February 11, 2026 • 38 mins
Chuck Zodda and Marc Fandetti break down a stronger-than-expected January jobs report showing 130,000 new jobs added and unemployment ticking down to 4.3%. With wage growth accelerating and inflation still elevated, the discussion turns to whether the Federal Reserve has misread the economy and whether markets are wrongly pricing in rate cuts later this year. The hosts also explore how fiscal stimulus, tariffs, immigration shifts, and historically low unemployment complicate traditional economic modeling. Later in the hour, Todd Lutsky of Cushing & Dolan joins for “Ask Todd,” answering listener questions about irrevocable trusts, tax ID numbers, estate planning costs, and income flexibility within Medicaid planning structures.
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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 Mark Vandebbi.
Speaker 2 (01:09):
Chuck, Mark and Tucker with you here and as we
kick things off today, top story that we're gonna be
talking about is the jobs report from this morning, which
came in with one hundred and thirty thousand jobs created
for the month of January. The unemployment rate dropped from
(01:30):
four point four to four point three percent, and quite honestly,
when looking through this report, there's very little to be
upset about. I think it is an incredibly solid report
all around, especially given the questions that have been building
surrounding the labor market and whether there's some weakening that
(01:52):
and whether the weakening that we've seen the last few
years would continue January and on the whole now I
think probably pointing towards the potential at least for some
green shoots in the labor market, with this report being
one of them. But ultimately, Mark, I think this is
a really good report, albeit one that still needs confirmation
in the coming months that it's not an outlier.
Speaker 3 (02:14):
Yeah, there was probably too much cynicism or concern about
the labor market given the economic growth backdrop, which was solid.
I never fully understood the economic concerns given that the
only thing that seemed to be sick. Well, there were
a couple of high level labor market indicators that seemed
to be pointing toward weakening, but it wasn't clear that
(02:36):
that wasn't just normalization. It's becoming a little clearer. I'm
not going to say that that hypothesis, if you will,
is confirmed by this. We need to see a little
bit more you know data, as we always say, But
labor market doesn't appear to be weak unemployed. If anybody
told you ten years ago, twenty years ago, GE's word
at four points something percent unemployment and everybody's worried, they
(02:57):
would have said you were crazy. Strong economic growth, historically
low unemployment, elevated inflation. Unclear to me why anybody would
think we needed or need FED easing.
Speaker 2 (03:11):
So looking at this when we talk about the labor market,
the reasons why, if we talk about the reasons why
we've been concerned about it over the last you know,
six to nine months. I know there's been sporadic concerns
for the last several years now. Much of that the
first couple of years of the labor market slowing, I
think was clearly normalization. But I think that when we
look at the last six months. The reason for concern
(03:34):
has there's been a few different items. The first is
just the pace of job growth has continued to drop
to you know, net net pretty close to zero on
a monthly basis. Number two, job openings have continued to
drop down, such that when we look at the beverage curve,
which relates the job opening's rate to the unemployment rate,
(03:54):
we started to get into some dangerous territory there, albeit
you know, not one that actually showed any real problems
in this cycle. Here other rates in the Jolts report,
the higherst rate continue to tick down, the quits rate
ticked down, and so it was this you know, consistent
message that we were getting that hiring was slowing, labor
(04:14):
market mobility was slowing, and you know, that was becoming
problematic a lot of surveys, by the way, you know,
you ask people how they feel about the labor market,
and they're saying it's harder to get a job. So
I think that when we look at this the positive
signs that we've seen this month, by this month I
really mean January, from the January data, we have seen
(04:34):
continuing unemployment claims go from rising four to six percent
year over year to being flat for the first few
months of the year. We've seen indeed's job openings data
stabilize and start to maybe show a little bit of
improvement over a short time period.
Speaker 4 (04:51):
And now we've got this job's report.
Speaker 2 (04:53):
So I think on the whole, you look at it
and it points to the January data being stro longer.
Speaker 4 (05:00):
Here.
Speaker 2 (05:01):
Is that enough to put any of those labor market
concerns to bed. I don't think completely, But this is
a fantastic report that at least for this month says, yeah,
things may be getting better, and if we can see
some follow through, that will be a fantastic start to
the year for a labor market that's had some questions.
Speaker 3 (05:22):
Yeah, you cited a bunch of economics statistics. From the
Fed's point of view, I think there are a couple
big things that matter and the models that they use.
One is unemployment, the other is vacancies. Vacancies have come down,
the number of job openings that firms post have come down,
but there's still a lot higher relative to the available
(05:44):
pool of labor relative to unemployed people than they were
prior to roughly twenty nineteen twenty eighteen, when something about
that relationship changed. It's just not clear to me it
hasn't been. It's still not clear whether this labor market
is just sort of normal. Look, we never know what
the right the so called natural, equivalently non inflationary rate
(06:06):
of unemployment is. Is it four point five that'd be
very low historically speaking, is it five that'd be closer
to the ballpark historically speaking? That is an unemployment rate
that doesn't push up, that doesn't reflect too much demand
pushing against the productive limits of the economy, thus pushing
up inflation. As you know, as you could tell by
my tone, and I don't, I don't, I don't want to.
(06:29):
I don't want to, like not share in your enthusiasm,
your your excitement. My word not maybe the one you
would choose about this report. But I'm really concerned that
the FED has misread the economy, has overstimulated it. The
recent rate cuts effect, by the way, hasn't even made
its way through to the real economy yet.
Speaker 4 (06:49):
Talk to me about that.
Speaker 2 (06:51):
Yeah, give me a little bit more detail in terms
of what you're seeing, because in look in the broad
scheme of things, when we look at twenty twenty five data,
the unemployment rate moved up over the course of twenty
twenty five. It did, and on the inflation side of things,
we basically saw inflation inflect upward modestly, but mostly on
(07:13):
the good side. They could be explained away by tariff.
So walk me through the concern that you have, just
so our listeners can understand it better.
Speaker 3 (07:21):
The way the way you think, the way economists think
about the right policy rate for the FED is to
weigh unemployment and changes no unemployment against inflation. You could
also you could substitute vacancies or GDP relative to potential GDP.
You're trying to get it, is there slack in the economy,
(07:42):
and notwithstanding last year's signs of stalling in the labor market,
there were few other signs of slack. Inflation did not
fall dramatically GDP. There was a little hiccup the in
the second quarter, but we've recovered, and that's an understatement,
recovery dramatically. From that, financial conditions are loose, it's easy
(08:04):
to get your hands on capital, and related to that,
stocks are at all time highs. It seems very odd
to me that anybody would be worried given that sort
of constellation of facts and thinking about it through traditional
economic lens. Seems odd to me that anybody would be
thinking this economy needs stimulus, which is exactly what we're doing.
(08:25):
Fiscal policy is loosening, tax rebates, tax cuts, Monetary policy
is eased. I was going to say considerably, maybe modestly
is a better term, but it's eased, and it's eased
into elevated inflation and very low unemployment. All that strikes
me is weird.
Speaker 2 (08:42):
I think weird is a fair characterization real Just again,
it's this isn't economy that I do think it's hard
to get a handle on it.
Speaker 4 (08:52):
And look, we clearly.
Speaker 2 (08:54):
Have different cross currents that are going on at the
moment in the economy, and so I think that in
trying to sort through, you know, what is actually happening here,
given some of the policy shifts that we've seen in
the last year, which are ones by the way that
no living economists is seen during their lifetime, you know what,
(09:17):
when when's the last time the United States had, you know,
any kind of significant increase in tariff's mark?
Speaker 4 (09:26):
One hundred years ago? Yeah, you know, we're talking one
hundred years ago.
Speaker 3 (09:29):
So that those were well studied. We may not have
they might.
Speaker 2 (09:33):
It was a different world than though, you know, like
it's yes, they were well studied for the time period,
but the airplane didn't exist, you know, the Internet didn't exist.
