August 20, 2025 • 38 mins
Chuck Zodda and Paul Lane discuss a big pullback in stocks that many expected has yet to arrive. Target shares tumble after retailer names new CEO to steer turnaround. Todd Lutsky joins the show for his weekly segment, Ask Todd. This week, Todd explains how an irrevocable life insurance trusts work.
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Episode Transcript
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Speaker 1 (00:00):
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(00:42):
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(01:06):
and Paul Lane.
Speaker 2 (01:11):
Well, it's Chuck, Paul and Tucker with you here today, and.
Speaker 3 (01:17):
Top story here is from the blooming Berg.
Speaker 2 (01:22):
Big pullback in stocks that many expect, it has yet
to arrive. Man, we're really operating on some short timeframes
these days.
Speaker 3 (01:31):
Huh. It's uh, you know.
Speaker 2 (01:33):
It's it's been four months since the stock market went
through one of the dodgiest two week periods in history,
and we're sitting here being like, hey, like nothing's broken
since then, which is accurate, But sometimes I Tucker, you
(01:54):
remember last year when it was on like the third
or fourth day of the year, the Wall Street Journal
out of piece the stock market opened down the first
three days of last year, and the Wall Street Journal
out of piece about like all, like the January effective
stocks are down in January, like it's gonna be a
bad year, and lo and behold, stocks didn't even finish
down for last January, and neither did the market. But
(02:18):
it didn't stop the Wall Street Journal from writing, oh
my goodness, like what a horrible year it's gonna be.
And things were just fine. So likewise, when I see
like a piece that's like, hey, there hasn't been a
big pullback you know, since the last big pullback in April.
I kind of sit there and I say, Paul, what
are we really doing here? Because first of all, typically
(02:42):
ten percent corrections in the stock market on a historical
basis happen usually every twelve to eighteen months.
Speaker 3 (02:49):
It's not clockwork.
Speaker 2 (02:50):
Sometimes they're you know, shorter time periods than that between them.
Sometimes they're longer ones. But that's generally what we see.
And so the fact that there hasn't been some kind
of big pullback in the last four months now A
doesn't mean that anything's you know, really different from the norm. B.
It doesn't mean that it can't happen tomorrow. And see
(03:14):
also means, hey, the reasons why stocks went down in
April are not necessarily present in the same capacity today,
and as such you have to evolve your view as
the market and surrounding conditions evolve as well.
Speaker 4 (03:30):
The story of the tariffs that was so prevalent during
the month of April that led to that huge sell off,
like you said, has the concerns around it have subsided,
not to say that they're not still there, it's just
not to the same degree it was in April. To me,
I have trouble with the word pullback when yesterday or
(03:51):
sell off yesterday.
Speaker 3 (03:52):
Talk to me about it.
Speaker 4 (03:53):
Really, I get everyone here. You gotta have headlines, you know,
you got to keep things moving. They got to keep
working every day, blue Berg and Wallster and so do we.
We got to take care of business. But every day
when the market was off only a little over a
half percent yesterday and the Nasdaq sold off what was
it three quarters one to one and a half percent? Okay,
(04:15):
I'll give the nasdak if it's over a percent, chuck.
I'm willing to I'm willing to give them that grace
that there was some bit of a pullback.
Speaker 3 (04:23):
But when the.
Speaker 4 (04:23):
Overall S and P five hundred was off a half percent,
I just can't go there. Three hundred and fifty members
of the S and P five hundreds, five hundred were
up in positive territory yesterday. It just happened to be
the biggest weighted ones. And you mentioned it during the
program yesterday. The NVIDIAs, the you know, the heavier tech
stocks that have some significant weight in the SMP, they
(04:44):
were down and they're largely in the Nasdaq too. That's
why we saw that pull back. But I can't go
there if it's not more than one percent.
Speaker 2 (04:53):
Article is this article saying that there hasn't been a
big pullback. I mean, if if we want to get
into like terminology, look, bear market is down twenty percent
or more, correction is down ten percent. I think I
could define a pullback is maybe five percent, you know,
like now we're getting into like splitting hairs. A modest
(05:13):
decline is maybe one to three percent. And so, yeah,
what we are seeing right now, even today, where the
SMP continues to sell off down almost you know, one percent,
at the moment you look at it, there's still thirty
nine more S and P five hundred stocks positive right
now than there are ones that are negative. And so
(05:34):
the reason why the index as a whole is getting
you know, hit, is because okay, you know, you look
at Nvidio it's down three percent, Tesla's down three percent,
Metas down two percent, Amazon's down to Google's down two It's.
Speaker 4 (05:48):
Close to twenty five percent of the SMP right there.
Speaker 2 (05:50):
It doesn't matter that Chipotle is up one and a
half percent, because it takes a lot of Chipotles to
make an Nvidia. I know, the you know, the conversion
changes time to time, but you need a lot of
to make a chip.
Speaker 3 (06:01):
Is what is what I hear. So I think that
when we look at this.
Speaker 2 (06:06):
The other thing is the market has changed what it's
been looking at over the last four to five months.
If you go back and I remember clear as day,
because it wasn't that long ago. It was the beginning
of the year February, March, and April, markets were concerned
about tariff announcements because they took them to be gospel.
(06:27):
At this point, what we've seen is that the initial
announcement is often not as strong as the final implementation.
You look at the Mexico and Canada tariffs as an example,
and it's oh, like, we're gonna have these tariffs of
x percent, but we're exempting you know, USMCA complying goods,
which is like ninety plus percent of goods traded between
(06:47):
the countries. So it's really not a huge thing. Hey,
we're gonna, you know, have these big announcements about you know,
reciprocal tariff rates. Okay, then we're going down to ten percent.
We're gonna step back up a little bit. But okay,
I don't know that people still fully believe that these
new rates from August first are going to stay in
effect long term. They may they may not, but this
(07:08):
is where we are. And so I think the market
has moved from hey, let's react to the announcement to Okay,
now that the policy is in place, we have to
react to the data. And that's fundamentally different also because
the announcements can happen like that, you know, any particular
point in time, and the markets back in February, March,
(07:28):
and April we're reacting really quickly as if oh, we
got a position for this to happen. They're not doing
that anymore. And so now that we have tariffs that
are actually in place, it's, hey, show me how this
is actually affecting the US economy. And you can see
this because on August first, the thing that moved markets
(07:50):
wasn't the announcement of reciprocal tariff rates. We were down
modestly and in pre market when you know that announcement
had been made the night before. The thing that moved
markets was bad jobs report that we got on August first.
That was the catalyst for that, you know, one hundred
plus point downward day in the S and P five
hundred and so I think, quite honestly, that's a healthy
(08:11):
way to approach this, because look, if you're gonna run
around like a chicken with your head cut off on
every announcement about this and that, then you're gonna need
a lot of a lot more chicken heads. You're gonna
need lots of chicken heads, and quite honestly, like we
don't have an ample supply of those here at the
Financial Exchange. No, no, we're running short on the chicken heads.
(08:37):
We've given all the live chickens to Pedro Serrano who
was still trying to break out of his slump from
Major League.
Speaker 3 (08:43):
But I digress here.
Speaker 2 (08:45):
Ultimately, markets looking at data is healthy and then responding
to that data as opposed to how are we gonna
you know, what's this announcement? I mean, what's that one? Hey,
just take a step back and wait for you know,
the final policy, and then you can go from there.
Speaker 4 (09:02):
That's a great, great point to make. It was very
challenging back during that time period covering it because there
was a tremendous amount of uncertainty, the mess the final
rates would be different than what was initially announced, and
that was You're right, it was all the market cared
about the earnings of Nvidia or whoever you want to
pick from the S and P five hundred. We're insignificant
(09:23):
at that point in time. But now going through this
most recent earning season and the jobs report and some
of the inflationary reports, that has become the major focus
on markets and the Federal Reserve to a degree too,
which we'll talk about a little bit later in the
Program's take.
Speaker 2 (09:40):
A quick break here, and when we return, a couple
of items that I want to get to. I want
to get to Target and then also stopping shop announcing
some price cuts on items, so let's talk about those
when we come back.
Speaker 1 (09:55):
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Speaker 5 (10:22):
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Speaker 2 (10:53):
Target's got a problem and they're hoping that a new
CEO can shake them out of their malaise. Their chief
operating officer, Michael, do you think it's Fidelk Fidelki?
