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Good morning, and welcome to the Haven Financial Group Radio Show. I'm Larry call Big, founder and CEO of the Haven Financial Group, and again thanks for listening this morning. Every week we talk about retirement topics, the economy, what's going on, Thanks to do, things not to do, and Kim. Every week we have certain new things that we want to talk about and help people with, So I encourage the listeners to call six ' one to two five zero four eight four zero zero or visit us online at
Havenfinancialgroup dot com all kinds of retirement tools classes. Yes, I know it's the end of the year, holidays and Christmas are here, so we do slow down a little bit, but we get right back at it after the first of the year.
Absolutely. Well, Larry, it's great to be with you, like always, and I understand that we have a guest today, Lance Larson, from the Haven Financial Group offices with us. He's a certified CPA and we're sure glad to have him with us because today we're planning to talk a little bit
about a state planning. You know, Larry, as you get toward the end of the year, this is that time where you sort of button things up, and I think estate planning is one of those things that you put off, you put off, you put off, and when you get to the end of the year, it's almost difficult to keep putting it off. You have to start to make some plans and make some decisions about when you're going to tackle that, and maybe that's right now, or maybe
that's right after the first of the year. Maybe that's something you want to do in twenty twenty five, but we're going to talk about the importance of tackling it at some point. We're going to start by talking about gift tax rules and how they work, which is something very important at this time of year. We're going to
talk about strategies to reduce gift and inheritance taxes. We'll talk about key legal documents for an airtight estate plan, and then finally we're going to wrap up the show by talking about what to know about inheritance retirement accounts. So full show, lots of great information for everyone, and we're certainly happy to have Lance with us today.
Thanks Ken, it's great to be here.
Absolutely. I know that you know a lot when it comes to estate planning and everything associated with it. But could you just talk in general for us here, Lance, real quickly, why you urge people to really tackle this issue, even though maybe it's not one that's so fun.
State taxes, to me, is probably one of the most morally indefensible taxes that our government has put on the public. Here, we work hard all our life, we pay our income taxes, we have our take home pay, and then we're frugal with it, we do good planning with it. And then just because we've done a good job of saving all our money, we are over this threshold and we have to then give a cut of it back to the government.
It just seems really wrong to me. And so that's why I want to talk to a lot of clients about making sure we don't hit those thresholds that most people when they pass away, they want this money to go to a specific cause, person, family member. Those people should get that money full out and not just a
portion of it after the government takes your cut. So that's one of the biggest reasons why we want to do a state planning is make sure that all our beneficiaries get the full amount that we want them to have there.
I think it's pretty rare that people in their wills or in their estate planning that they want to give it to Uncle Sam.
Yeah, I'm sure that's.
Usually a beneficiary, right, Yeah.
Well, oftentimes uncle Sam, not your favorite uncle, is the beneficiary. And if you don't do some estate planning or tax planning, that might be the outcome and the outcome that you don't want. You know, this show, Kim is going to be We're going to talk a state planning later. You know those legal documents, what those look like, but a big chunk of it, especially the first two segments are going to be about taxation of the estate on a federal level, on a state level, and we're here in Minnesota.
Each state has some different guidelines. But I know as humans, what we're good at doing is putting things off that we should have done. And many listeners might get a chuckle that they know they should have been done the estate plan twenty thirty, forty years ago and they still haven't gotten around to doing it. Professional procrastinators is what I had a couple in recently. They go, we should
have done this when our kids were born. Now our kids are forty five and we still haven't done anything. There's still time to do it. Don't wait till it's late. Don't wait till it's too late to do anything, because then it's not going to matter. And your loved ones or errors or whoever's you want to benefit now they are going to have to do all the leg work.
So Lance, let's talk about some of the ways that you can leave your legacy, maybe to your family members like you said, or to an organization, whatever it might be. How can you do so in the most effective way without them having to pay taxes like an annual gift for example.
So there's a combination of two methods that we want to look at to make sure we pass money on to our beneficiaries without having to give the tax money to Uncle Sam. First one is is that for Minnesota, we want to make sure that we are under a three million dollars total value.
Of the estate.
