- And good evening.

You've got More Than Money.

You've got Gene Dickison, your host, your personal financial advisor on the most relevant financial show on television today.

That's a bold statement, but I'm very, very confident that I am correct, because our show centers on you.

We answer your questions.

You determine what's most relevant, what's at the top of your mind.

So those questions come to us and we try to give you answers that will give you peace of mind and balance all that out.

So whether it's an investment question, a retirement question, an income tax question, a 401(k) question, maybe an estate planning issue, executors and trustees and guardians or a business question about how to best start, perhaps manage, perhaps liquidate a business, we're here to help.

Easiest way for you to access us is by email, gene@askmtm.com.

gene@askmtm.com comes right into our More Than Money world headquarters and our entire team is at your service.

So we have specialist advisors and partners that can answer almost, almost every question.

We still have one that we haven't been able to get anybody's answer to.

Maybe I'll circle back to that later.

But bottom line is that we're here to serve you.

We answer every single question back.

Even though we can't possibly put all your emails on our future shows, we'll try to get to as many as we possibly can.

So why don't we get right to it?

Let's turn our attention to our financial correspondent.

Megan, where do we start this evening?

- Hi, Gene.

Our first question tonight says, "I frequently receive invitations to free dinners "to listen to a sales pitch.

"The most recent invitation states "The keys to retiring tax free in today's economy.

"'Learn what an LIRP is and why senators, congressmen "'and high-paid executives use this winning strategy "'to create tax free income.'

"So what is an LIRP?

"I am 68 years old, retired, "but working part time in a fun job.

"Thank you for your guidance.

"I'm a loyal viewer of your show."

- Well, thank you so much.

That sounds fantastic to start.

Bottom line is, what the heck is an "LIRP"?

LIRP, shorthand for life insurance retirement plan, sometimes referred to as a life insurance retirement policy, it is a marketing gimmick.

It is a way for a salesman, and your email described it quite accurately, a salesman to try to get you to part with a great deal of your money and so that that person, he or she, can earn a great deal of money because the commissions are rather generous.

So life insurance retirement plan, most of you have never heard of it.

That's because it's not technically a retirement plan at all.

Retirement plans generally are supervised by the Department of Labor, whether they're pensions, profit sharings, 401(k)s, 403(b)s and the like.

Those are generally regulated, developed and are operated on the administrative framework as provided by the Department of Labor.

A LIRP has nothing to do with any of that.

It is simply the suggestion that if you were so inclined, you could put a substantial sum of money as a life insurance premium on an annual basis, allow cash value to grow inside that policy and over many, many, many years in the future, retire and pull dollars from that life insurance policy.

You'll note that in the email the draw was twofold, tax free income in retirement and, number two, the envy factor.

You know, "Senators, executives, "smart people are doing this.

"And if you're envious of those folks, you can do it, too."

The reality is that life insurance retirement plans, or whatever you wish to call them, have been around for many, many years.

Life insurance advisors, whether you call them salespeople or advisors, it depends on the quality of their advice, really professional life insurance people will tell you life insurance is not an investment, should not be viewed as an investment.

The fact that it has some investment qualities is almost a distraction because it was not developed, it was not designed, it's not intended to be.

But are there salesmen that will suggest that it should be?

Of course, because the commissions can be extraordinary.

If they could set up a plan that would ask you to put in, I'm picking a number, $25,000 a year for the next 20 or 30 years, until you retire, they likely in the first year will get a premium, a commission larger than the premium, more than $25,000 in commissions, even though you've only paid in $25,000.

So the motivation is pretty clear for the salesman, not so clear for you, because the tax free carrot that's being dangled at one point many, many years ago was possibly the reason you would want to do that.

But bottom line is, since that time, not necessary.

Since that time, the Roth program has been developed, whether it's a Roth IRA or a 401(k), and you can get all the tax free income you want without giving someone huge commissions along the way, without paying mortality and expenses that are very, very substantial.

So life insurance retirement plan isn't necessarily a retirement plan, isn't necessarily one that you want to look at.

Probably isn't necessary.

Megan, interesting, indeed.

- Our next question says, "I thought all financial advisors charge "the same percentage fee, but I guess I was wrong.

"We've talked to three advisors "and their percentages go from 1.5% down to 0.75%.

"It's not a huge difference, but it will add up over time.

"Why are they different and how do we pick which one?"

- Excellent question.

And indeed, a lot of folks are under the impression that financial advisors are all paid exactly the same.

Not the case at all.