Speaker 4 (11:05):
I was gonna for Fidelki when I was reading it
this morning.
Speaker 3 (11:08):
Not fiddle K. Definitely not Fidelki. Fidelki.
Speaker 2 (11:12):
Okay, So their chief operating officer, micro Fidelki is going
to be their new CEO starting in February. Brian Cornell,
who was basically an outsider that they brought in.
Speaker 4 (11:24):
From Pepsi for the last eleven years.
Speaker 3 (11:26):
Correct.
Speaker 2 (11:27):
You can make a case that the first seven years
he was there, they did a really strong run during
that time. I mean, the stock price went from thirty
eight bucks a share in early twenty fifteen, I'm sorry,
early twenty fourteen up to two hundred and thirty nine
and twenty twenty one.
Speaker 3 (11:48):
So when you're hitting, you know, an eight bagger on
your stock.
Speaker 2 (11:51):
Granted a lot of that was fueled by spending in
twenty twenty and twenty twenty one during you know, the.
Speaker 3 (11:56):
COVID stimulus days.
Speaker 2 (11:59):
Hey, you still have to take a victory opp and say, okay,
it did a pretty good job. The problem is when
your stock then goes from two hundred and thirty nine
dollars a share to ninety six. The board looks at
you and says, okay, what have you done for me lately?
And the answer is not much. So I don't know
that I can look at Cornell's tenure and say definitively, hey,
this was all good or all bad, because like most
(12:19):
of us, there's you know, a lot of nuance, and
you know, sometimes you get up to bat and you
hit two home runs. The next game hit you know,
you got two strikeouts, and you're like, okay, who's the
real me?
Speaker 3 (12:29):
It's it's it's both of them.
Speaker 4 (12:31):
Having over a ten year ten year as CEO there
is certainly not too shabby, and he came in. It's
easy to forget. I forgot personally. Target had been hit
by a data breach where I believe forty million of
their debit and credit cards had been compromised. They had
tried to expand to Canada and that had failed, and
he cut back that initiative totally and got them back
(12:52):
on the right track. Where they sit today is over
the last eleven quarters they have had basically flat or
declining sales. They really have had a difficult time shifting
from the pandemic. Whereas Chuck mentioned, they just did tremendous
I mean, you had a ton of excess savings and
cash slashing around in consumers pockets, and there was a
tremendous amount of demand for really the specialty of Target,
(13:17):
which is, you know, the discretionary items like clothing and
then things for your home home good items. But now
they sit in a spot, Chuck, where Walmart has very
low prices and a dominance in grocery. They have a
huge amount of market share there. So there's a tremendous
amount of people who take a lot of trips to
(13:37):
Walmart because their grocery presence. Amazon, its other big competitor,
has the speed and efficiency. And I was talking to
my wife this morning, the resident expert on all things retail,
of course, and she was mentioning that the tricky thing
for Target is that they do have a good clothes selection,
but they have kids clothes from Carters that if she
just wants it quickly, sure order from Amazon because she
(13:57):
knows she'll get it in a twenty four hour turnaround,
versus Target really has to focus on that in store
experience while also trying to service some e commerce too.
So they find themselves in kind of a difficult position
here where they're in competition with two other companies that
have done tremendous in retail, but they have really lagged
(14:18):
them significantly on all these issues that I've mentioned, issues
with staffing and merchandise and sort of trying to get
their reputation back.
Speaker 3 (14:27):
So excuse me.
Speaker 2 (14:29):
So we're gonna have to see how they do under
the new CEO when he takes over officially in February.
And obviously the clock's ticking because you know, this isn't
quite it's not a Macy's or Coal situation yet, but
you can see a path where it turns into that
in the next five years. So I think this CEO
is one of the most important hires that they've had,
(14:51):
and he's got to nail this. He's got to stop
the bleeding and figure out how to grow the company again,
because they haven't really grown in.
Speaker 3 (14:56):
The last couple of years.
Speaker 4 (14:57):
Now, No, they haven't.
Speaker 2 (15:00):
Boston Globe today Stop and Shop to cut prices on
three thousand plus items in Massachusetts stores. So I was
reading through this piece and I get to like the
third or second, second or third.
Speaker 3 (15:12):
Paragraph, and here's what it says.
Speaker 2 (15:15):
The Quincy based retailer and arm of European conglomerate Ahold
del Hayes started out testing out price cuts in other
parts of New England last year. Now those price cuts
are coming to the chain's home base starting on Friday
at the eighty eight Stop and Shop supermarkets inside hang
On Staple east of Interstate four ninety five. Price cuts
(15:38):
will vary in size between five and forty percent. So
they're saying they're gonna cut prices on three thousand items.
So I went through and I pulled. Because Ahold del
Hayes is a publicly traded company, they're based out of
the Netherlands, but they operate Stop and Shop Food Lion Hannaford,
so they've they've got, you know, a big grocery presence
(15:58):
in the United States. Here's the thing, about a hold
del Hayes.
Speaker 3 (16:03):
They made.
Speaker 2 (16:04):
They brought in ninety nine billion dollars in revenue last year,
which is great, Like one hundred billion dollars in revenue,
that's wonderful. They made on that net income of two
billion dollars. So margins are anywhere generally two to three
percent for them, as it is for most grocers. If
you're not familiar with the economics of grocery stores.
Speaker 4 (16:21):
The margins are razor thin.
Speaker 2 (16:23):
The margins are razor thin, and there it's a horrible
business to be in. You basically spend a bunch of
money studying an area to make sure that it has
the demographics that can support the development of a new store.
Then you spend fifteen to twenty million dollars building a
new store, and you hope to make that back over
a twenty five year period. It's an absolutely horrible business
(16:44):
to run. It's just it's really hard. I say this
is someone who has never run a grocery store, but
my first job was in a stopping shop. Actually, so
I look at this and I see three percent margins,
and I go, you're not going to be in grocery
prices by five to forty percent. Maybe it'll be on
(17:05):
some items here and there, but I have no idea
how many items are actually stocked in the average, you know,
stop and shop. It's got to be way more than
three thousand. I mean, you could probably just find that
just in the cereal aisle, you know, you're looking at it.
Speaker 4 (17:18):
I think for Walmart it's like one hundred thousand skews.
I mean, so grocery store not the same scale. But yeah,
that's a small portion of whatever the number is at
a stop and shop.
Speaker 2 (17:28):
So I look at this and it's clear that they're
trying to take back market share more than anything else
because they don't have the margins to support broad based
price cuts. But you sit there and you say, okay,
they're going right after the market baskets and shaws, trying
to compete on price there, And I guess I look
(17:52):
at this and I just wonder, are they going to
be able? You know, is this going to move the
needle at all? Because they don't have the margins to
do broad based price cuts. So the fact that they're
announcing this is just trying to get people thinking, oh,
stopping shop is its value.
Speaker 4 (18:09):
It's a pr move, for sure.
Speaker 2 (18:10):
It is because like you're not going to go to
stop and shop and walk out saying, wow, I paid
five to forty percent less for my groceries. The margins
are not there to support it.
Speaker 4 (18:20):
Now, there was a survey done in June by a
retail consultancy group, the Strategic Resources Group.
Speaker 3 (18:26):
The show.
Speaker 4 (18:26):
The survey showed that prices collectively at a stopping shop
store in Greater Boston were nearly thirty percent higher than
at relatively close Walmart or Market Basket stores, while prices
at Shaws were nearly thirty seven percent higher. And so
that's the deal. And you know this talking to any
consumer around the Greater Boston area. Everyone knows that Market
Basket from a pricing standpoint and Walmart two are going
(18:47):
to be your best bet if you want cheap groceries
out there. And this is just a move for stopping
Shop in the minds of people to kind of bring
down prices to the level. But it's gonna be tough
to beat those two other chains that they're up again.
Speaker 2 (19:00):
Right you look at it, you go, Okay, So, like
the if you're looking for the cheapest grocery stores, you
got Walmart, you got Ald, you got you mentioned market basket.
That next tier up is your stopping shopping Hannah Ferd's,
and then you know the high end you get into,
you know, your Brothers.
Speaker 3 (19:17):
Wegmans.
