1 00:00:46,360 --> 00:00:51,459 Suze: July 25th, 2024. Welcome everybody to the Women and Money podcast. 2 00:00:51,470 --> 00:00:52,490 KT: And KT. 3 00:00:53,860 --> 00:00:59,180 Suze: Yes. And welcome everybody to KT. Today is KT's Day. Period. 4 00:00:59,189 --> 00:01:01,569 Suze: It's her day. Nothing else exists. 5 00:01:02,740 --> 00:01:06,769 KT: I had the best birthday week with my twin sister 6 00:01:07,069 --> 00:01:12,760 KT: and Suze was so great. We did everything and Lynn's husband, 7 00:01:12,769 --> 00:01:16,529 KT: Tom was golfing and it was just so much fun. 8 00:01:16,879 --> 00:01:17,889 Suze: KT was golfing. 9 00:01:17,900 --> 00:01:21,690 KT: I was golfing and my sister was golfing, but most important, 10 00:01:21,699 --> 00:01:23,269 KT: it was just the most relaxing. 11 00:01:24,069 --> 00:01:26,389 KT: Enjoyable. Fabulous. 12 00:01:26,400 --> 00:01:27,989 Suze: What was your favorite present? 13 00:01:28,000 --> 00:01:33,010 KT: Colo crying on the podcast? Yeah. Did, did you all 14 00:01:33,019 --> 00:01:36,940 KT: hear that on Sunday on my birthday? Oh, my God. 15 00:01:36,949 --> 00:01:39,419 KT: Suze snuck him in the studio 16 00:01:39,779 --> 00:01:41,970 KT: and I thought we were gonna all do like a 17 00:01:41,980 --> 00:01:46,169 KT: family podcast. Wishing each other happy birthday. But Suze said, no, no, no. 18 00:01:46,330 --> 00:01:48,940 KT: My studio is really small. I'm just gonna do something 19 00:01:48,949 --> 00:01:53,440 KT: on my own. It'll be a surprise. Well, for those 20 00:01:53,449 --> 00:01:56,830 KT: of you that haven't listened, go back and listen to Sunday, 21 00:01:56,839 --> 00:02:02,459 KT: July 21st because Colo wished me and my sister a 22 00:02:02,470 --> 00:02:06,319 KT: happy birthday in tears. All right, let's get on with it. 23 00:02:06,750 --> 00:02:08,320 Suze: For all of you who wanted 24 00:02:08,399 --> 00:02:12,279 Suze: see pictures from those incredible days because it was more 25 00:02:12,288 --> 00:02:15,079 Suze: than one day. Trust me on that, you can go 26 00:02:15,089 --> 00:02:19,649 Suze: to the women and money podcast app and that's where 27 00:02:19,660 --> 00:02:21,619 Suze: they are posted. 28 00:02:21,679 --> 00:02:23,600 KT: And Suze, wait, I just have to do a little 29 00:02:23,610 --> 00:02:29,779 KT: shout out Jennifer Little Hales. You are incredible. Everyone. She 30 00:02:29,788 --> 00:02:34,830 KT: wrote a birthday card. That was a synopsis of 72 31 00:02:34,839 --> 00:02:36,779 KT: years of my life. 32 00:02:37,210 --> 00:02:41,869 KT: It took me three days to read it. It was unbelievable. 33 00:02:41,880 --> 00:02:46,320 Suze: And Jennifer, you know, you have written me many of 34 00:02:46,330 --> 00:02:50,869 Suze: those emails that we will treasure forever. And a day, 35 00:02:50,880 --> 00:02:53,389 Suze: you are one extraordinary woman. 36 00:02:53,699 --> 00:02:57,320 Suze: KT. Before we begin. Do you know what tomorrow is? 37 00:02:57,690 --> 00:03:00,779 Suze: Come on, come on July 26. 38 00:03:01,889 --> 00:03:03,660 KT: Love your Credit Union day. 39 00:03:03,690 --> 00:03:05,309 Suze: That's right. Everybody. 40 00:03:05,369 --> 00:03:08,478 KT: Wait. What's your favorite credit union, Suze? 41 00:03:08,490 --> 00:03:12,279 Suze: Well, I have to tell you and everybody should know this. 42 00:03:12,529 --> 00:03:17,660 Suze: I really, really, really, really love Alliant Credit Union. And 43 00:03:17,669 --> 00:03:21,720 Suze: how do you know that? I love Alliance Credit Union 44 00:03:22,240 --> 00:03:26,299 Suze: because do you think I would allow them to sponsor 45 00:03:26,309 --> 00:03:30,779 Suze: the Women and Money podcast for all these years if 46 00:03:30,788 --> 00:03:34,800 Suze: I didn't know that they were the most honest credit 47 00:03:34,809 --> 00:03:36,100 Suze: union out there? 48 00:03:36,399 --> 00:03:39,860 Suze: The credit union that tries to bring you the highest 49 00:03:39,869 --> 00:03:43,830 Suze: interest rates when it comes to certificates of deposits and, 50 00:03:43,839 --> 00:03:49,289 Suze: or with the ultimate opportunity, savings account or other things. 