September 10, 2025 • 37 mins
Chuck Zodda and Marc Fandetti discuss the PPI data unexpectedly dropping 0.1% instead of the predicted rise of 0.3%. The Fed easing too much is a massive gamble. Jamie Dimon says the US economy is weakening after record BLS revision. Judge blocks Trump from removing Fed Gov Lisa Cook. Todd Lutsky joins the show to explain how to limit estate tax exposure.
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Episode Transcript
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Speaker 1 (00:00):
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(01:05):
Zada and Mark Fandetti.
Speaker 2 (01:12):
Chuck, Mark and Tucker with you here. As we continue
through the week and this morning, we continue to get
more economic data with the Producer Price Index out at
eight thirty am Eastern, and what we saw there was
some better than expected UH numbers overall, when you look
at the headline number coming in with actually a point
(01:35):
one percent decline for the month versus expectations of a
point three percent increase. Core number coming in at a
point one percent decline for the month as well with
a point three percent increase expected. And ultimately what we're
seeing is not really much movement in the bond market
for the reason that basically PPI is. You know, first
(02:00):
of all, no one really understands what it does, if
we're being honest, a lot of people can even think
it means something that it doesn't. But the other piece
is the reason why people care about PPI is simply
because there are some items in it that are passed
throughs to the personal consumption Expenditures inflation data, the PCEE data,
(02:22):
which the Fed does pay close attention to, and in
this report, the pce passed throughs were not as muted
as the overall headline or core numbers, and so as such,
it doesn't really change the projection for PCE, which is
what matters when you're trying to determine what FED policy is.
(02:43):
So this is why, Hey, despite this, you know, much
cooler than expected number, the tenure treasury is off half
a basis point. I'm sorry, is seeing its yield move
down half a basis point today, And there's just not
a ton of movement on the back of this. So
I think you can look at this and say, yeah,
it's good that this reading came in cooler than expected,
(03:06):
but it's not going to have a huge influence on
FED policy simply because the stuff that does influence FED
policy didn't come in as cool as the rest.
Speaker 1 (03:14):
Of the report.
Speaker 3 (03:16):
Man, nice summary.
Speaker 2 (03:17):
Other takeaways from this and not other takeaways, but just
other other items that are you know, questions that I
think are worth asking. If we look at this report
and remember what producer price index. What the producer price
index measures is it's a backwards view of the CPI
where the CPI measures, Hey, how much did you pay
(03:39):
for something? This measures what did producers receive for something?
Wholesalers what did they receive for something? And So the
question that I think is worth asking is okay, given
some of the upward input cost pressures that we're seeing,
and you can see them in this report. By the way,
if you look at intermediate goods prices as opposed to
(04:00):
final goods prices, you see intermediate goods prices rising in
this report while final goods fall. The question that you
ask is why are end buyers not paying more at
the same pace that intermediate buyers are paying And it
raises a question of, hey, is there a demand issue?
(04:22):
But also when I look out there at the demand
side of the equation, you know, for consumer spending, credit
card data continues to be very good. Retail data has
been better the last couple months. Bank data is not
really showing anything that is out of line. And so
part of me like, on one hand, you look at
the jobs data and you say, yeah, based on what
(04:44):
we're seeing in the labor market, there's a convincing case
that the FED should begin a cutting cycle. On the
other hand, you look at the demand stuff, which is,
you know, typically demand starts to move before the labor
market cracks. Labor market tends to be a lagging indicator,
and you look at you know, the demand side of
the equation, and you're like, there's not really much that's
(05:04):
a huge problem there. There's there's been nothing confirming demand
weakness on that side, and so I think, quite honestly,
I have a hard time getting a handle on exactly
where this economy is moving right now, and so because
of that, I kind of just say, yeah, until proven otherwise,
it's just in a slow growth environment where GDP might
(05:27):
end up coming in again kind of as a lot
of people are projecting maybe between like one and two
percent this year, and there's nothing exciting to the upside
where you're growing, you know, the fastest economy. Ever, there's nothing,
you know, horrible where this is the you know, some
deep recession that is suddenly emerging. It just kind of
looks like muddling through because you don't have a ton
of stuff pointed convincingly in one direction right now.
Speaker 3 (05:51):
The FED works through demand. It has control over the
supply of money. It uses that to target a short
term interestrate called FED funds, that's the one we always
talk about, which in turn sets a floor under bank
lending rates, which in turn determines how much banks lend,
(06:11):
affirms and people.
Speaker 4 (06:12):
The FED you could think of the FED as.
Speaker 3 (06:14):
Controlling a variable you like to talk a lot about chuck,
and with good reason. Nominal gdp't it's not perfect. But
the FED, for our purposes, we could say controls nominal GDP.
How fast do you now? There was a time when
economs were very excited about the idea of nominal GDP targeting.
That doesn't get talked about that much anymore. There are
(06:34):
lots of implementation challenges there, but it's a legitimate thing
to talk about the FED targeting nominal GDP, and it's
a useful construct. So the question is is the FED
growing nominal GDP too fast, too slow, or just right?
What is it growing relative too well? Whenever you hear demand,
you should be asking what about supply supply? Aggregate supply
(06:57):
More technically, and you could think about nominal GDP as
aggregate demand. Aggregate supply is just potential GDP. That's labor
force growth times how much those people are producing per
hour productivity plus whatever. The fed's inflation target is two percent.
If you do a back of the envelope, you get
to about four to five. That's the growth in the
(07:17):
economy's supply productive capacity. Potential GDP said different.
Speaker 2 (07:21):
It alwayst like for the last ten to fifteen years.
Speaker 3 (07:22):
That's kind of yeah, the potential GDP has come down
because that's determined by structural forces.
Speaker 2 (07:28):
Which not giving many kids.
Speaker 3 (07:30):
Demography is important, immigration is important to that with you
and Mike Armstrong talk a lot about on this show.
So the question is does the FED need to boost
nominal GDP? Is it that which is slowing down? And
I think you just in your setup to this segment
illustrated perfectly that no, it's not. We don't really have
a nominal GDP problem. It seems we may have a
(07:50):
supply side problem. Go ahead.
Speaker 2 (07:53):
I didn't say, oh sorry.
Speaker 3 (07:54):
I always assume that I should be stopping somewhere and
coming up for air. So what we have a supply
side problem, in which case, if the FED pushes demand
too hard when supply is going in the opposite direction.
Think of a supply side problem as being equivalent to stagflation,
when supply is shrinking, the prices are going up, the
(08:16):
economy is slowing. I FED can't do anything to combat
that in the short term anyway. This is why they're
in quite a pickle.
Speaker 2 (08:25):
And I think that the problem is you try to
reconcile the different things that would indicate nominal GDP and
where it's going. And on one hand, the one that
I love to use is aggregate payrolls because I think
it's a good proxy for, hey, how much stuff can
people buy? And given that you know consumer demand is,
(08:45):
you know, big part of the economy. You sit there
and you say, okay, okay, you're seeing some signs that
that might be weakening a little bit. But on the
other hand, the actual spending data isn't messing with this,
and we're seeing consumer spending continuing to move along. Actually
the last couple months, it's kind of an accelerating clip.
The other piece is when you look at FIKER receipts,
(09:07):
so the amount of Social Security tax that's withheld from
paychecks and things like that, those are actually increasing at
a faster pace the last couple months as well, which
like nothing's really pointing in the same direction. And so
this is why the next few months, it's the thirty
year in a row where this has been the case.
