October 22, 2025 • 37 mins
Chuck Zodda and Marc Fandetti discuss how American corporations are crushing it and it's not just tech companies. Gold suffers its worst rout in twelve years. Is the rally over? Todd Lutsky (Cushing & Dolan) joins the show to chat about navigating around federal and state level estate taxes.
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Episode Transcript
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Speaker 1 (00:00):
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(00:42):
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donation today. This is the Financial Exchange with Chuck Zada,
(01:06):
and Mark Fandetti.
Speaker 2 (01:10):
I believe that's us. Mark.
Speaker 3 (01:13):
Well, I hope so, because I blocked off the next
two hours.
Speaker 4 (01:18):
Well, even if you didn't, we've got your AI likeness
in studio with us. It's Chuck Zada, Mark Fandetai and
we are here too tell you about what's going on
in markets and in the economy. Today we kick things
off with a piece from Barons titled American corporations are
(01:38):
crushing it. This stock rally isn't just about tech, and
to cut to the chase in this piece, data from
LSG show that I expected year over year Q three
earnings growth for MAG seven tech Titans is fourteen percent,
but performance is broadening out with an estimated growth of
seven point eight percent for the other s and P
(01:59):
five hundred company. These a much narrower gap than in
recent quarters.
Speaker 3 (02:03):
Your thoughts mark a crushing it seems a little overly enthusiastic.
It's solid. I'm talking about the eight and a half
is percent growth. From this source and from earnings data
provider fact set, they estimate similar year over year earnings
growth for the period ending September thirtieth. Stocks are up
(02:24):
twice that though, so one way to interpret stocks being
up twice. What earnings are up? Is that the willingness
of investors to pay for future earnings is it? The
sale has gone up faster than earnings themselves. Said differently,
price to earnings ratios, and I'm using the trailing twelve
months pe price to earnings, and that's just what it
(02:46):
sounds like. It's a fraction. You can use other metrics
to come to the same conclusion. Investors are presumably pleased
with these results, but they're future assumptions are even more heady.
So if those aren't met, you know, it could be
a problem for equities. But I guess we should celebrate
(03:08):
a year of reasonably solid earnings growth.
Speaker 5 (03:10):
Yeah.
Speaker 4 (03:10):
I haven't done the the numbers myself on this, but
I'd be interested in seeing. So this separates you know,
MAG seven from the rest of the S and P five.
Speaker 2 (03:20):
That was helpful. I'm doing that, Yeah it is. But okay,
like what happens if I.
Speaker 4 (03:25):
Include you know, broad Common here, which is not MAG
seven but is a huge contributor to earnings growth, both
because of its size in the S and P five
hundred now and the area that it represents, which is
ai adjacent you know, what happens if we include Oracle,
which has been you know, a darling over the course
(03:47):
of this year as well, What what happens if that
gets you know, kind of included in that bucket there.
So I think that the message that I do think
is is out.
Speaker 2 (03:58):
There is Look, the overall picture.
Speaker 4 (04:02):
For the other four hundred and ninety three companies in
the S and P five hundred is not bad by
any means.
Speaker 2 (04:08):
It simply is. I think the best way to describe it.
Speaker 4 (04:12):
Is in line with historical norms, which like, if you
look at earnings growth in the S and P five
hundred historically generally averages around seven percent a year. Oh yeah,
and if you're within a couple you know, percentage point
or so of that. Yeah, there's there's nothing that is
a huge issue on that front. And the US economy,
despite a number of questions this year, has remained incredibly
(04:36):
resilient to this point and continues to show corporate profit
growth that is, I think, quite honestly in excess of
where a lot of people thought it would be at
this point. If you ask them, you know, in Q
one or early Q two, Hey, what do you think
is gonna happen with earnings this year. I think a
lot of people would have said, yeah, they're gonna get
(04:56):
you know, worse and challenge because of tariffs and this
and that. Some of that's mitigated by the fact that
the worst case tariffs were pulled off the table, but
companies have done a really good job of trying to
navigate them as well to this point. Now, this is
the place where you get to the question of, you know,
our corporate earnings the US economy, and the answer is
obviously no, because we do talk about quite often. Hey,
(05:20):
even though corporate earnings look pretty good right now, household
earnings there's some questions about, you know, kind of where
that pictures going for, in particular the bottom fifty percent
of incomes in households. So I think that you know,
you can you can kind of have both these things
happening at the same time. Where you say, look, households
(05:41):
are struggling because job creation is weak, Inflation is still
running around three percent, and it's kind of hard for
households in.
Speaker 2 (05:50):
A lot of cases to get by with that situation.
Speaker 4 (05:54):
But companies are doing well because part of the reason
that inflation is at three percent is that they're able
to raise prices a little bit in order to make
maintain margins, and demand is still really strong in the aggregate.
I know we've talked about, you know, housing being slow
and in a couple areas that have slowed down, like restaurants,
but aggregate demand continues to just hum along, and so
(06:14):
these two things can be reconciled, I think, especially when
you put in place the third thing that we've talked
about a lot, which is hey, a lot more spending
is being driven by the wealthy, and that's more asset
based spending, and if portfolios are up as they are
this year, that's not really going to be impacted.
Speaker 1 (06:32):
Yeah.
Speaker 3 (06:33):
I think there's a tendency. I certainly fall into this
trap of looking at the performance of the stock market,
and although it is although company, which is driven in
turn by company earnings as well as investor expectations for
future earnning. So there's that pe multiple so called expansion
component that we talked about earlier to stock market performance.
(06:53):
But you can be fooled by a strong stock market.
You can be a full to the extent that you
infer that that means everything that the gains from economic
growth are being reasonably widely are broadly distributed. They clearly aren't.
And I don't know what to make of Mark zandi
(07:14):
statistic that the top ten percent of the income distribution
accounted for about half of total spending in the second quarter,
a number that has been climbing relentlessly going back nearly
for decades.
Speaker 4 (07:29):
It's it's not good societally, No, we know that, you know,
and look, it's the big thing. In the United States
and pretty much in any successful country anywhere, you never
have a situation where the top ten percent of earners
are spending like ten to twenty percent of you know,
(07:50):
all spending in the US historically, Like if you go
back and look at the historical data that they've pulled
on this, it's typically somewhere in the mid thirty is
kind of where that concentration is. The top ten percent
you know, spent you know, thirty five to thirty eight
percent of all consumer spending. That's even like if you
look back at you know, times where we've said, hey,
(08:11):
this is a good economy and people are able to
you know, you know, find their way economically, you still
had you know, a skewed spending by that that top
ten percent I think the issues that we have right
now are twofold, you could even say threefold quite honestly,
with with how things are setting up. The first is
(08:33):
it's it's very clear that you get to a certain
point and it's just like, hey, so many people just
feel economically left behind because they're not in control of
their economic destiny, which dovetails into the second piece that
I hear a lot from people in their twenties. I
try to make an effort to talk to, you know,
people in their in their twenties a decent amount about
(08:55):
this stuff, because you know, you think about it, and
it's been twenty years since since I was you know,
someone young, you know, coming out of college basically, and
the like, the world is different now.
Speaker 2 (09:08):
I know.
Speaker 4 (09:08):
We always like to project kind of our past experiences
and like, well, why can't you just do like what
I did when I was younger? Man, When I was younger,
it was a different world, Like the iPhone had barely
just come out, Like it was not the same world.
So the people that are twenty three today are living
in a different world.
Speaker 2 (09:24):
Than I was at that time.
Speaker 4 (09:26):
And I realized that, and you talk to people at
that age and it's not just hey, I'm not making much,
but the path to being able to make it feels
narrower to them. I don't know if it actually is
or is not. I don't know if there's less upward
mobility today than there used to be, but it feels
(09:47):
like it to them and to a lot of their friends.
Speaker 2 (09:52):
I don't know if it's.
Speaker 4 (09:52):
True or not, but I know that it feels that way.
