And good evening.

You've got More Than Money.

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

I'm all yours.

For the next half an hour, I am literally all yours.

We are THE most relevant financial show on television today.

I say that with no reservations whatsoever because we relate directly to you.

All of the questions that we'll explore in tonight's show came from you, from the audience, asking what's most important to you?

Whether it's retirement or investments, could be a tax question, a Social Security question.

Roth Conversions, pretty popular topic.

Gifting - what are the limits?

What can you do?

What can't you do?

Those are just general topics.

Those are fun to explore, perhaps, but in reality, way more fun, way more relevant...

When we answer questions about what's important in your life, specifically what's important in your life.

So as we do every single week, we try to craft a line-up that will give you some insight into what your friends, your family, maybe the guy down the street's worrying about, the guy that you work with might be having a question similar to yours.

So you can pick up some ideas, both for you to learn all automatically, all on your own.

And occasionally it may spark an issue where you say, Wait a second, that's interesting, but my question is a little different, and you send those off to me.

The e-mail address... Just like you see on the screen.

It works very, very well.

We have a complete team in our More Than Money world headquarters that answers every single question back to you, even the silly ones.

And we get some silly ones.

99% fantastic.

1% silly.

We answer them all.

We can't put all of them live on air, but we'll put as many as we can.

So why don't we give you a good demo of exactly how this works?

Let's go to our financial correspondent, Megan.

Where do we start this evening?

- Hey, Gene.

Our first e-mail tonight says, Our financial adviser invested our money in a balanced fund, heavy on bonds, and we are down about $30,000 out of investments totaling originally 220,000.

He hasn't contacted us during the downside, and I'm wondering if I should leave those investments where they are, or is it time to reinvest and take our losses?

Thank you for this and your excellent work in general.

- Well, thank you very much.

You're very kind.

We have a number of concerns in this brief e-mail.

A number of red flags, if you will.

The hearing little - huge red flag.

It is a huge red flag.

If your financial adviser is not proactively... That's a fancy term for meaning, Taking it, in his own initiative, reaching out to you, making those phone calls, reaching out with e-mails, with information.

Now, to be fair to the rest of the financial advisors of the world, they don't all have weekly television shows on PBS where we can share so much information.

So they must go the extra mile.

They must reach out and make those phone calls.

There was a time, historically, years and years, decades ago, when an annual review was thought to be more than enough.

The reality is, at that time has long passed, and if your financial advisor is not reaching out to you, having conversations, whether they're in person, by Zoom, by phone call, having those connections in that communication at least at least four times a year, something's wrong.

This individual has not reached out to his or her client.

And all during this downturn, so nearly a year.

That's a problem.

And in my opinion, enough of a problem that that financial adviser should be replaced.

Second big red flag.

$220,000 is a very substantial sum of money, significantly substantial sum of money.

To place it all into one fund, a balanced fund, that's not a professional investment portfolio.

That is a lackadaisical, take the easy route... Kind of roll the dice and hope that it works out kind of an approach to investing.

The word balanced has been used for many, many years in the industry, mutual fund industry, to indicate that there are stocks and bonds.

This e-mail indicates that they were heavy into bonds, another red flag.

I'll circle back to that.

But bottom line is that a balanced fund sounds, Wow, it's...

I'm a normal person, kind of conservative.

A balanced fund seems to make sense, but it doesn't.

A large sum of money needs to be broken down, allocated into various pieces that, when they are brought together, produce an end result that meets your investment needs.

And to take a large sum of money, 220,000, drop it into one fund and then ghost the investment client.

Totally unacceptable.

The issue with a large amount of bonds, particularly troublesome this year, as, for the year 2022, bonds have dropped double digits.

The last I looked, 14, 15% decline... Decline - downward push on their principal.

If half of your money or more is in that position, you were doomed.

You had no choice but to lose money.

So should you leave it there?

No, for all of those red flag reasons.

Should you explore working with another advisor?

Yes, for all those red flag reasons, you still have, by rough calculations, 190,000, a tremendously significant sum of money.

Find a financial advisor that's experienced, that you trust, that you communicate with well, and will continue to communicate proactively with you throughout the year.

Bring those assets in and create an investment platform that will get you where you want to go and hopefully recoup all of those dollars that have declined.

Interesting question.

Brief.

Lots of meat on the bone for that one.

Megs, where do we go from there?

- This next question...has a lot going on in it as well.

Lots of numbers in the beginning.

And then two questions at the end.

It says, One of your clients recommended your firm to me.

I just turned 63 years old.