We're heading into the fall saying this is gonna tell
(09:30):
us where we're going, because one of two things is
going to happen. Either the fight of withholding and the
retail sales and the credit card data is going to
worsen over the next few months, and that says, okay,
the economy is slowing, or the jobs picture, like the
aggregate payrolls data and the jobs picture has to start
(09:51):
to improve because if you're actually seeing FIKA withholding up
seven percent year over year for like six months in
a row, people are going to be spending that money.
Why are you cutting your workforce into more consumer spending,
And so you start to see hiring pick up again.
Speaker 3 (10:08):
The FED has to act in advance of any perspective
slow down because monetary policy takes time to work its
way into the economy because of the channels through which
it gets transmitted into the economy. But it is taking
a gamble here in easing, perhaps aggressively, because we don't
know that the economy is no weakening. We do know
(10:28):
that inflation is elevated underlying inflation to trend in inflation.
That is, it's well above their target. We can quibble
about whether their target should be two percent, but it is,
and we do know that the supply side of the
economy is probably being buffeted by shocks from tariffs and
from deportation policy. You could say you like those policies.
I'm not judging them. I'm saying simply they serve to
(10:51):
constrict supply. So think about supply move think about supply shrinking,
That is, stagflation area reduces potential output at the same
time putting upward pressure on prices. If the FED pushes
too hard on the gas, or any harder than it's
pushing today on the gas, financial conditions are quite loose,
you run the risk of a repeat of the seventies,
(11:12):
perhaps without the oil price shocks. People peer parallels to
the seventies. They automatically think of the twin peaks of
inflation in seventy three, seventy four and then seventy nine
to eighty one, them overlapping decades. A little bit here.
Those were unique due to Opek. But take those out,
and you still have very high underlying inflation throughout the
course of the decade. Because the FED did. The FED
(11:33):
made what the same mistakes that it seems to be
making now, mistaking a supply problem for a demand problem.
Said differently, over estimating the economy's productive capacity. You get
that nagging feeling, or at least I do.
Speaker 2 (11:47):
Let's take a quick break. When we return, let's talk
a little bit about what Jamie Diamond has to say
about the US economy.
Speaker 1 (11:53):
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Speaker 2 (13:03):
Jamie Diamond had an interview with CNBC yesterday and he said, quote,
the economy is weakening. Whether that's on the way to
recession or just weakening, I don't know. Okay, what else.
Speaker 3 (13:22):
I've stopped When a headline says Jamie Diamond says something
I stopped reading.
Speaker 2 (13:26):
This was gonna be the next place that I go.
Speaker 6 (13:28):
Yeah, sorry, Jamie Diamond. It's not what he does. He's
not a macro forecaster. His bones were cut as a
risk manager in the banking industry, and when you're a
risk manager, you're always on the lookout for what could
go wrong. And I think that just when he talks,
he has, you know, kind of a way of saying
that pretty strongly, like here's like something that could go wrong.
(13:52):
Back in twenty twenty two, he said, you know, there
was a hurricane coming for the US economy.
Speaker 2 (13:56):
That hurricane never hit land. Basically like every fall he
comes out and is like, there's something bad that's going
to happen in the US economy, and every fall it
doesn't happen. I'm not saying that this time won't be different.
You know, maybe it could be, but I don't think
there's that much signal in how Diamond talks about the
economy as it relates to where the economy actually goes.
Speaker 3 (14:19):
Now, he's always pretty non specific. I think he suffers
from the same you know, hubrists that a lot of
very successful people do. They start to assume that they
are divinely favored or something and that they can a
pine on anything. They become philosophers as they get older.
Ray Dalio is a good example of this. He writes
(14:39):
books covering topics that a lot of people have thought
about for decades, doesn't cite any previous work. He just
likes to pontificate.
Speaker 2 (14:47):
I used to think Dahlio is the smartest guy in
the room, and now it just I think he's just
in the room. He's not. He's a guy in the room.
He's fine. Like, I'm not saying he should be listening
to The guy has made hundreds of billions of It's
more than I ever have. So Like, the guy understands
markets in the economy. I'm not saying he doesn't, but
I don't think he has any unique insight as to
(15:09):
what's actually going on in the economy.
Speaker 3 (15:14):
Yeah, he just doesn't cite previous work he starts. It's
embarrassing to listen to him sometimes because he talks about
things as if he's the first person ever stumble on
the topic, and it's been pretty well explored, and a
lot of his assumptions about the way the economy works
are things that wouldn't get you a passing grade in
an undergraduate econcourse. And I'm not saying economists know exactly
(15:39):
obviously what the future holds.
Speaker 4 (15:40):
They don't.
Speaker 3 (15:40):
They're terrible at making predictions, but they're really good at
describing relationships generally and talking about how the economy works,
much like your doctor is good at telling you how
your body works and how things are likely to say,
interact with other things you are doing, but bad at
making forecasts other than very general forecasts.
Speaker 2 (16:01):
Lisa Cook, at least for now, is going to be
able to maintain her seat on the Federal Reserve Board
of Governor's Judge Cobb in d C granted Cook's request
for a temporary restraining order to stay on the board
for now, and basically this is likely to be appealed
(16:22):
by the Trump administration in pretty short order, I would
imagine before the end of the day at the very least,
you know, by tomorrow. And this is something that is
going to make its way to the Supreme Court pretty
quickly in my opinion, And again I don't think you
know exactly what is going to happen here, just because
(16:43):
again I am not the I'm not a pre eminent
legal scholar, and I don't possess any you know, specific
information about you know, exactly how the Supreme Court is
going to rule in this, But based on what they've
said earlier this year, it would seem more likely than
not that at least at this point, based on what
(17:04):
is alleged not proven, and also based on the timeline
laid out by the judge, something that happened prior to
Cook joining the FED, it would seem to me that
it's pretty likely that Cook is able to retain her
seat on the board for now, that that might not
be permanent depending on how things evolve over the next
six to twelve months with that investigation and other follow
(17:25):
ups and things like that.
Speaker 3 (17:26):
I think it's just a matter of time before the
White House gets its way on monetary policy. So this
might be a short term victory for people that favor
FED independence, or at least find the idea of the
President removing somebody maybe on flimsy on a flimsy pretext,
and I don't know that it's flimsy in this case. Obviously,
if she falls, I don't want to get into that,
(17:48):
but you can't avoid veering into it slightly because she
may have broken the law, in which case.
Speaker 2 (17:54):
A few different things can be true.
Speaker 1 (17:55):
Here.
Speaker 2 (17:56):
It's very possible that she broke the law. It's very
possible that she might be too big of a distraction
to be able to serve on the FED board. But
it's also possible that because of the circumstances of how
this happened, in the timing and everything, then it might
not be grounds for removal from that position.
Speaker 6 (18:14):
Yeah.
Speaker 2 (18:14):
I hold all of these different views at the same
time and still get to a point where you say,
I don't know exactly how this is going to end
up playing out in the long run.
Speaker 3 (18:25):
I don't think this is how the issue of FED
independence should be adjudicated. And I don't mean as in
her case getting educated, I mean what do we want
as a society, as a polity in terms of our
federal Reserve and its relationship to politicians. It's time to
have that discussion. We need to start sort of denvo
what is the FED? What does it do. Who do
we want pulling the levers. There's a legitimate argument to
(18:46):
be made that the president should get his way when
it comes to monetary policy. I don't think I agree
with it, but I'm sort of sympathetic, and then let
the chips fall. If he's an incompetent monetary policy maker,
then he'll suffer at the polls or his party will.