And the other piece that then, like doveta that kind
of the third piece that I pull together there is
there's also this looming thread of AI that everyone talks about,
and so I think a lot of young people are
also feeling, hey, if I don't make my money now,
I'm not gonna have a chance to because AI is
gonna just take out everything from a job perspective. And
(10:16):
this is partly why I think a lot of people
in their twenties are doing these financially reckless things like
you know, running up you know, big gambling debts and
prediction markets and all all this stuff that we look
at and we're like, hey, that's not that's not safe,
and they're like, yeah, you know what's not safe. Not
being able to pay my rent is kind of the
message that they give me.
Speaker 2 (10:35):
It's interesting, so.
Speaker 4 (10:37):
I don't either, but I realize that it's going on
and it's happening. I'm not saying it's good, bad, or
you know, new Trum'm just saying that it's happening, and
it doesn't feel like it's a healthy place for us
to be. Let's take a quick break here. When we
come back, let's talk a little bit about what we
are seeing in guild.
Speaker 2 (10:59):
Right after this.
Speaker 1 (11:00):
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Speaker 4 (12:02):
Gold has been the the focus of investors over the
last couple of months since late August. Gold Well, gold
didn't decide to do anything. It's not scenty, and it
doesn't wake up and say, oh gee, I'm a gold rock.
Let me go do some stuff today.
Speaker 2 (12:17):
And why it sounds probably you think it would sound
like that.
Speaker 3 (12:20):
I sluggish? Sluggish, Yeah, sort of slug because it did move,
is it?
Speaker 5 (12:26):
Well?
Speaker 2 (12:26):
Is picture more like the enz from ward to the rings,
like oh, I'm gold, I need to go.
Speaker 3 (12:34):
Yeah.
Speaker 4 (12:34):
I think it's a little bit more peppy than that.
You know, I don't know, but I'm picturing it kind
of like look, you and I are both Italian. I'm
picturing it kind of like a gold chain, you.
Speaker 3 (12:44):
Know, like thinking of the Italian horn.
Speaker 2 (12:48):
I'm going there, badass, I'm going there with it. You know.
It's like, Hey, I'm a little bit of gold. You
want some of me? Yeah, of course you do.
Speaker 4 (12:56):
So in any case, gold went on just a an absolute,
a torrid rally up you know, almost thirty five percent
from late August through late last week, and it has
now promptly fallen on its face in the last couple
trading days, down you know, eight nine percent from that high.
(13:17):
And so investors, you know, are kind of looking just like, okay,
like what comes next? Like where does this go? And
the answer is, look, I have no idea exactly what
gold is going to do over the next week, month,
or you know, a couple months. But what I can
tell you is historically I talk to people about this
a lot. Investors want to hold gold the way they
(13:39):
should hold stocks, and they want to hold stocks the
way they should hold gold.
Speaker 2 (13:43):
What I mean by that.
Speaker 4 (13:44):
Is, if you look at the long term track record
of stocks, basically the conventional wisdom, and what the data
shows you is, yeah, you don't really know where US
equities are gonna go in any day, week, month, or year.
But if you look at the long term track record
over ten twenty thirty year rolling periods, you basically should
hold those stocks and not do anything with them as
(14:05):
long as they fit your risk tolerance and personal situation
totally different. Buy them, hold, them, sit on them, whatever
you want to do. But what do people want to
do with stocks? Hey, I'm gonna trade in and out.
I'm gonna zig when they zag, and and most people
quite honestly, aren't very good at it.
Speaker 2 (14:22):
You know.
Speaker 4 (14:23):
It's just most people are not winning stock pickers, especially
when you factor in things like transaction cost, taxes, all
that stuff. Most people are not winning stock pickers.
Speaker 2 (14:34):
They're just not.
Speaker 4 (14:36):
On the other hand, gold people say, well, gold's my
insurance policy. I gotta hold this forever in case it
hits the fan, Like I'm this is something I'm holding forever.
Speaker 2 (14:49):
And if you look at the long.
Speaker 4 (14:50):
Term track record of gold, it's basically punctuated by these
bursts of just tremendous price growth over short periods of time,
but and then long periods of time where it is
absolutely nothing because it's not in a creative asset in
any way, shape or form.
Speaker 3 (15:03):
Right, which is exactly what you'd expect from a form
of insurance your career. You bleed, you bleed, and then
eventually if things don't go well, but you're glad you've
got it, it pays off. And that's that's the way
to think about gold is distinguished from generative, as you say,
assets like.
Speaker 4 (15:18):
Equity, which the wild thing is you talk to people
about their insurance company and they're like, can't stand my
insurance company.
Speaker 2 (15:26):
Hate it.
Speaker 4 (15:27):
All I do is give them money. And you have
people talk about their gold and they're like, this is
my pet rock.
Speaker 2 (15:32):
Hmm, would you like it?
Speaker 4 (15:34):
Like it's it's just kind of wild, like they even
though it is insurance that provides them no tangible benefit
on a daily basis, because if you're just sitting there
looking at your gold, does it actually do anything for you?
Speaker 2 (15:48):
No, it doesn't.
Speaker 4 (15:49):
It is an insurance policy. Well, but people love looking
at that insurance policy.
Speaker 3 (15:55):
Yeah.
Speaker 2 (15:55):
No, one loves looking.
Speaker 4 (15:57):
At their thing from you know, so and so mutual
and being like, got to pay that premium again.
Speaker 3 (16:04):
Yeah, And I'm I think that actually makes a lot
of sense. How much gold a long term investor should
own depends on their risk tolerance. Maybe they don't think
they need insurance against whatever.
Speaker 2 (16:15):
You think.
Speaker 3 (16:15):
Gold provides a hedge against geopolitical turmoil, bad policy, tariff uncertainty,
an outbreak of inflation.
Speaker 2 (16:25):
Dollar defach or something like that, or.
Speaker 3 (16:27):
Yeah, or the traditional outbreaks. So we all have something
slightly different in mind. When we think about gold as
a hedge, your hedge, you're the scenario you're edging against
a little different than the one I'm conjuring up. Probably
I don't make it good.
Speaker 2 (16:42):
I don't believe in it is end of the world insurance.
Speaker 3 (16:44):
Well, yeah, because it's not really marketable and in the
end its use area.
Speaker 4 (16:49):
I always say, Look, if you really think the end
of the world's coming, you want plenty of arable land,
lots of animals, maybe a little bit of high ground,
and the ability to defend yourself.
Speaker 2 (17:00):
Gold provides you none of those things.
Speaker 3 (17:03):
No, probably not. It's way not easily marketable.
Speaker 5 (17:06):
You know.
Speaker 4 (17:06):
And by the way, once people find out that you
have a lot of it, not great in the end
of the world situation.
Speaker 2 (17:13):
You know.
Speaker 4 (17:13):
It's I know we all everyone likes to think they're
going to be the winners of the mad Max scenario.
I will tell you I would be the loser. I
would not be the winner in the mad Max scenario.
So I don't try to pretend that I would be.
Speaker 3 (17:26):
But I struggle with this issue. I should an investor,
a serious investor own gold, And part of it depends
on your frame of reference. I started working in the nineties.
Gold had been a horrible investment since nineteen eighty and
it continued to be a horrible investment for the next
several years. And I remember telling institutional investors at the time,
you don't need it, you don't want it, it's not generative,
the same things we would say about bitcoin today. Sure,
(17:49):
but there are periods, as I think you put it
very well, there's long periods of nothing happening punctuated by
periods of a lot of excitement in.
Speaker 2 (17:56):
Gold, and this year has been one of them.
Speaker 3 (17:58):
It has been. But does that this neither makes the
case for nor against gold.
Speaker 2 (18:05):
It doesn't help, but it doesn't.
Speaker 3 (18:06):
Help me at all as an analyst, unfortunately.
Speaker 1 (18:07):
No.
Speaker 4 (18:08):
But I do think it's one of those where it
comes back to that fundamental question of Hey, if you're
putting something in your portfolio, whether it's a precious metal
and equity, a bond, private credit instrument, fart coin, whatever
it might be, you know, whatever you're putting in your portfolio.
(18:28):
Adolescent Listen, we realized by accident, like two weeks ago
that fart coin actually exists.
Speaker 3 (18:34):
We yeah, he's a millionaire. Whoever started it? Yeah, Jimmy fart, Yeah,
Tony fart.
