
a I don't know, a coffee shop near Logan Airport
and you go through, you know, three four weeks of
week demand, you say, hey, Sally, Jim, don't in you know,
two days next week, and then that causes you know,
(18:04):
a ripple effect from there and things along those lines.
Are those things that happen as this goes on longer.
Maybe we've never seen one that long. I still think
the most likely thing is a resolution either next week
or end of October. I have a hard time seeing
this dragging into November.
Speaker 6 (18:22):
But.
Speaker 2 (18:24):
I've been known to be wrong occasionally, hopefully not too often,
but occasionally it can happen.
Speaker 3 (18:30):
Yeah, who's gonna flinch. I don't know that's that's political,
but it depends on whose pain point is reached first.
Speaker 2 (18:39):
So this is this is again kind of where we
are in terms of the economic impacts to this point. Broadly,
there's not much there, but obviously if you are employed
by the federal government or in an adjacent business, you
could personally be seeing some significant disruptions that have you
a little bit nervous about where things go from here.
But the broader economic impact estimated to be around point
(19:03):
one percent of GDP for every week that this goes on.
And we'll just have to see how things develop from
here as we go and whether we get a resolution
in the next week or two, We'll just have to
wait and see on that. Right now, let's take a
quick break. When we come back, we've got Wall Street watch,
(19:24):
and then Todd Lutsky from Cushing and Dolan joined us
for Ask Todd. Get your estate planning questions ready for Todd.
Speaker 1 (19:44):
Like us on Facebook and follow us on Twitter at
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 at what's moving market so far
today right here on the Financial Exchange Radio Network.
Speaker 4 (20:03):
Well after the SMP five hundred snapped its seven day
winning street, markets today are in positive territory as the
government shutdown continues into its second week. Right now, the
Dow is up by about a quarter percent, or one
hundred and six points, SMP five hundreds up four tenths
of one percent, or twenty nine points higher, Nasdaq up
seven tenths of one percent or one hundred and sixty
(20:25):
three points. For US two thousand is also up four
tenths of one percent ten Your Treasure reeled down one
basis point at four point one one one percent, and
crude oil up just over one percent higher today training
sixty two dollars and forty eight cents a barrel. Well
after it's two and a half percent loss yesterday, Oracle
(20:45):
shares a rebounding about one percent today. Oracle's recent pullback
was driven by a report by The Information saying the
company's margins from its cloud business were weaker than analysts
were forecasting, and that Oracle is losing money on some
of its deals to rent out in Nvidia chips. Meanwhile,
Equifax shares are rising over two percent after the company
(21:06):
said it would cut prices for mortgage scores. This comes
after fair Isaac last week said it would sell credit
scores directly to mortgage lenders bypassing credit bureaus like Equifax. Elsewhere,
Tesla unveiled stripped down versions of its best selling SUV
and Sedan. However, the lower prices don't quite cover the
recently expired seventy five hundred EV tax credit. The standard
(21:31):
Model three costs about thirty seven thousand dollars, while these
Standard Model Y costs about forty thousand dollars. Tesla stock
is edging higher. Ast Space Mobile announced to deal with
Verizon to provide its customers will sell service from Space
beginning in twenty twenty six, sending that stock up eight percent,
Verizon down modestly, and third quarter earning season kicks off
(21:53):
tomorrow morning with PEPSI and Delta ahead of the opening bell.
I'm Tucker Silva and that is Walstree.
Speaker 5 (22:00):
Watch.
Speaker 1 (22:02):
This is ask Todd on the Financial Exchange Radio Network.
If you have an existing estate plan or in the
market for one. Todd Letsky is here to answer your
questions and help you plan for a 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.
(22:23):
Visit Cushingdolan dot com. Now here's Todd Lutsky ask Problems.
Speaker 2 (22:29):
We're now joined by Todd Lutsky from Cushing and Dolan.
It's your chance to ask Todd your estate planning questions.
That's why the segment is named Ask Todd. Phone lines
wide open right now at eight eight eight to zero
five two two six three, So get calling early and
often to make sure you've got a chance to ask
Todd your estate planning questions. That number is eight eight
(22:52):
eight to zero five two two six three. Remember we
can only get through two to three of these, so
make sure that you get your calls in again. Eight
eight eight two zero five two two six three. That
is the number to call to ask Todd your state
planning questions, live on air. Mister Lutsky, how are you
doing today?
Speaker 5 (23:12):
I am doing great? How about you doing well.