So the impacts can be different and they can show
up differently with different delays in different you know, substitutions
that can happen. I'm not saying that the research on
those is inaccurate. I'm just saying it's a different world
(09:55):
from them.
Speaker 3 (09:56):
I'd say price rigidity is price rigidity. I mean it
all else equal tariffs push up prices full.
Speaker 4 (10:01):
Stop, which they have.
Speaker 3 (10:03):
I'm not saying they have it, I know, and I'm
not saying you say what what I'm what.
Speaker 2 (10:06):
I'm trying to say, Mark is actually living through something
is different from reading about it. I can't actually the
actually no, but the actual like impacts in terms of Hey,
when we read about smoot Holly, we say, okay, it
increased prices in X y Z fashion. Does that happen
(10:27):
faster now because the world is more integrated and decisions
can be made more quickly. Does that speed mean that
it ends up having a larger or smaller impact than
These are things that are fundamentally different because it's not
the same world as.
Speaker 4 (10:44):
It was then.
Speaker 3 (10:44):
Well and it Yeah, but this was just one example. Yeah,
it definitely never is.
Speaker 2 (10:49):
Again, I'm just trying to say, on the immigration side,
when's the last time the US had negative immigration?
Speaker 3 (10:56):
Possibly probably the same period, the twenties.
Speaker 2 (10:59):
So again, haven't lived through something like this to know
how it may directly?
Speaker 4 (11:05):
I see what true.
Speaker 3 (11:06):
So you're saying, Morley, it's not like you have to
be there observing it because most people, myself included, are
clueless when you're in the moment. But you're saying it doesn't.
It's going to play out differently every time, so you can't.
I mean, this is a version of what one economist
Bob Lucas called the Lucas ended up being called the
Lucas critique. You cannot take past estimates and apply them
to say future activity, because agents expectations change. He said
(11:30):
it with respect to policy, but you can apply it
more broadly. Yeah, I see what you're saying.
Speaker 4 (11:35):
So let's take a quick break.
Speaker 2 (11:36):
When we return, let's talk a little bit about how
this mark kind of alluded to it, how this job
support may or may not impact FED policy looking forward.
Speaker 1 (11:49):
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Speaker 2 (12:40):
Market's talk a little bit about this job support in
the context of future FED meetings. So the CME has
their Fedwatch tool that basically allows us to see projected
probabilities for future meetings and you know, compare it to
what they were in the past. So, just as an
example yesterday, if you look to the upcoming meeting for
(13:02):
March eighteenth, there's a twenty percent chance of a rate
cut happening, then seventy nine percent chance.
Speaker 4 (13:07):
Of no cut.
Speaker 2 (13:08):
Today, in light of this new data, only a six
percent chance of a rate cut ninety four percent chance
of no action if we go out further. Let's look
at the July meeting, just as an example. At the
if we looked yesterday, there was only a twenty i'm sorry,
only a fifteen percent chance that rates were still where
(13:28):
they were art are today. Now it's up to a
twenty five percent chance that rates are still where they
are today by the end of July. When we go
to the December meeting. Previously, there was only a nineteen
i'm sorry, a four point eight percent chance that rates
were still where they are today. Now it's up to
a seven point one. So overall, the what's being priced
(13:52):
in here at this point is basically, hey, if there
are going to be rate cuts. There's not a huge
shift when you look at later in the year, but
it's basically saying, hey, if there are to be rate cuts,
they're gonna have to start later than originally projected.
Speaker 4 (14:07):
And you still do have.
Speaker 2 (14:09):
When you look at the probabilities and the aggregate two
cuts being priced in this year. I will say I'm
in complete agreement with you in that. Look, if we
get more reports that show what we saw in this
report here you are not seeing. I will go so
far as to say you are not seeing rate cuts
by the end of the year. You are seeing rate
hikes by the end of the.
Speaker 3 (14:29):
I'd like to put a simple question to these people
who think they're gonna be rate cuts this year, given
what we know today, are you crazy?
Speaker 4 (14:36):
I don't know. No, Go ahead, listen. I don't think
they're necessarily crazy.
Speaker 3 (14:41):
What are they But they're making assumptions about the future
of the economy and ignoring what we know factually. What
is concrete. What is concrete is that inflation is elevated.
What is concrete is that unemployment is epically low by
historical standards. What is concrete is that we're pouring a
lot of fiscal and monet Harry, especially if you count
those MBS's that the administration told its people over at
(15:06):
Freddy to to buy. We're lavishing stimulus on the economy
at a time of elevated inflation, very low unemployment, and
massive deficits. You'd have to be predicting some something that
the rest of us don't have the gifts to foresee,
some kind of economic a calamity or unexpected dramatic slowdown.
Speaker 2 (15:29):
Isn't the thing that they could be predicting. Again, hear
me out on this, because I'm one of the PEPs.
I don't expect I was this year. I know, I know,
But in the context of let's look at the unemployment rate,
and specifically the unemployment rate over the last year or so,
if we go back to January of January of twenty
(15:55):
five and we say, okay, like, where was unemployment, then
we were at four point I'm sorry, four percent. Even
we then rose, okay, to get up to four point
six percent with that November report. Initially that's subsequently been
revised down to four point.
Speaker 4 (16:11):
Five with the updates that we've seen.
Speaker 2 (16:14):
But you saw unemployment rise by half a percent last year,
given the continued weakness that we'd seen in the labor
market and the fact that until the last month of data,
there didn't seem to be any meaningful turn that could
be happening, and even this it's still early, in my opinion,
Is it something where someone could reasonably say unemployment's gone
(16:37):
up by half a percent. We're getting into the dangerous
part of the beverage curve, where unemployment starts to ratchet
up more rapidly and more exponential fashion. And as such,
rate cuts in the fall were warranted, you.
Speaker 3 (16:51):
Because unapployment to say that, because.
Speaker 2 (16:55):
With the dual mandate, unemployment was moving up more rapidly
than inflation one, and so the Fed could make a
judgment call to say, yes, inflation is a problem, but
unemployment is the more urgent, more imminent one, and so
let's try to address that.
Speaker 3 (17:08):
Before looking at this, you would have to explain why
your estimate of the natural rate is outside the bounds
of virtually every all historical experience. You would have to,
And I know there are plenty of widely respected economists
far more accomplished than say I am. You know, PhD
academics and people who thought rates needed to come down.
I respectfully, using in some cases the textbooks and papers
(17:31):
that they wrote in my reasoning, came to the conclusion
that wait a minute, you might be wrong about your
estimate of the natural rate. You don't and sometimes we
throw around the term natural rate. We're referring to GDP
potential GDP sometimes we're referring to the rate that the
Fed should set the Fed funds rate at. I'm referring
here to the rate of unemployment that is consistent with
stable inflation. That's one way to define it and good
(17:53):
for our purposes. How do you know that it should
be four point five? You've got to make a case
for that, And don't give me some ai productivity story,
perhaps tariffs and all the restructuring of the economy that's
going on under this new administration. And you may like it,
you may hate it, but you can't deny there's been
some pretty dramatic and it's ongoing economic restructuring. If we're
(18:13):
gonna look more like the economy of the fifties and sixties,
the natural rate should probably be closer to what it
was then than where it was in the late nineties
and even more recently, which suggests to me somewhere in
the five to six percent range if you want non
inflationary unemployment. I'm not saying i'd hang my hat on that,
but I don't get why, maybe because it's maybe they're
just commentators throwing something out there. They're not thinking rigorously
(18:37):
if you think it through.
Speaker 2 (18:39):
And if you want the evidence that inflation could potentially
evolve into the bigger problem.
Speaker 4 (18:49):
As we go through this year.
Speaker 2 (18:52):
Take a look at the wage growth data from the
last three months. Two of the last three months now
printing point seven percent month over month average weekly earnings gains.
That's an eight and a half percent annualized clip. That
is freaking hot.