I have a traditional IRA, approximately $629,000 and a Roth IRA, approximately $292,000.

I have two properties with two mortgages with some rental income, approximately 10,000 a year, salary bonus, approximately 130,000.

I also have a brokerage account, approximately 420,000, mostly what it would take to pay off approximately 3% mortgages.

But I plan to not pay them off and grow that account with the money, 25,000 HSA, some other cash bonds, perhaps 30,000 or so.=, I have a small pension, approximately $1,500 dollars a month with potential to take a lump sum - approximately 320,000 if they reinstate the lump sum option.

I'm interested in, one - advice with an hourly fee on retirement planning and investment strategy, and two - I'm planning to use new retirement software to work on my plan, Roth conversions, RMDs, Health Coverage optimization, Social Security, tax, torpedo avoidance, etc..

I would like to review a plan with you every so often at an hourly fee, for your advice or recommendations and answers to my questions.

Can you help with this?

Thank you.

- Well, in a word, "Can I help with this?"

"No."

The question.

Long winded, but important.

Ends with the disconnect where we must go our separate ways.

In my experience, as loyal viewers will recall... ..780 years.

In my experience, hourly rates are requested by folks who are much more interested in the do-it-yourself portion and what they're really interested in doing, for an hourly rate, whatever that may be, my hourly rate is mind-numbing, so I'm certain that wouldn't be the pleasing part of the discussion.

But for an hourly rate, what they're really interested in is having somebody go, "Attaboy."

"Good job."

"Ooh, well thought."

"That's the way to go."

We have far more important things to do.

We have clients who value our guidance on a relationship basis far more than we have the time to give "attaboys" to folks who wish to do things themselves.

Now, in my experience, again, 780 years, it's a lot of experience, if you lined up 100 prospective financial advisory clients, 93 of them want a relationship.

They want a long-term relationship.

Ten, 15, 20 years if possible.

My longest term client relationship at this moment, 42 years, pretty impressive.

For 42 years, we have grown, not just to understand each other, but we have grown to be able to communicate almost in shorthand.

It's not unlike a marriage, but I have tons of clients at 30 years, tons at 20, tons at 15.

This is the direction that we as a business model in the MtM world are interested in.

There are other advisors who love to charge by the hour and say "Attaboy" to do it yourself or so.

Is this a platform that we can work on?

The answer is sadly no.

This is not how we work in developing a relationship with a client.

By the way, I mentioned 93% of the folks that I've met in my 780 years appreciate the relationship, enjoy the work, the opportunity to work as a team, adding their perspective, gaining some knowledge and some support and some interesting ideas.

That's why in our MtM world headquarters we have a director of Advanced Strategies so that we can bring new ideas to the table.

7%, however, seven out of 100.

They should not work with financial advisors.

They should do it themselves.

They have the time, maybe retired.

They have the training.

They've done some study - at least they feel confident that they've got the training.

They may have the temperament.

This is not for everyone, but perhaps it is for them.

And goodness, if you've got the time, the training, the temperament, and you like doing this, you should.

And to take someone who's a do-it-yourself or connect it to a team is a recipe for disaster.

A recipe for disaster!

So politely, no, not how we would work.

But I can assure you, if you spend a little bit of time, you can find a financial advisor or two that work on an hourly basis.

We'd be happy to do it exactly as you wish, and we wish you great luck.

Well, OK, so we've had two interesting kind of questions.

One, that, gosh, the financial advisor involved isn't doing the right job.

One where there is no financial advisor involved, so to speak, and maybe shouldn't be.

I can't wait to see what our third question's going to be about.

Megan, what do you got back there?

- Our next question, I think does need some advising, but maybe another friend of ours can help them.

It says, We watch your MtM show and always learn something or better understand something that we thought we did.

I think it was last year you answered a question someone asked about preparing before going to a lawyer to update a will.

Unfortunately, I don't remember when it was to look up and rewatch that show.

I'm wondering, would you please e-mail a list of things we should do ourselves before we go, in early 2023, to update our wills?

Thank you so much and I look forward to your show every Tuesday night.

- You're very kind.

We look forward to being here.

For those of you who are relatively new to our show, we have an archive on our on our website, MoreThanMoneyOnline.com And we have an archive - all of the shows that we've done from season one, episode one.

They're all on our show.

But as this young lady found out, finding a specific question within that archive can be a bit of a challenge.

So reaching out to us, as she did, brilliant.

Exactly as she should have done.

Now, having said that, yes, I'm going to give you some guidance as to how to best prepare to meet with your estate attorney.