Speaker 2 (23:15):
Do you know what's green and lightweight?
Speaker 5 (23:17):
Green and lightweight?
Speaker 2 (23:19):
Yeah? No, like green.
Speaker 5 (23:21):
Yeah, that's true, that would be true.
Speaker 2 (23:24):
Todd, want to talk to you a little bit about
gifting as part of an estate planning strategy. Okay, A
lot of times we talk about the perils of gifting assets.
Speaker 5 (23:34):
There's plenty.
Speaker 2 (23:34):
I want to be optimistic today. Yeah, when can gifting
actually fit into an estate plan and what tools are
needed in order to make it as effective as it
can possibly be.
Speaker 5 (23:48):
So i'd say gifting when you're there's there's so many
things entwined in that question that people don't even realize
how many issues you just brought up. But gifting can
make sense.
Speaker 2 (23:58):
We do have a time limit.
Speaker 5 (23:59):
There's a lot to think about. You're absolutely right. So
one I think you got to look at the size
of your state, right, sure do I you know? Right
now with the federal exemption come January one being fifteen
million dollars each if you're married, So now you can
shelter thirty million dollars without doing any gifting at all
from mistate taxes. So that kind of eliminates the need
(24:20):
for a lot of people to say I need to
gift away assets to what to save federal death taxes. Right,
that takes a lot of people off the table. I
don't need to because I'm under that. Well, if I'm
under that, then I only want to gift away assets
because I have what a Massachusetts let's say, or your state,
but a Massachusetts estate tax that I have to worry about.
(24:42):
Why do I worry about that? Because that's over. If
I'm married, I can only shelter four million dollars in
assets with the same basic estate planning that can shelter
thirty million dollars federally. Okay, well, maybe I should start
thinking about gifting away some assets to save massachue use
It's taxes. Oh but hold the horses. Why because what
(25:04):
am I going to give away? Well, I don't want
to give away anything with a very low cost basis,
which translates into a large built in capital gain associated
with that asset. Why. Well, if I give away any
of those assets like stock portfolios, like real estate that
(25:24):
I've rented over the years and maybe depreciated it to zero,
or even a vacation home that just has grown in
value over the years, if I give that away, then
what am I saving oh, well, Massachusetts is about ten
twelve percent on average for the estate tax. Okay, well,
I'll lower my estate and save ten twelve percent. But
(25:47):
I've given away an asset that has a built in
gain associated with it, which will be taxed at almost
thirty percent, not factoring in depreciation recapture. Well, I don't
want to give away something to save ten percent, but
trap thirty percent tax capital gains tax doesn't make sense.
So there's a lot to think about in what you're giving. Now,
(26:10):
if I have cash, that's different. Okay, well, cash is cash.
I can give that away and it won't hurt me
as much. Remember, there's no gift tax in the state,
but there's a federal gift tax if you exceed the
present interest exclusion of nineteen thousand dollars per year per person.
So those are freebies and you can just give those away.
And as you might imagine, we are limited in time.
(26:32):
But there's also how do we gifted? Do we use
gifting trusts to?
Speaker 1 (26:35):
You know?
Speaker 5 (26:36):
So many things to think about, Chuck, But I'm glad
you at least, you know, sort of sparked that curiosity
for people.
Speaker 2 (26:44):
Talking with Todd Lotski from Kushingan Dolan. We still got
a little bit of room on the phone line, so
get calling at eight eight eight to zero five two
two six three so you can ask Todd your estate
planning questions. The number again is eight eight eight to
zero five to two sixty three. Let's take a quick
break here, and when we come back, we are going
(27:04):
to get right to your questions with Todd Lotsky. That
phone number one more time eight eight eight two zero
five two two six three.
Speaker 1 (27:13):
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 (27:33):
All right, right to your calls with Tod Letsky. First up,
we got Dan in PbD. Dan, you're on with Todd.
Speaker 7 (27:41):
Good morning, Todd. I have a revocable trust right now? Okay,
if I switched to an irrevocable trust the two thousand,
two million dollar exemption, What does zecho, do I get
an exemption for that two million if I put it
(28:02):
in that irrevocable trust.
Speaker 5 (28:03):
Well, sure, it would depend on the type of irrevocable
trust that we do. So let me just ask you this.
Are you married?
Speaker 7 (28:11):
Well?
Speaker 6 (28:12):
I was?
Speaker 5 (28:12):
And do you do you have children?
Speaker 6 (28:16):
Yes? Three?