So as far as Minnesota goes, we have to be under that three million in order to not pay any taxes. There are other states that actually have had a little bit higher thresholds. I can know, I believe this New York has like a four million dollar and they're so on and so forth. But that's the biggest thing we want to look at there. Then we can look at
trying to give that money on an annual basis. Each person can give up to eighteen thousand dollars here in twenty twenty four, nineteen thousand dollars in twenty twenty five to any individual and without having to do any type of reporting and any type of gift tax on that at all, and so we start delving into that strategy. Right there, you can look at a married couple, Well, then if a married couple is going to do it, then this year they can give thirty six thousand dollars
to an individual. If they have a child that's married, well, you can give then seventy two thousand dollars to that couple because mom gives sixteenth or eighteen thousand dollars to child, Dad gives eighteen thousand dollars to child, Mom gives eighteen thousand to spouse, and then dad gives eighteen thousand spouse. So that's seventy two thousand. Then you can even multiply that more by children that or grandchildren that are there. So we can do a really big gift every year
without triggering any type of filing requirements. And that's probably one of the biggest strategy we have. If we're trying to reduce the state taxes, Now.
What about federal taxes?
So federal level right now is not too much of a concern. Federal level is actually going to be about thirteen and a half million dollars right now, almost fourteen million for twenty twenty five. If individuals are getting up into that and need to talk about that, we definitely can do that, but most people were not typically dealing with that type that dollar range right there.
And lance, what do you do if your state is worth three or maybe five million, but a lot of it's tied up in assets versus cash, so it's not so easily distributed like that, Then we can.
Start doing things as joint tenants getting ownership transferred over in that manner. I had a client at one point who had a family cabin and they were able to put that in a family partnership where mom and dad owned one hundred percent to begin with, and then they started bringing their child in and then every year they would trans or over units of that family partnership over
to the child there. And they were able to do that for many years until the child was able to have one hundred percent ownership.
So I would imagine that there are a lot of people who are listening right now and maybe they're thinking about just that. You know, is there a way to avoid taxes on real estate? Maybe something that we want to keep in the family, but we want to transfer that. And I think you've explained that I would imagine there are lots of other ways in which to go about this if you started early enough to avoid some of these taxes.
Correct, Yeah, there's a lot of One of the biggest things that we're trying to accomplish here is that we want to get these transfers done over time because we had these small thresholds without having to report it. It's kind of the same idea of investing. You want to invest early and let the element of time take care of all the growth there. We are limited to when
someone away. Once you pass away and you can't give away anymore, it's all into your state, and then they're the opportunity is lost.
Absolutely seeah Kim. And if I could add, what we want people to do is look at all the options. You know, if this is applicable to you, to look at all the options and weigh all the options from a tax perspective. You know, if you're wondering about real estate, typically if you have a good estate plan, a trust or something that will pass at the stepped up basis,
avoiding a lot of that capital gains tax right. Other things like contributing for education and medical gifts made directly to those types of institutions can be very beneficial and exempt from some of the taxes. Looking at all the options, weighing the options, and this is applicable to in different ways to different people. And you say, well, I don't have anything close to three million or six million, and these are only big numbers. I don't want anybody listening
to think this is only for the rich people. State planning and tax planning is for those for the rich and for those that don't have nearly as much. So please don't take that as oh, this is only for rich people today, not even close.
Absolutely, so I can chime in also, just pigging back on what Larry says that this is for everyone. Having a competent state plan is more about making sure the assets go where you want them to go. Most of the time, parents want things to be split equally among their children. That's all fine and dandy if that's your plan, but if you don't have your documents set up to do that, then everybody has to follow what the documents say.
I've had a couple of different clients come in there where the children were supposed to split everything fifty to fifty, but mom and dad unfortunately didn't have fifty to fifty set up on beneficiaries on some IRA accounts, and so when you look at the total estate, what happened was that child number one ended up with about eighty percent
of everything and child number two ended up with twenty percent. Now, fortunately in both cases right there, the siblings were on good terms and they were able to work out something equitable between the two of them so that it was more fifty to fifty. But imagine if those siblings were not on good terms and that one gets way more than the other, and that's just going to cause even more division between the siblings right there.
Yeah, absolutely, yeah, there can be so many outside influences associated with this, Larry, you and I have talked about this many times. You know, money and estates can really do away with family relationships very quickly, and I think most parents don't want that to happen. So the way to do that is to have things set up before there could possibly be any kind of problem. Six one two five zero four eight four zero zero. That's the number.