I'm assuming, I'm making the broad assumption, that you have located, identified, secured a trusted, experienced estate planning attorney.

If you have not, please reach back out to us.

We can get you a solid referral.

In preparation for meeting with any estate attorney, there are certain things that you need, you should have prepared before you go or... ..be prepared that that first meeting is going to be pretty expensive because particularly if a husband and wife have maybe a discussion they need to have about certain decisions, maybe a disagreement about certain items in the estate, it is best to resolve those without the attorney sitting in front of you with the timer going.

That measures how much he's going to bill you or she's going to bill you.

And it's much more efficient and effective.

Some decisions require that you take some time.

"Hey, I hadn't thought about that.

"I need to take a little time to consider my options, explore my options, "maybe pray about my options so that when we go "to the document preparation phase of estate planning, "that we're in good shape."

Now, before you go, you should be aware that there are potentially four documents you're going to be addressing in this conversation - a will, potentially a trust, a power of attorney and a medical directive.

It's a package that a quality estate planning attorney will provide.

The last two are the ones that most folks maybe had not considered.

A medical directive is your medical power of attorney.

It tells the physician what you wish them to do or not in order to keep you alive.

So when those tragic situations happen and those questions come up, lots of folks think, "Well, my husband can tell the doctor "what to do.

My wife can tell the doctor what to do."

No, they can't.

And so having it documented is extremely important.

Your attorney will help you do that.

One of the things you're going to think about before you get there is, "What do I wish?

"Do I want to be kept alive at all costs?

"Do I want gosh, if I have a hangnail, let me go..." Somewhere in the middle, I hope!

Bottom line, you've got to make some of those choices before you get there.

Power of attorney who will speak for you, or who will act on your behalf if you are unable to.

Husbands and wives are almost always each other's powers of attorney, but that's not a hard and fast rule.

It could certainly be someone else.

And you might very well want a contingent power of attorney in case.

What if you and your spouse are both incapacitated, an automobile accident, COVID, etc.?

Those examples are just a couple of why you might want someone else to be power of attorney.

So now we turn to the decisions around the wills and trusts.

There are three, potentially three jobs, one of which is required for all estate planning documents.

The other two might be.

The first is the executor - who's going to carry out your wishes, who's going to follow your instructions?

And to make it as challenging as we possibly can, you need two.

Not two as in co-executors, but you need a primary, the person that you wish to be your executor, and a contingent in case your first choice either can't or won't.

So that is your first decisions that need to be made, and you will probably wish to decide that before you get to the attorney.

If you have children, minor children or special needs children, if you have dependents, that, if you were to leave today, will need to be cared for, you'll need to name a guardian.

And remember - two.

Primary and contingent.

Who will raise care for those that child, those children as close to the way as you would as humanly possible?

Those are choices you must make.

And if there are indeed folks who are left behind, minor children, special needs children, etc., who are not either able, legally or functionally to manage their own money, you will need a trust.

And a trust, as you might suspect, requires that you name a trustee, Two of them - primary, contingent.

So these are some of the basics that you should put together before you go to the attorney.

And finally, from an organizational standpoint, to give you the attorney the best opportunity to see the bigger picture, if you have an inventory, a simple list, one side, all of your assets, home, personal property, IRAs, 401Ks, life insurance, annuities, etc..

The other side, a list of your liabilities.

Who do...?

To whom do you owe money?

That will be very, very useful.

And I will assure you, if you walk into any trusted, experienced estate planning attorney's office with those action plans, those preparations in hand, you will put a smile on that attorney's face because you will be one of the very few, one of the very tiny minority that have actually come well prepared and well prepared translates into the ability for the attorney to give you not only just the best advice, but also at a much more reasonable price, perhaps, because indeed, while some attorneys price these as a package, others, if they work on an hourly basis, if you can save them a lot of time, you might save yourself a lot of money.

I hope that helped a bit.

Very, very good for lots of folks out there because if recent memory serves me, 70% of the people watching this show right this moment, don't have a will drawn up.

They've not drafted any estate planning documents.

Really important.

People that you care about are reliant on you to do the right thing.

So if you have any questions about how to proceed beyond what you've heard here, or if you need assistance in locating an attorney that you can trust, please reach out to us.

We'll help in any way we can.

Excellent.

Most excellent.

Megan, do we have a most excellent question to follow?

- We do.

This question says, Before my mother passed away earlier this year, the names of my two siblings and I were added to some of mom's CDs.

After she died, the CDs matured and were divided equally.

Each share is about 200,000.

My question is about taxes.