Speaker 4 (19:07):
Now.
Speaker 2 (19:08):
The other one did show a modest decline. But if
you start seeing anything that looks like that, you've got problems,
because then employers need to raise their prices in order
to cover those wage gains, and that is something to
watch out for if this continues. Quick Break Wall Street
watches next, followed by Ask tod.
Speaker 1 (19:28):
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on the Financial Exchange Radio Network. Time now for Wall Street.
Watch a complete look at what's moving market so far
today right here on the Financial Exchange Radio Network.
Speaker 5 (19:47):
Market's pulling back after opening the day in positive territories.
Wall Street reacts to a stronger than expected January jobs report,
where one hundred and thirty thousand jobs were added last month,
above expectations of sixty five thousand. The unemployment rate also
ticked lower to four point three percent. Right now, the
Dow is off about a third of a percent, SMB
(20:08):
five hundred down about a quarter percent, NASDAC down just
over half a percent, Russell two thousand selling off about
nine tenths of one percent. Tenure Treasure yield is up
two basis points at four point one six eight percent,
and crude oil up over one and a half percent higher,
trading above sixty five dollars.
Speaker 4 (20:29):
A barrow.
Speaker 5 (20:30):
Craft Hens announced this morning it is pausing work on
a previously announced plan to split the company, stating that
many of the company's issues are fixable and within its control.
Shares and craft Hines are flat at the moment. Meanwhile,
shares a Warner Brothers Discovery edging higher after The Wall
Street Journal reported that activist investor and Kora built a
near two hundred million dollars stake in Warner and plans
(20:53):
to oppose its deal with Netflix, saying Warner failed to
adequately engage with paramounts rival offer. Netflix shares down two
percent elsewhere, Maderna falling eleven percent following news that the
FDA refused to review the drugmaker's application to sell a
new seasonal flu vaccine. Humanics stock down two percent despite
(21:17):
the health insurance company beating on both profit and revenue
forecast for its most recent quarter. Zillow sinking seventeen percent
after the home listing platform reported a lower than expected
ebit arrange for the first quarter, and shares and toy
manufacturer Mattel plunging twenty five percent after it missed earnings
in revenue expectations for the fourth quarter. Both City Group
(21:40):
and JP morgan Chase also downgraded the stock. I'm Tucker
Silva and that is Waltree.
Speaker 1 (21:47):
Watch. This is Asked Todd on the Financial Exchange Radio Network.
If you have an existing estate plan or in the
market for one, Tod Letsky is here to answer your
questions and help you plan for a later life. 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.
(22:10):
Visit Cushingdolan dot com. Now here's Todd Lutsky.
Speaker 2 (22:16):
And we are now joined by Todd Lutsky for Ask
Todd Get your Estate planning questions ready, because this is
your chance to ask them to Todd live on air
right now.
Speaker 4 (22:28):
Phone lines are open at eight eight eight.
Speaker 2 (22:31):
To zero five two two six three, So get calling
early and often because we can usually get through two
or three questions once we start getting into four or
five then and so, boy, I don't know if we
can handle that. So again, the number is eight eight
eight to zero five two two six three. You got
(22:51):
a state planning questions? Todd Lutsky is going to try
to answer him right now.
Speaker 4 (22:55):
Again.
Speaker 2 (22:55):
That phone number is eight eight eight to zero five six'.
Three Mister, Lutsky how are you? DOING i am never
better in you? GOOD i was at the circus the other.
Day yeah you like? That not a great, Show the
Lion ate the Tightrope. Walker oh, yeah it was a
well balanced. MEAL i bet so not.
Speaker 4 (23:17):
Good not, Good todd want to talk to.
Speaker 2 (23:19):
You let's say that someone has not done any estate,
Planning they've never met with an. Attorney they're, like, NO
i didn't need, IT i don't need. It but WELL
i GUESS i do need, it because everyone at some
point needs an. Attorney, yeah what should someone expect as
they go through the estate planning, process like what are
the things that the boxes that you want to see
(23:41):
that estate planning attorney check as they're going.
Speaker 6 (23:43):
Through, yeah this is really. Important the whole IDEA i
think behind this, Question, chuck IF i, may is you,
know how DO i get? Started how DO i kick
off my estate? Planning? Right what DO i think? About
what are the? Checklists if you? Will so couple of.
Things you, first you, know talk about how old AM
i because age could impact the type of plan that we. Do,
(24:07):
Right so if WE'RE i just throw out like sixty and,
OVER i might, say, well you KNOW i want the.
Basics of, course you, know, taxes, probate bloodline. Planning those
are always important because you, know everybody, dies but not
everybody goes to a nursing. Home but If i'm sixty and,
OVER i might add that to my checklist BEFORE i get. Started, so,
(24:28):
OKAY i got to think about. That next versus let's
Say I'm i'm you, know thirty five with young. Kids,
well probably nursing home planning is not on the to do.
Speaker 1 (24:38):
List.
Speaker 6 (24:39):
Now, next valuation how large is my?
Speaker 3 (24:43):
Estate?
Speaker 6 (24:43):
Right and WHEN i say, valuation it's not just, valuation
but maybe at the same time you're thinking of, valuation
you think about what's included in my? Estate what DO
i have to? Value so things like real, estate rental,
properties vacation, Homes, yes life insurance you don't think about. That,
yes iras and wroth iras and four oh one k's
(25:06):
and investment. Accounts so all of these things you need
to really think about as WHAT i need to, value
then value. It and, again If i'm you, know way up,
THERE i have that fifteen million is the federal estate
tax exemption or thirty, Million, well NOW i Know i'm
in revocable trust world and maybe even gifting trust. World
thinking about things like. That If i'm somewhere between the
(25:28):
three and five million dollar, range you, know which there's
a lot more of those. People, well Now i'm, thinking you,
know based on my, age what kind of planning revocable or,
irrevocable but more of a basic estate. Planning you, know
DO i have minor? Children DO i have? Children DO
i have a family dynamic? Problem AM i a second?
Marriage so those are all things you need to think,
about you, know in terms of the, planning especially second marriage.
(25:52):
Folks if you're a second marriage or in a relationship
and you're not, married you, know think about how you
want to leave things and how you want to take
care of each. Other so those are all basically items
to put on a checklist when you're getting.
Speaker 2 (26:06):
Started talk With Todd lutsky from the law firm Of
cushing And. Dolan, again we've got space on the phone
lines at eight eight eight to zero five two two sixty.
Three that is the number to call to Ask todd
your estate planning questions live on air right now eight
eight eight.
Speaker 4 (26:25):
To zero five two two six.
Speaker 2 (26:28):
Three we're gonna take a break, here but when we come,
back we're gonna get right to your questions With todd.
Again eight eight eight two zero five two two sixty
three is the. Number quick break in your calls when we.
Speaker 4 (26:41):
Return Ask todd.
Speaker 1 (26:43):
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 4 (26:56):
Network talk With Todd.
Speaker 2 (27:06):
Lutsky, here still room on the phone lines for your
estate planning questions at eight eight eight two zero five
two two six. Three that number again is eight eight
eight to zero five two two sixty, Three, Todd let's
go with first caller, Here steven East. Bridgewater, steve what's
your question For Todd, Lutsky.
Speaker 7 (27:28):
Hi, guys thanks for taking my. QUESTION i was wondering
about the difference between The Social security number and A
ei in number for a. Trust is there any advantages
to using an ei in number over a Social.
Speaker 6 (27:43):
So it's not about, advantages it's about, Need. Okay so
unfortunately it's a great question because people get. Confused even
accountants can get confused by. This so you're still it
could be a tax. Difference but let's start with social.
Security if you're setting up a revocable, trust, okay revocable,
(28:06):
trust that by the very nature of the fact that
it's revocable means that it's a grant or trust for
income tax, purposes and it means that you do not
need a TAX id.