Speaker 2 (19:17):
I find is kind of all over the place. There's
some stuff there where you're like, wow, this is really cheap.
Speaker 3 (19:22):
There's an other way.
Speaker 2 (19:22):
You're like, I'm not paying for that, Like how did
this happen? It's it's just kind of sporadic. And I say,
this is someone who used to be a really big
fan of Wegmans.
Speaker 3 (19:31):
And I haven't soured on it. But they're they're just fine,
you know, they're they're good. Let's take a quick break here.
When we come back, we got Wall Street Watch and
ask Todd.
Speaker 1 (19:41):
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 markets so
far today right here on the Financial exchan Change Radio Network.
Speaker 3 (20:01):
All the tech sectors.
Speaker 5 (20:02):
Adding to its losses from yesterday's sell office traders, digest
more retailer earnings. Wall Street's also waiting minutes from the
feds July meeting, due out this afternoon at two o'clock
right now, the Dow is down by about a quarter
of a percent, or one hundred and sixteen points. SMP
five hundred is down nearly nine tenths of one percent,
(20:22):
Nasdaq selling off over one and a half percent or
three hundred and forty eight points lower, Russell two thousands
down nine tenths of one percent, Ten year Treasure realed
flat at four point two nine to five percent, and
crude oil up one percent higher today, trading just above
sixty three dollars a barrel. Target tumbling over seven percent
(20:44):
after the retailer posted it's eleventh straight quarter of flat
or falling sales. The company noted improving quarterly traffic and
sales trends, but noted terror related in other cost pressures
in challenging retail conditions. However, the bigger news from Target
is the appointment of COO Michael Fidelki as its next CEO,
succeeding Brian Cornell. Meanwhile, Lows boosted its annual outlook after
(21:08):
beating earnings forecast for the second quarter. The home improvement
retailer also announced it agreed to buy distributor Foundation building
Materials for eight point eight billion dollars. Low's stock is
up modestly. Another retailer in TJX, seeing gains of four
percent after the TJ Max and Home Goods parent company
lifted its annual profit forecast after reporting better than expected
(21:31):
second quarter results where consumers flocked to discount stores in
search of deals. Elsewhere, STA Lawa down by four percent
after the beauty company misquarterly estimates where its terraf related
costs are projected to impact earnings by one hundred million
dollars after its a recent skid. Pallinteer shares it down
nearly seven percent today, bringing its total losses over the
(21:54):
last five sessions to about twenty percent, and car rental
company Hurts seeing a gain of sale seven percent after
it announced it will begin selling use cars on Amazon
Autos in four different cities as soon as today, and
we'll expand to forty five locations nationwide. I'm Tucker Silva
and that is Wall Street Watch.
Speaker 1 (22:16):
This is Ask Todd on the Financial Exchange Radio Network.
If you have an existing estate plan or in the
market for one, Todd Lutsky is here to answer your
questions and help you plan for 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.
(22:37):
Visit Cushingdolan dot com.
Speaker 2 (22:39):
Now here's Todd Lutsky a promise. We're joined now by
the one and only Todd Watski from the law firm
of Cushing and Dolan. Phone lines are open, so get
calling with your state planning questions for Todd. Eight eight
eight two zero five two two sixty three is the number.
Again we call the segment Ask Todd, so that you
(23:00):
can ask Todd your estate planning questions live on air
right now and so again room on the phone lines
at eight eight eight to zero five two two six three.
We can usually get through two to three calls in
any given show, so get calling early and often.
Speaker 3 (23:17):
Again.
Speaker 2 (23:17):
That number is eight eight eight to zero five two
two six'. Three Mister, lutsky how are you doing? Today
i'm doing pretty, well pretty.
Speaker 3 (23:28):
Well can't complain, you, uh not. BAD I SO i
have a pet. Snail, yeah that's an interesting.
Speaker 2 (23:35):
Pet YESTERDAY i took the shell off the snail to
see if he'd get. Faster and made it more. Sluggish,
Yeah i'm.
Speaker 1 (23:43):
Sure.
Speaker 2 (23:43):
Yeah real problem, Is, TODD i want to talk to
you about irrevocable. Trusts when you look at the menu
of choices that an individual, has how many different kinds
of irrevocable trusts are there realistically for an individual to choose,
from depending on what they're trying to.
Speaker 6 (24:01):
Do, YEAH i think that's a that's an interesting question
BECAUSE i always tell, people, yeah there's many kinds of irrevocable,
trust BUT i never know what kinds there.
Speaker 3 (24:08):
Are, yeah we never really get into all these different. Kinds.
Speaker 6 (24:11):
You you're absolutely, Right so you, know it really depends
on what you're trying to. Accomplish so let's start with
something like a qualified personal residence. Trust, well that's an irrevocable.
Trust it's a way of getting your home or your vacation,
home very specific to only those two kinds of, assets
(24:32):
where you transfer the home to the trust and you. Reaserve,
well you have this reversionary period where then you have
to LIVE x number of years and you can pick
the term of. Years of, course the longer the term of,
years meaning if you die within that term of, years
then that property never is out of your state it's back.
(24:52):
In that's called a risk of. Reversion, well that risk
of reversion allows me to discount the value of the
Property i'm putting in there for gift tax, Purposes so
it allows me to lower the value getting more assets
out of my, estate leveraging my exemption by doing. So
but the longer the time, period the larger the, discount
(25:15):
and it's nice then get that asset out of your
state and all the future growth.
Speaker 3 (25:18):
Out of your.
Speaker 6 (25:18):
State so that's for. That then there's people who want
to just make regular. Gifts they might just set up
gifting trust just for children or grandchildren and have it
designed only for.
Speaker 3 (25:29):
Them that's okay.
Speaker 6 (25:30):
Too then there's people who set up spousal lifetime access,
trusts also, irrevocable but these, are, yes like a gifting,
trust but more designed for, you husband and. Wife that's
why there's spousal lifetime access trusts to give something away
but retain the right to enjoy what you gave, away
(25:52):
kind of, indirectly so very different than an outright gifting
trust to kids or a grandchildren's.
Speaker 3 (25:58):
Trust and Then i'd say.
Speaker 6 (25:59):
No other one might be irrevocable life insurance trust to
hold life insurance and keep it a state and income tax.
Free and, finally how about To medicaid irrevocable. Trust while
we talk a lot about, that which is WHY i
left it for, last because we know about, it we
know it's designed Where unlike a lot of these other
TRUSTS i just, mentioned this one is very much in
(26:23):
control by, you so you get to control, it use,
it benefit from, it but yet avoid, probate reduce, taxes
and protect it from the cost of long term. Care
so very different, trusts very different control aspects to the,
trust and very different reasons to do each trust driven
(26:43):
by your family.
Speaker 2 (26:44):
Needs talk With Todd lotski from the law firm Of
cushing And. Dolan, again we've got space on the phone
lines for your estate planning. Questions eight eight eight two
zero five two two sixty three is the number, Again
that is eight eight eight to zero five two two six.
Three we are gonna take a quick break, here but
when we come, back we're gonna get right to your
(27:06):
questions With, Todd so again get. Calling we still do
have room on the phone. Lines that number again is
eight eight eight to zero five two two six. Three
one more time it is eight eight eight to zero
five two two six.
Speaker 1 (27:20):
Three 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.
Speaker 2 (27:36):
Network talking With Todd lutsky From. Christigan dolan's still got
room for your phone? Calls eight eight eight to zero
five two two six three is the. Number that number
again is eight eight eight to zero five two two
(28:00):
six three for you to Ask Todd letsky your state planning. Questions,
again it's eight eight eight two zero five two two six. Three,
todd during the last segment you mentioned irrevocable life insurance.
Trust described to me what that does in who that
would be a potential tool For.
Speaker 3 (28:19):
Yeah you know.
Speaker 6 (28:20):
Interesting not only is it a type of irrevocable, trust
it actually has its own. Subcategory so there's two types
of irrevocable life insurance. Trust so within the life insurance trust,
world we actually have two. Kinds one is called the
first to die and the second one is called ironically
(28:40):
enough second to die irrevocable life insurance. Trust what DO
i mean by? That that's driven by the type of
life insurance that you. Own so let's let's play out the.