That's how you reach haven financial group. If you're listening right now and you know that you don't have an estate planned or maybe you're not too pleased with the taxes that you're paying and you know that you need to do something about it. This is the number to call to set up a free consultation. Six one two five zero four eight four zero zero. By the way, don't have to just be looking at your state plan
you want to. You want a full retirement and a state planning proposal, and then ultimately that be your guide for your retirement as well as, as we've said, your tax plans and then ultimately your state plan. When we come back, we want to talk a little bit more about the gift tax rules, how they work, and what to do with them. We're really happy to have Lance Larson with us. He is a certified CPA from Haven Financial Group and he's going to be with us to
talk more about this when we come back. Right here on the Haven Financial Group Radio Show.
Don't go too far. We're gathering more important insights and retirement plase go. The Haven Financial Group Radio Show will be right back. Stick around. You've got questions, We've got answers. Your tune to the Haven Financial Group Radio Show with your host Larry Kulvig and Kim Karrigan. Now back to the show.
Welcome back listeners. My name is Larry Kolvig, founder and CEO of the Haven Financial Group. Give us a call at six ' one two five zero four eight four zero zero, or always visit us online Havenfinancialgroup dot com. We're talking today about taxes and estate planning, you know, things that are not very exciting, but there is a peace of mind to know that you've done the best you could, whether you have a lot or a little.
And you know our last segment, you know it sounded probably like that man, that's a lot to keep track of it. I don't know how we can do it on our own. You don't have to go it alone, and you don't have to do it on your own if you're working with somebody that is really looking at
your specific individual, unique individual situation. Uh, Kim. We had a couple and I just thought of this from Owatana that came town in the last month and they came out to a class that I had in Fairboat and we do them all over the cities, and they came in they go, we've been working with an attorney and we can't get anywhere. And then they don't work with the financial advisor and they don't work with the CPA
or the account and nothing is going. And I've seen a lot of things in all the years that I've done this, and they had the biggest, one of the biggest mess I've ever seen, and they knew it. We had an ex spouse in here who was a business partner with her life partner, and it was heard the female they had a mess. They visited with Lance, they visited with me, the staff with Lance, then our carry
our estate planning attorney, I would say, several times. And you know what, they got results that they couldn't get for several years. And that's that's just one story of those that have really benefited from just taking the time to visit, because that's where it all starts. There's no cost to come in and visit with us.
Six one, two, five zero four eight four zeros zero. That's how you set up that first visit to see if this is a perfect fit for both you and for Haven Financial Group. So, gentlemen, let's talk if we could a little bit more about this tax issue and reducing gift taxes and inheritance taxes. Lance Larson is with us.
He is a certified CPA with Haven financial group. So Lance, let's talk about if you have people come in and they sit down with you and they say, Lance, here we are, this is what we've got, and we've got to figure out how we can start to transfer these dollars. But we don't want to pay these astronomical taxes. Walk us through how you start to do it.
So the first thing we want to do is try to figure out where do we want the money to go to. Do we want money to go to kids, grandkids? What are we trying to pay for? I can give you a personal example. One of my mother's very prime desires is to make sure that all her grandkids go to college and can go graduate debt free. She wants that happen so much so for my mom's case right there, one of the big things for her was able to say, hey,
here's a five to twenty nine plan. Well, in the tax code allows us to front load a five to twenty nine plan with five years worth of gifting. So right now we're at eighteen thousand dollars. Next year is nineteen thousand dollars. So imagine we can put up almost one hundred thousand dollars in each five to twenty nine plan for my mom's grandchildren. Well, that could be the one thing that we can look at for any of these clients there say, hey, we want grandchildren to go
to college. Right there, one hundred grand into that five twenty nine plan. If you want to make sure that some kids can have money to help pay for Christmas. Right now, you know what mom and dad says, Here, son, daughter, here's thirty six thousand dollars that you can have to help have a nice Christmas for your family. Again, we're getting money out of the estate. We're gifting over to the kids because they will be the eventual beneficiaries of
that money. So why wait until mom and dad pass away when they can do it right now.
There's also the idea of establishing a trust. Let's talk about that.
Yeah, and I will comment first one this because you know we have those that are charitable. Now, I always say you don't give charitably for tax reasons, but if you are charitable, it can open up some good avenues for tax planning, especially in retirement. So qualified charitable distributions from those iras if you don't need those withdrawals, charitable remainder trusts, donor advice funds, certain types of things that you can set up through in your investments that can
benefit you and the recipient. They can be highly effective, then they're not for everybody. The use of irrevocable trusts now, we want people to talk through these because they may benefit and it may not benefit. States may vary. You know, there's people out there that's say trusts avoid nursing home. Be very careful because oftentimes that's not true, and you want to make sure you're doing what's actually true rather to doing something that has no benefit. Family limited partnerships
and other things like that. Again, a lot of these are state by state specific, and Lance could probably take that a little bit further.