Speaker 4 (28:20):
Number.
Speaker 6 (28:21):
Okay you simply would take your brokerage, account your bank,
account and let's say retitle it like to what call
it the you, know The Steve Family trust or whatever
you're calling. It that would be the name on the,
account and you would use Your Social security, number and
you would file no tax return for that. Trust everything
(28:43):
is picked up on your ten. Forty, if on the other,
hand you're doing like a medicaid irrevocable, trust or even
a gifting type, trust an irrevocable gifting trust of sorts
or espousal lifetime access, trust which is, irrevocable then generally
we try to draft those or design those as grand or.
(29:07):
Trusts but because they're irrevocable and oftentimes the donor and
the trustee are different, people then you need to get
a TAX id number and when you open up the
account again might be called The Steve Family Irrevocable. Trust,
well you can still retitle your bank account or your
(29:28):
brokerage account into that that, trust but then you would
use AN ei in number to set up that. Account
why because now that trust will have to file its
own income tax return under THAT ei in, number and
that's a form ten forty. One but as you, said
(29:48):
is one better than. Another, well in this, case as
long as the irrevocable, trust even though using THE ei
in number is a grand or, trust it means that
you the don't Or steve, is are treated as the
owner for income tax, purposes and therefore you're still going
to pick up all of that income interest dividends. Rent
(30:12):
if you put a rental property in, there you will
pick up that income on your personal ten. Forty the
only difference is the trust needs to file a ten
forty one to pick up the, numbers but then it
kicks out a letter to you with all those numbers
on it saying it gets picked up on your return
(30:32):
and the tax basic the tax at the trust level is,
zero so it doesn't necessarily change the amount of taxes you're.
Paying it just changes the way you file. It and
you also file it because we want to respect the
entity when it's irrevocable for nursing home purposes and the.
Like so seemingly a simple, question but definitely long winded,
(30:53):
answer but you needed to understand the difference between the.
Two hope that helped. Folks that's part of. It when
you're doing your, Planning that's what the guide is. About
back to the. Basics one of the things in the
guide is it helps you kick off your idea of
getting an estate plan. Done but it talks about these.
Things it talks about what to look, for like we talked,
(31:14):
earlier age, value types of, assets family, dynamics and then
it talks about basic documents, will, healthcare power of, attorney
little things that you need to know. About then it
talks about how an Irrevocable medicaid trust, works getting THE id,
number setting up the, accounts what happens when you, die
how it works when you're. Alive it's basically an estate
(31:36):
planning engagement letter for a, client and all the assets
are listed on. Here you could just put your assets
in and see if this plan works for. You if it,
doesn't at least it helps you get started in your
estate planning. World back to the basics eight six six
eight four eight five six nine nine Or Legal Exchange
(31:56):
show dot com again eight six six four eight five
six nine nine Or Legal Exchange show dot Com and
for more information visit Our instagram. Page Cushing DOLAN.
Speaker 2 (32:08):
Pc todd got another one for you. Here let's go
To shannon In Beltzer. Town, shannon you're on With Todd. Lotski, Hi,
hello how can we?
Speaker 7 (32:20):
Help i'm just curious as how much all this would
cost to.
Speaker 5 (32:25):
Start setting all this?
Speaker 6 (32:26):
Up so, again, well it's kind of hard to say
BECAUSE i don't know what we're doing. RIGHT i work
anyway on a flat, fee AND i HOPE i can
tell you that when you go to other, attorneys try
to make sure that at least you're gonna get a
flat fee quoted for. You and at the end of
our initial meeting for everybody, listening ONCE i know what we're,
(32:47):
doing THEN i can give you that flat fee. Number,
like you, know are we doing a, will a healthcare,
proxy a power of? Attorney are we doing one revocable
trust or? Two are we doing an irrevocable medicaid? Trust you?
Know are we doing gifting? Trust, unfortunately all of those
things result in a different. Cost SO i think the
best thing to do is go, in get that free
(33:08):
consultation and then get a flat, fee and then you'll
have a good idea of not only what you, need
but how much it. Costs SO i hope that helps a,
little just a little hard to answer an open ended
question like, That.
Speaker 4 (33:21):
Todd have one more for you. Here let's go To
rick In. Foulmouth, rick what is your question For Tod? Lutsky,
hey good, Morning, todd good.
Speaker 8 (33:29):
Morning two years ago you set up an irrevocable trust
for my wife AND, i which is, Great, okay thank.
YOU i have a high yield savings account that is
in the, trust AND i withdraw the interest that it
generates and use that as.
Speaker 4 (33:48):
Income so great.
Speaker 6 (33:49):
Questions so these are these irrevocable trusts that we've talked
about a lot on the. Air, folks everyone that needs
to understand how this works in case they have. It
so in this, case the answer is emphatically. Yes so
these are actually called Irrevocable medicaid income only. Trusts and
so what that means is any interest dividends or let's
(34:13):
just say you happen to have a rental, property you
put it in their rent. Income, normally if you read,
it it says income shall be paid to the donor
or the donor. Spouse that's, You rick and your spouse
if you're. Married so so, yes the income would come
out to. You AND i know you don't even have
(34:33):
to deal with the. Trustees so if this is something
that you're saying going, forward you, Know i've got a
high yield savings Or i've got an investment account in,
there and you know, what it's time THAT i want
to start living on that income to supplement My Social
security or my pension or whatever else is coming. In
CAN i do?
Speaker 1 (34:51):
That?
Speaker 6 (34:52):
Yes and the way you can do it is talk
with your bank or talk with your financial brokerage house
and and say please set up the account as an automatic.
Transfer SO i want every month the income to be
automatically distributed from the trust account to my personal bank,
(35:14):
account which you should have bank accounts outside the, trust
generally ones that receive your social, security your, pension things like.
That just have it automatically, transferred you. Know that way
you don't need to bother the, trustee who likely is not,
you so you, would you, know you just it'll just automatically.
Happen so hope that. Helps and and folks just expand
(35:38):
on that a little, bit, right because we have a
little bit of time. Left what IF i have a
rental property AND i put it in one of these,
trusts because there might be clients that have done that
or individuals who have done. That, well the rent makes
sure that's being deposited into the bank account in the
name of the trust to receive the, rent and then that's,
(35:59):
income right just because it, left just because it came
in as, rent it retains its character as. Income and
so then that particular bank account receiving the rent can
also be set up as an automatic, transfer so the
rent comes in and automatically hits your personal bank. ACCOUNT
i say this because a lot of times people, say,
(36:20):
oh it's a lot more complicated WHEN i have my
rental property in the. Trust when you back up and
think about, it it's really not because you're still making
only one.
Speaker 3 (36:30):
Deposit.
Speaker 6 (36:31):
Right if you didn't have the, trust you'd collect the
rent put it in your bank. Account now you collect
the rent deposited into a trust bank. Account one, deposit one,
transaction and it automatically hits your personal bank. Account so
definitely a good idea great, question and a lot of
control for you over these irrevocable.
Speaker 4 (36:51):
Trusts Mister, leutsky appreciate you joining us. Today, yeah always a.
Speaker 6 (36:55):
Pleasure thank.
Speaker 1 (36:56):
You this has been asked on on The Financial Exchange radio.
Network Ask tod With Todd lutsky has been presented By
cushing And, dolan Serving massachusetts And New england for more
than thirty, years helping families with the state and tax,
Planning medicaid, planning and probate. Law call eight hundred three
nine three four thousand and one or Visit cushingdolan dot.
Com the views expressed in this segment are solely those
(37:17):
Of 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.
Speaker 2 (37:25):
Affiliated still a bunch to come as we head towards
the second hour of the, show we'll talk about the
latest companies getting torched by THE ai. Trade we'll talk
a little bit about the state of the. Dollar also
credit card. Debt how much Do americans have?
Speaker 4 (37:42):
Now is that? Good is that? Bad does it matter at?