Speaker 5 (28:17):
Okay? So is the value of your estate way over
that two million dollar number or under it?
Speaker 7 (28:24):
No, it's over how much over I would say another two?
Speaker 5 (28:30):
All right? So you're at four million. Was there any
planning done when your wife passed?
Speaker 1 (28:36):
No?
Speaker 8 (28:36):
All right.
Speaker 5 (28:36):
So that's part of the problem, is the fact that
we weren't able to shelter anything on the first death.
Now with a four million dollar estate, just for everybody
else's edification as well as yours. If it was a
four million dollar estate and planning had been done, meaning
trusts were in place, like that revocable trust that you
mentioned that you have. Did your wife have one of
those when she passed? Or no?
Speaker 7 (28:58):
Yes she did?
Speaker 5 (28:59):
Oh okay, so you did have planning done. So now
you need to say how much of that four million
is sheltered in your wife's trust so that it's not
going to be taxed when you die? Do we know?
So let's assume that your wife's trust had roughly two
million dollars in it. Well, that two million dollars would
be sitting in now an irrevocable trust for the benefit
(29:21):
of you in what was called a remainder share, and
there would be no tax due when your wife died
because it was two million or less. And that two million,
no matter what it grows to, would not be taxable
in your estate when you pass. So if you pass tomorrow,
assuming my hypothetical fact pattern is accurate, you'd be worth
two million. If you're worth two million and you have
(29:44):
either the revocable trust that you are currently speaking about
or the newly created irrevocable trust, you'd still be able
to shelter your two million, thereby eliminating Massachusetts estate tax entirely. Now,
to your point, regardless of what your wife has done,
at least your two million probably should be put into
(30:08):
an irrevocable trust so that you can get it protected
from the cost of long term care at the same
time not giving up your two million dollar exemption, So
you will keep your two million dollar exemption to shelter
it for a state taxes. And you also might want
to get some guidance on thinking about your wife's trust
(30:28):
and see how you can change that to make it
also nursing home protected without creating an estate tax problem
for you. So you're on the right track. You absolutely
could get stuff done there and go ahead and make
that change. Folks. That was interesting because that's more about
(30:48):
estate planning. But some people do gifting to try and
reduce their estate for a state taxes. As Chuck had
asked me earlier. You know, gifting is not easy. There's
so many things, as we talked about it, whether they're
there as a gift tax and we have estate taxes
we have to consider. We have to consider income taxes
and basis. We have to consider if we want to
give away an asset and retain control over it, enjoy it.
(31:11):
So those are spousal lifetime access trusts, you know, do
we want to understand what owning assets jointly do from
even a medicaid perspective, a nursing home perspective. So so
much to think about when you're giving away assets. So
get the guide Learning about Making the Most of Gifting
Assets eight six six eight four eight five six nine
(31:33):
nine or Legal Exchange Show dot Com again eight six
six eight four eight five six nine nine or Legal
Exchange Show dot com to get your guy.
Speaker 2 (31:44):
Todd got another one for you here. Let's go to
Rick in Foulmouth. Rick, what's your question for Todd Alotski.
Speaker 8 (31:50):
Hey, good morning, Todd.
Speaker 5 (31:51):
How were you good?
Speaker 8 (31:53):
Hey Todd, about a year and a half ago, you
set up a near revocable trust for my wife and
I and did a great job.
Speaker 5 (31:59):
Well, thank you.
Speaker 8 (32:00):
We were talking about it the other day and she
her and I have a little misunderstanding on part of it.
And it's got to do with the savings account. Okay,
we put it in my name and you had gotten
me a SA duly day.
Speaker 5 (32:14):
We put it in your trust, not your name, that's correct,
it might trust. Okay, your trust got it?
Speaker 8 (32:19):
Now can I withdraw funds from that?
Speaker 5 (32:24):
So give me a let's use a number, like how
much is in there?
Speaker 8 (32:27):
Okay, it's like three hundred thousand.
Speaker 5 (32:29):
So you got three hundred thousand and basically a bank
account in the name of the trust. Correct.
Speaker 8 (32:33):
Correct, So you can.