Speaker 2 (18:40):
Yeah, he's oh boy, no, it's it's fine.
Speaker 4 (18:45):
But word whatever is in My daughter learned how to
spell it this week.
Speaker 2 (18:51):
I'm not kidding.
Speaker 4 (18:52):
So we're out to dinner the other night and we
play She's five, but she loves to play Hangman with like,
you know, three four letter words because she like trying
to like start putting words together.
Speaker 2 (19:02):
And the first word she does, it's a four letter word.
Speaker 4 (19:05):
I'm like guessing letters and the last three are art,
and so naturally I guess C and I'm like, she's like, no,
it's not C. And I'm like, is it F? And
she's like, yeah, I spelled fart. I'm like, how did
you do that?
Speaker 2 (19:18):
You're like, you're five and you're spelling fart in Hangman.
That's a proud moment. It was a great one.
Speaker 4 (19:24):
But in any case, everything in your portfolio has to
have a purpose. Understand why gold may or may not
be in your portfolio according to your purposes. Quick Break,
Wall Street Watch and Ask Todd are next.
Speaker 1 (19:41):
Like us on Facebook and follow us on Twitter. Act
TFE show breaking business news is always first right here
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Street Watch a complete look at what's moving market so
far today right here on the Financial Extreme Change Radio Network.
Speaker 6 (20:01):
Well its third quarter earning season ramps up. Markets today
are pulling back in negative territory right now. The Dow
is down by three tenths of one percent, or one
hundred and thirty three points. SMB five hundred also down
three tenths of one percent or twenty one points lower.
NASDAK down one hundred and fifty two points about two
thirds of one percent. Russell two thousand is down over
(20:24):
half a percent. Set Your Treasure reeled up one basis
point at three point nine seven four percent. In crude
oil up over two percent higher, trading a fifty eight
dollars and fifty one cents barrel. Netflix reported third quarter
earnings that miss street expectation, while its revenue matched estimates.
The streaming giant cut its extended operating margin for the
(20:47):
year to twenty nine percent from thirty percent, citing an
expense related to a dispute with Brazilian tax authorities, Netflix
sinking over nine percent. Following up on developing story where
CNBC's reporting that Warner Brothers Discovery rejected three paramount Skydance
offers as it fields broad buyout interest. Yesterday's reports said
(21:10):
Warner had received unsolicited interest from multiple parties. That stock
today's up modestly. Meanwhile, Beyond Meat is the latest meme
stock with wild gains continuing this week. Yesterday, shares in
the plant based meat alternative company rocketed one hundred and
forty percent higher after its signed a deal with Walmart
to expand distribution. Earlier this week, Round Hill Investments added
(21:34):
the stock to its meme stock. ETF shares today up
another one hundred percent. Elsewhere, shares an Intuitive Surgical jumping
sixteen percent higher after the maker of robotic assisted surgery
systems beat third quarter earnings expectations. Mattel down by two
percent after the barbie maker disappointed with its third quarter earning,
(21:57):
siting terrorists impacting North American sales. In after today's closing bell,
we'll see anticipated earnings from Tesla on Tucker Solva and
that is Wallstree Watch.
Speaker 1 (22:09):
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.
(22:30):
Visit Cushingdolan dot com. Now here's Todd Lutsky.
Speaker 4 (22:36):
Todd Lutsky from the law firm of Cushing and Dolan
joins us now in studio, and he's here to answer
your questions about your state plans. We got the phone
line open at eight eight eight two zero five two
two six three. The last couple of weeks we have
not been able to get through all of your questions,
So if you do want to have your question answered
(22:58):
by Todd, get calling early and often again. Eight eight
eight two zero five two two sixty three is the number.
One more time. That is eight eight eight two zero
five two two six three. The segment is asked Todd,
so you can ask Todd your questions. Mister Lutsky, How
are you doing today?
Speaker 7 (23:20):
I am never better? How you doing pretty good?
Speaker 1 (23:23):
Uh? Uh?
Speaker 2 (23:24):
Pretty good?
Speaker 7 (23:24):
Yeah? Only pretty good?
Speaker 2 (23:26):
I uh.
Speaker 4 (23:27):
I went on a date with a matador the other day,
a matador. Yeah, it didn't work out. No, too many
red flags yeah, definitely.
Speaker 2 (23:34):
Yeah.
Speaker 4 (23:34):
Real problem, Todd, want to talk to you a little
bit about is state tax thresholds today. Okay, federal limit
right now is currently just under fourteen million, is that right?
Speaker 2 (23:47):
Yeah?
Speaker 7 (23:48):
Thirteen nine to nine.
Speaker 2 (23:49):
What's it go do next year?
Speaker 7 (23:51):
So January one, twenty twenty six, it's going to jump
up to fifteen million. Even even that makes the math easy,
it does so for a spout, you could shelter thirty.
So what I want to hone in on today the
number of states that have a state estate tax. It's
not particularly high, right, It's like high single digits, low
double digits, like somewhere around ten states have them. Yeah,
(24:13):
it's a little higher, it is double digits, but I
think I think it's.
Speaker 4 (24:16):
Fifteen And most of those thresholds are significantly lower than
the federal limit. Correct, Yes, I don't know if I
can say most, but we can a number of them. Yeah,
a number of them could be lower, like Massachusetts is
the worst.
Speaker 2 (24:29):
So I guess here's here's the question that I have.
Speaker 4 (24:33):
People that fall above the fifteen million, we talk about,
you know, what you can do in those situations quite
a bit.
Speaker 2 (24:39):
People that might be you.
Speaker 4 (24:40):
Know, on the borderline of a state, a state tax threshold,
you know, a two million dollars state, three million.
Speaker 2 (24:45):
We talk about those a lot.
Speaker 4 (24:47):
Yeah, how does someone who kind of falls like right
in the middle, like again high levels of wealth, you know,
eight to twelve million dollars estate so no federal issue,
but they might have a sizeable state issue that they
need to deal with. What kind of tools are out
there to help mitigate those and work through those situations?
Speaker 7 (25:08):
Yeah, that's that's perfect. I mean, the the answer you
have there is first and foremost, you still need your trust.
You still need your at that level, you're looking at
a revocable trust, probably a joint revocable trust. Probably don't
need two and you need it? Why not? And I'm assuming, Chuck,
that we're in a state with a state estate tax, right,
not just federal yes, state a state, yes. So I'll
(25:30):
just use mass as an example with the two million
dollar exemption.
Speaker 2 (25:34):
And so.
Speaker 7 (25:36):
First you need the joint revocable trust simply to obviously
avoid the probate. And I say, take care of federal
estate tax. And I know you're saying, Chuck, the exemption
is going to third fifteen million, This client is maybe
worth ten million somewhere in between there. Why do they
need to worry about the FED, Well, there's nothing you
need to worry about it. But when you do the
trust planning, you're going to shelter whatever the estate tax
(25:58):
exemption is in effect. When you die again, come a
new president right down the road, and new regimes in office,
that exemption could drop. We can't necessarily assume it's going
to stay at fifteen. It could fall to seven, and
so you need to be mindful of that. So you
need to do a planning just to take sure make
sure that you grab whatever the estate tax exemption is
and plus reportability reasons. If you die when it's high
(26:20):
and you leave a spouse, you want to make sure
you capture the unused exemption for the surviving spouse so
that in case they really lower the exemption for the
surviving when the surviving spouse dies, she will have that
unused exemption as a coupon in her pocket to take
care of that. For Massachusetts or other states that have
a state exemption, yeah, we want to make sure we
(26:42):
double the two million to four million, at least do that.
So if I'm at ten million, I'm sheltering four million,
but to your point, we still owe six million. Is
there something we can do for that? Yes, gifting. Gifting
is an option. Perhaps moving, of course there is always
an option, but gifting is an option. But then you
need to really analyze the gifting. Am I going to
(27:05):
gift high basis low basis assets? The big deal here
is that you've got to make sure that you're not
just when you make a gift. Now, in this situation,
you're not saving the forty percent piece, You're only saving
the mass piece. And if mass is at ten percent,
I don't want to give away something that traps capital
gain at twenty eight point eight percent. So think about
(27:26):
what you're gonna gift. But at least that's a little
guidelines for you.