So. One of the biggest things with trust right there is if we're trying to reduce a state taxes, we need to have an irrevocable trust. By having an irrevocable trust, it means that we have given up control of the asset that is now owned by the trust, and therefore it is not going to be in our estate. That is the biggest way that we use trust right there, and that, like Larry said, you're going to make sure that the trust is actually going to do what you
wanted to do. I've had many people come up and say, hey, I have a trust and therefore it's not going to be my state, only to find out that it was a revocable trust which is actually included in the state. And so that's one of the hard parts right there, is you have to make sure you know what you have. If you don't, that could lead these problems in the future.
Well, and I think this always goes back to the idea of having a partner in all of this. I think that you can hear trust and you think you've got the right thing, and you think you've done the right thing. Or for example, you guys have just said you know that the amount of charitable donations will change
in twenty five that you can give each year. I mean, these are all the kinds of things that your office and all of you at Haven Financial Group stay on top of and people need to know on a regular basis.
Could agree more, Kim, Notice there is a direct coordination and link to a state planning tax planning your money. They're all connected and they go hand in hand and lances are in house CPA. We get him involved in many conversations with all varieties of folks carry Anna and Keith are a state planning attorney. They work very closely because again they go hand in hand whether you have
a little bit or a lot. And I wanted to point out that the current administration they were gonna they had some pretty wild ideas in my opinion about these things we're talking about today. They want. The new administration coming in in January, there's a good chance that they'll maintain these levels where the current one was going to lower these numbers significantly, causing the taxation to be even
more viable. So these things do change, and having somebody that can keep you up up to speed on these is so important. And when we're talking about gifting and doing these things and charitable, that doesn't mean you have to, Okay, be careful about don't give all your money away because you heard something on our show today. You may need this money for retirement. Maybe this is not applicable to your situation. You're not giving. The kids listening are going, boy,
this sounds great, I'm gonna get all this money. You should listen to the Haven Financial Group show. They're telling you how to give all your money to the kids or the grandkids. No, it's on a case by case basis, and even if it's just normal tax planning. You've heard me say this, Kim. We're big into forward tax planning. Even normal tax planning leads to tax preparation. And Lance does taxes and he's very fair, and he's a CPA. He's the whole thing is he doesn't want Uncle Sam
to get any more than they deserve. And I've never seen a CPA like to go to bat or go against the irs, and he loves to win, and we all like to win, especially against Uncle Sam.
Yeah. Absolutely, well, I think it's really important. And we talk about this all the time, Larry and Lance, I know you can certainly appreciate this as well. I always refer to it as one stop shopping because you just pointed this out, Larry. When you walk in the door and you say, listen, I need to do something about my estate planning, and I think I need to start gifting. I would imagine one of the first questions you would asked them was, well, are you set up for yourself
for retirement? And then you'd ask questions like, for example, are you prepared if you would need long term healthcare? And you know, is your medical insurance taken care of, and you'd start looking at all of these things so that they're all put together in a way that is most beneficial for an individual. And if you're just just sort of cherry picking, then the right hand doesn't know what the left hand is doing.
So true, We've had hundreds come through that we've helped in Medicare in this annual enrollment process, Glenn and Isabella and I can't tell you how many times I heard this, Oh, you guys have this here, and you have this here, and you have this here. Oh we didn't know that. Wow. And that led to more conversations Medicare long term care estate. It's led to more conversations, and that is the whole goal here. You don't have to do everything under the
same roof, but they should be working together. And I like your illustration, the right hand doesn't know what the left hand is doing. We can make this simple, even though it maybe seems very complicated. We can keep it very simple. But again, whatever your situation is, that's the discussion we're going to have. And oftentimes when we ask people do you have an estate plan, well, no, we don't. That'll lead to conversation, are your parents still with us.
Do you expect you would expect an inheritance at some point? Do they have an estate plan? And if anybody's had to experience something negatively like settling their mom and dad's estate, they know the importance of it. So if mom and dad are still here, maybe they're elderly, that maybe gives them time to hey, hey, mom and dad, you really need to do something to make sure that their stuff is done. So it's a trickle down from grandpa and grandma to mom and dad, to kids to grandkids. And
our kids are our daughters, Kim. You know our twenty three, twenty one, twenty one, and eighteen all girls powers of attorney. We'll talk later on the show about why they need that. Because you're an adult. So again sounds complicated. We're here to simplify it and hold people's hand and at the end of the day, thrive and retirement not just survive.