Financial advisors come in many different forms from, gosh, basically salespeople that have little or no value added to their services other than, "Hey, I've got a product I want you to have "and I'm going to make money if you buy it", to very sophisticated financial advisors who are part of a planning group that will have various partners in that group that can advise on financial topics, literally from A to Z, and giving you the complete picture.

One-stop shopping, so to speak.

And as a result, yes, there are some pretty dramatic differences in how financial advisors get paid.

And not unusual at all, this range that you've experienced, a 0.75, three quarters of 1% per year of the investments that they manage, up to 1.5%.

Pretty reasonable.

That's a pretty common range.

And it very much depends on the services that you're being offered.

You can acquire investment advice only, and typically for the low end of the spectrum.

So if the only real service you're interested in is "Here's my money, please invest it for me," then the low end of the spectrum is likely of interest to you.

If you are looking for a more comprehensive, a more personal, a more customized experience, relationship with your financial advisor, where you can ask questions about income tax issues, you can ask questions about retirement planning issues, estate planning, documentation and roles, life insurance, long term care insurance, then you're likely to see a fee on the higher end of that spectrum because you're getting more for your dollar.

How do you pick?

Start with what you need, start with, "What are you requesting of your financial advisor?"

You may find that your needs are rather modest and you should stay on the lower end.

You may find that you would greatly benefit from the services of a full range of financial advisory work, and you may end up on the higher end.

The key is, "What do you need?"

And then, "Are you receiving a good value for the dollar?"

Remember, it's not what you spend, it's what you receive in return.

If it's a small number that you're spending and you're getting nothing in return, that's a very bad deal indeed.

If you're spending a fair amount, maybe larger than average, but you're getting a great deal back, that might be the very best deal.

You need to decide what's best for you, "What do we need?

"What services do we wish to have provided?"

And then compare advisors that are apples to apples and pick the one that not necessarily is the lowest cost but that you have the best chemistry with, because with any luck at all, if you're doing this correctly, you'll be with the financial advisor for decades, perhaps.

And wouldn't that be wonderful to have a long term relationship with someone you trust?

Megan, that was fascinating.

Where do we go next?

- Our next email has a few questions.

It says, "My mother recently passed away "and most all of her assets are in a trust "where I am the sole trustee.

"The trust holds some long held securities that, "had we sold when she was alive, "would have meant some very large capital gains.

"Now that she has passed, and now that I have some concerns "that the securities may drop in value, "can I sell them in the trust "and the trust would only be responsible for the gain loss "from the time of her death to the sale?

"Also, I am currently a PA resident "but have been planning to move to California.

"Due to probate, my mom lived in Massachusetts, "we have been advised not to disburse any funds, "even her specified charity donations, "let alone disbursements to my siblings and me, "until the probate is resolved.

"So I will likely not receive any inheritance money "until sometime next year, when I am a resident of California.

"Would I still need to pay a Pennsylvania inheritance tax "for funds not allowed to be released to me "until after I was no longer a Pennsylvania resident?

"Thank you.

I love watching your show."

- Well, you're very kind.

OK, there are some pieces of this puzzle that are, forgive the phrase, puzzling to me, but I think some others that are puzzling to you.

So let's clean the most obvious one up first.

Where you live as the beneficiary of in a state has nothing to do with the fees or taxes that need to be paid from the estate.

So the fact that you are currently a resident of Pennsylvania does not mean that you will pay inheritance taxes in Pennsylvania.

The fact that you are considering or will be moving to California does not mean that you will be paying inheritance taxes in California.

Your residency is not relevant.

What is relevant was your mom's residency, Massachusetts.

So the rules that govern taxes, whether they're federal or state, the rules that govern probate... Again, generally state-run are different from state to state, but they are determined by the residency of the decedent, in this case, Massachusetts.

Now, my puzzle meant is the issue that nothing can be dispersed until probate is ended.

That is not typically the case.

My theory, my working theory, is that it isn't probate that needs to be complete in order for some disbursements to be made.

It is the initial assessment of the estate.

As executor, as an attorney settling an estate, it is incumbent that they understand what the estate owns and what the estate owes.

So there will be assets, there will be perhaps liabilities, almost certainly liabilities, perhaps final expenses, burial expenses, legal fees, etc.

It is quite common when settling an estate that we leave a portion of the estate assets in the estate account until everything is settled because things might pop up several months after the passing of the decedent.

So in this case, I'm picking the number out of thin air, the estate is $500,000, we might leave $100,000 and make disbursements on $400,000.

So it may simply be that the attorney is waiting for those final numbers to understand exactly what liabilities exist, what tax bills might need to be paid, etc, because normally those are all paid out of the estate.