Speaker 2 (37:44):
All we've got all that coming, up plus a whole
lot more as we get into our number. Two so
make sure you stick around because we're just getting started.
Speaker 1 (37:56):
Here
The Financial Exchange is produced by Money Matters Radio and
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(01:06):
and Mark Vandebbi.
Speaker 2 (01:09):
Chuck, Mark and Tucker with you here and as we
kick things off today, top story that we're gonna be
talking about is the jobs report from this morning, which
came in with one hundred and thirty thousand jobs created
for the month of January. The unemployment rate dropped from
(01:30):
four point four to four point three percent, and quite honestly,
when looking through this report, there's very little to be
upset about. I think it is an incredibly solid report
all around, especially given the questions that have been building
surrounding the labor market and whether there's some weakening that
(01:52):
and whether the weakening that we've seen the last few
years would continue January and on the whole now I
think probably pointing towards the potential at least for some
green shoots in the labor market, with this report being
one of them. But ultimately, Mark, I think this is
a really good report, albeit one that still needs confirmation
in the coming months that it's not an outlier.
Speaker 3 (02:14):
Yeah, there was probably too much cynicism or concern about
the labor market given the economic growth backdrop, which was solid.
I never fully understood the economic concerns given that the
only thing that seemed to be sick. Well, there were
a couple of high level labor market indicators that seemed
to be pointing toward weakening, but it wasn't clear that
(02:36):
that wasn't just normalization. It's becoming a little clearer. I'm
not going to say that that hypothesis, if you will,
is confirmed by this. We need to see a little
bit more you know data, as we always say, But
labor market doesn't appear to be weak unemployed. If anybody
told you ten years ago, twenty years ago, GE's word
at four points something percent unemployment and everybody's worried, they
(02:57):
would have said you were crazy. Strong economic growth, historically
low unemployment, elevated inflation. Unclear to me why anybody would
think we needed or need FED easing.
Speaker 2 (03:11):
So looking at this when we talk about the labor market,
the reasons why, if we talk about the reasons why
we've been concerned about it over the last you know,
six to nine months. I know there's been sporadic concerns
for the last several years now. Much of that the
first couple of years of the labor market slowing, I
think was clearly normalization. But I think that when we
look at the last six months. The reason for concern
(03:34):
has there's been a few different items. The first is
just the pace of job growth has continued to drop
to you know, net net pretty close to zero on
a monthly basis. Number two, job openings have continued to
drop down, such that when we look at the beverage curve,
which relates the job opening's rate to the unemployment rate,
(03:54):
we started to get into some dangerous territory there, albeit
you know, not one that actually showed any real problems
in this cycle. Here other rates in the Jolts report,
the higherst rate continue to tick down, the quits rate
ticked down, and so it was this you know, consistent
message that we were getting that hiring was slowing, labor
(04:14):
market mobility was slowing, and you know, that was becoming
problematic a lot of surveys, by the way, you know,
you ask people how they feel about the labor market,
and they're saying it's harder to get a job. So
I think that when we look at this the positive
signs that we've seen this month, by this month I
really mean January, from the January data, we have seen
(04:34):
continuing unemployment claims go from rising four to six percent
year over year to being flat for the first few
months of the year. We've seen indeed's job openings data
stabilize and start to maybe show a little bit of
improvement over a short time period.
Speaker 4 (04:51):
And now we've got this job's report.
Speaker 2 (04:53):
So I think on the whole, you look at it
and it points to the January data being stro longer.
Speaker 4 (05:00):
Here.
Speaker 2 (05:01):
Is that enough to put any of those labor market
concerns to bed. I don't think completely, But this is
a fantastic report that at least for this month says, yeah,
things may be getting better, and if we can see
some follow through, that will be a fantastic start to
the year for a labor market that's had some questions.
Speaker 3 (05:22):
Yeah, you cited a bunch of economics statistics. From the
Fed's point of view, I think there are a couple
big things that matter and the models that they use.
One is unemployment, the other is vacancies. Vacancies have come down,
the number of job openings that firms post have come down,
but there's still a lot higher relative to the available
(05:44):
pool of labor relative to unemployed people than they were
prior to roughly twenty nineteen twenty eighteen, when something about
that relationship changed. It's just not clear to me it
hasn't been. It's still not clear whether this labor market
is just sort of normal. Look, we never know what
the right the so called natural, equivalently non inflationary rate
(06:06):
of unemployment is. Is it four point five that'd be
very low historically speaking, is it five that'd be closer
to the ballpark historically speaking? That is an unemployment rate
that doesn't push up, that doesn't reflect too much demand
pushing against the productive limits of the economy, thus pushing
up inflation. As you know, as you could tell by
my tone, and I don't, I don't, I don't want to.
(06:29):
I don't want to, like not share in your enthusiasm,
your your excitement. My word not maybe the one you
would choose about this report. But I'm really concerned that
the FED has misread the economy, has overstimulated it. The
recent rate cuts effect, by the way, hasn't even made
its way through to the real economy yet.
Speaker 4 (06:49):
Talk to me about that.
Speaker 2 (06:51):
Yeah, give me a little bit more detail in terms
of what you're seeing, because in look in the broad
scheme of things, when we look at twenty twenty five data,
the unemployment rate moved up over the course of twenty
twenty five. It did, and on the inflation side of things,
we basically saw inflation inflect upward modestly, but mostly on
(07:13):
the good side. They could be explained away by tariff.
So walk me through the concern that you have, just
so our listeners can understand it better.
Speaker 3 (07:21):
The way the way you think, the way economists think
about the right policy rate for the FED is to
weigh unemployment and changes no unemployment against inflation. You could
also you could substitute vacancies or GDP relative to potential GDP.
You're trying to get it, is there slack in the economy,
(07:42):
and notwithstanding last year's signs of stalling in the labor market,
there were few other signs of slack. Inflation did not
fall dramatically GDP. There was a little hiccup the in
the second quarter, but we've recovered, and that's an understatement,
recovery dramatically. From that, financial conditions are loose, it's easy
(08:04):
to get your hands on capital, and related to that,
stocks are at all time highs. It seems very odd
to me that anybody would be worried given that sort
of constellation of facts and thinking about it through traditional
economic lens. Seems odd to me that anybody would be
thinking this economy needs stimulus, which is exactly what we're doing.
(08:25):
Fiscal policy is loosening, tax rebates, tax cuts, Monetary policy
is eased. I was going to say considerably, maybe modestly
is a better term, but it's eased, and it's eased
into elevated inflation and very low unemployment. All that strikes
me is weird.
Speaker 2 (08:42):
I think weird is a fair characterization real Just again,
it's this isn't economy that I do think it's hard
to get a handle on it.
Speaker 4 (08:52):
And look, we clearly.
Speaker 2 (08:54):
Have different cross currents that are going on at the
moment in the economy, and so I think that in
trying to sort through, you know, what is actually happening here,
given some of the policy shifts that we've seen in
the last year, which are ones by the way that
no living economists is seen during their lifetime, you know what,
(09:17):
when when's the last time the United States had, you know,
any kind of significant increase in tariff's mark?
Speaker 4 (09:26):
One hundred years ago? Yeah, you know, we're talking one
hundred years ago.
Speaker 3 (09:29):
So that those were well studied. We may not have
they might.
Speaker 2 (09:33):
It was a different world than though, you know, like
it's yes, they were well studied for the time period,
but the airplane didn't exist, you know, the Internet didn't exist.
So the impacts can be different and they can show
up differently with different delays in different you know, substitutions
that can happen. I'm not saying that the research on
those is inaccurate. I'm just saying it's a different world
(09:55):
from them.
Speaker 3 (09:56):
I'd say price rigidity is price rigidity. I mean it
all else equal tariffs push up prices full.
Speaker 4 (10:01):
Stop, which they have.
Speaker 3 (10:03):
I'm not saying they have it, I know, and I'm
not saying you say what what I'm what.