String If i've got a first to, die let's Say
i'm the. Insured it's a POLICY i on my. LIFE
(29:01):
i would put that into an irrevocable life insurance first
to die. Trust likely If i'm, married make my wife the,
trustee which is, OKAY i can't, be and THEN i
can be the, donor AND i can keep the power
to remove and replace the, trustee SO i keep some control,
sure and THEN i just pay the PREMIUMS i make
(29:22):
a gift to the, trust the trust pays the, premium
and life goes. On WHEN i, die the money flows
into that trust income and estate tax free for the
benefit of my spouse and my. Kids and there'll be
language in there with the spouse as trustee SAYING i
get the income for, life and the spouse can also
(29:45):
take out the principle as needed to maintain her standard
of living as, needed so great she gets to enjoy,
it so state tax free WHEN i, die available for
the use and enjoyment for my. Spouse and to the
extent my spouse has not spent it, all not taken
it all when she, dies whatever's left in there also
(30:06):
not included in her estate and passes yet again estate
tax free to either the kids or to a share
for the benefit of the, kids depending on how long
we want this to go, on generationally, speaking estate tax.
Free so wonderful approach as to how that works with life.
(30:29):
Insurance remember you got two million dollar policy and you
die In. Massachusetts that's one asset you got in a
state where two million, already so it can. Matter it can.
Matter second to, die on the other, hand is one
where my wife AND i are the owners of the,
policy ensured on the. Policy we both then contribute it
(30:50):
to the irrevocable trust and are both the, donors and
neither of us are the. Trustees usually put the kids,
on but keep the power to remove and replace the,
trustee so he keeps some. Control now the benefits of
the trust are for the kids and the. Grandkids but
(31:10):
again we pay the premiums to the. Trust to trust
then uses the money to pay the actual premium to
the insurance. Company life goes on till we both. Die
then the money flows in the. Trust and why is
that Important because that's really when the estate tax would be,
due if. Any and so now we use the money
(31:30):
in the life insurance, trust to satisfy the estate tax,
liability to prevent any liquidation, event to get money to
pay any estate. Taxes number one and number two it
was we leveraged our. Dollars, Right so if if we
owed let's say a million dollars in, tax but we
(31:52):
only paid you, know one hundred thousand dollars in. Premiums, wow,
yeah the government gets there million dollars in, tax but
really out of our, pocket they only got one hundred thousand. Bucks,
SO i mean that's a pretty significant. Leverage but life
insurance can do. THAT i don't know if it's to that,
degree but it certainly can provide. Leverage i'm just trying
to make a. Point so good idea if you're in that.
(32:16):
Situation so folks that need estate planning that have life
insurance in, play please consider. Those and if you need
more information on these kinds of, trusts, islets, revocable other irrevocable,
trusts revocable, trusts special needs, trusts pooled trusts you know
(32:36):
you might have a disabled. Child of, course nominy realty trust,
chuck you, know we hate. Those no one knows what they.
Are so we certainly got to learn that this is
a great. Guy the top seven estate planning trust will
help you if you've never done your, planning get started
doing your planning and pick which trust is right for.
You and if you've done your planning, already then this
(32:57):
trust will help you figure, out, well MAYBE i need to, upgrade,
change maybe my dynamics have, Changed Maybe i'm older AND
i want to switch. Trust something for everyone in these
in this. Guy top seven estate planning trusts eight six
six eight four eight five six nine nine Or Legal
Exchange show dot com again eight six six eight four
(33:19):
eight five six nine nine Or Legal Exchange show dot.
Speaker 2 (33:23):
Com todd got any question for you From sarah In. Westborough,
sarah you're on With Todd lupski and what's your.
Speaker 7 (33:31):
Question, Well i'm kind of curious because it's more on
behalf my mother in. LAW i listened to you guys
all the, time AND i feel like she's gotten bad
advice about the idea of doing a. Trust she's, eighty
she only has my husband as a, child she has two,
grandkids so she figures she's written a will and she's
(33:52):
good to. Go and WHEN i mentioned trust stuff to,
her she gets real. Prickly So i'm not sure how
to approach, it but she owns a. House she has
asked that she, has you, know pension and, whatever AND
i think she's been given poor advice that she doesn't
have enough assets to make it matter just right a.
Speaker 6 (34:13):
Will so so if if her goal is and again at,
EIGHTY i have to talk about or think about at,
least you, know nursing home type planning as, Well so
we we really just have to ask her some questions
help educate her as to what her wishes. Are you,
know when WHEN i meet these, CLIENTS i would say to, them,
well you, Know i'm not just going to throw a
trust at. You i'm going to, say you, know do
(34:34):
you want to make sure that you avoid? Probate and
they would, say, oh, YES i hate, probate you, know
do You it doesn't sound like she's over two, millions
so let's assume she doesn't have any estate tax, issues
but that's always an. Issue THEN i, say, well do
you want to provide for your? Family do you want
to figure out how to leave your assets in an efficient?
Manner because a will won't do, that it'll won't even avoid.
(34:54):
Probate and if they say, yes you, see you sort
of you got to you gotta Get we only want
to do what they want to, do and we can't
make them do, anything nor do we. Try my goal
is simply to, educate and as it should be, yours
to just ask her these. Questions you, know avoid, Probate,
yes provide for my, family, kid, grandkids what have? You?
(35:16):
Yes do you want to make sure the nursing home
doesn't take it so your kids and grandkids can get?
Speaker 1 (35:21):
It?
Speaker 6 (35:21):
Yes so you're getting her to say these are the
things she wants to. Do then you can, say, well,
okay a will will not accomplish that does not avoid,
probate you file the will with the, court does not
protect assets from the nursing. Home, Period so there's you,
know a will's a. Won't i've said that more than one.
Time then once you get them on, board then it's
(35:45):
up to the lawyer to explain to them how the
irrevocable trust will keep them in, control because that's their
next big. Concern you, know oh my, gosh AM i
going to lose all this? Control And i'm sure she
might have those same, concerns and we have to educate
them as to how they won't lose.
Speaker 3 (36:01):
CONTROL i.
Speaker 6 (36:02):
Know on even WHEN i do a seminar AND i
teach other lawyers or accountants these, issues they'll come up
to me and they'll, Say, todd it sounds great when
you say all, this but WHEN i talk to my
client and try to teach them these irrevocable, trusts they
just say that there's too restrictive and they can't do.
It AND i have to politely sort of answer them by, saying,
well is it the irrevocable trust that's the problem or
(36:24):
is it the person who's explaining. It perhaps not the
right way is the, problem you. Know so it's just
a matter of educating them so they understand that it
does work for. Them but even at the end of the,
day if they still, say you, KNOW i just can't
get past the word irrevocable and it's not right for, me,
well then we don't do.
Speaker 3 (36:45):
It SO i just want people to.
Speaker 6 (36:48):
Make sure they're making decisions based on as or based
on answers and information that's. Accurate you hate to make
them answer questions that on inaccurate. Information so that, SAID
i hope that helps you with your. Situation Mister, Latski
thank you so much for the time.
Speaker 3 (37:07):
Today always a.
Speaker 1 (37:08):
Pleasure this has been Asked odd on The Financial Exchange radio,
Network Ask todd With. Todd lutsky has been presented By
cushing And, dolan Serving massachusetts And New england for more
than thirty, years helping families with the state and tax,
Planning medicaid, planning and probate. Law call eight hundred and
three nine three four thousand and one or Visit Cushing
doolan dot. Com the views expressed in this segment are
(37:29):
solely those Of cushing And Dolan armstrong. Advisor he does
not provide any legal or tax. Advice please consult with
your legal or tax advisor on such. Matters cushing And
armstrong do not endorse each other and are not.
Speaker 2 (37:38):
Affiliated still quite a bit to get to as we
head towards the second.
Speaker 3 (37:42):
Hour we Got low's.
Speaker 2 (37:43):
Earnings we're going to be talking About we've Got Jay,
powell who's going to be speaking On friday From Jackson.
Hole now that they've gotten the bats out of the,
Cabins we've got let's, see, oh here's.
Speaker 3 (37:54):
One from Market.
Speaker 2 (37:55):
Watch will be covering why The rust of two thousand
has a real chance to beat THE s AND p five.
