And good evening.

You've got More Than Money.

You've got Gene Dickison your host, your personal financial adviser.

Happy to be with you, happy to serve you for the next half an hour.

I am indeed at your service.

Financial adviser for a very... ..very long time, claiming 780 years of experience.

That's one of life's great mysteries.

How could that possibly be true?

You'll figure that out as we go along.

For loyal viewers returning to us, you'll find that we take our work and our service to you very seriously.

We don't take ourselves very seriously at all.

It's a very nice balance.

I think you'll find it to be quite accommodating, a little bit easier on the psyche than all that stern stuff you hear on so many other shows.

We are without a doubt the most relevant financial show being broadcast today because you set the agenda, you describe to us what questions you wish to have answered.

What's important to you is what's important to us.

So it's at the top of your mind, you send us a question, we give you an answer that hopefully ends up with creating peace of mind for you.

Those two things match up really rather well.

We are blessed in that our audience is our... Is... Our audience is composed of some of the very best, some of the very brightest, some of the very best and most engaged people that you will find.

So your questions are far more interesting than anything I might come up with, just generically speaking.

Geriatrically speaking?

You'll figure that out, too.

So, if you have a question for us, send it along.

We answer every single e-mail, even the silly ones.

Every single e-mail gets answered.

Not everyone will appear on a future show.

We simply don't have enough time, not enough time on a show.

But every single e-mail is answered back.

We have a tremendous team.

They respond to you ASAP and with as much service again as we are able to provide.

So, retirement investment, estate planning, income tax issues, deductions and standard deductions.

Whether we've got Roth conversions, trustees being named guardians and executors starting a business, running a business, maybe taking a business into its fifth generation 120 years down the road.

All those are fair game.

So, speaking of fair game, let's give you a good demo.

Let's get it started.

Megan, our financial correspondent, where do we start our questions this evening?

- Hi, Gene.

Our first article that we're going to start with is actually an update on estate rules for making gifts to family members.

So this article says, in 2007, Pennsylvania resident William DeMuth executed a power of attorney appointing his son, Donald DeMuth, as his agent.

From 2007 through 2014, Donald gave annual gifts to his brothers and other family members.

Prior to William DeMuth's death, 11 gift checks were written on an investment account.

Prior to his death, one check was deposited and paid, three checks were deposited and unpaid, and seven of the 11 checks were deposited subsequent to death.

Donald DeMuth excluded the total of the 11 checks from the estate return.

The IRS issued a notice of deficiency for the value of the ten checks that were not paid until after William DeMuth's death.

The tax court held that gift checks written before death but not paid after death were includable in the gross estate.

This tax court ruling establishes that gifts need to be...need to clear the donor's bank account to be considered a completed gift.

This is especially important when gifts are made at the end of December.

Such gifts need to clear the donor's bank account on or before December 31st to be treated as a gift for the year.

What are your thoughts on this, Gene?

- Yeah, this is very, very important for folks to hear.

There has been discussion from the moment I became a financial adviser many, many years ago about the issue of gifts.

When is a gift completed?

If an individual writes a check and the check is not cashed - in this case, it was a matter of days, perhaps weeks, in other cases, we have seen it where, hey, a check was sent, it wasn't...it wasn't received promptly, or perhaps the individual who got it was procrastinating in making the deposit, and it wasn't deposited for weeks or months thereafter.

Has the gift actually been made?

This court ruling clearly now states it has not.

It is not.

Now, this gentlemen, the scenario is a little bit of... has a little bit of a nuance to it in that he was writing checks on behalf of his father, who was on his deathbed, and those checks that were the gifts that were being made were intended to remove that money from the taxable estate.

And because of this court ruling, the vast majority of those checks did not leave the estate.

They were brought back in, they were taxed... taxable and thereby taxed.

So, for the average person listening, as we get to the end of the year, they're saying we always make gifts at Christmas, we always give kids checks.

Very often people are coming...their kids are coming in from all around the country, they're coming in from various states, they're handing them a Christmas card - "Thank you, Mom and Dad, "thank you for this very generous gift" - and it may be days or weeks before they get home and deposit it.

It's not deposited, it's not paid until the next year, the gift is not complete until the following year.

So if you're making gifts, and particularly if you're making gifts at year end, ensure, be sure that the folks who are receiving the gifts, the folks that you are caring about enough to give gifts to get those checks paid and cleared in the tax year in which you intended them to be.

So, Meg, very important report.

Lots of clarity there for a lot of people who make family gifts on an annual basis.

It changes your... Should change your approach dramatically.