Speaker 2 (10:06):
I'm trying to say, Mark is actually living through something
is different from reading about it. I can't actually the
actually no, but the actual like impacts in terms of Hey,
when we read about smoot Holly, we say, okay, it
increased prices in X y Z fashion. Does that happen
(10:27):
faster now because the world is more integrated and decisions
can be made more quickly. Does that speed mean that
it ends up having a larger or smaller impact than
These are things that are fundamentally different because it's not
the same world as.
Speaker 4 (10:44):
It was then.
Speaker 3 (10:44):
Well and it Yeah, but this was just one example. Yeah,
it definitely never is.
Speaker 2 (10:49):
Again, I'm just trying to say, on the immigration side,
when's the last time the US had negative immigration?
Speaker 3 (10:56):
Possibly probably the same period, the twenties.
Speaker 2 (10:59):
So again, haven't lived through something like this to know
how it may directly?
Speaker 4 (11:05):
I see what true.
Speaker 3 (11:06):
So you're saying, Morley, it's not like you have to
be there observing it because most people, myself included, are
clueless when you're in the moment. But you're saying it doesn't.
It's going to play out differently every time, so you can't.
I mean, this is a version of what one economist
Bob Lucas called the Lucas ended up being called the
Lucas critique. You cannot take past estimates and apply them
to say future activity, because agents expectations change. He said
(11:30):
it with respect to policy, but you can apply it
more broadly. Yeah, I see what you're saying.
Speaker 4 (11:35):
So let's take a quick break.
Speaker 2 (11:36):
When we return, let's talk a little bit about how
this mark kind of alluded to it, how this job
support may or may not impact FED policy looking forward.
Speaker 1 (11:49):
This is your home for the most comprehensive coverage of
the economy and the trends on Wall Street. This is
the Financial Exchange Radio network.
Speaker 5 (12:00):
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Speaker 2 (12:40):
Market's talk a little bit about this job support in
the context of future FED meetings. So the CME has
their Fedwatch tool that basically allows us to see projected
probabilities for future meetings and you know, compare it to
what they were in the past. So, just as an
example yesterday, if you look to the upcoming meeting for
(13:02):
March eighteenth, there's a twenty percent chance of a rate
cut happening, then seventy nine percent chance.
Speaker 4 (13:07):
Of no cut.
Speaker 2 (13:08):
Today, in light of this new data, only a six
percent chance of a rate cut ninety four percent chance
of no action if we go out further. Let's look
at the July meeting, just as an example. At the
if we looked yesterday, there was only a twenty i'm sorry,
only a fifteen percent chance that rates were still where
(13:28):
they were art are today. Now it's up to a
twenty five percent chance that rates are still where they
are today by the end of July. When we go
to the December meeting. Previously, there was only a nineteen
i'm sorry, a four point eight percent chance that rates
were still where they are today. Now it's up to
a seven point one. So overall, the what's being priced
(13:52):
in here at this point is basically, hey, if there
are going to be rate cuts. There's not a huge
shift when you look at later in the year, but
it's basically saying, hey, if there are to be rate cuts,
they're gonna have to start later than originally projected.
Speaker 4 (14:07):
And you still do have.
Speaker 2 (14:09):
When you look at the probabilities and the aggregate two
cuts being priced in this year. I will say I'm
in complete agreement with you in that. Look, if we
get more reports that show what we saw in this
report here you are not seeing. I will go so
far as to say you are not seeing rate cuts
by the end of the year. You are seeing rate
hikes by the end of the.
Speaker 3 (14:29):
I'd like to put a simple question to these people
who think they're gonna be rate cuts this year, given
what we know today, are you crazy?
Speaker 4 (14:36):
I don't know. No, Go ahead, listen. I don't think
they're necessarily crazy.
Speaker 3 (14:41):
What are they But they're making assumptions about the future
of the economy and ignoring what we know factually. What
is concrete. What is concrete is that inflation is elevated.
What is concrete is that unemployment is epically low by
historical standards. What is concrete is that we're pouring a
lot of fiscal and monet Harry, especially if you count
those MBS's that the administration told its people over at
(15:06):
Freddy to to buy. We're lavishing stimulus on the economy
at a time of elevated inflation, very low unemployment, and
massive deficits. You'd have to be predicting some something that
the rest of us don't have the gifts to foresee,
some kind of economic a calamity or unexpected dramatic slowdown.
Speaker 2 (15:29):
Isn't the thing that they could be predicting. Again, hear
me out on this, because I'm one of the PEPs.
I don't expect I was this year. I know, I know,
But in the context of let's look at the unemployment rate,
and specifically the unemployment rate over the last year or so,
if we go back to January of January of twenty
(15:55):
five and we say, okay, like, where was unemployment, then
we were at four point I'm sorry, four percent. Even
we then rose, okay, to get up to four point
six percent with that November report. Initially that's subsequently been
revised down to four point.
Speaker 4 (16:11):
Five with the updates that we've seen.
Speaker 2 (16:14):
But you saw unemployment rise by half a percent last year,
given the continued weakness that we'd seen in the labor
market and the fact that until the last month of data,
there didn't seem to be any meaningful turn that could
be happening, and even this it's still early, in my opinion,
Is it something where someone could reasonably say unemployment's gone
(16:37):
up by half a percent. We're getting into the dangerous
part of the beverage curve, where unemployment starts to ratchet
up more rapidly and more exponential fashion. And as such,
rate cuts in the fall were warranted, you.
Speaker 3 (16:51):
Because unapployment to say that, because.
Speaker 2 (16:55):
With the dual mandate, unemployment was moving up more rapidly
than inflation one, and so the Fed could make a
judgment call to say, yes, inflation is a problem, but
unemployment is the more urgent, more imminent one, and so
let's try to address that.
Speaker 3 (17:08):
Before looking at this, you would have to explain why
your estimate of the natural rate is outside the bounds
of virtually every all historical experience. You would have to,
And I know there are plenty of widely respected economists
far more accomplished than say I am. You know, PhD
academics and people who thought rates needed to come down.
I respectfully, using in some cases the textbooks and papers
(17:31):
that they wrote in my reasoning, came to the conclusion
that wait a minute, you might be wrong about your
estimate of the natural rate. You don't and sometimes we
throw around the term natural rate. We're referring to GDP
potential GDP sometimes we're referring to the rate that the
Fed should set the Fed funds rate at. I'm referring
here to the rate of unemployment that is consistent with
stable inflation. That's one way to define it and good
(17:53):
for our purposes. How do you know that it should
be four point five? You've got to make a case
for that, And don't give me some ai productivity story,
perhaps tariffs and all the restructuring of the economy that's
going on under this new administration. And you may like it,
you may hate it, but you can't deny there's been
some pretty dramatic and it's ongoing economic restructuring. If we're
(18:13):
gonna look more like the economy of the fifties and sixties,
the natural rate should probably be closer to what it
was then than where it was in the late nineties
and even more recently, which suggests to me somewhere in
the five to six percent range if you want non
inflationary unemployment. I'm not saying i'd hang my hat on that,
but I don't get why, maybe because it's maybe they're
just commentators throwing something out there. They're not thinking rigorously
(18:37):
if you think it through.
Speaker 2 (18:39):
And if you want the evidence that inflation could potentially
evolve into the bigger problem.
Speaker 4 (18:49):
As we go through this year.
Speaker 2 (18:52):
Take a look at the wage growth data from the
last three months. Two of the last three months now
printing point seven percent month over month average weekly earnings gains.
That's an eight and a half percent annualized clip. That
is freaking hot.
Speaker 4 (19:07):
Now.
Speaker 2 (19:08):
The other one did show a modest decline. But if
you start seeing anything that looks like that, you've got problems,
because then employers need to raise their prices in order
to cover those wage gains, and that is something to
watch out for if this continues. Quick Break Wall Street
watches next, followed by Ask tod.