Speaker 4 (27:29):
Talking with Todd Lutsky from the law firm of Cushing
and Dolan. Phone lines still have room on them at
eight eight eight to zero five two two sixty three.
That is the number to call to ask Todd your
estate planning questions.
Speaker 2 (27:42):
Live on air.
Speaker 4 (27:43):
Right now again room on the phone lines at eight
eight eight to zero five two two sixty three. This
is your chance to ask Todd your estate planning questions.
We're going to take a quick break, but when we
come back, we'll have more Todd and your questions right
after this. That phone number is eight eight eight to
zero five two two six three. Again it is eight
(28:05):
eight eight two zero five two two sixty three.
Speaker 1 (28:10):
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 4 (28:33):
Todd Letski is here to answer your questions about your
estate plan Again. Phone number is eight eight eight to
zero five two two six three. That is the number
to call so that Todd can answer your estate planning
questions live on air again eight eight eight to zero
five two two six three. Let's go to Steve in
New Hampshire. Steve, what is your question for mister Lotsky?
Speaker 5 (28:58):
Well, my question is is that I have retirement. I
have a step that's got a value of a little
over three million dollars. Got a brokerage account also that
a little over two million dollars. I'm sixty eight years
old and I've been going back and forth thinking or
(29:21):
considering switching some money over.
Speaker 3 (29:24):
It's a raw.
Speaker 5 (29:27):
And I'm not convinced that that's the way I should
go at this point, being that I don't know that
I can really convert over enough funds that's going to
make the difference when it comes down to my required
minimum distribution. And I am also still working.
Speaker 7 (29:48):
Are you married, I am kids, I have two yet grandkids?
Speaker 5 (29:56):
Yeah, just one?
Speaker 7 (29:57):
That was just one, okay, And so you're looking at
maybe five million dollars. I think that the whether you
flip it to a wroth or don't flip it to
a wroth and and so forth, I really think is
more of a financial planner's question. You might want to
sit with your advisor and and sort of, you know,
play out whether or not it makes sense to do that,
and what are the taxes I'm going to pay now
when I do that? But so is the but do
(30:20):
you have like an estate planning question in here somewhere?
Like I notice you've got a step and a brokerage account,
so I've got five million. You also need your house
and any other assets to determine whether or not a
state planning is important or is that not an issue?
Speaker 5 (30:36):
No, the estate planning, I'm trying to figure out how
this is going to work best for my estate and
for my children down the road. I know if the
money is in a step that helps them in a roth,
it helps them. But that's again secondary question.
Speaker 2 (30:55):
Do you how much?
Speaker 7 (30:56):
How much are you worth? Altogether? House money? Everything?
Speaker 5 (31:02):
About seven millions.
Speaker 7 (31:03):
So it's seven million dollars again, some being qualified money,
some being not qualified money. I get it. You know,
it's important to think from an income tax perspective and
how it fits into your estate plan as well. So
but just in general, for someone sixty eight seven million dollars,
we're probably looking at a joint revocable trust for you.
(31:25):
How we draft the joint trust to accommodate the step IRA,
which is a three million dollar asset, is important, And
that's why I'm recommending a joint trust, because with a
joint revocable trust, the three million can't go in there
while you're alive because there's a big income tax hit.
I get that, but it can get there when the
death of the survivor occurs. But when the first death,
(31:48):
I want to be able to cram down as much
as I can for state planning purposes. So if I
back out three million from year seven, I only have
four to deal with. Well, I want that whole four
to be down on the first death for a state
taxes and not divide it between a husband trust and
a wife trust.
Speaker 2 (32:05):
So I think we're.
Speaker 7 (32:06):
Talking about the same thing here in terms of taxes,
estate taxes, income taxes. But I think the joint trust
would work best for you because it will accommodate both
the large IRA asset, the large set and your estate planning.
And I don't think you're probably in a situation where
you need to worry about nursing home care. You're probably
self insured with the you know, the interests and the
(32:27):
and the money you can generate, the income that you
can generate with your with your assets, and then you
just need to decide how you want to leave these
assets to your children, you know, over time from a
generation skipping tax perspective, et cetera, divorce proofing, et cetera.
So hope that helps folks. That's a great estate planning question.
(32:48):
Let's just turn a minute for the guide though, And
one thing I didn't mention here to this caller Steve,
was that gifting was right. And the guide we're given
away is making the most of gifting assets right.
Speaker 2 (33:00):
It is.
Speaker 7 (33:00):
It is a guide that explains really whether you should
gift or not. And again, gifting didn't seem like a
huge deal for this past caller. It's not appropriate. However
for you it might be. But then you need to
know how to do it. Do I give it a
way outright to kids? Probably not? Maybe a gifting trust.
If I want to make big gifts, Do I put
it in a trust that I can keep control over
(33:22):
after I give it? Well, I would want that, So
espousal lifetime access trust comes up. There's a state tax
and income tax issues to consider and whether to gift
at all or not. Folks get the guide eight six
six eight four eight five six nine nine or Legal
Exchange Show dot com and learn how to make the
most of gifting assets eight six six eight four eight
(33:45):
five six nine nine or Legal Exchange Show dot com.
Speaker 4 (33:50):
Todd in the last segment, we were talking about, you
know kind of things to do to potentially mitigate state
level is state taxing?
Speaker 5 (33:59):
Yes?
Speaker 4 (34:00):
Is the assumption if you are if you do have
a large enough estate where you have a federal estate
tax liability? Are you using the same tools or they're
different ones that come into play based on the size
and scale of an estate.
Speaker 7 (34:14):
Yeah, and I think after the you know, the OBBBA,
if I said enough bees in there, the new Act
that passed, I think it's it's really important to talk
about those things because they left a lot of the
old rules in play. And so for larger estates, and
maybe a lot of times we don't speak enough about them,
but you know, for a larger estate, you're pushing close
(34:36):
to thirty million. When you're talking about larger you know,
these folks are going to be making much bigger gifts,
and gifts will matter.
Speaker 2 (34:45):
Then.
Speaker 7 (34:46):
Remember before we were talking about this, you know, ten
million dollar estate, and I'm saying, well, wow, if you
make a gift, you're really not helping to save the
forty percent estate tax rate. You're really only talking about
the state estate tax savings, which is closer to ten
(35:06):
twelve percent. Well that's not a huge savings. But as
you bring up, Chuck, if we're talking about larger estates,
now I'm not so worried about the carryover basis or
the trapping of the capital gain on the assets that
I give away, because now if I'm making a gift
(35:27):
at this larger level, I am saving you know, the
state and the federal estate tax, So that could be
fifty two percent. So let's just freazing numbers. Let's say
fifty percent. Well, if I give away something that saves
me at the fifty percent level and trap something at
the twenty eight percent level, I guess I'm okay with
(35:48):
that sure. And another reason I'd be okay with that
when you're dealing with those big numbers, is that tax
when you die is do nine months after you die.
It's a hard stop you gotta pay. I mean, you
could be faced with a down market. You could be
faced with a fire sale on real estate to come
(36:09):
up with the money you need to pay the tax.
Whereas if I've made the gift and I've built in
the capital gain, I get it, it's there, But the
kids don't have to sell it nine months after I'm dead.
They can play around with that capital gain, right, They
could say, well, you know what, I'll just hang on
(36:29):
to this. You know, as you know from a financial
planning standpoint, giving up. You know, selling all the time
isn't the right thing to do in a down market.
Maybe I know there's gain there, but if I've got
some losses built in, I can wait till I have
losses sell the lost items, then sell the gain items,
and offset the capital gain with the capital loss, so
(36:50):
you have a little more play with that capital gain
than you do with the death tax. That's a hard
and fast Hey, nine months you gotta pay, so I
think that's a little bit food for thought.
Speaker 4 (37:02):
Mister Lutsky, I appreciate you joining us today. Thank you
so much for the time.
Speaker 7 (37:05):
Thank you always a pleasure.
Speaker 1 (37:08):
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 Cushingdolan dot com.