Is this considered an inheritance or a gift or simply income?

Our names were definitely included as owners of the account.

I have no idea what to do when filing taxes though.

The CD was not in my husband's name and we have always filed jointly, if that makes any difference.

Thank you so much.

I love your show and I have learned so much from you.

- Well, you're very, very kind.

One of the things that you will learn from me, this evening show, is that things are live to tape.

Things happen.

And if I had an upset tummy right now, I'd be going, "Mm!"

But we would persevere.

So, for example, when you read the headline, it says, How much of plus 200,000 from MtM is taxable?"

The headline should read, How much of 200,000 from Mom is taxable?

Mom is the person that this young lady received this money from.

It would have been nice if MtM had sent her a check, but that is a different question for another time.

So she received $200,000, but she received it in basically a two-step process, initially.

And I understand that there are three siblings, roughly 200,000 apiece.

If I focus on one, you'll have the answer for all three.

So just follow with me.

I think it'll be fine.

So this young lady has $200,000.

She was added to the $200,000 prior to her mother's passing.

That's a really important point.

It's a very important point because it changes substantially how that 200,000 will be treated by the IRS.

If she had inherited the entire $200,000 from her mother, had never been added to the account, the taxation situation's very simple.

Inheritances - no income tax.

It's not even reported on your tax return.

So the 200,000 comes to her - she pays nothing.

And if that is subsequently invested, whatever interest she makes, interest, dividends, capital gains, she will pay tax on because it's 100% hers.

And 100% of that would have been taxable to the Pennsylvania, assuming she, her mother, passed in Pennsylvania.

Pennsylvania Inheritance Tax.

So she would have paid 4,500...

I'm sorry, $9,000 in taxes.

I'm already anticipating.

I've given you a little foreshadowing of where we're going.

Since Mom added her name to the account prior to her passing, this young lady actually owned half of that account before her mom passed.

So when her mom did pass, she did not receive $200,000 from mom.

She already had 100 of that in her name.

She received $100,000 from mom.

So instead of $9,000 in inheritance taxes, it's cut in half.

She saves $4,500.

Can she report whatever she earns thereafter on a joint tax return?

She absolutely can.

Can it stay in her name?

In my opinion, not only can it, but there are lots of reasons why she might very well want to keep it in her name.

Those are, again, perhaps discussions for another time.

But there are pros and cons, but an inheritance received by an individual, as long as it is not commingled, is not joint property, it is not joint property, is that young lady's alone.

It is not hers and her husband's, it is hers.

If she chooses to drop that into a joint bank account, it becomes joint marital assets.

But if she chooses to keep it separate, it is hers and hers alone.

But even though it's hers and hers alone, married couples often have accounts in their own individual names for various reasons, and they can all be funneled onto the same tax return.

Now, logically, some folks out there are saying, "Why did Mom do that?"

Well, if you're looking at putting children's names on accounts, splitting the account now technically in half, Mom having given - literally given - half of those dollars in this case, 600,000, gave away 300,000, she has saved the children, collectively, about $13,500 in estate taxes.

And because these are CDs, CDs don't have embedded gains.

She has hurt them from a tax standpoint.

Not at all.

Not at all.

If these had been stocks, if this was 600,000 stocks that Mom had paid 25,000 for, that's a very different story.

And it could have caused a significant problem.

It doesn't.

They weren't.

They were CDs.

One of the things that must be paid attention to when the discussion, around the family table, whether it's a dining room table or the kitchenette or out...on the deck is what type of assets are we passing, what type of gifts are we making and what long-term impact will that have.

We might save some money on taxes for the estate, cost us significant money on income taxes, or vice versa.

So it's very important that you sit with a trusted, experienced tax professional before you make these gifts, before you make these changes.

We understand the motivations.

We understand Mom wants what's best for the kids.

But you've got to be very, very conscious and fully informed - pros and cons, before you make those choices.

Speaking of choices, we hope you've made the choice to stick with us through the entire show.

We hope that you've picked up a couple ideas.

You say, "Gosh, I didn't know that, that might be useful."

We hope you'll take the opportunity to share with us the concerns that you have, those questions that are at the top of your mind so that our answers might hopefully bring you some peace of mind as you go forward.

Your questions to... make us the most relevant financial show on television today because it all relates back to you and the kinds of things that you find of most concern.

So we appreciate your involvement in the show.

You're the heart of the show.

You're what makes us most relevant.

And we pray that you've learned a lot, maybe been entertained just a smidge, that you might want to return next week when we return to the studio for a very new edition of More Than Money.

Goodnight.