It would be extremely unusual for no disbursements to be made prior to the completion of the estate resolution.

So I would certainly ask that question.

And if you're not convinced you're getting the right information from the attorney in Massachusetts, make sure you secure your own attorney, one that you trust, one that understands the circumstance and can guide you.

Now, you're absolutely right.

If these stocks that are held in the trust had been sold during your mother's lifetime, the capital gains, depending on the numbers, could have been very, very large, and there might have been substantial taxes.

Because of the...what's referenced as a stepped up basis, the new cost basis of these stocks is the value on the date that she passed away.

So it is very likely that some of these stocks are below the value of the date that she passed.

And you may end up selling them not only not paying a tax, but getting a tax deduction for selling them and others might be slightly above.

This is something that needs to be carefully attended to.

A professional, trusted tax advisor is very much necessary here.

And keep in mind that this is not normally done instantaneously.

It's not normal that, again, picking $500,000 as the number, "Hey, we paid 100, it's worth 500, "Let's sell everything in one block today."

That's a pretty unusual step to be taken.

It is most typically done almost in a reversed dollar cost averaging kind of a basis.

Let's say that we want to sell the stocks over time, pick a number, ten months.

We'll sell 10% a month over each month for ten months.

That'll give you the, at least, opportunity to get in a rising market, a better price.

And sadly, if the price drops over that ten-month period, maybe a little lower at the end, but on average a better price.

So you've got some things to be addressed.

And don't hesitate, don't hesitate at all to secure your own attorney, to represent your interest in the estate and make sure that everything's happening as it should for you.

Very interesting question.

Megan, where do we go from here?

- I think you'll like how the next email starts.

"It says, "HI, GENE, YOU ROCK!!"

- in all caps with two exclamation points.

It says, "I am 63 years old.

"As long as I am mentally and physically able, "I plan to work until I am 70, "in order to collect 100% of my Social Security.

"I currently have a regular IRA with a portfolio "at 100% annuities.

"The surrender date is July 24th, 2025.

"My question is, once I meet my surrender date, can I reinvest "and change my portfolio?

"Your advice would be much appreciated.

"Thank you so much."

- Well, of course, because I rock!

That's very kind, very, very sweet.

There are folks out there watching right this second going, "Seriously?

Rocks?"

That's the question mark.

I think that's pretty sure.

Bottom line is, yes, you will have at the maturity of your annuities every option available to you that's legally possible.

The maturity of the annuity is simply the point in time where you no longer need to pay surrender charges for leaving.

So let's pick a number and say ten years ago, seven years ago, you invested in a ten-year annuity.

And in the initial stages, if you had moved that money, it might have cost you 10% penalty for moving that money out of the annuity.

As that has progressed closer and closer to maturity, maturity isn't exactly the right word, but we'll use that for common understanding, as we get closer and closer, that number drops.

It might go 1% per year.

And at the end of ten years, it is zero.

So you will be at a point where all of the money that's inside the IRA, currently inside the annuity, will now be available to stay inside the IRA.

You're not pulling it out yet because this is 2025, two years down the road.

You wish to continue to work, hopefully seven years.

You will then have the option to determine, "Do I want to go into a second annuity?

"Does that offer the kinds of benefits that I'm looking for?

"Or do I want to pull that still inside the IRA, "but pull it out of the annuity and put it into a collection "of exchange traded funds, "perhaps CDs, perhaps bonds, stocks?"

You have all of those options available to you with no restrictions.

So, yes, it's going to be pretty straightforward for you.

I will make mention so that everyone listening has maybe a bit clearer understanding.

This young lady references 70 as getting her 100% Social Security.

Actually, at age 70, you get about 130% of your Social Security.

Your normal retirement age, 66, 67, is what's referenced in the Social Security world as 100%.

You can take, you're eligible to take early Social Security as early as age 62 at a much reduced benefit amount.

If you decide to wait, as is her plan, to age 70, you get an enhanced amount.

It goes up about 8% per year from the point that you would normally have received your normal retirement age Social Security to age 70, where it completely maxes out at about 130% of your normal retirement age.

So you are, I think, very wisely pointing towards getting as much money through Social Security as you can.

It's, as my mom would have referenced, "Hell or high water" money.

It shows up in your bank account every single month without you worrying about stock markets or interest rates or those kinds of things.

And it is something you cannot outlive, so a very powerful piece of a retirement plan indeed.

Good for you.

You're doing the right things.

Check back with us in a couple of years as your annuity matures.

And we'll give you some good advice then about what might be in your best interest, in terms of reinvestment.

Megan, excellent!

Any more "You rock"?