The views expressed in this segment are solely those of
(37:28):
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
The Financial Exchange is produced by Money Matters Radio and
is hosted by employees of the Armstrong Advisory Group, a
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(00:20):
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Armstrong and Money Matters Radio do not compensate each other
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Exchange with Chuck Zada and Mark fan Daddy, your exclusive
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(01:06):
and Mark Fandetti.
Speaker 2 (01:10):
I believe that's us. Mark.
Speaker 3 (01:13):
Well, I hope so, because I blocked off the next
two hours.
Speaker 4 (01:18):
Well, even if you didn't, we've got your AI likeness
in studio with us. It's Chuck Zada, Mark Fandetai and
we are here too tell you about what's going on
in markets and in the economy. Today we kick things
off with a piece from Barons titled American corporations are
(01:38):
crushing it. This stock rally isn't just about tech, and
to cut to the chase in this piece, data from
LSG show that I expected year over year Q three
earnings growth for MAG seven tech Titans is fourteen percent,
but performance is broadening out with an estimated growth of
seven point eight percent for the other s and P
(01:59):
five hundred company. These a much narrower gap than in
recent quarters.
Speaker 3 (02:03):
Your thoughts mark a crushing it seems a little overly enthusiastic.
It's solid. I'm talking about the eight and a half
is percent growth. From this source and from earnings data
provider fact set, they estimate similar year over year earnings
growth for the period ending September thirtieth. Stocks are up
(02:24):
twice that though, so one way to interpret stocks being
up twice. What earnings are up? Is that the willingness
of investors to pay for future earnings is it? The
sale has gone up faster than earnings themselves. Said differently,
price to earnings ratios, and I'm using the trailing twelve
months pe price to earnings, and that's just what it
(02:46):
sounds like. It's a fraction. You can use other metrics
to come to the same conclusion. Investors are presumably pleased
with these results, but they're future assumptions are even more heady.
So if those aren't met, you know, it could be
a problem for equities. But I guess we should celebrate
(03:08):
a year of reasonably solid earnings growth.
Speaker 5 (03:10):
Yeah.
Speaker 4 (03:10):
I haven't done the the numbers myself on this, but
I'd be interested in seeing. So this separates you know,
MAG seven from the rest of the S and P five.
Speaker 2 (03:20):
That was helpful. I'm doing that, Yeah it is. But okay,
like what happens if I.
Speaker 4 (03:25):
Include you know, broad Common here, which is not MAG
seven but is a huge contributor to earnings growth, both
because of its size in the S and P five
hundred now and the area that it represents, which is
ai adjacent you know, what happens if we include Oracle,
which has been you know, a darling over the course
(03:47):
of this year as well, What what happens if that
gets you know, kind of included in that bucket there.
So I think that the message that I do think
is is out.
Speaker 2 (03:58):
There is Look, the overall picture.
Speaker 4 (04:02):
For the other four hundred and ninety three companies in
the S and P five hundred is not bad by
any means.
Speaker 2 (04:08):
It simply is. I think the best way to describe it.
Speaker 4 (04:12):
Is in line with historical norms, which like, if you
look at earnings growth in the S and P five
hundred historically generally averages around seven percent a year. Oh yeah,
and if you're within a couple you know, percentage point
or so of that. Yeah, there's there's nothing that is
a huge issue on that front. And the US economy,
despite a number of questions this year, has remained incredibly
(04:36):
resilient to this point and continues to show corporate profit
growth that is, I think, quite honestly in excess of
where a lot of people thought it would be at
this point. If you ask them, you know, in Q
one or early Q two, Hey, what do you think
is gonna happen with earnings this year. I think a
lot of people would have said, yeah, they're gonna get
(04:56):
you know, worse and challenge because of tariffs and this
and that. Some of that's mitigated by the fact that
the worst case tariffs were pulled off the table, but
companies have done a really good job of trying to
navigate them as well to this point. Now, this is
the place where you get to the question of, you know,
our corporate earnings the US economy, and the answer is
obviously no, because we do talk about quite often. Hey,
(05:20):
even though corporate earnings look pretty good right now, household
earnings there's some questions about, you know, kind of where
that pictures going for, in particular the bottom fifty percent
of incomes in households. So I think that you know,
you can you can kind of have both these things
happening at the same time. Where you say, look, households
(05:41):
are struggling because job creation is weak, Inflation is still
running around three percent, and it's kind of hard for
households in.
Speaker 2 (05:50):
A lot of cases to get by with that situation.
Speaker 4 (05:54):
But companies are doing well because part of the reason
that inflation is at three percent is that they're able
to raise prices a little bit in order to make
maintain margins, and demand is still really strong in the aggregate.
I know we've talked about, you know, housing being slow
and in a couple areas that have slowed down, like restaurants,
but aggregate demand continues to just hum along, and so
(06:14):
these two things can be reconciled, I think, especially when
you put in place the third thing that we've talked
about a lot, which is hey, a lot more spending
is being driven by the wealthy, and that's more asset
based spending, and if portfolios are up as they are
this year, that's not really going to be impacted.
Speaker 1 (06:32):
Yeah.
Speaker 3 (06:33):
I think there's a tendency. I certainly fall into this
trap of looking at the performance of the stock market,
and although it is although company, which is driven in
turn by company earnings as well as investor expectations for
future earnning. So there's that pe multiple so called expansion
component that we talked about earlier to stock market performance.
(06:53):
But you can be fooled by a strong stock market.
You can be a full to the extent that you
infer that that means everything that the gains from economic
growth are being reasonably widely are broadly distributed. They clearly aren't.
And I don't know what to make of Mark zandi
(07:14):
statistic that the top ten percent of the income distribution
accounted for about half of total spending in the second quarter,
a number that has been climbing relentlessly going back nearly
for decades.
Speaker 4 (07:29):
It's it's not good societally, No, we know that, you know,
and look, it's the big thing. In the United States
and pretty much in any successful country anywhere, you never
have a situation where the top ten percent of earners
are spending like ten to twenty percent of you know,
(07:50):
all spending in the US historically, Like if you go
back and look at the historical data that they've pulled
on this, it's typically somewhere in the mid thirty is
kind of where that concentration is. The top ten percent
you know, spent you know, thirty five to thirty eight
percent of all consumer spending. That's even like if you
look back at you know, times where we've said, hey,
(08:11):
this is a good economy and people are able to
you know, you know, find their way economically, you still
had you know, a skewed spending by that that top
ten percent I think the issues that we have right
now are twofold, you could even say threefold quite honestly,
with with how things are setting up. The first is
(08:33):
it's it's very clear that you get to a certain
point and it's just like, hey, so many people just
feel economically left behind because they're not in control of
their economic destiny, which dovetails into the second piece that
I hear a lot from people in their twenties. I
try to make an effort to talk to, you know,
people in their in their twenties a decent amount about
(08:55):
this stuff, because you know, you think about it, and
it's been twenty years since since I was you know,
someone young, you know, coming out of college basically, and
the like, the world is different now.
Speaker 2 (09:08):
I know.
Speaker 4 (09:08):
We always like to project kind of our past experiences
and like, well, why can't you just do like what
I did when I was younger? Man, When I was younger,
it was a different world, Like the iPhone had barely
just come out, Like it was not the same world.
So the people that are twenty three today are living
in a different world.
Speaker 2 (09:24):
Than I was at that time.
Speaker 4 (09:26):
And I realized that, and you talk to people at
that age and it's not just hey, I'm not making much,
but the path to being able to make it feels
narrower to them. I don't know if it actually is
or is not. I don't know if there's less upward
mobility today than there used to be, but it feels
(09:47):
like it to them and to a lot of their friends.
Speaker 2 (09:52):
I don't know if it's.
Speaker 4 (09:52):
True or not, but I know that it feels that way.
And the other piece that then, like doveta that kind
of the third piece that I pull together there is
there's also this looming thread of AI that everyone talks about,
and so I think a lot of young people are
also feeling, hey, if I don't make my money now,
I'm not gonna have a chance to because AI is
gonna just take out everything from a job perspective. And
(10:16):
this is partly why I think a lot of people
in their twenties are doing these financially reckless things like
you know, running up you know, big gambling debts and
prediction markets and all all this stuff that we look
at and we're like, hey, that's not that's not safe,
and they're like, yeah, you know what's not safe. Not
being able to pay my rent is kind of the
message that they give me.