Speaker 5 (32:34):
Invest that money anyway you want. If you don't like
the bank, you can put it in an investment account,
earn interest in dividends. Any interest and dividends that it earns,
you can take directly, so you can have it. And
let's say you went to a brokerage house, set it up,
invested it. You can take that money directly and put
it into your personal bank account, not the trust bank account,
(32:55):
anytime you want. It's the three hundred thousand dollars principle
that's protected and you can can't take it directly. There
is a way to get it in directly, but before
you start accessing it indirectly, I would tell you please
spend money that you have outside the trust first, like
IRA money either you or your wife, or any other
(33:16):
investments that you left outside the trust, because we never
put everything in right, so spend those first. Why because
those are at risk for the nursing home, whereas what's
in the trust is not. So if you do need
to access that money though, there is a way to
get it and certainly happy to help you with that.
You can give me a ring off air and we
can get you that information. So hopefully that helps clarify
(33:41):
your situation.
Speaker 2 (33:42):
Tod got another for you with Tony in Falmouth. Tony,
you are on with Tom Lunsky. Tony are you there,
lost Tony?
Speaker 6 (33:53):
Hello?
Speaker 5 (33:54):
Oh there's Tony.
Speaker 6 (33:55):
Yes, yes, Scott, thank you for your time. My sister
and I recently inherited our mother's condo and we've already
sold it and we're going to end up with roughly
two hundred thousand dollars each. And my question is is
this a taxable event?
Speaker 5 (34:12):
So when you say you inherited your mother's condo, she
did not need it to you folks while you were alive. Correct, well,
she was alive.
Speaker 6 (34:24):
She had it in her will that we would get it.
Speaker 5 (34:27):
Great, that's exactly what I want to hear. So if
if she died owning it, and then the deed went
from her at death or from her estate to you
and your sister, then you inherited the property and it
was not gifted to you during life, which is all
about this guide, right, don't just give things away. It
sounds like your mom did the right thing. She didn't
(34:49):
give it away, and so she passed away owning it.
Then you then it was included in her estate for
estate tax purposes, passed to the k kids. So if
the property at the date of your mom's death was
worth four hundred thousand dollars and you sell it for
four hundred thousand dollars, you kids will have gotten something
(35:11):
known as a step up in cost basis, which means
that your cost of that property is four hundred thousand
dollars even though you paid nothing for it. So now
if you sell it for four four hundred fair market
value minus four hundred thousand dollars stepped up cost basis
equals a capital gain of zero. And so their answer,
(35:35):
the long winded answer to your question, is no capital
gains tax on the sale. So hopefully that's helpful.
Speaker 2 (35:44):
Todd appreciate you joining us today. I know you gave
a bunch of information there on gifting and answered some
great questions from our listeners. There anything else on the
gifting side that you want to touch on. We got
about a minute or so still to go here.
Speaker 5 (35:59):
Yes, yes, I think back to you know, to Tony's
point is that the everything was done, you know, good
for the mother the way she did it, although the
one thing that maybe we could have improved on there
was I guess we're fortunate and happy that she didn't
end up in a nursing home, but you know, if
she did, then there might not have been any you know,
(36:20):
house left to get a step up. So people always say,
how come on, I put assets in an irrevocable trust,
I get a step up in basis, Well, I can
get the same step up by just dying owning it.
That's true, But why is there still a benefit. Why
do I mention that as a benefit with the irrevocable trust. Well,
because at least in the irrevocable trust, I know there
will be a house there to pass on to the family,
(36:43):
to get that step up in basis so they can
sell it with capital gains tax. Whereas here if unfortunately
Tony's mother, if she had gone into a nursing home,
you know, there could have been a very different outcome
because there may not have been that house, you know,
still there.
Speaker 2 (36:59):
Mister wank you thank you so much for joining us today.
We appreciate the time.
Speaker 5 (37:04):
Always a pleasure. Thank you.
Speaker 1 (37:06):
This has been asked ond on the Financial Exchange Radio Network.
Askedd 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 three nine three four
thousand and one or visit Cushingdolan dot com. The views
expressed in this segment are solely those of Cushing and Dolan.
(37:27):
Armstrong Advisory does not provide any legal or tax advice.
Please consult with your illegal or tax advisor on such matters.
Cushing and Armstrong do not endorse each other and are
not affiliated.
Speaker 2 (37:36):
Buns to come in the second hour of our show,
including we're gonna be touching on gold and the recent
rally that has it north of four thousand dollars, an ounce,
talk a little bit about the housing market and what
we are seeing there, and then also can be continue
to touch on what we are seeing in Ai and
(37:56):
the spending boom there that is driving just a ton
of economic activity both in the United States and around
the globe. Quick break now, but our two it's coming
up in just a little bit.
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