And our particular case, my recommendation, December 1st should be your deadline.

That should be your deadline for writing the check and handing it to the person you wish to have, so that they have plenty of time and no excuse, no excuse for not getting that in the bank and paid.

So, interesting.

Very interesting.

And kind of a clarification for lots of folks out there.

Gene@askmtm.com is the e-mail address that we received this next question.

Megs, what's next?

- Our next question says, "I have always managed "our own money, but I am concerned that my wife "would not do it well if I were to die first.

"We would like our children to receive a nice inheritance.

"I find this economic time a bit of a puzzle "to try to do the right thing.

"Our ages are 78 and 75, "and we're wondering what advice you could give us."

- Well, first of all, you're very wise.

You're very wise.

It is not unusual that in a married couple, one person generally takes charge of the finances, one person generally is not as involved.

For many years, perhaps for eternity, the man was in charge of the money.

"And don't you worry your little head "about this, young lady."

No, that's...that's historic.

That's dinosaur kind of stuff.

We meet lots of couples these days, husband's in charge.

Lots of couples, wife's in charge.

Lots of couples where they are very much co equal and doing it together.

So the pattern can be different.

It could be a wife writing in worried about her husband who is not interested.

It is irrelevant who's not interested at the moment.

What is relevant is that when the person who's currently taking charge of all these things is no longer here, the person left behind can be confused, overwhelmed, frightened, anxious, because these are things that they have never attended to previously.

Now, having said that long winded preamble, my opinion - you establish a relationship with a financial advisor right this moment while the two of you are still both with us, both with us on this planet.

You will have, in all probability, a little better understanding of the technical side of what you're looking for with a financial advisor.

Your wife in this case will have a better handle on the chemistry that she's looking for because the likelihood is she will be dealing with the financial advisor longer than you will.

That's the entire idea of why we're setting up this relationship now.

So you will need to shift gears a little bit from I'm in charge, I'm a do it yourself where I do everything all by myself to I am part of a team and the team now has at least three members.

You, of course... ..your wife is much more active now than ever before, and a financial adviser who is kind of the linchpin and gives you the longevity, the protection for your wife that you're seeking.

And if I might extend that recommendation a bit, financial advisors come in lots of different sizes, shapes, flavors, etc, and there are lots of high quality financial advisors out there to choose from.

Seeing as you're looking for the continuity, the protection for your wife over many, many years, it would be, in my opinion, inappropriate to look to a solo practitioner, a financial advisor who is all by him or herself and has no associates and no succession plan.

That, in and of itself, defeats the purpose that you are seeking.

The second issue is you might be concerned about the age of your financial advisor because you are 75, 73, roughly those ages.

If you pick somebody that you're very comfortable with, who's 75, 73, all of a sudden you're in a very similar circumstance.

As an example, our More Than Money world headquarters, we have the seniors, of course, and we have several generations, both chronologically, biologically, several generations that have been assembled as financial advisors within our organization, so that if a senior member for some reason is no longer available, the client service is uninterrupted.

The attention to the client's needs is uninterrupted.

That's what you're looking for.

So it's a transition, you're going to need to shift gears mentally from I do all this to I am part of a team.

You're going to need to identify an individual that has the right chemistry, as measured by your wife.

And then finally, you're going to want to be with an organization that can give your wife literally decades of assurance that she will be well served.

Excellent question.

Short question.

Long answer, important answer.

Meghan, outstanding, very, very good.

Let's go to our next question.

- Our next question says, "I'm 66 and expect to work "another four years.

"I'm very unhappy with my 401k at work.

"It's dropped over 30% since last year.

"This is the fourth 401k plan we've had "in the last ten years "and nobody here seems to know where to turn.

"I had a financial advisor look at it, "and she agreed the performance was dreadful.

"When I asked her to move it, she refused.

"She said the fees inside the plan were very, very low "and she couldn't compete.

"I said, 'What good are low fees "'if the investments drop like a stone?'

"She said she just couldn't do it.

"We're wondering would a second opinion meeting "be in line here or are we just stuck?

"Thank you for your help."

- You are not stuck.

Not by a long shot.

There actually are a number of rules built into the administration of 401ks that permit people in your circumstance to be unstuck.

The general category of those rules is called in-service rollovers.

In-service rollovers.

Breaking down, "in-service" means you stay in service to your company, to your employer, you are not terminated, you are not fired, you are not retiring, you are not leaving.

You're still in the deal.

You're still in the 401k plan.

You are still fully active.

"Rollover" says the current balance in your 401k plan can be lifted out and dropped into an IRA, a rollover IRA in your name.