Speaker 2 (10:35):
It's interesting, so.
Speaker 4 (10:37):
I don't either, but I realize that it's going on
and it's happening. I'm not saying it's good, bad, or
you know, new Trum'm just saying that it's happening, and
it doesn't feel like it's a healthy place for us
to be. Let's take a quick break here. When we
come back, let's talk a little bit about what we
are seeing in guild.
Speaker 2 (10:59):
Right after this.
Speaker 1 (11:00):
Text US six one seven three six two thirteen eighty
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This year's DAV five k is sold out, but you
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Eighth, a Castle Island and you can visit DAV fivek
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Speaker 4 (12:02):
Gold has been the the focus of investors over the
last couple of months since late August. Gold Well, gold
didn't decide to do anything. It's not scenty, and it
doesn't wake up and say, oh gee, I'm a gold rock.
Let me go do some stuff today.
Speaker 2 (12:17):
And why it sounds probably you think it would sound
like that.
Speaker 3 (12:20):
I sluggish? Sluggish, Yeah, sort of slug because it did move,
is it?
Speaker 5 (12:26):
Well?
Speaker 2 (12:26):
Is picture more like the enz from ward to the rings,
like oh, I'm gold, I need to go.
Speaker 3 (12:34):
Yeah.
Speaker 4 (12:34):
I think it's a little bit more peppy than that.
You know, I don't know, but I'm picturing it kind
of like look, you and I are both Italian. I'm
picturing it kind of like a gold chain, you.
Speaker 3 (12:44):
Know, like thinking of the Italian horn.
Speaker 2 (12:48):
I'm going there, badass, I'm going there with it. You know.
It's like, Hey, I'm a little bit of gold. You
want some of me? Yeah, of course you do.
Speaker 4 (12:56):
So in any case, gold went on just a an absolute,
a torrid rally up you know, almost thirty five percent
from late August through late last week, and it has
now promptly fallen on its face in the last couple
trading days, down you know, eight nine percent from that high.
(13:17):
And so investors, you know, are kind of looking just like, okay,
like what comes next? Like where does this go? And
the answer is, look, I have no idea exactly what
gold is going to do over the next week, month,
or you know, a couple months. But what I can
tell you is historically I talk to people about this
a lot. Investors want to hold gold the way they
(13:39):
should hold stocks, and they want to hold stocks the
way they should hold gold.
Speaker 2 (13:43):
What I mean by that.
Speaker 4 (13:44):
Is, if you look at the long term track record
of stocks, basically the conventional wisdom, and what the data
shows you is, yeah, you don't really know where US
equities are gonna go in any day, week, month, or year.
But if you look at the long term track record
over ten twenty thirty year rolling periods, you basically should
hold those stocks and not do anything with them as
(14:05):
long as they fit your risk tolerance and personal situation
totally different. Buy them, hold, them, sit on them, whatever
you want to do. But what do people want to
do with stocks? Hey, I'm gonna trade in and out.
I'm gonna zig when they zag, and and most people
quite honestly, aren't very good at it.
Speaker 2 (14:22):
You know.
Speaker 4 (14:23):
It's just most people are not winning stock pickers, especially
when you factor in things like transaction cost, taxes, all
that stuff. Most people are not winning stock pickers.
Speaker 2 (14:34):
They're just not.
Speaker 4 (14:36):
On the other hand, gold people say, well, gold's my
insurance policy. I gotta hold this forever in case it
hits the fan, Like I'm this is something I'm holding forever.
Speaker 2 (14:49):
And if you look at the long.
Speaker 4 (14:50):
Term track record of gold, it's basically punctuated by these
bursts of just tremendous price growth over short periods of time,
but and then long periods of time where it is
absolutely nothing because it's not in a creative asset in
any way, shape or form.
Speaker 3 (15:03):
Right, which is exactly what you'd expect from a form
of insurance your career. You bleed, you bleed, and then
eventually if things don't go well, but you're glad you've
got it, it pays off. And that's that's the way
to think about gold is distinguished from generative, as you say,
assets like.
Speaker 4 (15:18):
Equity, which the wild thing is you talk to people
about their insurance company and they're like, can't stand my
insurance company.
Speaker 2 (15:26):
Hate it.
Speaker 4 (15:27):
All I do is give them money. And you have
people talk about their gold and they're like, this is
my pet rock.
Speaker 2 (15:32):
Hmm, would you like it?
Speaker 4 (15:34):
Like it's it's just kind of wild, like they even
though it is insurance that provides them no tangible benefit
on a daily basis, because if you're just sitting there
looking at your gold, does it actually do anything for you?
Speaker 2 (15:48):
No, it doesn't.
Speaker 4 (15:49):
It is an insurance policy. Well, but people love looking
at that insurance policy.
Speaker 3 (15:55):
Yeah.
Speaker 2 (15:55):
No, one loves looking.
Speaker 4 (15:57):
At their thing from you know, so and so mutual
and being like, got to pay that premium again.
Speaker 3 (16:04):
Yeah, And I'm I think that actually makes a lot
of sense. How much gold a long term investor should
own depends on their risk tolerance. Maybe they don't think
they need insurance against whatever.
Speaker 2 (16:15):
You think.
Speaker 3 (16:15):
Gold provides a hedge against geopolitical turmoil, bad policy, tariff uncertainty,
an outbreak of inflation.
Speaker 2 (16:25):
Dollar defach or something like that, or.
Speaker 3 (16:27):
Yeah, or the traditional outbreaks. So we all have something
slightly different in mind. When we think about gold as
a hedge, your hedge, you're the scenario you're edging against
a little different than the one I'm conjuring up. Probably
I don't make it good.
Speaker 2 (16:42):
I don't believe in it is end of the world insurance.
Speaker 3 (16:44):
Well, yeah, because it's not really marketable and in the
end its use area.
Speaker 4 (16:49):
I always say, Look, if you really think the end
of the world's coming, you want plenty of arable land,
lots of animals, maybe a little bit of high ground,
and the ability to defend yourself.
Speaker 2 (17:00):
Gold provides you none of those things.
Speaker 3 (17:03):
No, probably not. It's way not easily marketable.
Speaker 5 (17:06):
You know.
Speaker 4 (17:06):
And by the way, once people find out that you
have a lot of it, not great in the end
of the world situation.
Speaker 2 (17:13):
You know.
Speaker 4 (17:13):
It's I know we all everyone likes to think they're
going to be the winners of the mad Max scenario.
I will tell you I would be the loser. I
would not be the winner in the mad Max scenario.
So I don't try to pretend that I would be.
Speaker 3 (17:26):
But I struggle with this issue. I should an investor,
a serious investor own gold, And part of it depends
on your frame of reference. I started working in the nineties.
Gold had been a horrible investment since nineteen eighty and
it continued to be a horrible investment for the next
several years. And I remember telling institutional investors at the time,
you don't need it, you don't want it, it's not generative,
the same things we would say about bitcoin today. Sure,
(17:49):
but there are periods, as I think you put it
very well, there's long periods of nothing happening punctuated by
periods of a lot of excitement in.
Speaker 2 (17:56):
Gold, and this year has been one of them.
Speaker 3 (17:58):
It has been. But does that this neither makes the
case for nor against gold.
Speaker 2 (18:05):
It doesn't help, but it doesn't.
Speaker 3 (18:06):
Help me at all as an analyst, unfortunately.
Speaker 1 (18:07):
No.
Speaker 4 (18:08):
But I do think it's one of those where it
comes back to that fundamental question of Hey, if you're
putting something in your portfolio, whether it's a precious metal
and equity, a bond, private credit instrument, fart coin, whatever
it might be, you know, whatever you're putting in your portfolio.
(18:28):
Adolescent Listen, we realized by accident, like two weeks ago
that fart coin actually exists.
Speaker 3 (18:34):
We yeah, he's a millionaire. Whoever started it? Yeah, Jimmy fart, Yeah,
Tony fart.
Speaker 2 (18:40):
Yeah, he's oh boy, no, it's it's fine.