Lance is a very busy guy and I know he needs to get back to work. But Lance, before we wrap this segment up, any final things you'd like to say when it comes to you know, gifting and inheritance tax and what people need to know.
The biggest thing I wanted to make sure everyone understands is that where is your money going? And is it going there in the most tax efficient way possible? And the best way to talk. The best way to figure that out is by talking about it and saying, what are your goals? If you don't know what your goals are, well, then maybe it's time you sit down to figure out what they are.
You bet six one two five zero four eight four zero zero set up a free consultation with Even Financial Group talk about some of those goals.
Lance.
Thank you, Lance Larson, thank you very much for joining us today. When we come back, he legally documents for an air tight state plan. This is the Haven Financial Group Radio Show.
Ready to find your financial safe haven. Your dream retirement is in reach. Don't go away, The Haven Financial Group Radio Show will be right back. Are you worried that your financial strategy might be missing something, Well, you're in the right place. Larry Kolvig is back and ready to help you find your financial safe haven.
Welcome back to the Haven Financial Group Radio Show. I'm Larry Kulvig, founder and CEO of the Haven Financial Group. Give us a call at six one two five zero four eight four zero zero, ask us question set up some time to come in. Uh, we'll sit down and ask a lot of questions. You can ask us lots of questions. It's laid back atmosphere, but you may learn something that you didn't know and uh, maybe we can help you if you're looking to get help in any
of these certain retirement areas. I call them the puzzle pieces, putting all the pieces to retirement to together so you're not missing if you when you finally get to the end in that being in the golden years. So Cammy, it's great to have Lance on again our in house CPA. We're going to talk of state planning. Normally, oftentimes i'd have Carrie in on this show with me, but I had years of estate planning. But her Anna and Keith
are the estate planning attorneys. But this also is going to be a good conversation.
Absolutely Well, we've talked about, you know, gifting and inheritance taxes and sort of the taxation portion of estate planning. So now we wanted to back up, if you will, and just talk about what are some of those key legal documents that you need for a good effective estate plan. So let's start with a less will and testament. Why don't you walk us through some of that and some of these other legal documents.
Yeah, and I think I'll readirect that a little bit because I classify these into living documents, documents needed or I hope you don't need them, but you may need them, sure, and you're alive. And then when those documents you're no longer here, documents that you should have or at least look at, and those living documents, or I would say, when you're in capacity, you're capable, you're able. Those starts with simply the durable powers of attorney. Who have you
given the authority? And the financial the medical records, healthcare? Who have you given legally access to? And right now listeners are thinking, well, I've been married for fifty years, my spouses have automatic authority. They do not, They absolutely do not. So you need to appoint somebody, a friend,
a neighbor, whoever that may be. And sometimes I get this response, I don't even know who, Well, name somebody that you would rather have, because the alternative is the state that you live in, and that could be guardianship, conservatorship, and that means who's your parent? If you're unable to speak for yourself, who has your checkbook and who's in charge of the money if you're unable to tend to
tend to your own business. So those are the living documents, and anybody over the age of eighteen should have those of attorney, any legal adult. And I know Kerrie are a state planning attorney for graduation gifts has discounted her costs or actually she may even give them out two
young young graduates. So even though younger generation are our daughters at at their age in college, they all have theirs because thankfully I'm practicing what I preach, and I had to be reminded when our eighteen year old because kind of these things can just kind of go by you. So the healthcare powers of attorney, the living wills, those terrible types of things that do you want to be have life support, resuscitation. You know those aren't fun conversations.
But you know, if you have kids, they might have different ideas or Dad wants this, Mom wants this, and maybe you don't want that. But if it's not legally drawn out, it's as if it doesn't even exist. And these living documents would have to have as of two thousand and three, we called it hip hop you know, the Privacy Act. The verbiage needs to be in there, the protection of your privacy, the hip authorization. It's actually
legal ease in the documents. And that's where if you have old, old documents, you should get them reviewed because they might be outdated. And I know the tendency, and I'm not against doing it yourself, but in some areas doing it yourself is not the right answer. Are you an attorney? Are you not an attorney? Have these should be legally done? And I'd be very cautious of people that sell paper, you know, Susie Orman and others. Hey respect them and all this, but there's different rules in
different states. Sometimes we call them selling paper and it's not even good as the paper it's written on. So be very careful legal zoom some of those other things. Yeah, you may be okay, but I'd rather take them may out of the equation and say, you know what, we had them done right and they will be okay.