Hundred we'll talk about whether that's a bunch of hot
air or. Not and then also we're gonna be talking
about data centers and electricity, demand because this is a
story that is just going to continue to, grow unlike electricity,
supply which we just can't build fast. Enough all that
(38:17):
and more coming up in our number two
The Financial Exchange is produced by Money Matters Radio and
is hosted by employees of the Armstrong Advisory Group, a
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the hosts, do not reflect the opinions of Armstrong Advisory
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(01:06):
and Paul Lane.
Speaker 2 (01:11):
Well, it's Chuck, Paul and Tucker with you here today, and.
Speaker 3 (01:17):
Top story here is from the blooming Berg.
Speaker 2 (01:22):
Big pullback in stocks that many expect, it has yet
to arrive. Man, we're really operating on some short timeframes
these days.
Speaker 3 (01:31):
Huh. It's uh, you know.
Speaker 2 (01:33):
It's it's been four months since the stock market went
through one of the dodgiest two week periods in history,
and we're sitting here being like, hey, like nothing's broken
since then, which is accurate, But sometimes I Tucker, you
(01:54):
remember last year when it was on like the third
or fourth day of the year, the Wall Street Journal
out of piece the stock market opened down the first
three days of last year, and the Wall Street Journal
out of piece about like all, like the January effective
stocks are down in January, like it's gonna be a
bad year, and lo and behold, stocks didn't even finish
down for last January, and neither did the market. But
(02:18):
it didn't stop the Wall Street Journal from writing, oh
my goodness, like what a horrible year it's gonna be.
And things were just fine. So likewise, when I see
like a piece that's like, hey, there hasn't been a
big pullback you know, since the last big pullback in April.
I kind of sit there and I say, Paul, what
are we really doing here? Because first of all, typically
(02:42):
ten percent corrections in the stock market on a historical
basis happen usually every twelve to eighteen months.
Speaker 3 (02:49):
It's not clockwork.
Speaker 2 (02:50):
Sometimes they're you know, shorter time periods than that between them.
Sometimes they're longer ones. But that's generally what we see.
And so the fact that there hasn't been some kind
of big pullback in the last four months now A
doesn't mean that anything's you know, really different from the norm. B.
It doesn't mean that it can't happen tomorrow. And see
(03:14):
also means, hey, the reasons why stocks went down in
April are not necessarily present in the same capacity today,
and as such you have to evolve your view as
the market and surrounding conditions evolve as well.
Speaker 4 (03:30):
The story of the tariffs that was so prevalent during
the month of April that led to that huge sell off,
like you said, has the concerns around it have subsided,
not to say that they're not still there, it's just
not to the same degree it was in April. To me,
I have trouble with the word pullback when yesterday or
(03:51):
sell off yesterday.
Speaker 3 (03:52):
Talk to me about it.
Speaker 4 (03:53):
Really, I get everyone here. You gotta have headlines, you know,
you got to keep things moving. They got to keep
working every day, blue Berg and Wallster and so do we.
We got to take care of business. But every day
when the market was off only a little over a
half percent yesterday and the Nasdaq sold off what was
it three quarters one to one and a half percent? Okay,
(04:15):
I'll give the nasdak if it's over a percent, chuck.
I'm willing to I'm willing to give them that grace
that there was some bit of a pullback.
Speaker 3 (04:23):
But when the.
Speaker 4 (04:23):
Overall S and P five hundred was off a half percent,
I just can't go there. Three hundred and fifty members
of the S and P five hundreds, five hundred were
up in positive territory yesterday. It just happened to be
the biggest weighted ones. And you mentioned it during the
program yesterday. The NVIDIAs, the you know, the heavier tech
stocks that have some significant weight in the SMP, they
(04:44):
were down and they're largely in the Nasdaq too. That's
why we saw that pull back. But I can't go
there if it's not more than one percent.
Speaker 2 (04:53):
Article is this article saying that there hasn't been a
big pullback. I mean, if if we want to get
into like terminology, look, bear market is down twenty percent
or more, correction is down ten percent. I think I
could define a pullback is maybe five percent, you know,
like now we're getting into like splitting hairs. A modest
(05:13):
decline is maybe one to three percent. And so, yeah,
what we are seeing right now, even today, where the
SMP continues to sell off down almost you know, one percent,
at the moment you look at it, there's still thirty
nine more S and P five hundred stocks positive right
now than there are ones that are negative. And so
(05:34):
the reason why the index as a whole is getting
you know, hit, is because okay, you know, you look
at Nvidio it's down three percent, Tesla's down three percent,
Metas down two percent, Amazon's down to Google's down two It's.
Speaker 4 (05:48):
Close to twenty five percent of the SMP right there.
Speaker 2 (05:50):
It doesn't matter that Chipotle is up one and a
half percent, because it takes a lot of Chipotles to
make an Nvidia. I know, the you know, the conversion
changes time to time, but you need a lot of
to make a chip.
Speaker 3 (06:01):
Is what is what I hear. So I think that
when we look at this.
Speaker 2 (06:06):
The other thing is the market has changed what it's
been looking at over the last four to five months.
If you go back and I remember clear as day,
because it wasn't that long ago. It was the beginning
of the year February, March, and April, markets were concerned
about tariff announcements because they took them to be gospel.
(06:27):
At this point, what we've seen is that the initial
announcement is often not as strong as the final implementation.
You look at the Mexico and Canada tariffs as an example,
and it's oh, like, we're gonna have these tariffs of
x percent, but we're exempting you know, USMCA complying goods,
which is like ninety plus percent of goods traded between
(06:47):
the countries. So it's really not a huge thing. Hey,
we're gonna, you know, have these big announcements about you know,
reciprocal tariff rates. Okay, then we're going down to ten percent.
We're gonna step back up a little bit. But okay,
I don't know that people still fully believe that these
new rates from August first are going to stay in
effect long term. They may they may not, but this
(07:08):
is where we are. And so I think the market
has moved from hey, let's react to the announcement to Okay,
now that the policy is in place, we have to
react to the data. And that's fundamentally different also because
the announcements can happen like that, you know, any particular
point in time, and the markets back in February, March,
(07:28):
and April we're reacting really quickly as if oh, we
got a position for this to happen. They're not doing
that anymore. And so now that we have tariffs that
are actually in place, it's, hey, show me how this
is actually affecting the US economy. And you can see
this because on August first, the thing that moved markets
(07:50):
wasn't the announcement of reciprocal tariff rates. We were down
modestly and in pre market when you know that announcement
had been made the night before. The thing that moved
markets was bad jobs report that we got on August first.
That was the catalyst for that, you know, one hundred
plus point downward day in the S and P five
hundred and so I think, quite honestly, that's a healthy
(08:11):
way to approach this, because look, if you're gonna run
around like a chicken with your head cut off on
every announcement about this and that, then you're gonna need
a lot of a lot more chicken heads. You're gonna
need lots of chicken heads, and quite honestly, like we
don't have an ample supply of those here at the
Financial Exchange. No, no, we're running short on the chicken heads.
(08:37):
We've given all the live chickens to Pedro Serrano who
was still trying to break out of his slump from
Major League.
Speaker 3 (08:43):
But I digress here.
Speaker 2 (08:45):
Ultimately, markets looking at data is healthy and then responding
to that data as opposed to how are we gonna
you know, what's this announcement? I mean, what's that one? Hey,
just take a step back and wait for you know,
the final policy, and then you can go from there.
Speaker 4 (09:02):
That's a great, great point to make. It was very
challenging back during that time period covering it because there
was a tremendous amount of uncertainty, the mess the final
rates would be different than what was initially announced, and
that was You're right, it was all the market cared
about the earnings of Nvidia or whoever you want to
pick from the S and P five hundred. We're insignificant
(09:23):
at that point in time. But now going through this
most recent earning season and the jobs report and some
of the inflationary reports, that has become the major focus
on markets and the Federal Reserve to a degree too,
which we'll talk about a little bit later in the
Program's take.
Speaker 2 (09:40):
A quick break here, and when we return, a couple
of items that I want to get to. I want
to get to Target and then also stopping shop announcing
some price cuts on items, so let's talk about those
when we come back.
Speaker 1 (09:55):
Tara Fleevery's in high gear. We've got the latest on
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This segment of the Financial Exchange brought to in part
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Speaker 2 (10:53):
Target's got a problem and they're hoping that a new
CEO can shake them out of their malaise. Their chief
operating officer, Michael, do you think it's Fidelk Fidelki?