Speaker 4 (18:45):
But word whatever is in My daughter learned how to
spell it this week.
Speaker 2 (18:51):
I'm not kidding.
Speaker 4 (18:52):
So we're out to dinner the other night and we
play She's five, but she loves to play Hangman with like,
you know, three four letter words because she like trying
to like start putting words together.
Speaker 2 (19:02):
And the first word she does, it's a four letter word.
Speaker 4 (19:05):
I'm like guessing letters and the last three are art,
and so naturally I guess C and I'm like, she's like, no,
it's not C. And I'm like, is it F? And
she's like, yeah, I spelled fart. I'm like, how did
you do that?
Speaker 2 (19:18):
You're like, you're five and you're spelling fart in Hangman.
That's a proud moment. It was a great one.
Speaker 4 (19:24):
But in any case, everything in your portfolio has to
have a purpose. Understand why gold may or may not
be in your portfolio according to your purposes. Quick Break,
Wall Street Watch and Ask Todd are next.
Speaker 1 (19:41):
Like us on Facebook and follow us on Twitter. Act
TFE show breaking business news is always first right here
on the Financial Exchange Radio Network. Time Now for Wall
Street Watch a complete look at what's moving market so
far today right here on the Financial Extreme Change Radio Network.
Speaker 6 (20:01):
Well its third quarter earning season ramps up. Markets today
are pulling back in negative territory right now. The Dow
is down by three tenths of one percent, or one
hundred and thirty three points. SMB five hundred also down
three tenths of one percent or twenty one points lower.
NASDAK down one hundred and fifty two points about two
thirds of one percent. Russell two thousand is down over
(20:24):
half a percent. Set Your Treasure reeled up one basis
point at three point nine seven four percent. In crude
oil up over two percent higher, trading a fifty eight
dollars and fifty one cents barrel. Netflix reported third quarter
earnings that miss street expectation, while its revenue matched estimates.
The streaming giant cut its extended operating margin for the
(20:47):
year to twenty nine percent from thirty percent, citing an
expense related to a dispute with Brazilian tax authorities, Netflix
sinking over nine percent. Following up on developing story where
CNBC's reporting that Warner Brothers Discovery rejected three paramount Skydance
offers as it fields broad buyout interest. Yesterday's reports said
(21:10):
Warner had received unsolicited interest from multiple parties. That stock
today's up modestly. Meanwhile, Beyond Meat is the latest meme
stock with wild gains continuing this week. Yesterday, shares in
the plant based meat alternative company rocketed one hundred and
forty percent higher after its signed a deal with Walmart
to expand distribution. Earlier this week, Round Hill Investments added
(21:34):
the stock to its meme stock. ETF shares today up
another one hundred percent. Elsewhere, shares an Intuitive Surgical jumping
sixteen percent higher after the maker of robotic assisted surgery
systems beat third quarter earnings expectations. Mattel down by two
percent after the barbie maker disappointed with its third quarter earning,
(21:57):
siting terrorists impacting North American sales. In after today's closing bell,
we'll see anticipated earnings from Tesla on Tucker Solva and
that is Wallstree Watch.
Speaker 1 (22:09):
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.
(22:30):
Visit Cushingdolan dot com. Now here's Todd Lutsky.
Speaker 4 (22:36):
Todd Lutsky from the law firm of Cushing and Dolan
joins us now in studio, and he's here to answer
your questions about your state plans. We got the phone
line open at eight eight eight two zero five two
two six three. The last couple of weeks we have
not been able to get through all of your questions,
So if you do want to have your question answered
(22:58):
by Todd, get calling early and often again. Eight eight
eight two zero five two two sixty three is the number.
One more time. That is eight eight eight two zero
five two two six three. The segment is asked Todd,
so you can ask Todd your questions. Mister Lutsky, How
are you doing today?
Speaker 7 (23:20):
I am never better? How you doing pretty good?
Speaker 1 (23:23):
Uh? Uh?
Speaker 2 (23:24):
Pretty good?
Speaker 7 (23:24):
Yeah? Only pretty good?
Speaker 2 (23:26):
I uh.
Speaker 4 (23:27):
I went on a date with a matador the other day,
a matador. Yeah, it didn't work out. No, too many
red flags yeah, definitely.
Speaker 2 (23:34):
Yeah.
Speaker 4 (23:34):
Real problem, Todd, want to talk to you a little
bit about is state tax thresholds today. Okay, federal limit
right now is currently just under fourteen million, is that right?
Speaker 2 (23:47):
Yeah?
Speaker 7 (23:48):
Thirteen nine to nine.
Speaker 2 (23:49):
What's it go do next year?
Speaker 7 (23:51):
So January one, twenty twenty six, it's going to jump
up to fifteen million. Even even that makes the math easy,
it does so for a spout, you could shelter thirty.
So what I want to hone in on today the
number of states that have a state estate tax. It's
not particularly high, right, It's like high single digits, low
double digits, like somewhere around ten states have them. Yeah,
(24:13):
it's a little higher, it is double digits, but I
think I think it's.
Speaker 4 (24:16):
Fifteen And most of those thresholds are significantly lower than
the federal limit. Correct, Yes, I don't know if I
can say most, but we can a number of them. Yeah,
a number of them could be lower, like Massachusetts is
the worst.
Speaker 2 (24:29):
So I guess here's here's the question that I have.
Speaker 4 (24:33):
People that fall above the fifteen million, we talk about,
you know, what you can do in those situations quite
a bit.
Speaker 2 (24:39):
People that might be you.
Speaker 4 (24:40):
Know, on the borderline of a state, a state tax threshold,
you know, a two million dollars state, three million.
Speaker 2 (24:45):
We talk about those a lot.
Speaker 4 (24:47):
Yeah, how does someone who kind of falls like right
in the middle, like again high levels of wealth, you know,
eight to twelve million dollars estate so no federal issue,
but they might have a sizeable state issue that they
need to deal with. What kind of tools are out
there to help mitigate those and work through those situations?
Speaker 7 (25:08):
Yeah, that's that's perfect. I mean, the the answer you
have there is first and foremost, you still need your trust.
You still need your at that level, you're looking at
a revocable trust, probably a joint revocable trust. Probably don't
need two and you need it? Why not? And I'm assuming, Chuck,
that we're in a state with a state estate tax, right,
not just federal yes, state a state, yes. So I'll
(25:30):
just use mass as an example with the two million
dollar exemption.
Speaker 2 (25:34):
And so.
Speaker 7 (25:36):
First you need the joint revocable trust simply to obviously
avoid the probate. And I say, take care of federal
estate tax. And I know you're saying, Chuck, the exemption
is going to third fifteen million, This client is maybe
worth ten million somewhere in between there. Why do they
need to worry about the FED, Well, there's nothing you
need to worry about it. But when you do the
trust planning, you're going to shelter whatever the estate tax
(25:58):
exemption is in effect. When you die again, come a
new president right down the road, and new regimes in office,
that exemption could drop. We can't necessarily assume it's going
to stay at fifteen. It could fall to seven, and
so you need to be mindful of that. So you
need to do a planning just to take sure make
sure that you grab whatever the estate tax exemption is
and plus reportability reasons. If you die when it's high
(26:20):
and you leave a spouse, you want to make sure
you capture the unused exemption for the surviving spouse so
that in case they really lower the exemption for the
surviving when the surviving spouse dies, she will have that
unused exemption as a coupon in her pocket to take
care of that. For Massachusetts or other states that have
a state exemption, yeah, we want to make sure we
(26:42):
double the two million to four million, at least do that.
So if I'm at ten million, I'm sheltering four million,
but to your point, we still owe six million. Is
there something we can do for that? Yes, gifting. Gifting
is an option. Perhaps moving, of course there is always
an option, but gifting is an option. But then you
need to really analyze the gifting. Am I going to
(27:05):
gift high basis low basis assets? The big deal here
is that you've got to make sure that you're not
just when you make a gift. Now, in this situation,
you're not saving the forty percent piece, You're only saving
the mass piece. And if mass is at ten percent,
I don't want to give away something that traps capital
gain at twenty eight point eight percent. So think about
(27:26):
what you're gonna gift. But at least that's a little
guidelines for you.