That may seem strange coming for me because I sort
of you fed independence as sacrisanct, but I also acknowledge
that this is a democracy. My point is we need
(19:08):
to be having this conversation, and ultimately Congress has to
settle the issue. It shouldn't be shouldn't come down to
what the Supreme Court decides in the case of one governor.
There are bigger things at stake here.
Speaker 2 (19:18):
I don't love the this is a democracy argument. By
that extension, shouldn't we all vote on FED policy?
Speaker 3 (19:25):
Then we do indirectly through the elected representatives.
Speaker 2 (19:28):
Well, then shouldn't we do it directly like we Eventually
you get to a point where we just can't vote
on everything. Let's take a quick break. When we come back,
it's Wall Street.
Speaker 1 (19:37):
Watch ask Todd like us on Facebook and follow us
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now for Wall Street. Watch a complete look and what's
moving markets so far today right here on the Financial
(19:59):
Exchange Radio Network.
Speaker 5 (20:00):
Markets in mixed territory after the first of two inflation
readings were posted or going to be posted this week.
Speaker 2 (20:07):
This morning, we saw the.
Speaker 5 (20:08):
Producer Price Index, where it revealed wholesale prices fell zero
point one percent last month, better than expectations of a
zero point three percent increase. Tomorrow morning, we'll get a
look at the all important consumer Price Index. Right now,
the Dow is down by three tenths of one percent.
S and P five hundred is up just over half
(20:28):
a percent higher, NASDAC up half a percent as well.
Russell two thousand is up four tenths of one percent.
Ten year treasure Reel is down one basis point at
four point zero five to nine percent in crude oil
is up just over one percent higher, trading at sixty
three dollars and forty four cents a barrel. Oracle surging
(20:48):
forty percent after the software company forecasted huge gains in
cloud infrastructure revenue, where CEO Software Katz said she expects
several more multi billion customers dollar customers in the next
few months. Meanwhile, memestock in video game retailer game Stop
is climbing seven percent after it reported a jump in
(21:11):
quarterly profit and said the value of its bitcoin holdings
topped half a billion dollars in the previous quarter. Elsewhere,
we Go Vi and Ozembic maker Novo Nordis said it
plans to cut nine thousand jobs. The company also cut
its guidance for the second time in six weeks. That
stock is actually up nearly one percent. Chewy shares retreating
(21:33):
sixteen percent after the online pet products retailer posted a
decline in quarterly profit. Online brokerage Robinhood announced it will
launch its own social media network that will allow users
to post their trades. Robinhood stock is up three percent,
and online payments provider Klarna is set to IPO at
forty dollars a share, above the expected range. I'm Tucker
(21:57):
Slova and that is Wall Street Watch.
Speaker 1 (22:00):
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
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(22:21):
Visit Cushingdolan dot com. Now here's Todd Lutsky.
Speaker 2 (22:27):
Todd Lotskey joins us now for Ask Todd. Which is
your chance to ask Todd your estate planning questions live
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two sixty three. That is the number to call to
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(22:50):
Eight eight eight to zero five two two sixty three
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eight to zero five two two six three. A reminder,
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(23:15):
six three. Mister Lutsky, how are you doing today?
Speaker 4 (23:18):
I am doing great? How about yourself?
Speaker 2 (23:20):
Good? I was out at the bar the other night. Yeah,
and this Mobias Strip walked in and it was it
was crying, and the bartender said, hey, what's what's what's
wrong buddy? And the Mobia strip goes, where do I
even begin? And it was it was just it was
very sad, very sad. Todd, I want to talk to
you about uh estate taxes within the concept of naming beneficiaries. Yeah,
(23:45):
is there anything that people can do as it relates
to beneficiaries, either on investment accounts, insurance products, or anything
else that can help with estate taxes as far as
how they're naming those bennies?
Speaker 4 (23:58):
Yeah, I think you need to think about out a lot.
You have to think about all of you of your
assets really, so when you're doing your estate plan, you know,
if you're dealing with a and by the way, the
answer will vary depending on whether it's a revocable trust
situation or an irrevocable trust situation, so there can be
some differences. But you know, like if you're funding your
(24:20):
revocable trust, you probably want to change the owner, not
necessarily the beneficiary, right, So the owner on your bank accounts,
the owner on your investment accounts, the owner on I
guess that's it. Brokerage, investment accounts, bank accounts, CDs. The
owner can be the trust don't really need to get
into beneficiaries really, because you want it to be owned
(24:44):
by the trust, and then the language of the trust
is going to sort of dictate where those assets go. So,
for example, I had a client was convinced all they
needed they were not married, but they had certain people
that they wanted to take care of in certain nieces
and nephews, et cetera whole laundry list of people, and
they said, all we really need to do is name beneficiaries.
(25:06):
We don't need to bother because you know we're not
we're married, but we don't we don't have any kids.
I said, well, then you're gonna have to run around
and make sure that you know if you spend money
out of one account and then spend money out of
another account, and then that particular person who was a
beneficiary on that account doesn't get anything, and you got
to keep track all the time of where the money is.
I mean, that's just not helpful. But if you just
(25:27):
put all those assets in a revocable trust, now spend
whatever you want to spend, because everybody in the trust
will benefit from every dollar that's in there, from every account, right,
and it's great. And you don't even name dollar amounts.
You name percentages. So if the tide rises, everybody gets
a little more. The tide shrinks, everybody gets a little less.
(25:49):
So it's a wonderful way of doing it. It's easy,
it's simple. Change the owner. Don't need to worry about
the beneficiary. Not for iras, not for four oh one
or any qualified retirement account. And now, by the way,
for an irrevocable trust, it's similar to the extent I'm
putting things in the trust, I don't need to name
(26:12):
a beneficiary. I need to just change the owner. However,
for iras and or life insurance, you want to think.
If you're concerned about protecting assets from the nursing home,
then you need to think about naming the beneficiary of
those items something so revocable or irrevocable. The beneficiary of
(26:36):
an IRA is generally a spouse, and the contingent is
generally kids or a trust. You can name a trust
a beneficiary when you die. If you're concerned about nursing
home planning and you want to protect the asset from
a nursing home, then there are ways and times and rules,
but you can name the estate the beneficiary of the
(26:57):
IRA first ahead of the spouse, and get all kinds
of other nursing home planning benefits at so much to
talk about. It was a great question, Chuck, but I
can't even that just tip tip of the iceberg.
Speaker 2 (27:09):
Talking with Todd Lutsky from Kushian Dolan. You've got questions
for Todd. This is your chance to ask them. Eight
eight eight to zero five two two sixty three is
the number. We do still have room on the phone lines,
So get calling to ask Todd your questions right now
because we're going to take a quick break and then
is right to your questions with Todd. That number is
(27:30):
eight eight eight to zero five two two six three.
One last time, that is eight eight eight to zero
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Speaker 1 (27:41):
Ask Todd with Todd Lutsky every Wednesday at ten thirty
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Speaker 2 (28:10):
All right, let's get right to your questions with Todd.
Let's be first up. We've got Anna in Massachusetts. Anna,
what's your question?