Speaker 4 (11:05):
I was gonna for Fidelki when I was reading it
this morning.
Speaker 3 (11:08):
Not fiddle K. Definitely not Fidelki. Fidelki.
Speaker 2 (11:12):
Okay, So their chief operating officer, micro Fidelki is going
to be their new CEO starting in February. Brian Cornell,
who was basically an outsider that they brought in.
Speaker 4 (11:24):
From Pepsi for the last eleven years.
Speaker 3 (11:26):
Correct.
Speaker 2 (11:27):
You can make a case that the first seven years
he was there, they did a really strong run during
that time. I mean, the stock price went from thirty
eight bucks a share in early twenty fifteen, I'm sorry,
early twenty fourteen up to two hundred and thirty nine
and twenty twenty one.
Speaker 3 (11:48):
So when you're hitting, you know, an eight bagger on
your stock.
Speaker 2 (11:51):
Granted a lot of that was fueled by spending in
twenty twenty and twenty twenty one during you know, the.
Speaker 3 (11:56):
COVID stimulus days.
Speaker 2 (11:59):
Hey, you still have to take a victory opp and say, okay,
it did a pretty good job. The problem is when
your stock then goes from two hundred and thirty nine
dollars a share to ninety six. The board looks at
you and says, okay, what have you done for me lately?
And the answer is not much. So I don't know
that I can look at Cornell's tenure and say definitively, hey,
this was all good or all bad, because like most
(12:19):
of us, there's you know, a lot of nuance, and
you know, sometimes you get up to bat and you
hit two home runs. The next game hit you know,
you got two strikeouts, and you're like, okay, who's the
real me?
Speaker 3 (12:29):
It's it's it's both of them.
Speaker 4 (12:31):
Having over a ten year ten year as CEO there
is certainly not too shabby, and he came in. It's
easy to forget. I forgot personally. Target had been hit
by a data breach where I believe forty million of
their debit and credit cards had been compromised. They had
tried to expand to Canada and that had failed, and
he cut back that initiative totally and got them back
(12:52):
on the right track. Where they sit today is over
the last eleven quarters they have had basically flat or
declining sales. They really have had a difficult time shifting
from the pandemic. Whereas Chuck mentioned, they just did tremendous
I mean, you had a ton of excess savings and
cash slashing around in consumers pockets, and there was a
tremendous amount of demand for really the specialty of Target,
(13:17):
which is, you know, the discretionary items like clothing and
then things for your home home good items. But now
they sit in a spot, Chuck, where Walmart has very
low prices and a dominance in grocery. They have a
huge amount of market share there. So there's a tremendous
amount of people who take a lot of trips to
(13:37):
Walmart because their grocery presence. Amazon, its other big competitor,
has the speed and efficiency. And I was talking to
my wife this morning, the resident expert on all things retail,
of course, and she was mentioning that the tricky thing
for Target is that they do have a good clothes selection,
but they have kids clothes from Carters that if she
just wants it quickly, sure order from Amazon because she
(13:57):
knows she'll get it in a twenty four hour turnaround,
versus Target really has to focus on that in store
experience while also trying to service some e commerce too.
So they find themselves in kind of a difficult position
here where they're in competition with two other companies that
have done tremendous in retail, but they have really lagged
(14:18):
them significantly on all these issues that I've mentioned, issues
with staffing and merchandise and sort of trying to get
their reputation back.
Speaker 3 (14:27):
So excuse me.
Speaker 2 (14:29):
So we're gonna have to see how they do under
the new CEO when he takes over officially in February.
And obviously the clock's ticking because you know, this isn't
quite it's not a Macy's or Coal situation yet, but
you can see a path where it turns into that
in the next five years. So I think this CEO
is one of the most important hires that they've had,
(14:51):
and he's got to nail this. He's got to stop
the bleeding and figure out how to grow the company again,
because they haven't really grown in.
Speaker 3 (14:56):
The last couple of years.
Speaker 4 (14:57):
Now, No, they haven't.
Speaker 2 (15:00):
Boston Globe today Stop and Shop to cut prices on
three thousand plus items in Massachusetts stores. So I was
reading through this piece and I get to like the
third or second, second or third.
Speaker 3 (15:12):
Paragraph, and here's what it says.
Speaker 2 (15:15):
The Quincy based retailer and arm of European conglomerate Ahold
del Hayes started out testing out price cuts in other
parts of New England last year. Now those price cuts
are coming to the chain's home base starting on Friday
at the eighty eight Stop and Shop supermarkets inside hang
On Staple east of Interstate four ninety five. Price cuts
(15:38):
will vary in size between five and forty percent. So
they're saying they're gonna cut prices on three thousand items.
So I went through and I pulled. Because Ahold del
Hayes is a publicly traded company, they're based out of
the Netherlands, but they operate Stop and Shop Food Lion Hannaford,
so they've they've got, you know, a big grocery presence
(15:58):
in the United States. Here's the thing, about a hold
del Hayes.
Speaker 3 (16:03):
They made.
Speaker 2 (16:04):
They brought in ninety nine billion dollars in revenue last year,
which is great, Like one hundred billion dollars in revenue,
that's wonderful. They made on that net income of two
billion dollars. So margins are anywhere generally two to three
percent for them, as it is for most grocers. If
you're not familiar with the economics of grocery stores.
Speaker 4 (16:21):
The margins are razor thin.
Speaker 2 (16:23):
The margins are razor thin, and there it's a horrible
business to be in. You basically spend a bunch of
money studying an area to make sure that it has
the demographics that can support the development of a new store.
Then you spend fifteen to twenty million dollars building a
new store, and you hope to make that back over
a twenty five year period. It's an absolutely horrible business
(16:44):
to run. It's just it's really hard. I say this
is someone who has never run a grocery store, but
my first job was in a stopping shop. Actually, so
I look at this and I see three percent margins,
and I go, you're not going to be in grocery
prices by five to forty percent. Maybe it'll be on
(17:05):
some items here and there, but I have no idea
how many items are actually stocked in the average, you know,
stop and shop. It's got to be way more than
three thousand. I mean, you could probably just find that
just in the cereal aisle, you know, you're looking at it.
Speaker 4 (17:18):
I think for Walmart it's like one hundred thousand skews.
I mean, so grocery store not the same scale. But yeah,
that's a small portion of whatever the number is at
a stop and shop.
Speaker 2 (17:28):
So I look at this and it's clear that they're
trying to take back market share more than anything else
because they don't have the margins to support broad based
price cuts. But you sit there and you say, okay,
they're going right after the market baskets and shaws, trying
to compete on price there, And I guess I look
(17:52):
at this and I just wonder, are they going to
be able? You know, is this going to move the
needle at all? Because they don't have the margins to
do broad based price cuts. So the fact that they're
announcing this is just trying to get people thinking, oh,
stopping shop is its value.
Speaker 4 (18:09):
It's a pr move, for sure.
Speaker 2 (18:10):
It is because like you're not going to go to
stop and shop and walk out saying, wow, I paid
five to forty percent less for my groceries. The margins
are not there to support it.
Speaker 4 (18:20):
Now, there was a survey done in June by a
retail consultancy group, the Strategic Resources Group.
Speaker 3 (18:26):
The show.
Speaker 4 (18:26):
The survey showed that prices collectively at a stopping shop
store in Greater Boston were nearly thirty percent higher than
at relatively close Walmart or Market Basket stores, while prices
at Shaws were nearly thirty seven percent higher. And so
that's the deal. And you know this talking to any
consumer around the Greater Boston area. Everyone knows that Market
Basket from a pricing standpoint and Walmart two are going
(18:47):
to be your best bet if you want cheap groceries
out there. And this is just a move for stopping
Shop in the minds of people to kind of bring
down prices to the level. But it's gonna be tough
to beat those two other chains that they're up again.
Speaker 2 (19:00):
Right you look at it, you go, Okay, So, like
the if you're looking for the cheapest grocery stores, you
got Walmart, you got Ald, you got you mentioned market basket.
That next tier up is your stopping shopping Hannah Ferd's,
and then you know the high end you get into,
you know, your Brothers.
Speaker 3 (19:17):
Wegmans.
Speaker 2 (19:17):
I find is kind of all over the place. There's
some stuff there where you're like, wow, this is really cheap.