Speaker 4 (27:29):
Talking with Todd Lutsky from the law firm of Cushing
and Dolan. Phone lines still have room on them at
eight eight eight to zero five two two sixty three.
That is the number to call to ask Todd your
estate planning questions.
Speaker 2 (27:42):
Live on air.
Speaker 4 (27:43):
Right now again room on the phone lines at eight
eight eight to zero five two two sixty three. This
is your chance to ask Todd your estate planning questions.
We're going to take a quick break, but when we
come back, we'll have more Todd and your questions right
after this. That phone number is eight eight eight to
zero five two two six three. Again it is eight
(28:05):
eight eight two zero five two two sixty three.
Speaker 1 (28:10):
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 4 (28:33):
Todd Letski is here to answer your questions about your
estate plan Again. Phone number is eight eight eight to
zero five two two six three. That is the number
to call so that Todd can answer your estate planning
questions live on air again eight eight eight to zero
five two two six three. Let's go to Steve in
New Hampshire. Steve, what is your question for mister Lotsky?
Speaker 5 (28:58):
Well, my question is is that I have retirement. I
have a step that's got a value of a little
over three million dollars. Got a brokerage account also that
a little over two million dollars. I'm sixty eight years
old and I've been going back and forth thinking or
(29:21):
considering switching some money over.
Speaker 3 (29:24):
It's a raw.
Speaker 5 (29:27):
And I'm not convinced that that's the way I should
go at this point, being that I don't know that
I can really convert over enough funds that's going to
make the difference when it comes down to my required
minimum distribution. And I am also still working.
Speaker 7 (29:48):
Are you married, I am kids, I have two yet grandkids?
Speaker 5 (29:56):
Yeah, just one?
Speaker 7 (29:57):
That was just one, okay, And so you're looking at
maybe five million dollars. I think that the whether you
flip it to a wroth or don't flip it to
a wroth and and so forth, I really think is
more of a financial planner's question. You might want to
sit with your advisor and and sort of, you know,
play out whether or not it makes sense to do that,
and what are the taxes I'm going to pay now
when I do that? But so is the but do
(30:20):
you have like an estate planning question in here somewhere?
Like I notice you've got a step and a brokerage account,
so I've got five million. You also need your house
and any other assets to determine whether or not a
state planning is important or is that not an issue?
Speaker 5 (30:36):
No, the estate planning, I'm trying to figure out how
this is going to work best for my estate and
for my children down the road. I know if the
money is in a step that helps them in a roth,
it helps them. But that's again secondary question.
Speaker 2 (30:55):
Do you how much?
Speaker 7 (30:56):
How much are you worth? Altogether? House money? Everything?
Speaker 5 (31:02):
About seven millions.
Speaker 7 (31:03):
So it's seven million dollars again, some being qualified money,
some being not qualified money. I get it. You know,
it's important to think from an income tax perspective and
how it fits into your estate plan as well. So
but just in general, for someone sixty eight seven million dollars,
we're probably looking at a joint revocable trust for you.
(31:25):
How we draft the joint trust to accommodate the step IRA,
which is a three million dollar asset, is important, And
that's why I'm recommending a joint trust, because with a
joint revocable trust, the three million can't go in there
while you're alive because there's a big income tax hit.
I get that, but it can get there when the
death of the survivor occurs. But when the first death,
(31:48):
I want to be able to cram down as much
as I can for state planning purposes. So if I
back out three million from year seven, I only have
four to deal with. Well, I want that whole four
to be down on the first death for a state
taxes and not divide it between a husband trust and
a wife trust.
Speaker 2 (32:05):
So I think we're.
Speaker 7 (32:06):
Talking about the same thing here in terms of taxes,
estate taxes, income taxes. But I think the joint trust
would work best for you because it will accommodate both
the large IRA asset, the large set and your estate planning.
And I don't think you're probably in a situation where
you need to worry about nursing home care. You're probably
self insured with the you know, the interests and the
(32:27):
and the money you can generate, the income that you
can generate with your with your assets, and then you
just need to decide how you want to leave these
assets to your children, you know, over time from a
generation skipping tax perspective, et cetera, divorce proofing, et cetera.
So hope that helps folks. That's a great estate planning question.
(32:48):
Let's just turn a minute for the guide though, And
one thing I didn't mention here to this caller Steve,
was that gifting was right. And the guide we're given
away is making the most of gifting assets right.
Speaker 2 (33:00):
It is.
Speaker 7 (33:00):
It is a guide that explains really whether you should
gift or not. And again, gifting didn't seem like a
huge deal for this past caller. It's not appropriate. However
for you it might be. But then you need to
know how to do it. Do I give it a
way outright to kids? Probably not? Maybe a gifting trust.
If I want to make big gifts, Do I put
it in a trust that I can keep control over
(33:22):
after I give it? Well, I would want that, So
espousal lifetime access trust comes up. There's a state tax
and income tax issues to consider and whether to gift
at all or not. Folks get the guide eight six
six eight four eight five six nine nine or Legal
Exchange Show dot com and learn how to make the
most of gifting assets eight six six eight four eight
(33:45):
five six nine nine or Legal Exchange Show dot com.
Speaker 4 (33:50):
Todd in the last segment, we were talking about, you
know kind of things to do to potentially mitigate state
level is state taxing?
Speaker 5 (33:59):
Yes?
Speaker 4 (34:00):
Is the assumption if you are if you do have
a large enough estate where you have a federal estate
tax liability? Are you using the same tools or they're
different ones that come into play based on the size
and scale of an estate.
Speaker 7 (34:14):
Yeah, and I think after the you know, the OBBBA,
if I said enough bees in there, the new Act
that passed, I think it's it's really important to talk
about those things because they left a lot of the
old rules in play. And so for larger estates, and
maybe a lot of times we don't speak enough about them,
but you know, for a larger estate, you're pushing close
(34:36):
to thirty million. When you're talking about larger you know,
these folks are going to be making much bigger gifts,
and gifts will matter.
Speaker 2 (34:45):
Then.
Speaker 7 (34:46):
Remember before we were talking about this, you know, ten
million dollar estate, and I'm saying, well, wow, if you
make a gift, you're really not helping to save the
forty percent estate tax rate. You're really only talking about
the state estate tax savings, which is closer to ten
(35:06):
twelve percent. Well that's not a huge savings. But as
you bring up, Chuck, if we're talking about larger estates,
now I'm not so worried about the carryover basis or
the trapping of the capital gain on the assets that
I give away, because now if I'm making a gift
(35:27):
at this larger level, I am saving you know, the
state and the federal estate tax, So that could be
fifty two percent. So let's just freazing numbers. Let's say
fifty percent. Well, if I give away something that saves
me at the fifty percent level and trap something at
the twenty eight percent level, I guess I'm okay with
(35:48):
that sure. And another reason I'd be okay with that
when you're dealing with those big numbers, is that tax
when you die is do nine months after you die.
It's a hard stop you gotta pay. I mean, you
could be faced with a down market. You could be
faced with a fire sale on real estate to come
(36:09):
up with the money you need to pay the tax.
Whereas if I've made the gift and I've built in
the capital gain, I get it, it's there, But the
kids don't have to sell it nine months after I'm dead.
They can play around with that capital gain, right, They
could say, well, you know what, I'll just hang on
(36:29):
to this. You know, as you know from a financial
planning standpoint, giving up. You know, selling all the time
isn't the right thing to do in a down market.
Maybe I know there's gain there, but if I've got
some losses built in, I can wait till I have
losses sell the lost items, then sell the gain items,
and offset the capital gain with the capital loss, so
(36:50):
you have a little more play with that capital gain
than you do with the death tax. That's a hard
and fast Hey, nine months you gotta pay, so I
think that's a little bit food for thought.
Speaker 4 (37:02):
Mister Lutsky, I appreciate you joining us today. Thank you
so much for the time.
Speaker 7 (37:05):
Thank you always a pleasure.
Speaker 1 (37:08):
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 Cushingdolan dot com.
The views expressed in this segment are solely those of
(37:28):
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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