Speaker 7 (28:17):
For Todd, I'd like to know when both spouses have
irrevocable trust and the first spouse that, how does does
the second spouse have access to the past or the
deceasedous assets? How does that work?
Speaker 4 (28:38):
So are you are you suggesting that we have a
married couple and they're doing one joint irrevocable medicaid type
trust nursing home protection trust or are we doing two
separate trusts, one for husband and wife.
Speaker 7 (28:51):
Each spouse has their own irrevocable trust, got it?
Speaker 4 (28:58):
And and is the irrevocable trust designed to protect assets
from the nursing home? I assume right.
Speaker 7 (29:04):
I don't know about that. It's just I don't want
to care about that. I just want to know when
the first stout said, if I die tomorrow, does my
husband have access to the assets in my trust?
Speaker 4 (29:18):
Okay? So first and foremost, just to help everybody understand
that you would never do an irrevocable trust for you know,
to keep control over it if you're giving things away
outside of your state. So I assume the value of
this estate is probably under five million dollars correct?
Speaker 7 (29:36):
Yes?
Speaker 4 (29:36):
Okay, So then you folks would be doing probably if
you don't care about nursing home. It would be a
revocable trust, and it would be joint. But to your question,
even if it's a joint revocable trust while you're living,
and that that was your question, you're both in control.
But then let's say your husband dies, and then how
(29:57):
would you have access to the assets that are in
this world? Once joint revocable trust that now automatically becomes irrevocable.
That's correct. So as soon as one dies, it becomes irrevocable,
and the surviving spouse, let's say it's you, and it
would be considered, would become the trustee. So now you
(30:19):
are the sole trustee, when before it was you and
your husband. And so now that you're the sole trustee,
you read the language of the trust to determine the
access that you have. So with a revocable trust that
is now irrevocable, there'd be two buckets in there, probably
two maybe three buckets, a marital share, a state marital share,
(30:40):
and a remainder share. And then these buckets are going
to be filled with the assets that were in the
overall joint trust. So if you had three million dollars
of stuff in the trust when you were alive. That
three million dollars is now sprinkled between these three buckets,
call them A, B, and C, the trustee of which
is Anna. So you're in charge, Anna, and then you
(31:03):
need to read the language. So if it's three million dollars,
I can tell you that two million would be in
the sea bucket and one million would be in the
B bucket, and the A bucket would be empty. That
is driven by the value by the estate tax laws
that are that are in place. So in Massachusetts you
can shelter two million each. That's why the two million
(31:26):
ended up in the sea bucket because it equals the
mass exemption and the amount over the two million. But
under the thirteen excuse me, the thirteen point nine million
would end up in the B bucket. So that's why
the one million is there. Now, Anna, you're probably saying, Okay,
there's three million dollars there, Todd, but what can I
(31:49):
do with it? Well, you're in charge. You get to
take the in, you manage it, you invest it, you
buy and sell stocks and bonds, you buy and sell
real estate, and you can take out all the income
because the trust says you're entitled to the income and
it says you can take out the three million dollars,
which is principal, but you're supposed to take it as
you need it to maintain your standard of living that
(32:12):
you enjoyed when your husband was alive. Follow those rules.
The assets are still yours, but the design of the
trust will shelter the assets from a state taxes. So
big answer to your question. But I wanted you to hope.
Hope that helps. Hope, that helps everybody. But folks, that's
not the only items we talk about. That's great for
what's in the trust, but the guide we're giving away
(32:34):
deals with life insurance and iras, which are a little
more complicated because they can't go into the trust right away.
So if you're concerned about nursing home planning and you're married,
right this guide is for you because it offers guidance
on how to protect an IRA well, basically naming the
(32:55):
estate the IRA beneficiary is going to help you with
not only life insurance, but with iras. It will provide
nursing home protection, it will shelter from the costs of
estate taxes, and it will be done without providing adverse
income tax consequences. And that's the real wild card with IRA.
(33:19):
So learn how to do this. Folks. If you're doing
a state planning and concerned about the nursing home, call
and get this guide eight six six eight four eight
five six nine to nine or Legal Exchange Show dot
com eight six six eight four eight, five six nine
nine or Legal Exchange Show dot Com.
Speaker 2 (33:39):
Let's go now to Norman in Portland. Norman, what is
your question for Todd Lutsky?
Speaker 8 (33:47):
Oh? Hi, I was wondering how I tell if the
transfer on disk uh language has been transferred to the
financial institutions that are in my revocable trust. And the
lawyer said the girl Friday would do it, and I'm
(34:07):
just wondering if she ever did. And I guess I
should just call. But is that what you do?
Speaker 1 (34:14):
Well?
Speaker 4 (34:15):
Let me let me ask you a couple of questions
so I can follow this. So, Norman, are you are
you married?
Speaker 8 (34:21):
Oh?
Speaker 7 (34:21):
Yes?
Speaker 4 (34:22):
And you did a revocable trust you and your wife? Yes, okay,
And the revocable trust needs to have assets put in it.
That's what you're just so everybody understands what we're talking about.
We're suggesting that you fund the trust with your brokerage account,
with your bank account, and I totally agree. And funding
(34:42):
the trust, I would stay if it's a revocable trust,
like what Chuck was asking earlier in the show, I
would stay away from transfers on death. There's no need
to do that, right, why not just change the owner
on the on the account, on the bank account, on
the broker account, make the owner the name of the trust.
(35:03):
So like if I've done a trust and I'm married,
and it's a joint revocable trust, the name on my
brokerage account will be Lotsky Family Trust, bank account Lotski
Family Trust, and then you don't have to worry about
who the beneficiary is because the trust owns it, and
the trust's language will say where all the assets of
(35:24):
the trust go when you die. Right, so if we
both die, my wife and I, everything is equally to
our kids. Well, everything that's owned by the trust will
be divided amongst the children, and you're completely covered. So
that's probably my advice, And yes to your question, Yeah,
call them, ask them if they did it, or send
a statement to you. The next statement you get, take
(35:46):
a look at it and see if it says, you know,
Norman Family Trust or whatever the name is. On your trust.
If it says that, then you know that particular asset
is in that trust.
Speaker 2 (36:00):
Todd, we were talking earlier about beneficiaries. Any last items
that you want to add as it relates to that
earlier conversation we were having.
Speaker 4 (36:09):
Yeah, and again it's kind of good to talk about
the Norman case, right. He was just talking about doing that, right,
So that's that's how you do it for revocable trusts,
and we talked it's similar for an irrevocable trust, but
kind of like you know, I think that the wild
card is is what this guide is really all about,
and it's the iras of the world and the life
insurance policies of the world. So folks, when you're dealing
(36:32):
with those, if you're thinking about nursing home protection, instead
of making the life insurance policy, you know the benefit.
You never change the owner, you don't need to, but
you change the life insurance beneficiary. Instead of putting it
in the trust, you might put it into the estate
of kind of what we were talking about, and that
(36:53):
way it will flow into this testamentary trust and be
protected for the surviving spouse from nursing home, but at
the same time allow access to it and shelter it
for a state taxes, So those are the tricky assets.
Speaker 2 (37:07):
Mister Lutski, thank you so much for joining us today.
Speaker 4 (37:10):
Always a pleasure.
Speaker 1 (37:12):
This has been asked Todd on the Financial Exchange Radio
network Aske 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 three nine
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The views expressed in this segment are solely those of
(37:32):
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(01:05):
Zada and Mark Fandetti.