So the current 401k investments would end, you would have the cash value of your 401k, whatever that might be when it's transferred, and you would then have the entire universe of investments to select from.

So that, in response to the young lady that initially looked at this question and said the fees are too low, there are limitless - not really, but effectively limitless - options that you could choose, that have fees that are, I guarantee, every bit as low as what you have in the 401k or lower.

Or lower.

In addition, there are investments that you might choose that are not available in your 401k, that you might find very, very valuable.

A 30% drop from last year is dreadful.

I did a review just recently, as in several hours ago, for a client that over the last year and ten months, over 2021 and 2022, the net decline, 2%.

We have certain clients net positive.

Other clients net slightly lower numbers, but -30, no.

Doesn't mean that anybody has done something horribly wrong in your 401k, but it does mean something doesn't fit here.

The investments don't fit you, the performance hasn't been appropriate.

Can you make a move?

The answer is sure.

Now, curiosity.

I'm sure a lot of folks are out there going, "Then...Then why did she refuse?"

Well, we've got to be really, really clear about the current regulatory environment that financial advisers find themselves in.

For decades, the organization that regulated my work as a financial adviser was known as FINRA, the Financial Industry Regulatory Authority.

For decades.

And then, as we became registered investment advisers, the additional regulatory authority in addition to FINRA, the SEC, Securities Exchange Commission, those are the folks that are responsible for looking after More Than Money, MTM Financial Group and so many others, thousands of others.

Now there's a new one, Department of Labor.

Department of Labor declared a couple of years back that they were interested in regulating retirement plans to a much broader extent than they ever had before.

They have always had the responsibility of ensuring that pension plans, and profit share plans, and 401ks, and 403bs were properly established, properly administrated.

They've always had that responsibility.

They decided they were also responsible for IRAs.

And as a result, the requirements that they place on a registered investment adviser to be able to move an account from a 401k to an IRA are very serious.

They want to be assured that this movement is in the best interest of the client.

And as a result, this young lady is saying, "Well, the fees are so low, my fees are higher, "I can't compete.

I will say no."

That's not what the Department of Labor has said at all.

They have not said that the only answer is which one is least expensive.

That's...

They have, as a matter of fact, expressly not said that, they have said something quite to the contrary.

They expect that a competent, responsible, professional financial adviser will do a due diligence.

They will look carefully at the 401k and what it offers in terms of investments and other services and, of course, the cost structure, and they will compare that to the rollover IRA in terms of investments, opportunities, cost structure, and, very important, what other services an individual, a client might receive as a result of being a client of that registered investment advisor.

So, for example, in the current 401k for this gentleman, does he receive tax planning, income tax planning?

The answer is no.

With his IRA, he would.

Would he receive estate planning?

The answer in the 401k is no.

With an IRA, he would.

Does he receive a retirement plan, as in a software package that plans out retirements and helps make those decisions?

401k, no.

IRA, yes.

Those are just three simple examples, basic examples of the kind of services that he could expect with an in-service rollover.

Typically, 401k plans allow in-service rollovers for employees that are 55 and older.

This gentleman is 66, so he fits beautifully.

And typically it's simply a function of requesting the appropriate paperwork from the 401k administrator, typically not the employer.

And particularly in small companies, the employer is also a participant of the 401k and knows, in most cases, very little, if anything, more about it than you do.

But they are relying on the plan administrator.

Many plans are administered by the payroll service that they currently use.

We often bump into Paychex as a payroll service.

They are also a 401k administrator.

So if you had a question about the 401k through that company that has Paychex administering both the payroll and 401k, you would call Paychex and you would say, "I'd like to do an in-service rollover."

They would provide you with all the documentation that you would need.

And it should be, should be quite simple.

And the fact that there are significantly evolved investment options that are often available for IRA rollovers that are not available for 401ks should give you some incentive to move sooner rather than later.

Rather than watching your 401k devolve even further.

You want to stop the bleeding and turn this around and hopefully return to former glory.

Speaking of glory, Miss Megan, you look glorious this evening.

What question do you have for me?

- Thank you, Gene.

Very nice of you to say.

This question says, "As we get near the end of the year, "we need to take our RMDs "based on last December's high account numbers.

"I know there is a way to get this to our church "without paying taxes, but I don't remember how that goes.

"Please remind two forgetful viewers.

"Also, will this get us an audit from the IRS?

"Thank you for your help."

- Well, I'm happy to remind.

This is what we do on a day by day basis, this is not what you do on a day by day basis.