51 00:03:49,300 --> 00:03:55,520 Suze: So I love Alliant Credit Union, not just tomorrow, I 52 00:03:55,529 --> 00:03:59,100 Suze: love them 365 days 53 00:03:59,270 --> 00:04:03,809 Suze: a year and 366 if it's a leap year. By 54 00:04:03,820 --> 00:04:06,350 Suze: the way, for those of you who want to check 55 00:04:06,360 --> 00:04:10,589 Suze: out the offers that Alliant Credit Union is still giving 56 00:04:10,600 --> 00:04:16,399 Suze: to all of you. Go to my alliant.com and look 57 00:04:16,410 --> 00:04:21,950 Suze: for me. That's myalliant.com. 58 00:04:22,738 --> 00:04:23,700 Suze: All right, KT. 59 00:04:24,369 --> 00:04:27,149 KT: So wait, I have to start with another one of my. 60 00:04:27,579 --> 00:04:28,910 KT: It's not a question. 61 00:04:30,119 --> 00:04:35,049 Suze: This is going to happen every time now. KT is on, 62 00:04:35,059 --> 00:04:35,479 Suze: I can tell. 63 00:04:35,488 --> 00:04:37,760 KT: These are little mini love letters but this one I 64 00:04:37,769 --> 00:04:41,070 KT: love is from Lynn. My, the same name as my twins. 65 00:04:41,079 --> 00:04:45,720 KT: It says hi Suze and KT. I have never understood money. 66 00:04:46,809 --> 00:04:47,890 KT: My ex-husband. 67 00:04:47,920 --> 00:04:50,599 Suze: Oh, you have something in common with her. I didn't mean that, 68 00:04:51,940 --> 00:04:54,479 Suze: so I take it back, I take it back. 69 00:04:55,250 --> 00:04:59,549 KT: So she said I have never understood money. My ex-husband 70 00:04:59,559 --> 00:05:03,309 KT: kept me in the dark now. I am single at 71 00:05:03,320 --> 00:05:07,089 KT: 58 and learning about money for the first time with 72 00:05:07,100 --> 00:05:10,790 KT: you and ready everyone and sweet KT 73 00:05:11,260 --> 00:05:14,709 KT: you go on every dog walk with me every car ride. 74 00:05:14,720 --> 00:05:19,238 KT: I am so appreciative for all you do now. I 75 00:05:19,250 --> 00:05:22,679 KT: know I won't be living under a bridge at 80. 76 00:05:23,750 --> 00:05:26,179 KT: I love that. That was from Lynn. Thanks to Lynn 77 00:05:26,190 --> 00:05:29,239 KT: for the, the little love letter 78 00:05:29,799 --> 00:05:31,079 Suze: And sweet KT, yes she is. 79 00:05:34,488 --> 00:05:39,019 KT: All right, my first question is from Anne. Hi, beautiful ladies. 80 00:05:39,109 --> 00:05:39,640 KT: My father 81 00:05:39,769 --> 00:05:44,010 KT: mother bought a savings bank life insurance policy for me 82 00:05:44,019 --> 00:05:49,808 KT: in the 1970s with a death benefit of $5000. The 83 00:05:49,820 --> 00:05:54,209 KT: policy is now paid up and worth 11,000 if I 84 00:05:54,220 --> 00:05:55,790 KT: were to surrender it now, 85 00:05:56,390 --> 00:05:59,959 KT: I have the option of taking the 6000 and leaving 86 00:05:59,970 --> 00:06:04,500 KT: the 5000 policy or cashing out the entire amount I 87 00:06:04,510 --> 00:06:07,160 KT: will have to pay taxes. Of course, on whatever I 88 00:06:07,170 --> 00:06:11,980 KT: take out. If I keep the $5000 policy, then my 89 00:06:11,988 --> 00:06:16,660 KT: daughters get it tax free when I die. Suze, what 90 00:06:16,670 --> 00:06:17,868 KT: do you recommend? 91 00:06:17,880 --> 00:06:21,078 Suze: Pop quizzy, pop quizzy real quick. What would you do? 92 00:06:21,089 --> 00:06:21,750 Suze: Pop quizz? 93 00:06:23,029 --> 00:06:26,880 KT: Um I would I would cash it out totally right. 94 00:06:27,619 --> 00:06:29,289 Suze: Do you have a reason for it or you just... 95 00:06:29,738 --> 00:06:31,458 KT: I just would get rid of it. 96 00:06:31,500 --> 00:06:35,929 Suze: Alright. Ding ding, ding, ding, ding, ding, ding. Alright. There 97 00:06:35,940 --> 00:06:38,428 Suze: you go. That's the answer. But Ann let me tell 98 00:06:38,440 --> 00:06:41,570 Suze: you why. That is the correct answer. 99 00:06:41,970 --> 00:06:45,349 Suze: You said that your father bought you a savings bank 100 00:06:45,359 --> 00:06:49,549 Suze: life insurance policy for you in the seventies. So let's 101 00:06:49,559 --> 00:06:52,118 Suze: just say it was 1975 because I have to tell 102 00:06:52,130 --> 00:06:57,750 Suze: you they were very, very popular back then and usually 103 00:06:57,760 --> 00:07:05,589 Suze: the average premium per year was about 100 to $300. 