Right.
So, really we're talking about anybody over the age of eighteen needs all of those documents. We are, yeah, absolutely, because after eighteen, you're making your own legal decisions. Your parents are not your guardians anymore as far as these kinds of legal situations are concerned.
Yeah, the release of information. God forbid. Your good kid goes off to college and breaks a leg or gets hurt or an accident, and if they haven't given you consent, they can't talk to you, so you have to go ask the permission and kim. Then it goes into all what if we're not here, then what documents take over? Well, hopefully the documents you have prepared legal legally prepared when you're not under dress, dress, not under stress, and able to speak, and that would be what's called the last
will and testament. A will is your wishes for what you want when you're gone. It's your wishes. It designates who you want to be guardian over your kids. It you can designate if you're not here, if you die, what happens. But it's really your wishes.
It does not your right, it's not about your set, it's about your wishes.
It's about your wishes, So it's your wishes for the probate court if your state is over I think it's seventy five thousand of the titles, deeds and accounts in the state of Minnesota. Otherwise that would have to be go through the probate court, through a probate judge. Many listeners may have had gone through a not so fun experience if you went through that. Not that all are bad, but they tend to be costly, time consuming for the
kids or loved ones through whoever's benefiting. So it's why a lot of people look at a revocable living trust. That is an entity designed to hold your assets, titles, deeds, accounts. Our house is in the Larry and Michelle call big family trust and anybody trying to find it. By the way, trusts are private, so good luck trying to find where that is. Okay, it's the beauty of a trust. It
is a private where a will is public. Once you're gone, if you're dealing with probate, they're going to announce your stuff. There's going to be a certain time line and there's nothing private about it. And most people tend to be more private. So a trust may be the thing for you, it's not for everybody. There's some financial health of people out there that say everybody should have a trust. I say that's not true. How do you know, sit down and talk with somebody and have an evaluation to say
it makes sense or it doesn't make sense. It's revocable. My wife and I are the trustees of our trust. Nobody can change it but us. When one of us is gone. We've chosen to make it, for the most part, irrevocable. So somebody doesn't, you know, if anybody can't come in. So a trust does avoid probate. Now, if it's not necessary and you own a piece of property you know we're going to carry or whoever you work with should
talk to you about a transfer on death deed. It's a tool, not a detailed plan like a trust is. It's a tool that may be suffice to avoid probate on any property. These are the documents when you're in, when you're gone, or you passed away. And I know there's some people that give this advice. Well, if you're married, don't worry about it. But if somebody else pat with one of you passes, then the other one should do it.
You do all your things together for all these years, Do not wait till one of you because what if, what if you go together? I think that's terrible advice. If you're a married couple or a partner, you should do this when you're capable, competent. And by the way, we've made a state planning these things kind of a senior topic. It should not be a senior topic. When you had kids, got married, bought a house, and started getting assets, that's when it was intended to be done well.
And what people I think have to remember is this has to constantly be updated. So what was important to you when your children were minors might change when your children are adults. And another thing, and literally it's you who has said this over and over and I actually started talking to my husband about this. You have to double check your beni officiaries. You know, when we were younger and we didn't have children, our parents were our beneficiaries.
We had them on a lot of our documents. Well, now we have adult children, they clearly would now be our beneficiaries, and we have gone back through to double check and make sure that everything is in their names now versus my parents or my in laws.
You know, it's one of the most simplest things. Some would call it elementary, but we ask it in all our conversations and who we work with, if they're coming in, if they're new, who are your beneficiaries? And most of the time they say, well, it's my kids or whomever, but is it really is it on the actual accounts. I can't tell you how many times in all the years I've done this where there have been no beneficiaries. And again I made this comment before on the show.
I was with a couple. She was a forty one year nurse at Fairview Ridges, and they were in my office and just the most wonderful people. And I noticed do on her four h three b at work. Mind you forty one years, there was no beneficiaries. And I asked her, I said, you have no beneficiary. She goes, I don't know who to put. Your husband is sitting right next to you. Oh yeah, I guess I should put him. Thankfully nothing happened or ex spouses that were on there and or just none. So make sure your
beneficiaries are current. We're going to talk more in the next segment about you know, different things with that, but so often they're outdated, there's not there. Make sure something is simple as beneficiary beneficiary designations, avoid probate, and if that's your intent, you probably should do it. You know, on the living will, healthcare directives, that type of thing. I mentioned starting this coming year, Haven Financial Group to
our clients, we're going to provide a now what. It's a nice book to document all this information, whether you're alive or we're still with us. And when you pass, the more information you can give to your kids or loved ones. And you know, sometimes people say, well, I don't really care that they can deal with it now. Most often they don't really mean that. But for those that do care and want to make it as simple and seamless as possible, this now would Haven Financial Book.