So, easy, you're very welcome.

And I'll answer the last question first.

No, it's not going to get you audited.

The rules and mechanics to get money from your IRA required minimum distribution - or more, we'll talk about that in a second - over to your church or any other nonprofit that's approved - and you can do it in multiples, so it could be your church and something else, it could be Folds Of Honor, and it could be Laughing At My Nightmare, and it could be your church, any combination that you wish - simply requires that, number one, you be 70 and a half.

If you're taking RMDs, you are 70 and a half or older.

It requires you to be 70 and a half.

You are limited to about $100,000 a year that you're allowed to send to any, in total, to organizations that are non profit, non taxed, and you do it directly.

So you would instruct your IRA custodian what nonprofits, church, etc.

that you would like these dollars sent to.

You would tell them exactly how many dollars.

Using a simple example, you have 500,000 in your IRA, your RMD is $20,000, you'd like to send half of that to the church, you'd like to send... That's $10,000.

You'd like to send $5,000 to Folds Of Honor.

You'd like to send $5,000 to Laughing At My Nightmare.

They would cut the checks directly to those organizations.

You have the choice of having them send them directly to those organizations, they're happy to do that, or send them to you and you can hand deliver.

Lots of folks really enjoy that.

I'm in that group, as well.

It's a great deal of fun.

So, mechanically easy.

Follow the rules, no problem.

There are limitations, but they're very generous.

And as long as you're 70 and a half or older, it should go beautifully.

And by the way, just as a little icing on the cake, not only will they not be reported as taxable income, they will not affect your Medicare premiums.

And for folks who are already retired, they already know what I'm talking about, that Medicare premiums can be jacked if you have an unexpected income increase, and they can be jacked to a point where they're kind of painful.

None of that happens.

It's called a qualified charitable distribution.

QCD.

Qualified charitable distribution.

Not sure exactly how to pull it off, need more information, just reach out.

We'll be happy to help.

Megan, one more.

- Sure thing.

Our last question says, "My wife and I are recently retired.

"I am 68 and waiting until age 70 to take Social Security.

"Once this happens, we will be able "to live off Social Security and a modest pension "and will not need to touch our IRA for the rest of our lives, "which totals around 1.5 million.

"In trying to maximize our legacy for our two children, "we are converting $50,000 per year from our traditional IRA "to a Roth IRA.

"Our IRA is in mostly stock mutual funds "and the conversion is being done in-kind "so we do not lose money by selling stock "when it is low.

"No taxes are taken out and the taxes will be paid at year end "with the money from our cash accounts.

"Two questions for you.

"Number one, if we do the conversions every January, "will we be required to pay estimated quarterly taxes "on the 50,000?

"Second question, what is your opinion on our logic?

"Are we doing the right thing?

"Thank you.

We both love your show."

- You're very kind.

We love that you have trusted us with your question.

Number one, your logic is incredibly sound.

The real key for folks listening and saying, "Well, why is he so quick to say that?"

The cash flow.

Your Social Security and pensions cover your cash flow needs as soon as you make that claim, so you are not reliant on this money.

You have the ability to pay the tax out of pocket.

That's fantastic.

So, the conversion, if you're moving 50,000, the entire 50,000 goes into the Roth.

That will benefit your family dramatically.

It will lower your taxable estate.

It will increase the tax free income that your family will get.

It's fantastic.

I have nothing but praise for your thought process.

Estimated taxes, you would be very wise to pay the estimated taxes.

If you do not, especially if you've done this in terms of a pattern, the IRS sees this every year.

The IRS does not look at a calendar year as your tax base, they look at quarters.

And if you should have paid the tax in January, they will hit you with interest and penalties for three quarters minimum, likely four, because the tax is not due until after the first quarter of the following year.

So, do yourself a favor, work with a competent, trusted, experienced tax professional.

Help them set up either estimated payments or increase the taxes withheld from your other income in retirement.

Either way, get you exactly where you want to be, where you don't really owe anything right around tax time.

And it's done simply and easily.

Speaking of simple and easy, that pretty much describes me, I would think.

Bottom line, is it simple and easy for you to get to questions that most concern you?

Get the answers to those questions and achieve some real peace of mind.

Send those to me, Gene@askmtm.com.

We answer every single question back to you, even the silly ones.

And bottom line, is that maybe, just maybe, a future show we'll be answering your question on air for our entire audience to enjoy.

Hopefully you enjoyed tonight's show, hopefully you learned a lot, hopefully you learned enough that you'll want to return next week, right here, as we come back with More Than Money.

Goodbye.