Speaker 2 (01:12):
Chuck, Mark and Tucker with you here. As we continue
through the week and this morning, we continue to get
more economic data with the Producer Price Index out at
eight thirty am Eastern, and what we saw there was
some better than expected UH numbers overall, when you look
at the headline number coming in with actually a point
(01:35):
one percent decline for the month versus expectations of a
point three percent increase. Core number coming in at a
point one percent decline for the month as well with
a point three percent increase expected. And ultimately what we're
seeing is not really much movement in the bond market
for the reason that basically PPI is. You know, first
(02:00):
of all, no one really understands what it does, if
we're being honest, a lot of people can even think
it means something that it doesn't. But the other piece
is the reason why people care about PPI is simply
because there are some items in it that are passed
throughs to the personal consumption Expenditures inflation data, the PCEE data,
(02:22):
which the Fed does pay close attention to, and in
this report, the pce passed throughs were not as muted
as the overall headline or core numbers, and so as such,
it doesn't really change the projection for PCE, which is
what matters when you're trying to determine what FED policy is.
(02:43):
So this is why, Hey, despite this, you know, much
cooler than expected number, the tenure treasury is off half
a basis point. I'm sorry, is seeing its yield move
down half a basis point today, And there's just not
a ton of movement on the back of this. So
I think you can look at this and say, yeah,
it's good that this reading came in cooler than expected,
(03:06):
but it's not going to have a huge influence on
FED policy simply because the stuff that does influence FED
policy didn't come in as cool as the rest.
Speaker 1 (03:14):
Of the report.
Speaker 3 (03:16):
Man, nice summary.
Speaker 2 (03:17):
Other takeaways from this and not other takeaways, but just
other other items that are you know, questions that I
think are worth asking. If we look at this report
and remember what producer price index. What the producer price
index measures is it's a backwards view of the CPI
where the CPI measures, Hey, how much did you pay
(03:39):
for something? This measures what did producers receive for something?
Wholesalers what did they receive for something? And So the
question that I think is worth asking is okay, given
some of the upward input cost pressures that we're seeing,
and you can see them in this report. By the way,
if you look at intermediate goods prices as opposed to
(04:00):
final goods prices, you see intermediate goods prices rising in
this report while final goods fall. The question that you
ask is why are end buyers not paying more at
the same pace that intermediate buyers are paying And it
raises a question of, hey, is there a demand issue?
(04:22):
But also when I look out there at the demand
side of the equation, you know, for consumer spending, credit
card data continues to be very good. Retail data has
been better the last couple months. Bank data is not
really showing anything that is out of line. And so
part of me like, on one hand, you look at
the jobs data and you say, yeah, based on what
(04:44):
we're seeing in the labor market, there's a convincing case
that the FED should begin a cutting cycle. On the
other hand, you look at the demand stuff, which is,
you know, typically demand starts to move before the labor
market cracks. Labor market tends to be a lagging indicator,
and you look at you know, the demand side of
the equation, and you're like, there's not really much that's
(05:04):
a huge problem there. There's there's been nothing confirming demand
weakness on that side, and so I think, quite honestly,
I have a hard time getting a handle on exactly
where this economy is moving right now, and so because
of that, I kind of just say, yeah, until proven otherwise,
it's just in a slow growth environment where GDP might
(05:27):
end up coming in again kind of as a lot
of people are projecting maybe between like one and two
percent this year, and there's nothing exciting to the upside
where you're growing, you know, the fastest economy. Ever, there's nothing,
you know, horrible where this is the you know, some
deep recession that is suddenly emerging. It just kind of
looks like muddling through because you don't have a ton
of stuff pointed convincingly in one direction right now.
Speaker 3 (05:51):
The FED works through demand. It has control over the
supply of money. It uses that to target a short
term interestrate called FED funds, that's the one we always
talk about, which in turn sets a floor under bank
lending rates, which in turn determines how much banks lend,
(06:11):
affirms and people.
Speaker 4 (06:12):
The FED you could think of the FED as.
Speaker 3 (06:14):
Controlling a variable you like to talk a lot about chuck,
and with good reason. Nominal gdp't it's not perfect. But
the FED, for our purposes, we could say controls nominal GDP.
How fast do you now? There was a time when
economs were very excited about the idea of nominal GDP targeting.
That doesn't get talked about that much anymore. There are
(06:34):
lots of implementation challenges there, but it's a legitimate thing
to talk about the FED targeting nominal GDP, and it's
a useful construct. So the question is is the FED
growing nominal GDP too fast, too slow, or just right?
What is it growing relative too well? Whenever you hear demand,
you should be asking what about supply supply? Aggregate supply
(06:57):
More technically, and you could think about nominal GDP as
aggregate demand. Aggregate supply is just potential GDP. That's labor
force growth times how much those people are producing per
hour productivity plus whatever. The fed's inflation target is two percent.
If you do a back of the envelope, you get
to about four to five. That's the growth in the
(07:17):
economy's supply productive capacity. Potential GDP said different.
Speaker 2 (07:21):
It alwayst like for the last ten to fifteen years.
Speaker 3 (07:22):
That's kind of yeah, the potential GDP has come down
because that's determined by structural forces.
Speaker 2 (07:28):
Which not giving many kids.
Speaker 3 (07:30):
Demography is important, immigration is important to that with you
and Mike Armstrong talk a lot about on this show.
So the question is does the FED need to boost
nominal GDP? Is it that which is slowing down? And
I think you just in your setup to this segment
illustrated perfectly that no, it's not. We don't really have
a nominal GDP problem. It seems we may have a
(07:50):
supply side problem. Go ahead.
Speaker 2 (07:53):
I didn't say, oh sorry.
Speaker 3 (07:54):
I always assume that I should be stopping somewhere and
coming up for air. So what we have a supply
side problem, in which case, if the FED pushes demand
too hard when supply is going in the opposite direction.
Think of a supply side problem as being equivalent to stagflation,
when supply is shrinking, the prices are going up, the
(08:16):
economy is slowing. I FED can't do anything to combat
that in the short term anyway. This is why they're
in quite a pickle.
Speaker 2 (08:25):
And I think that the problem is you try to
reconcile the different things that would indicate nominal GDP and
where it's going. And on one hand, the one that
I love to use is aggregate payrolls because I think
it's a good proxy for, hey, how much stuff can
people buy? And given that you know consumer demand is,
(08:45):
you know, big part of the economy. You sit there
and you say, okay, okay, you're seeing some signs that
that might be weakening a little bit. But on the
other hand, the actual spending data isn't messing with this,
and we're seeing consumer spending continuing to move along. Actually
the last couple months, it's kind of an accelerating clip.
The other piece is when you look at FIKER receipts,
(09:07):
so the amount of Social Security tax that's withheld from
paychecks and things like that, those are actually increasing at
a faster pace the last couple months as well, which
like nothing's really pointing in the same direction. And so
this is why the next few months, it's the thirty
year in a row where this has been the case.
We're heading into the fall saying this is gonna tell
(09:30):
us where we're going, because one of two things is
going to happen. Either the fight of withholding and the
retail sales and the credit card data is going to
worsen over the next few months, and that says, okay,
the economy is slowing, or the jobs picture, like the
aggregate payrolls data and the jobs picture has to start
(09:51):
to improve because if you're actually seeing FIKA withholding up
seven percent year over year for like six months in
a row, people are going to be spending that money.