Speaker 1 (19:28):
Like us on Facebook, and follow us on Twitter at
TFE show. Breaking business news is always first right here
on the Financial Exchange Radio Network. Time now for Wall Street.
Watch a complete look at what's moving market so far
today right here on the Financial Exchange Radio Network.
Speaker 5 (19:47):
Market's pulling back after opening the day in positive territories.
Wall Street reacts to a stronger than expected January jobs report,
where one hundred and thirty thousand jobs were added last month,
above expectations of sixty five thousand. The unemployment rate also
ticked lower to four point three percent. Right now, the
Dow is off about a third of a percent, SMB
(20:08):
five hundred down about a quarter percent, NASDAC down just
over half a percent, Russell two thousand selling off about
nine tenths of one percent. Tenure Treasure yield is up
two basis points at four point one six eight percent,
and crude oil up over one and a half percent higher,
trading above sixty five dollars.
Speaker 4 (20:29):
A barrow.
Speaker 5 (20:30):
Craft Hens announced this morning it is pausing work on
a previously announced plan to split the company, stating that
many of the company's issues are fixable and within its control.
Shares and craft Hines are flat at the moment. Meanwhile,
shares a Warner Brothers Discovery edging higher after The Wall
Street Journal reported that activist investor and Kora built a
near two hundred million dollars stake in Warner and plans
(20:53):
to oppose its deal with Netflix, saying Warner failed to
adequately engage with paramounts rival offer. Netflix shares down two
percent elsewhere, Maderna falling eleven percent following news that the
FDA refused to review the drugmaker's application to sell a
new seasonal flu vaccine. Humanics stock down two percent despite
(21:17):
the health insurance company beating on both profit and revenue
forecast for its most recent quarter. Zillow sinking seventeen percent
after the home listing platform reported a lower than expected
ebit arrange for the first quarter, and shares and toy
manufacturer Mattel plunging twenty five percent after it missed earnings
in revenue expectations for the fourth quarter. Both City Group
(21:40):
and JP morgan Chase also downgraded the stock. I'm Tucker
Silva and that is Waltree.
Speaker 1 (21:47):
Watch. This is Asked Todd on the Financial Exchange Radio Network.
If you have an existing estate plan or in the
market for one, Tod Letsky is here to answer your
questions and help you plan for a later life. 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.
(22:10):
Visit Cushingdolan dot com. Now here's Todd Lutsky.
Speaker 2 (22:16):
And we are now joined by Todd Lutsky for Ask
Todd Get your Estate planning questions ready, because this is
your chance to ask them to Todd live on air
right now.
Speaker 4 (22:28):
Phone lines are open at eight eight eight.
Speaker 2 (22:31):
To zero five two two six three, So get calling
early and often because we can usually get through two
or three questions once we start getting into four or
five then and so, boy, I don't know if we
can handle that. So again, the number is eight eight
eight to zero five two two six three. You got
(22:51):
a state planning questions? Todd Lutsky is going to try
to answer him right now.
Speaker 4 (22:55):
Again.
Speaker 2 (22:55):
That phone number is eight eight eight to zero five six'.
Three Mister, Lutsky how are you? DOING i am never
better in you? GOOD i was at the circus the other.
Day yeah you like? That not a great, Show the
Lion ate the Tightrope. Walker oh, yeah it was a
well balanced. MEAL i bet so not.
Speaker 4 (23:17):
Good not, Good todd want to talk to.
Speaker 2 (23:19):
You let's say that someone has not done any estate,
Planning they've never met with an. Attorney they're, like, NO
i didn't need, IT i don't need. It but WELL
i GUESS i do need, it because everyone at some
point needs an. Attorney, yeah what should someone expect as
they go through the estate planning, process like what are
the things that the boxes that you want to see
(23:41):
that estate planning attorney check as they're going.
Speaker 6 (23:43):
Through, yeah this is really. Important the whole IDEA i
think behind this, Question, chuck IF i, may is you,
know how DO i get? Started how DO i kick
off my estate? Planning? Right what DO i think? About
what are the? Checklists if you? Will so couple of.
Things you, first you, know talk about how old AM
i because age could impact the type of plan that we. Do,
(24:07):
Right so if WE'RE i just throw out like sixty and,
OVER i might, say, well you KNOW i want the.
Basics of, course you, know, taxes, probate bloodline. Planning those
are always important because you, know everybody, dies but not
everybody goes to a nursing. Home but If i'm sixty and,
OVER i might add that to my checklist BEFORE i get. Started, so,
(24:28):
OKAY i got to think about. That next versus let's
Say I'm i'm you, know thirty five with young. Kids,
well probably nursing home planning is not on the to do.
Speaker 1 (24:38):
List.
Speaker 6 (24:39):
Now, next valuation how large is my?
Speaker 3 (24:43):
Estate?
Speaker 6 (24:43):
Right and WHEN i say, valuation it's not just, valuation
but maybe at the same time you're thinking of, valuation
you think about what's included in my? Estate what DO
i have to? Value so things like real, estate rental,
properties vacation, Homes, yes life insurance you don't think about. That,
yes iras and wroth iras and four oh one k's
(25:06):
and investment. Accounts so all of these things you need
to really think about as WHAT i need to, value
then value. It and, again If i'm you, know way up,
THERE i have that fifteen million is the federal estate
tax exemption or thirty, Million, well NOW i Know i'm
in revocable trust world and maybe even gifting trust. World
thinking about things like. That If i'm somewhere between the
(25:28):
three and five million dollar, range you, know which there's
a lot more of those. People, well Now i'm, thinking you,
know based on my, age what kind of planning revocable or,
irrevocable but more of a basic estate. Planning you, know
DO i have minor? Children DO i have? Children DO
i have a family dynamic? Problem AM i a second?
Marriage so those are all things you need to think,
about you, know in terms of the, planning especially second marriage.
(25:52):
Folks if you're a second marriage or in a relationship
and you're not, married you, know think about how you
want to leave things and how you want to take
care of each. Other so those are all basically items
to put on a checklist when you're getting.
Speaker 2 (26:06):
Started talk With Todd lutsky from the law firm Of
cushing And. Dolan, again we've got space on the phone
lines at eight eight eight to zero five two two sixty.
Three that is the number to call to Ask todd
your estate planning questions live on air right now eight
eight eight.
Speaker 4 (26:25):
To zero five two two six.
Speaker 2 (26:28):
Three we're gonna take a break, here but when we come,
back we're gonna get right to your questions With todd.
Again eight eight eight two zero five two two sixty
three is the. Number quick break in your calls when we.
Speaker 4 (26:41):
Return Ask todd.
Speaker 1 (26:43):
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 4 (26:56):
Network talk With Todd.
Speaker 2 (27:06):
Lutsky, here still room on the phone lines for your
estate planning questions at eight eight eight two zero five
two two six. Three that number again is eight eight
eight to zero five two two sixty, Three, Todd let's
go with first caller, Here steven East. Bridgewater, steve what's
your question For Todd, Lutsky.
Speaker 7 (27:28):
Hi, guys thanks for taking my. QUESTION i was wondering
about the difference between The Social security number and A
ei in number for a. Trust is there any advantages
to using an ei in number over a Social.
Speaker 6 (27:43):
So it's not about, advantages it's about, Need. Okay so
unfortunately it's a great question because people get. Confused even
accountants can get confused by. This so you're still it
could be a tax. Difference but let's start with social.
Security if you're setting up a revocable, trust, okay revocable,
(28:06):
trust that by the very nature of the fact that
it's revocable means that it's a grant or trust for
income tax, purposes and it means that you do not
need a TAX id.
Speaker 4 (28:20):
Number.