Any more?

- That one doesn't say it, but I'm sure they meant it.

This one says, "I have a question regarding a promissory note "that I have with my mother for a mortgage.

"The note has a self canceling clause upon her death.

"I believe I heard on your show that all assets "can have a beneficiary.

"I'm wondering if the note is an asset for Mom, "would having me listed as a beneficiary be a better option?

"Mom is 96 and living in an assisted living facility "and I am renting the home I am buying from her "to other family members.

"Please let me know if you need more information."

- Interesting.

Very, very interesting.

This is a topic that is rarely discussed.

It's not something that comes across our desk often, but it's a very interesting idea.

Self canceling notes, promissory notes, is a form of loan where at the death of the lender, at Mom's passing, whatever the balance is still owed on the note is forgiven.

It cancels.

It is self cancelling.

So the gentleman asks, should he be the beneficiary on this asset?

The answer in that case, in this case is, no, it's not necessary for him to be the beneficiary, because at your mom's passing, there is no asset.

It has been cancelled.

During your mom's lifetime, it is an asset.

I'm picking a number, you borrowed 100, you owe her still 90.

On her balance sheet, she has a 90,000 asset, which is a lien, a note, a debt, an IOU from you to her for a certain amount per month at a certain amount of interest.

But at her passing... ..it disappears like smoke in the air.

So there is no asset for you to inherit.

There is a concern I do have.

You may want to adjust this to be a non self canceling note.

Here's why.

At your mother's passing, yes, indeed, it disappears, it's no longer an asset, you no longer owe the money.

The estate doesn't have the money.

So there's no estate tax on that note because it no longer exists.

But, and this is a concern, it's not an absolute fact, as I haven't done as much research as perhaps I should have... ..you may end up owing income tax on the amount that you still owe your mom.

It is quite common that when a loan is forgiven that... For whatever reason, "Hey, I can't pay you back."

"Well, then, all right, let's just say never mind."

In this case, that's not the situation.

It's a self cancelling note.

Mom did that intentionally.

But in this case, it could be that the IRS would interpret that you received, in my example, $90,000 as income.

You may end up saving the estate tax and paying income tax.

Make sure that you consult with a trusted, experienced tax advisor to make sure that you're setting this up so that it benefits the family to the maximum amount.

Megan, do we have one more?

- We do.

This last question says, "I'm writing on behalf of an elderly family friend "who's asked for my help in formalizing "her final arrangements.

"She currently lives in New Jersey, "but she also has a flat in Yorkshire, United Kingdom.

"Her husband had a will which has not been updated "since his passing a few years ago.

"My best guess is that she probably has quite a bit "in savings and investments, which I also intend "to assist her in getting organized "by investigating some options for her.

"My friend is looking for an executor, but I believe "she'll need that in addition to a new will or wills "covering both US and UK jurisdictions.

"She specifically mentioned your firm to me "since she watches More Than Money.

"Thank you for your help."

- Well, obviously, she's a wonderful woman and very, very bright.

She watches our show.

This is going to be a little less complicated than it might first appear.

The fact that she owns an asset, in this case a flat, outside the country isn't terribly unusual.

Not lots of folks own flats in the UK, no, but lots of folks own property outside of the United States.

It might be a timeshare in Mexico.

It might be a second home in Costa Rica.

It might be, It might be... You get the idea.

And some international assets are simply financial assets.

They have some, perhaps, Israeli bonds or they have bank accounts, perhaps, in Switzerland.

So a qualified, trusted, experienced estate planning attorney in the state of New Jersey - everything's governed by the residency of the individual planning the estate - in the state of New Jersey should be able to handle this quite easily.

Might there be some income tax wrinkles when these assets are inherited through her estate?

Perhaps.

That's further down the line.

But for your friend's purposes, a trusted, experienced New Jersey licensed estate planning attorney is fundamental.

And whether she selects someone trusted as her executor or decides to appoint the attorney as the executor, that will be a personal decision she will need to make so that she is most confident that her estate has the impact that she wishes it to have.

And in some cases, not always my first choice, but in some cases, co-executors might actually work out, where someone she trusts is named as a co-executor with the attorney so that all the bases, so to speak, are covered.

We wish you great help, great luck in helping your friend.

That's very kind of you to do.

It's what we try to do every week on More Than Money.

We try to help our friends.

That's how we view our audience, as friends.

And so many of you have written us wonderful emails, gene@askmtm.com.

They apparently consider us friends as well.

So if in the future you would like your question seen on air, perhaps, stay tuned because that could happen.

We'll see you next week when we return to the studio for another edition of More Than Money.