Speaker 3 (19:22):
There's an other way.
Speaker 2 (19:22):
You're like, I'm not paying for that, Like how did
this happen? It's it's just kind of sporadic. And I say,
this is someone who used to be a really big
fan of Wegmans.
Speaker 3 (19:31):
And I haven't soured on it. But they're they're just fine,
you know, they're they're good. Let's take a quick break here.
When we come back, we got Wall Street Watch and
ask Todd.
Speaker 1 (19:41):
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 markets so
far today right here on the Financial exchan Change Radio Network.
Speaker 3 (20:01):
All the tech sectors.
Speaker 5 (20:02):
Adding to its losses from yesterday's sell office traders, digest
more retailer earnings. Wall Street's also waiting minutes from the
feds July meeting, due out this afternoon at two o'clock
right now, the Dow is down by about a quarter
of a percent, or one hundred and sixteen points. SMP
five hundred is down nearly nine tenths of one percent,
(20:22):
Nasdaq selling off over one and a half percent or
three hundred and forty eight points lower, Russell two thousands
down nine tenths of one percent, Ten year Treasure realed
flat at four point two nine to five percent, and
crude oil up one percent higher today, trading just above
sixty three dollars a barrel. Target tumbling over seven percent
(20:44):
after the retailer posted it's eleventh straight quarter of flat
or falling sales. The company noted improving quarterly traffic and
sales trends, but noted terror related in other cost pressures
in challenging retail conditions. However, the bigger news from Target
is the appointment of COO Michael Fidelki as its next CEO,
succeeding Brian Cornell. Meanwhile, Lows boosted its annual outlook after
(21:08):
beating earnings forecast for the second quarter. The home improvement
retailer also announced it agreed to buy distributor Foundation building
Materials for eight point eight billion dollars. Low's stock is
up modestly. Another retailer in TJX, seeing gains of four
percent after the TJ Max and Home Goods parent company
lifted its annual profit forecast after reporting better than expected
(21:31):
second quarter results where consumers flocked to discount stores in
search of deals. Elsewhere, STA Lawa down by four percent
after the beauty company misquarterly estimates where its terraf related
costs are projected to impact earnings by one hundred million
dollars after its a recent skid. Pallinteer shares it down
nearly seven percent today, bringing its total losses over the
(21:54):
last five sessions to about twenty percent, and car rental
company Hurts seeing a gain of sale seven percent after
it announced it will begin selling use cars on Amazon
Autos in four different cities as soon as today, and
we'll expand to forty five locations nationwide. I'm Tucker Silva
and that is Wall Street Watch.
Speaker 1 (22:16):
This is Ask Todd on the Financial Exchange Radio Network.
If you have an existing estate plan or in the
market for one, Todd Lutsky is here to answer your
questions and help you plan for 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.
(22:37):
Visit Cushingdolan dot com.
Speaker 2 (22:39):
Now here's Todd Lutsky a promise. We're joined now by
the one and only Todd Watski from the law firm
of Cushing and Dolan. Phone lines are open, so get
calling with your state planning questions for Todd. Eight eight
eight two zero five two two sixty three is the number.
Again we call the segment Ask Todd, so that you
(23:00):
can ask Todd your estate planning questions live on air
right now and so again room on the phone lines
at eight eight eight to zero five two two six three.
We can usually get through two to three calls in
any given show, so get calling early and often.
Speaker 3 (23:17):
Again.
Speaker 2 (23:17):
That number is eight eight eight to zero five two
two six'. Three Mister, lutsky how are you doing? Today
i'm doing pretty, well pretty.
Speaker 3 (23:28):
Well can't complain, you, uh not. BAD I SO i
have a pet. Snail, yeah that's an interesting.
Speaker 2 (23:35):
Pet YESTERDAY i took the shell off the snail to
see if he'd get. Faster and made it more. Sluggish,
Yeah i'm.
Speaker 1 (23:43):
Sure.
Speaker 2 (23:43):
Yeah real problem, Is, TODD i want to talk to
you about irrevocable. Trusts when you look at the menu
of choices that an individual, has how many different kinds
of irrevocable trusts are there realistically for an individual to choose,
from depending on what they're trying to.
Speaker 6 (24:01):
Do, YEAH i think that's a that's an interesting question
BECAUSE i always tell, people, yeah there's many kinds of irrevocable,
trust BUT i never know what kinds there.
Speaker 3 (24:08):
Are, yeah we never really get into all these different. Kinds.
Speaker 6 (24:11):
You you're absolutely, Right so you, know it really depends
on what you're trying to. Accomplish so let's start with
something like a qualified personal residence. Trust, well that's an irrevocable.
Trust it's a way of getting your home or your vacation,
home very specific to only those two kinds of, assets
(24:32):
where you transfer the home to the trust and you. Reaserve,
well you have this reversionary period where then you have
to LIVE x number of years and you can pick
the term of. Years of, course the longer the term of,
years meaning if you die within that term of, years
then that property never is out of your state it's back.
(24:52):
In that's called a risk of. Reversion, well that risk
of reversion allows me to discount the value of the
Property i'm putting in there for gift tax, Purposes so
it allows me to lower the value getting more assets
out of my, estate leveraging my exemption by doing. So
but the longer the time, period the larger the, discount
(25:15):
and it's nice then get that asset out of your
state and all the future growth.
Speaker 3 (25:18):
Out of your.
Speaker 6 (25:18):
State so that's for. That then there's people who want
to just make regular. Gifts they might just set up
gifting trust just for children or grandchildren and have it
designed only for.
Speaker 3 (25:29):
Them that's okay.
Speaker 6 (25:30):
Too then there's people who set up spousal lifetime access,
trusts also, irrevocable but these, are, yes like a gifting,
trust but more designed for, you husband and. Wife that's
why there's spousal lifetime access trusts to give something away
but retain the right to enjoy what you gave, away
(25:52):
kind of, indirectly so very different than an outright gifting
trust to kids or a grandchildren's.
Speaker 3 (25:58):
Trust and Then i'd say.
Speaker 6 (25:59):
No other one might be irrevocable life insurance trust to
hold life insurance and keep it a state and income tax.
Free and, finally how about To medicaid irrevocable. Trust while
we talk a lot about, that which is WHY i
left it for, last because we know about, it we
know it's designed Where unlike a lot of these other
TRUSTS i just, mentioned this one is very much in
(26:23):
control by, you so you get to control, it use,
it benefit from, it but yet avoid, probate reduce, taxes
and protect it from the cost of long term. Care
so very different, trusts very different control aspects to the,
trust and very different reasons to do each trust driven
(26:43):
by your family.
Speaker 2 (26:44):
Needs talk With Todd lotski from the law firm Of
cushing And. Dolan, again we've got space on the phone
lines for your estate planning. Questions eight eight eight two
zero five two two sixty three is the number, Again
that is eight eight eight to zero five two two six.
Three we are gonna take a quick break, here but
when we come, back we're gonna get right to your
(27:06):
questions With, Todd so again get. Calling we still do
have room on the phone. Lines that number again is
eight eight eight to zero five two two six. Three
one more time it is eight eight eight to zero
five two two six.
Speaker 1 (27:20):
Three 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.
Speaker 2 (27:36):
Network talking With Todd lutsky From. Christigan dolan's still got
room for your phone? Calls eight eight eight to zero
five two two six three is the. Number that number
again is eight eight eight to zero five two two
(28:00):
six three for you to Ask Todd letsky your state planning. Questions,
again it's eight eight eight two zero five two two six. Three,
todd during the last segment you mentioned irrevocable life insurance.
Trust described to me what that does in who that
would be a potential tool For.
Speaker 3 (28:19):
Yeah you know.
Speaker 6 (28:20):
Interesting not only is it a type of irrevocable, trust
it actually has its own. Subcategory so there's two types
of irrevocable life insurance. Trust so within the life insurance trust,
world we actually have two. Kinds one is called the
first to die and the second one is called ironically
(28:40):
enough second to die irrevocable life insurance. Trust what DO
i mean by? That that's driven by the type of
life insurance that you. Own so let's let's play out the.