Why are you cutting your workforce into more consumer spending,
And so you start to see hiring pick up again.
Speaker 3 (10:08):
The FED has to act in advance of any perspective
slow down because monetary policy takes time to work its
way into the economy because of the channels through which
it gets transmitted into the economy. But it is taking
a gamble here in easing, perhaps aggressively, because we don't
know that the economy is no weakening. We do know
(10:28):
that inflation is elevated underlying inflation to trend in inflation.
That is, it's well above their target. We can quibble
about whether their target should be two percent, but it is,
and we do know that the supply side of the
economy is probably being buffeted by shocks from tariffs and
from deportation policy. You could say you like those policies.
I'm not judging them. I'm saying simply they serve to
(10:51):
constrict supply. So think about supply move think about supply shrinking,
That is, stagflation area reduces potential output at the same
time putting upward pressure on prices. If the FED pushes
too hard on the gas, or any harder than it's
pushing today on the gas, financial conditions are quite loose,
you run the risk of a repeat of the seventies,
(11:12):
perhaps without the oil price shocks. People peer parallels to
the seventies. They automatically think of the twin peaks of
inflation in seventy three, seventy four and then seventy nine
to eighty one, them overlapping decades. A little bit here.
Those were unique due to Opek. But take those out,
and you still have very high underlying inflation throughout the
course of the decade. Because the FED did. The FED
(11:33):
made what the same mistakes that it seems to be
making now, mistaking a supply problem for a demand problem.
Said differently, over estimating the economy's productive capacity. You get
that nagging feeling, or at least I do.
Speaker 2 (11:47):
Let's take a quick break. When we return, let's talk
a little bit about what Jamie Diamond has to say
about the US economy.
Speaker 1 (11:53):
Right after this, find daily interviews and full shows of
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(12:14):
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Speaker 5 (12:19):
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Speaker 2 (13:03):
Jamie Diamond had an interview with CNBC yesterday and he said, quote,
the economy is weakening. Whether that's on the way to
recession or just weakening, I don't know. Okay, what else.
Speaker 3 (13:22):
I've stopped When a headline says Jamie Diamond says something
I stopped reading.
Speaker 2 (13:26):
This was gonna be the next place that I go.
Speaker 6 (13:28):
Yeah, sorry, Jamie Diamond. It's not what he does. He's
not a macro forecaster. His bones were cut as a
risk manager in the banking industry, and when you're a
risk manager, you're always on the lookout for what could
go wrong. And I think that just when he talks,
he has, you know, kind of a way of saying
that pretty strongly, like here's like something that could go wrong.
(13:52):
Back in twenty twenty two, he said, you know, there
was a hurricane coming for the US economy.
Speaker 2 (13:56):
That hurricane never hit land. Basically like every fall he
comes out and is like, there's something bad that's going
to happen in the US economy, and every fall it
doesn't happen. I'm not saying that this time won't be different.
You know, maybe it could be, but I don't think
there's that much signal in how Diamond talks about the
economy as it relates to where the economy actually goes.
Speaker 3 (14:19):
Now, he's always pretty non specific. I think he suffers
from the same you know, hubrists that a lot of
very successful people do. They start to assume that they
are divinely favored or something and that they can a
pine on anything. They become philosophers as they get older.
Ray Dalio is a good example of this. He writes
(14:39):
books covering topics that a lot of people have thought
about for decades, doesn't cite any previous work. He just
likes to pontificate.
Speaker 2 (14:47):
I used to think Dahlio is the smartest guy in
the room, and now it just I think he's just
in the room. He's not. He's a guy in the room.
He's fine. Like, I'm not saying he should be listening
to The guy has made hundreds of billions of It's
more than I ever have. So Like, the guy understands
markets in the economy. I'm not saying he doesn't, but
I don't think he has any unique insight as to
(15:09):
what's actually going on in the economy.
Speaker 3 (15:14):
Yeah, he just doesn't cite previous work he starts. It's
embarrassing to listen to him sometimes because he talks about
things as if he's the first person ever stumble on
the topic, and it's been pretty well explored, and a
lot of his assumptions about the way the economy works
are things that wouldn't get you a passing grade in
an undergraduate econcourse. And I'm not saying economists know exactly
(15:39):
obviously what the future holds.
Speaker 4 (15:40):
They don't.
Speaker 3 (15:40):
They're terrible at making predictions, but they're really good at
describing relationships generally and talking about how the economy works,
much like your doctor is good at telling you how
your body works and how things are likely to say,
interact with other things you are doing, but bad at
making forecasts other than very general forecasts.
Speaker 2 (16:01):
Lisa Cook, at least for now, is going to be
able to maintain her seat on the Federal Reserve Board
of Governor's Judge Cobb in d C granted Cook's request
for a temporary restraining order to stay on the board
for now, and basically this is likely to be appealed
(16:22):
by the Trump administration in pretty short order, I would
imagine before the end of the day at the very least,
you know, by tomorrow. And this is something that is
going to make its way to the Supreme Court pretty
quickly in my opinion, And again I don't think you
know exactly what is going to happen here, just because
(16:43):
again I am not the I'm not a pre eminent
legal scholar, and I don't possess any you know, specific
information about you know, exactly how the Supreme Court is
going to rule in this, But based on what they've
said earlier this year, it would seem more likely than
not that at least at this point, based on what
(17:04):
is alleged not proven, and also based on the timeline
laid out by the judge, something that happened prior to
Cook joining the FED, it would seem to me that
it's pretty likely that Cook is able to retain her
seat on the board for now, that that might not
be permanent depending on how things evolve over the next
six to twelve months with that investigation and other follow
(17:25):
ups and things like that.
Speaker 3 (17:26):
I think it's just a matter of time before the
White House gets its way on monetary policy. So this
might be a short term victory for people that favor
FED independence, or at least find the idea of the
President removing somebody maybe on flimsy on a flimsy pretext,
and I don't know that it's flimsy in this case. Obviously,
if she falls, I don't want to get into that,
(17:48):
but you can't avoid veering into it slightly because she
may have broken the law, in which case.
Speaker 2 (17:54):
A few different things can be true.
Speaker 1 (17:55):
Here.
Speaker 2 (17:56):
It's very possible that she broke the law. It's very
possible that she might be too big of a distraction
to be able to serve on the FED board. But
it's also possible that because of the circumstances of how
this happened, in the timing and everything, then it might
not be grounds for removal from that position.
Speaker 6 (18:14):
Yeah.
Speaker 2 (18:14):
I hold all of these different views at the same
time and still get to a point where you say,
I don't know exactly how this is going to end
up playing out in the long run.
Speaker 3 (18:25):
I don't think this is how the issue of FED
independence should be adjudicated. And I don't mean as in
her case getting educated, I mean what do we want
as a society, as a polity in terms of our
federal Reserve and its relationship to politicians. It's time to
have that discussion. We need to start sort of denvo
what is the FED? What does it do. Who do
we want pulling the levers. There's a legitimate argument to
(18:46):
be made that the president should get his way when
it comes to monetary policy. I don't think I agree
with it, but I'm sort of sympathetic, and then let
the chips fall. If he's an incompetent monetary policy maker,
then he'll suffer at the polls or his party will.