Speaker 6 (28:21):
Okay you simply would take your brokerage, account your bank,
account and let's say retitle it like to what call
it the you, know The Steve Family trust or whatever
you're calling. It that would be the name on the,
account and you would use Your Social security, number and
you would file no tax return for that. Trust everything
(28:43):
is picked up on your ten. Forty, if on the other,
hand you're doing like a medicaid irrevocable, trust or even
a gifting type, trust an irrevocable gifting trust of sorts
or espousal lifetime access, trust which is, irrevocable then generally
we try to draft those or design those as grand or.
(29:07):
Trusts but because they're irrevocable and oftentimes the donor and
the trustee are different, people then you need to get
a TAX id number and when you open up the
account again might be called The Steve Family Irrevocable. Trust,
well you can still retitle your bank account or your
(29:28):
brokerage account into that that, trust but then you would
use AN ei in number to set up that. Account
why because now that trust will have to file its
own income tax return under THAT ei in, number and
that's a form ten forty. One but as you, said
(29:48):
is one better than. Another, well in this, case as
long as the irrevocable, trust even though using THE ei
in number is a grand or, trust it means that
you the don't Or steve, is are treated as the
owner for income tax, purposes and therefore you're still going
to pick up all of that income interest dividends. Rent
(30:12):
if you put a rental property in, there you will
pick up that income on your personal ten. Forty the
only difference is the trust needs to file a ten
forty one to pick up the, numbers but then it
kicks out a letter to you with all those numbers
on it saying it gets picked up on your return
(30:32):
and the tax basic the tax at the trust level is,
zero so it doesn't necessarily change the amount of taxes you're.
Paying it just changes the way you file. It and
you also file it because we want to respect the
entity when it's irrevocable for nursing home purposes and the.
Like so seemingly a simple, question but definitely long winded,
(30:53):
answer but you needed to understand the difference between the.
Two hope that helped. Folks that's part of. It when
you're doing your, Planning that's what the guide is. About
back to the. Basics one of the things in the
guide is it helps you kick off your idea of
getting an estate plan. Done but it talks about these.
Things it talks about what to look, for like we talked,
(31:14):
earlier age, value types of, assets family, dynamics and then
it talks about basic documents, will, healthcare power of, attorney
little things that you need to know. About then it
talks about how an Irrevocable medicaid trust, works getting THE id,
number setting up the, accounts what happens when you, die
how it works when you're. Alive it's basically an estate
(31:36):
planning engagement letter for a, client and all the assets
are listed on. Here you could just put your assets
in and see if this plan works for. You if it,
doesn't at least it helps you get started in your
estate planning. World back to the basics eight six six
eight four eight five six nine nine Or Legal Exchange
(31:56):
show dot com again eight six six four eight five
six nine nine Or Legal Exchange show dot Com and
for more information visit Our instagram. Page Cushing DOLAN.
Speaker 2 (32:08):
Pc todd got another one for you. Here let's go
To shannon In Beltzer. Town, shannon you're on With Todd. Lotski, Hi,
hello how can we?
Speaker 7 (32:20):
Help i'm just curious as how much all this would
cost to.
Speaker 5 (32:25):
Start setting all this?
Speaker 6 (32:26):
Up so, again, well it's kind of hard to say
BECAUSE i don't know what we're doing. RIGHT i work
anyway on a flat, fee AND i HOPE i can
tell you that when you go to other, attorneys try
to make sure that at least you're gonna get a
flat fee quoted for. You and at the end of
our initial meeting for everybody, listening ONCE i know what we're,
(32:47):
doing THEN i can give you that flat fee. Number,
like you, know are we doing a, will a healthcare,
proxy a power of? Attorney are we doing one revocable
trust or? Two are we doing an irrevocable medicaid? Trust you?
Know are we doing gifting? Trust, unfortunately all of those
things result in a different. Cost SO i think the
best thing to do is go, in get that free
(33:08):
consultation and then get a flat, fee and then you'll
have a good idea of not only what you, need
but how much it. Costs SO i hope that helps a,
little just a little hard to answer an open ended
question like, That.
Speaker 4 (33:21):
Todd have one more for you. Here let's go To
rick In. Foulmouth, rick what is your question For Tod? Lutsky,
hey good, Morning, todd good.
Speaker 8 (33:29):
Morning two years ago you set up an irrevocable trust
for my wife AND, i which is, Great, okay thank.
YOU i have a high yield savings account that is
in the, trust AND i withdraw the interest that it
generates and use that as.
Speaker 4 (33:48):
Income so great.
Speaker 6 (33:49):
Questions so these are these irrevocable trusts that we've talked
about a lot on the. Air, folks everyone that needs
to understand how this works in case they have. It
so in this, case the answer is emphatically. Yes so
these are actually called Irrevocable medicaid income only. Trusts and
so what that means is any interest dividends or let's
(34:13):
just say you happen to have a rental, property you
put it in their rent. Income, normally if you read,
it it says income shall be paid to the donor
or the donor. Spouse that's, You rick and your spouse
if you're. Married so so, yes the income would come
out to. You AND i know you don't even have
(34:33):
to deal with the. Trustees so if this is something
that you're saying going, forward you, Know i've got a
high yield savings Or i've got an investment account in,
there and you know, what it's time THAT i want
to start living on that income to supplement My Social
security or my pension or whatever else is coming. In
CAN i do?
Speaker 1 (34:51):
That?
Speaker 6 (34:52):
Yes and the way you can do it is talk
with your bank or talk with your financial brokerage house
and and say please set up the account as an automatic.
Transfer SO i want every month the income to be
automatically distributed from the trust account to my personal bank,
(35:14):
account which you should have bank accounts outside the, trust
generally ones that receive your social, security your, pension things like.
That just have it automatically, transferred you. Know that way
you don't need to bother the, trustee who likely is not,
you so you, would you, know you just it'll just automatically.
Happen so hope that. Helps and and folks just expand
(35:38):
on that a little, bit, right because we have a
little bit of time. Left what IF i have a
rental property AND i put it in one of these,
trusts because there might be clients that have done that
or individuals who have done. That, well the rent makes
sure that's being deposited into the bank account in the
name of the trust to receive the, rent and then that's,
(35:59):
income right just because it, left just because it came
in as, rent it retains its character as. Income and
so then that particular bank account receiving the rent can
also be set up as an automatic, transfer so the
rent comes in and automatically hits your personal bank. ACCOUNT
i say this because a lot of times people, say,
(36:20):
oh it's a lot more complicated WHEN i have my
rental property in the. Trust when you back up and
think about, it it's really not because you're still making
only one.
Speaker 3 (36:30):
Deposit.
Speaker 6 (36:31):
Right if you didn't have the, trust you'd collect the
rent put it in your bank. Account now you collect
the rent deposited into a trust bank. Account one, deposit one,
transaction and it automatically hits your personal bank. Account so
definitely a good idea great, question and a lot of
control for you over these irrevocable.
Speaker 4 (36:51):
Trusts Mister, leutsky appreciate you joining us. Today, yeah always a.
Speaker 6 (36:55):
Pleasure thank.
Speaker 1 (36:56):
You this has been asked on on The Financial Exchange radio.
Network Ask tod With Todd lutsky has been presented By
cushing And, dolan Serving massachusetts And New england for more
than thirty, years helping families with the state and tax,
Planning medicaid, planning and probate. Law call eight hundred three
nine three four thousand and one or Visit cushingdolan dot.
Com the views expressed in this segment are solely those
(37:17):
Of 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.
Speaker 2 (37:25):
Affiliated still a bunch to come as we head towards
the second hour of the, show we'll talk about the
latest companies getting torched by THE ai. Trade we'll talk
a little bit about the state of the. Dollar also
credit card. Debt how much Do americans have?
Speaker 4 (37:42):
Now is that? Good is that? Bad does it matter at?
Speaker 2 (37:44):
All we've got all that coming, up plus a whole
lot more as we get into our number. Two so
make sure you stick around because we're just getting started.
Speaker 1 (37:56):
Here
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