String If i've got a first to, die let's Say
i'm the. Insured it's a POLICY i on my. LIFE
(29:01):
i would put that into an irrevocable life insurance first
to die. Trust likely If i'm, married make my wife the,
trustee which is, OKAY i can't, be and THEN i
can be the, donor AND i can keep the power
to remove and replace the, trustee SO i keep some control,
sure and THEN i just pay the PREMIUMS i make
(29:22):
a gift to the, trust the trust pays the, premium
and life goes. On WHEN i, die the money flows
into that trust income and estate tax free for the
benefit of my spouse and my. Kids and there'll be
language in there with the spouse as trustee SAYING i
get the income for, life and the spouse can also
(29:45):
take out the principle as needed to maintain her standard
of living as, needed so great she gets to enjoy,
it so state tax free WHEN i, die available for
the use and enjoyment for my. Spouse and to the
extent my spouse has not spent it, all not taken
it all when she, dies whatever's left in there also
(30:06):
not included in her estate and passes yet again estate
tax free to either the kids or to a share
for the benefit of the, kids depending on how long
we want this to go, on generationally, speaking estate tax.
Free so wonderful approach as to how that works with life.
(30:29):
Insurance remember you got two million dollar policy and you
die In. Massachusetts that's one asset you got in a
state where two million, already so it can. Matter it can.
Matter second to, die on the other, hand is one
where my wife AND i are the owners of the,
policy ensured on the. Policy we both then contribute it
(30:50):
to the irrevocable trust and are both the, donors and
neither of us are the. Trustees usually put the kids,
on but keep the power to remove and replace the,
trustee so he keeps some. Control now the benefits of
the trust are for the kids and the. Grandkids but
(31:10):
again we pay the premiums to the. Trust to trust
then uses the money to pay the actual premium to
the insurance. Company life goes on till we both. Die
then the money flows in the. Trust and why is
that Important because that's really when the estate tax would be,
due if. Any and so now we use the money
(31:30):
in the life insurance, trust to satisfy the estate tax,
liability to prevent any liquidation, event to get money to
pay any estate. Taxes number one and number two it
was we leveraged our. Dollars, Right so if if we
owed let's say a million dollars in, tax but we
(31:52):
only paid you, know one hundred thousand dollars in. Premiums, wow,
yeah the government gets there million dollars in, tax but
really out of our, pocket they only got one hundred thousand. Bucks,
SO i mean that's a pretty significant. Leverage but life
insurance can do. THAT i don't know if it's to that,
degree but it certainly can provide. Leverage i'm just trying
to make a. Point so good idea if you're in that.
(32:16):
Situation so folks that need estate planning that have life
insurance in, play please consider. Those and if you need
more information on these kinds of, trusts, islets, revocable other irrevocable,
trusts revocable, trusts special needs, trusts pooled trusts you know
(32:36):
you might have a disabled. Child of, course nominy realty trust,
chuck you, know we hate. Those no one knows what they.
Are so we certainly got to learn that this is
a great. Guy the top seven estate planning trust will
help you if you've never done your, planning get started
doing your planning and pick which trust is right for.
You and if you've done your planning, already then this
(32:57):
trust will help you figure, out, well MAYBE i need to, upgrade,
change maybe my dynamics have, Changed Maybe i'm older AND
i want to switch. Trust something for everyone in these
in this. Guy top seven estate planning trusts eight six
six eight four eight five six nine nine Or Legal
Exchange show dot com again eight six six eight four
(33:19):
eight five six nine nine Or Legal Exchange show dot.
Speaker 2 (33:23):
Com todd got any question for you From sarah In. Westborough,
sarah you're on With Todd lupski and what's your.
Speaker 7 (33:31):
Question, Well i'm kind of curious because it's more on
behalf my mother in. LAW i listened to you guys
all the, time AND i feel like she's gotten bad
advice about the idea of doing a. Trust she's, eighty
she only has my husband as a, child she has two,
grandkids so she figures she's written a will and she's
(33:52):
good to. Go and WHEN i mentioned trust stuff to,
her she gets real. Prickly So i'm not sure how
to approach, it but she owns a. House she has
asked that she, has you, know pension and, whatever AND
i think she's been given poor advice that she doesn't
have enough assets to make it matter just right a.
Speaker 6 (34:13):
Will so so if if her goal is and again at,
EIGHTY i have to talk about or think about at,
least you, know nursing home type planning as, Well so
we we really just have to ask her some questions
help educate her as to what her wishes. Are you,
know when WHEN i meet these, CLIENTS i would say to, them,
well you, Know i'm not just going to throw a
trust at. You i'm going to, say you, know do
(34:34):
you want to make sure that you avoid? Probate and
they would, say, oh, YES i hate, probate you, know
do You it doesn't sound like she's over two, millions
so let's assume she doesn't have any estate tax, issues
but that's always an. Issue THEN i, say, well do
you want to provide for your? Family do you want
to figure out how to leave your assets in an efficient?
Manner because a will won't do, that it'll won't even avoid.
(34:54):
Probate and if they say, yes you, see you sort
of you got to you gotta Get we only want
to do what they want to, do and we can't
make them do, anything nor do we. Try my goal
is simply to, educate and as it should be, yours
to just ask her these. Questions you, know avoid, Probate,
yes provide for my, family, kid, grandkids what have? You?
(35:16):
Yes do you want to make sure the nursing home
doesn't take it so your kids and grandkids can get?
Speaker 1 (35:21):
It?
Speaker 6 (35:21):
Yes so you're getting her to say these are the
things she wants to. Do then you can, say, well,
okay a will will not accomplish that does not avoid,
probate you file the will with the, court does not
protect assets from the nursing. Home, Period so there's you,
know a will's a. Won't i've said that more than one.
Time then once you get them on, board then it's
(35:45):
up to the lawyer to explain to them how the
irrevocable trust will keep them in, control because that's their
next big. Concern you, know oh my, gosh AM i
going to lose all this? Control And i'm sure she
might have those same, concerns and we have to educate
them as to how they won't lose.
Speaker 3 (36:01):
CONTROL i.
Speaker 6 (36:02):
Know on even WHEN i do a seminar AND i
teach other lawyers or accountants these, issues they'll come up
to me and they'll, Say, todd it sounds great when
you say all, this but WHEN i talk to my
client and try to teach them these irrevocable, trusts they
just say that there's too restrictive and they can't do.
It AND i have to politely sort of answer them by, saying,
well is it the irrevocable trust that's the problem or
(36:24):
is it the person who's explaining. It perhaps not the
right way is the, problem you. Know so it's just
a matter of educating them so they understand that it
does work for. Them but even at the end of the,
day if they still, say you, KNOW i just can't
get past the word irrevocable and it's not right for, me,
well then we don't do.
Speaker 3 (36:45):
It SO i just want people to.
Speaker 6 (36:48):
Make sure they're making decisions based on as or based
on answers and information that's. Accurate you hate to make
them answer questions that on inaccurate. Information so that, SAID
i hope that helps you with your. Situation Mister, Latski
thank you so much for the time.
Speaker 3 (37:07):
Today always a.
Speaker 1 (37:08):
Pleasure this has been Asked odd on The Financial Exchange radio,
Network Ask todd With. Todd lutsky has been presented By
cushing And, dolan Serving massachusetts And New england for more
than thirty, years helping families with the state and tax,
Planning medicaid, planning and probate. Law call eight hundred and
three nine three four thousand and one or Visit Cushing
doolan dot. Com the views expressed in this segment are
(37:29):
solely those Of cushing And Dolan armstrong. Advisor he does
not provide any legal or tax. Advice please consult with
your legal or tax advisor on such. Matters cushing And
armstrong do not endorse each other and are not.
Speaker 2 (37:38):
Affiliated still quite a bit to get to as we
head towards the second.
Speaker 3 (37:42):
Hour we Got low's.
Speaker 2 (37:43):
Earnings we're going to be talking About we've Got Jay,
powell who's going to be speaking On friday From Jackson.
Hole now that they've gotten the bats out of the,
Cabins we've got let's, see, oh here's.
Speaker 3 (37:54):
One from Market.
Speaker 2 (37:55):
Watch will be covering why The rust of two thousand
has a real chance to beat THE s AND p five.
Hundred we'll talk about whether that's a bunch of hot
air or. Not and then also we're gonna be talking
about data centers and electricity, demand because this is a
story that is just going to continue to, grow unlike electricity,
supply which we just can't build fast. Enough all that
(38:17):
and more coming up in our number two
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