That may seem strange coming for me because I sort
of you fed independence as sacrisanct, but I also acknowledge
that this is a democracy. My point is we need
(19:08):
to be having this conversation, and ultimately Congress has to
settle the issue. It shouldn't be shouldn't come down to
what the Supreme Court decides in the case of one governor.
There are bigger things at stake here.
Speaker 2 (19:18):
I don't love the this is a democracy argument. By
that extension, shouldn't we all vote on FED policy?
Speaker 3 (19:25):
Then we do indirectly through the elected representatives.
Speaker 2 (19:28):
Well, then shouldn't we do it directly like we Eventually
you get to a point where we just can't vote
on everything. Let's take a quick break. When we come back,
it's Wall Street.
Speaker 1 (19:37):
Watch ask Todd 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 and what's
moving markets so far today right here on the Financial
(19:59):
Exchange Radio Network.
Speaker 5 (20:00):
Markets in mixed territory after the first of two inflation
readings were posted or going to be posted this week.
Speaker 2 (20:07):
This morning, we saw the.
Speaker 5 (20:08):
Producer Price Index, where it revealed wholesale prices fell zero
point one percent last month, better than expectations of a
zero point three percent increase. Tomorrow morning, we'll get a
look at the all important consumer Price Index. Right now,
the Dow is down by three tenths of one percent.
S and P five hundred is up just over half
(20:28):
a percent higher, NASDAC up half a percent as well.
Russell two thousand is up four tenths of one percent.
Ten year treasure Reel is down one basis point at
four point zero five to nine percent in crude oil
is up just over one percent higher, trading at sixty
three dollars and forty four cents a barrel. Oracle surging
(20:48):
forty percent after the software company forecasted huge gains in
cloud infrastructure revenue, where CEO Software Katz said she expects
several more multi billion customers dollar customers in the next
few months. Meanwhile, memestock in video game retailer game Stop
is climbing seven percent after it reported a jump in
(21:11):
quarterly profit and said the value of its bitcoin holdings
topped half a billion dollars in the previous quarter. Elsewhere,
we Go Vi and Ozembic maker Novo Nordis said it
plans to cut nine thousand jobs. The company also cut
its guidance for the second time in six weeks. That
stock is actually up nearly one percent. Chewy shares retreating
(21:33):
sixteen percent after the online pet products retailer posted a
decline in quarterly profit. Online brokerage Robinhood announced it will
launch its own social media network that will allow users
to post their trades. Robinhood stock is up three percent,
and online payments provider Klarna is set to IPO at
forty dollars a share, above the expected range. I'm Tucker
(21:57):
Slova and that is Wall Street Watch.
Speaker 1 (22:00):
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 estate and tax planning, medicaid planning, and probate law.
(22:21):
Visit Cushingdolan dot com. Now here's Todd Lutsky.
Speaker 2 (22:27):
Todd Lotskey joins us now for Ask Todd. Which is
your chance to ask Todd your estate planning questions live
on air right now. Phone lines are wide open, all
clear for you. Eight eight eight to zero five two
two sixty three. That is the number to call to
ask Todd your estate planning questions right now on air again.
(22:50):
Eight eight eight to zero five two two sixty three
is the number. One more time it is eight eight
eight to zero five two two six three. A reminder,
we can usually get through a couple of calls, so
make sure that you call early in order to get
in line to speak with Todd right now. That number
again is eight eight eight two zero five two two
(23:15):
six three. Mister Lutsky, how are you doing today?
Speaker 4 (23:18):
I am doing great? How about yourself?
Speaker 2 (23:20):
Good? I was out at the bar the other night. Yeah,
and this Mobias Strip walked in and it was it
was crying, and the bartender said, hey, what's what's what's
wrong buddy? And the Mobia strip goes, where do I
even begin? And it was it was just it was
very sad, very sad. Todd, I want to talk to
you about uh estate taxes within the concept of naming beneficiaries. Yeah,
(23:45):
is there anything that people can do as it relates
to beneficiaries, either on investment accounts, insurance products, or anything
else that can help with estate taxes as far as
how they're naming those bennies?
Speaker 4 (23:58):
Yeah, I think you need to think about out a lot.
You have to think about all of you of your
assets really, so when you're doing your estate plan, you know,
if you're dealing with a and by the way, the
answer will vary depending on whether it's a revocable trust
situation or an irrevocable trust situation, so there can be
some differences. But you know, like if you're funding your
(24:20):
revocable trust, you probably want to change the owner, not
necessarily the beneficiary, right, So the owner on your bank accounts,
the owner on your investment accounts, the owner on I
guess that's it. Brokerage, investment accounts, bank accounts, CDs. The
owner can be the trust don't really need to get
into beneficiaries really, because you want it to be owned
(24:44):
by the trust, and then the language of the trust
is going to sort of dictate where those assets go. So,
for example, I had a client was convinced all they
needed they were not married, but they had certain people
that they wanted to take care of in certain nieces
and nephews, et cetera whole laundry list of people, and
they said, all we really need to do is name beneficiaries.
(25:06):
We don't need to bother because you know we're not
we're married, but we don't we don't have any kids.
I said, well, then you're gonna have to run around
and make sure that you know if you spend money
out of one account and then spend money out of
another account, and then that particular person who was a
beneficiary on that account doesn't get anything, and you got
to keep track all the time of where the money is.
I mean, that's just not helpful. But if you just
(25:27):
put all those assets in a revocable trust, now spend
whatever you want to spend, because everybody in the trust
will benefit from every dollar that's in there, from every account, right,
and it's great. And you don't even name dollar amounts.
You name percentages. So if the tide rises, everybody gets
a little more. The tide shrinks, everybody gets a little less.
(25:49):
So it's a wonderful way of doing it. It's easy,
it's simple. Change the owner. Don't need to worry about
the beneficiary. Not for iras, not for four oh one
or any qualified retirement account. And now, by the way,
for an irrevocable trust, it's similar to the extent I'm
putting things in the trust, I don't need to name
(26:12):
a beneficiary. I need to just change the owner. However,
for iras and or life insurance, you want to think.
If you're concerned about protecting assets from the nursing home,
then you need to think about naming the beneficiary of
those items something so revocable or irrevocable. The beneficiary of
(26:36):
an IRA is generally a spouse, and the contingent is
generally kids or a trust. You can name a trust
a beneficiary when you die. If you're concerned about nursing
home planning and you want to protect the asset from
a nursing home, then there are ways and times and rules,
but you can name the estate the beneficiary of the
(26:57):
IRA first ahead of the spouse, and get all kinds
of other nursing home planning benefits at so much to
talk about. It was a great question, Chuck, but I
can't even that just tip tip of the iceberg.
Speaker 2 (27:09):
Talking with Todd Lutsky from Kushian Dolan. You've got questions
for Todd. This is your chance to ask them. Eight
eight eight to zero five two two sixty three is
the number. We do still have room on the phone lines,
So get calling to ask Todd your questions right now
because we're going to take a quick break and then
is right to your questions with Todd. That number is
(27:30):
eight eight eight to zero five two two six three.
One last time, that is eight eight eight to zero
five two two six three.
Speaker 1 (27:41):
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 (28:10):
All right, let's get right to your questions with Todd.
Let's be first up. We've got Anna in Massachusetts. Anna,
what's your question?
Speaker 7 (28:17):
For Todd, I'd like to know when both spouses have
irrevocable trust and the first spouse that, how does does
the second spouse have access to the past or the
deceasedous assets? How does that work?