If you will, we're going to give it to our clients and you can put as much information funeral, what you want done, who you want to do what, and it's going to be very helpful. And already people go, I love that idea. So again, these things are not fun to talk about, but they're so important. Proactive not reactive, because in this world reacting is not gonna it's not gonna bode well.
No, it does not. Absolutely. So, do you need legal documents some of these legal documents that we've talked about, or maybe you have some and you need them reviewed. Let's make sure that your estate plan is airtight. Six one, two, five, zero four eight four zero zero. That is the number you call. Set a consultation with Haven Financial Group. They would be happy to go through the documents you currently have.
They are happy to draw up new documents and of course so much more when it comes to your retirement planning. Six one two five zero four eight four zero zero. You tell them that you heard Larry and me right here on the radio and that you'd like to come in and sit down and chat when we come back. What to know about inherited retirement accounts that is coming up here on the Haven Financial Group Radio Show.
Don't go too far. We're gathering more important insights and retirement ways. Devin, The Haven Financial Group Radio Show will be right back. Stick around. You've got questions, We've got answers. Your tune to the Haven Financial Group Radio Show with your host Larry Kulvig and Kim Karragan. Now back to the show.
Good morning, and welcome back to the Haven Financial Group Radio Show again, thanks for listening. Feel free to give us a call six one two five zero four eight four zero zero or Havenfinancialgroup dot com set up a time to come in, or just use the tools on our site. Check out the classes that are in the upcoming months, social Security investment classes, medicare classes. We teach them throughout the whole year and they're educational based and
workbooks provided each one of those. So we meet a lot of people through that, We meet a lot of people through referrals and through the show here, so we'd love to get to know you as well.
So Larry, let's talk a little bit about inherited retirement accounts. So first off, maybe explain to everybody what this means. I mean, I think it's pretty self evident, but maybe you could just explain what we're talking about here.
Well. Inherited retirement accounts is just what it says, inherited from somebody mom, dad, grandma, aunt, uncle, from anybody that may have left you as a beneficiary on their accounts, and when they're gone, you're going to have the ability to have some options. Now, retirement accounts are one of the most popular types of investment accounts in the country. It's where people have saved for retirement. It's what's worked. But eventually these accounts, if the money's not spent, we'll
have to transfer to somebody else. Now, how does that happen through beneficiaries? Now, inherited with that, there's a different caveats to that. If the one the deceased was over the required minium distribution age, then the inherited IRA by the recipient will still have to take required minimum distributions. Now it's determined by a divisor that the federal government sends determines and we need to take those out over
the next ten years. Now, if that sounds a little different, the Secure Act of twenty nineteen, there was a big law change. I'll cite Ed Slott, East Coast CPA. He's in the Wall Street Journal. If anybody's ever heard him, whatever, if he's mid seventies, I know Ed. I've heard him talk. He'll make your head spin about taxes, that's for sure.
But these rules change. His books became outdated because he wrote books on multi generational IRA, stretch iras, and the Secure Act that was over the rules that you could take recoil little bits or pieces of that inherited IRA for years and years and then to the kids, then to the grandkids. The transfer of wealth in America, legacy wealth. The rules changed. These iras. Now, these pre tax money that we're referring to that are inherited. Those inherited accounts
are going to have to be drained in ten years. Obviously, that creates tax revenues much faster for the government. It's very obvious now roth iras and four o one case you don't have to take our But there's other reasons why. If you're retired you wouldn't want to keep it in a four to one k If those if you'd passed away, your recipient or beneficiaries would have to take that in five years. So there's a lot of ins and outs.
The deadline for these r and ds inherited, inherited or not inherited is the end of the year, and I would say it's really right now because anything after the second half of December there's a chance it's not going to get done. And guess what happens if you don't get it out by the deadline. There's a nice big penalty that the government will slap on it. You don't want like, you don't want that. Now, we help people decide how do you take them if you're a beneficiary now,
spouses you could take it as a spousal rollover. They could put it in their own names. There's different options all I'm going to say is talk through those options, talk through the tax ramifications. There's different ways. Not enough time to go through it on this show by any means, but there's different rules. And have a partner that can talk through this to avoid some of the penalties, tax ramifications, early withdrawals. Just make sure that you're doing it the
right way. And quite frankly, that's what people rely.