Speaker 4 (28:38):
So are you are you suggesting that we have a
married couple and they're doing one joint irrevocable medicaid type
trust nursing home protection trust or are we doing two
separate trusts, one for husband and wife.
Speaker 7 (28:51):
Each spouse has their own irrevocable trust, got it?
Speaker 4 (28:58):
And and is the irrevocable trust designed to protect assets
from the nursing home? I assume right.
Speaker 7 (29:04):
I don't know about that. It's just I don't want
to care about that. I just want to know when
the first stout said, if I die tomorrow, does my
husband have access to the assets in my trust?
Speaker 4 (29:18):
Okay? So first and foremost, just to help everybody understand
that you would never do an irrevocable trust for you know,
to keep control over it if you're giving things away
outside of your state. So I assume the value of
this estate is probably under five million dollars correct?
Speaker 7 (29:36):
Yes?
Speaker 4 (29:36):
Okay, So then you folks would be doing probably if
you don't care about nursing home. It would be a
revocable trust, and it would be joint. But to your question,
even if it's a joint revocable trust while you're living,
and that that was your question, you're both in control.
But then let's say your husband dies, and then how
(29:57):
would you have access to the assets that are in
this world? Once joint revocable trust that now automatically becomes irrevocable.
That's correct. So as soon as one dies, it becomes irrevocable,
and the surviving spouse, let's say it's you, and it
would be considered, would become the trustee. So now you
(30:19):
are the sole trustee, when before it was you and
your husband. And so now that you're the sole trustee,
you read the language of the trust to determine the
access that you have. So with a revocable trust that
is now irrevocable, there'd be two buckets in there, probably
two maybe three buckets, a marital share, a state marital share,
(30:40):
and a remainder share. And then these buckets are going
to be filled with the assets that were in the
overall joint trust. So if you had three million dollars
of stuff in the trust when you were alive. That
three million dollars is now sprinkled between these three buckets,
call them A, B, and C, the trustee of which
is Anna. So you're in charge, Anna, and then you
(31:03):
need to read the language. So if it's three million dollars,
I can tell you that two million would be in
the sea bucket and one million would be in the
B bucket, and the A bucket would be empty. That
is driven by the value by the estate tax laws
that are that are in place. So in Massachusetts you
can shelter two million each. That's why the two million
(31:26):
ended up in the sea bucket because it equals the
mass exemption and the amount over the two million. But
under the thirteen excuse me, the thirteen point nine million
would end up in the B bucket. So that's why
the one million is there. Now, Anna, you're probably saying, Okay,
there's three million dollars there, Todd, but what can I
(31:49):
do with it? Well, you're in charge. You get to
take the in, you manage it, you invest it, you
buy and sell stocks and bonds, you buy and sell
real estate, and you can take out all the income
because the trust says you're entitled to the income and
it says you can take out the three million dollars,
which is principal, but you're supposed to take it as
you need it to maintain your standard of living that
(32:12):
you enjoyed when your husband was alive. Follow those rules.
The assets are still yours, but the design of the
trust will shelter the assets from a state taxes. So
big answer to your question. But I wanted you to hope.
Hope that helps. Hope, that helps everybody. But folks, that's
not the only items we talk about. That's great for
what's in the trust, but the guide we're giving away
(32:34):
deals with life insurance and iras, which are a little
more complicated because they can't go into the trust right away.
So if you're concerned about nursing home planning and you're married,
right this guide is for you because it offers guidance
on how to protect an IRA well, basically naming the
(32:55):
estate the IRA beneficiary is going to help you with
not only life insurance, but with iras. It will provide
nursing home protection, it will shelter from the costs of
estate taxes, and it will be done without providing adverse
income tax consequences. And that's the real wild card with IRA.
(33:19):
So learn how to do this. Folks. If you're doing
a state planning and concerned about the nursing home, call
and get this guide eight six six eight four eight
five six nine to nine or Legal Exchange Show dot
com eight six six eight four eight, five six nine
nine or Legal Exchange Show dot Com.
Speaker 2 (33:39):
Let's go now to Norman in Portland. Norman, what is
your question for Todd Lutsky?
Speaker 8 (33:47):
Oh? Hi, I was wondering how I tell if the
transfer on disk uh language has been transferred to the
financial institutions that are in my revocable trust. And the
lawyer said the girl Friday would do it, and I'm
(34:07):
just wondering if she ever did. And I guess I
should just call. But is that what you do?
Speaker 1 (34:14):
Well?
Speaker 4 (34:15):
Let me let me ask you a couple of questions
so I can follow this. So, Norman, are you are
you married?
Speaker 8 (34:21):
Oh?
Speaker 7 (34:21):
Yes?
Speaker 4 (34:22):
And you did a revocable trust you and your wife? Yes, okay,
And the revocable trust needs to have assets put in it.
That's what you're just so everybody understands what we're talking about.
We're suggesting that you fund the trust with your brokerage account,
with your bank account, and I totally agree. And funding
(34:42):
the trust, I would stay if it's a revocable trust,
like what Chuck was asking earlier in the show, I
would stay away from transfers on death. There's no need
to do that, right, why not just change the owner
on the on the account, on the bank account, on
the broker account, make the owner the name of the trust.
(35:03):
So like if I've done a trust and I'm married,
and it's a joint revocable trust, the name on my
brokerage account will be Lotsky Family Trust, bank account Lotski
Family Trust, and then you don't have to worry about
who the beneficiary is because the trust owns it, and
the trust's language will say where all the assets of
(35:24):
the trust go when you die. Right, so if we
both die, my wife and I, everything is equally to
our kids. Well, everything that's owned by the trust will
be divided amongst the children, and you're completely covered. So
that's probably my advice, And yes to your question, Yeah,
call them, ask them if they did it, or send
a statement to you. The next statement you get, take
(35:46):
a look at it and see if it says, you know,
Norman Family Trust or whatever the name is. On your trust.
If it says that, then you know that particular asset
is in that trust.
Speaker 2 (36:00):
Todd, we were talking earlier about beneficiaries. Any last items
that you want to add as it relates to that
earlier conversation we were having.
Speaker 4 (36:09):
Yeah, and again it's kind of good to talk about
the Norman case, right. He was just talking about doing that, right,
So that's that's how you do it for revocable trusts,
and we talked it's similar for an irrevocable trust, but
kind of like you know, I think that the wild
card is is what this guide is really all about,
and it's the iras of the world and the life
insurance policies of the world. So folks, when you're dealing
(36:32):
with those, if you're thinking about nursing home protection, instead
of making the life insurance policy, you know the benefit.
You never change the owner, you don't need to, but
you change the life insurance beneficiary. Instead of putting it
in the trust, you might put it into the estate
of kind of what we were talking about, and that
(36:53):
way it will flow into this testamentary trust and be
protected for the surviving spouse from nursing home, but at
the same time allow access to it and shelter it
for a state taxes, So those are the tricky assets.
Speaker 2 (37:07):
Mister Lutski, thank you so much for joining us today.
Speaker 4 (37:10):
Always a pleasure.
Speaker 1 (37:12):
This has been asked Todd on the Financial Exchange Radio
network Aske 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 three nine
three four thousand and one or visit Cushingdolan dot com.
The views expressed in this segment are solely those of
(37:32):
Cushing and Dolan. 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
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