On us for absolutely. Six one two five zero four eight four zero zero. You can call, set up a free consultation, tell them that you heard us here on the radio, and go in and talk about some of these retirement accounts and if they were inherited or if your intention is to leave it to someone, what's the most effective way to do that.
How often do you deal with.
This kind of thing, Laric? Do people come in pretty frequently and they've been here these kinds of attacks.
Yeah, I think it's kind to do because, of course, not jokingly, but the mortality rate in the United States is one hundred percent. We're all going to go someday, so we're all going to go. So where's your money going to go? If you don't spend it? All those beneficiary designations so important the utilization of trust. We talked about that earlier in the show quite frankly with our relationship closely, so closely with Carrie and Anna and Keith.
When people do get their estate plan done, our communication is so connected that they notify us of how beneficiary designations should look, how they should read, what accounts should be in the trust name. Certain things go in the trust name, other things do not. Because if you put trust as the beneficiary of iras, that could create different tax obligations that you maybe don't want. So again, the trust.
For example, my wife and I on some of our accounts, our trust is the name on the account, and for some things the trust is the contingent beneficiary after we have each other. Now that's another reason for a trust. If you have special needs, if your kids are minors, you can put meter distribution kind of say well, I don't want them to get it all at twenty twenty five thirty thirty five. You can map out the ages if you want a little bit more control. So again,
trust benefits pros cons talk through that. I mentioned rollovers, and we talked and inherited rollovers if someone passes. But it's worth mentioning we do a lot of individual rollovers, and that can be done at age fifty nine and a half. I just had a couple from Lakeville to It Content consultants, and they each had three four to one k's, three of them each that were called orphan
four one ks. They didn't work there anymore, and they had each had a current four O one K. Well, we rolled all three into one, simplified and consolidated and made them much easier and by the way, much better investments as well. So if you have some that you don't you're not working there anymore, or if you're fifty nine and a half and you don't want to risk as much or you want better in vestment options, we can look at rollover options as well. In a lot
of cases it makes sense. So again all of this may sound complicated, but looking at it in an individual basis, all these retirement puzzle pieces him at Haven Financial Group, we do all this in house. We do we do all of it. It doesn't have to be all spread out all over the place. You know, people can they deserve the time, They should take the time. And guess
why we have New Year's resolutions coming up. You maybe owe it to yourself, your spouse, your family, take the time, because here at Haven Financial Group will take the time with you.
I know it's a tough it's a tough conversation to have. I don't think anybody wants to think about mortality. And you know, these are the kinds of things you just want to keep putting off and putting off. Maybe if you put it off and you know you don't have to worry about it, but that that gets you nowhere.
And I'm sure that Larry would be the first one to say that once people do get this taken care of, they feel so much much better and they feel relief and they can walk right out the door and get on with their lives.
The oddu Old saying a failure to plan is a plan to fail. None of us want to fail. We don't want to fail our spouses, our parent, our parents, our kids. But a lack of planning can lead to some outcomes that we're just not going to want to have, nor would we wish on anybody, let alone our family or others that are beneficiaries.
Right six one two five zero four eight four zero zero six one two five zero four eighty four hundred call that number set up a consultation. Go in if you have paperwork that's already been drawn up. We've said this a couple of times during the course of the show, that paperwork needs to probably be looked at again if it hasn't been looked at in the last few years. So bring your paperwork in so that the experts here
at Haven Financial can take a look at it. If you don't have an estate plan, you don't have a retirement plan, you need a portfolio and you need you want to get on that right now, call that same number six one two five zero four eight four zero zero. Go in free consultation first for the first meeting. The whole idea here is just to see if everybody's comfortable together,
and then you begin to work from there. Many benefits to working with the folks at Haven Financial, not the least of which they're just some real good people who are concerned about your future. But they also have offer all of these different services in one place, the right hand talking to the left hand, and lots of education that goes on there at Haven Financial hanfinancialgroup dot com. You can get more information about the firm there. This has been really informative. I think Larry, it.
Has Kim always good to be with you listeners. We'd love to visit more with you and joy the holidays. Merry Christmas. We look forward to getting with you next week. Feel free to call us at six one two five four eighty four hundred or Havenfinancialgroup dot com.
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