104 00:07:05,600 --> 00:07:07,230 Suze: So let's just say 105 00:07:07,928 --> 00:07:14,959 Suze: that was about 50 years ago. And is that right, KT? 106 00:07:14,970 --> 00:07:18,440 Suze: About 50 something like that. 107 00:07:18,450 --> 00:07:21,559 KT: Yeah, it's 2024, 1970. 108 00:07:22,309 --> 00:07:26,190 Suze: There you go. My girls listening. Right? So, so that 109 00:07:26,200 --> 00:07:29,799 Suze: was 50 years ago and let's just say that your 110 00:07:29,809 --> 00:07:35,958 Suze: father spent $10 a month for 50 years 111 00:07:36,690 --> 00:07:40,290 Suze: and now you say it's paid up so no premiums 112 00:07:40,299 --> 00:07:43,829 Suze: are due anymore. If he put in $10 a month 113 00:07:43,839 --> 00:07:46,350 Suze: with no interest on that money, it's just what he 114 00:07:46,359 --> 00:07:46,950 Suze: put in, 115 00:07:47,309 --> 00:07:53,519 Suze: that would be $6000. So now you tell me that 116 00:07:53,529 --> 00:07:59,250 Suze: it's worth $11,000. But you then say to me in 117 00:07:59,260 --> 00:08:03,239 Suze: this email that, you know, if you cash it out, 118 00:08:03,250 --> 00:08:06,209 Suze: you have to pay taxes on whatever you take out. 119 00:08:06,220 --> 00:08:09,329 Suze: How do you know that? I don't think that's true 120 00:08:09,339 --> 00:08:13,619 Suze: on any level. Just so, you know, if he put 121 00:08:13,630 --> 00:08:14,890 Suze: in 6000 122 00:08:15,339 --> 00:08:20,160 Suze: and now it's worth 11,000, if you cash the whole 123 00:08:20,170 --> 00:08:21,480 Suze: thing out, 124 00:08:22,140 --> 00:08:25,459 Suze: chances are you're only going to owe income tax on 125 00:08:25,470 --> 00:08:31,480 Suze: that $5000. So you have got to call the insurance 126 00:08:31,489 --> 00:08:37,640 Suze: company and really ask them how much of this is taxable. 127 00:08:37,659 --> 00:08:41,390 Suze: If they tell you all of it is taxable, then 128 00:08:41,400 --> 00:08:45,829 Suze: possibly he got you something called a modified endowment policy. 129 00:08:46,229 --> 00:08:50,510 Suze: And therefore when it matures, if you take the money out, 130 00:08:50,520 --> 00:08:54,319 Suze: all of it is taxable, but I just have a 131 00:08:54,330 --> 00:09:00,949 Suze: feeling that only $5000 is taxable. Now, either way, let's 132 00:09:00,960 --> 00:09:04,369 Suze: say all $11,000 was taxable. 133 00:09:05,090 --> 00:09:08,869 Suze: If you took it out and you paid income tax 134 00:09:08,880 --> 00:09:14,030 Suze: on all $11,000. Let's just say, after taxes, you're in 135 00:09:14,039 --> 00:09:18,280 Suze: the highest tax bracket, federal state, whatever you'll have at 136 00:09:18,289 --> 00:09:23,650 Suze: least seven or $8000 left if you were to take 137 00:09:23,659 --> 00:09:27,710 Suze: that money since you want this for your Children anyway. 138 00:09:28,229 --> 00:09:31,710 Suze: And you were to put, let's just say, $7000 in 139 00:09:31,729 --> 00:09:34,109 Suze: a Roth IRA. 140 00:09:34,890 --> 00:09:38,229 Suze: Do you know that a Roth IRA, if you were 141 00:09:38,239 --> 00:09:42,699 Suze: to do that over, let's say 30 years, it's gonna 142 00:09:42,710 --> 00:09:50,280 Suze: be worth about $40,000 even if it was just $5000. 143 00:09:50,289 --> 00:09:53,280 Suze: And your kids put in 4000 in a Roth and 144 00:09:53,289 --> 00:09:56,590 Suze: only left it there for, let's say 15 years, it 145 00:09:56,599 --> 00:10:01,689 Suze: would still be worth $8300 which is still $3300 more 146 00:10:01,700 --> 00:10:04,590 Suze: than the $5000 that you would be leaving them. It 147 00:10:04,599 --> 00:10:04,789 Suze: would 148 00:10:04,890 --> 00:10:10,710 Suze: all be tax free anyway. So bottom line KT is 149 00:10:10,719 --> 00:10:15,840 Suze: absolutely correct. You cash that sucker out. But first just 150 00:10:15,849 --> 00:10:19,650 Suze: find out how much really any of it is taxable. 151 00:10:19,659 --> 00:10:23,640 KT: Ok. My next question is from Doris. Good morning KT 152 00:10:23,650 --> 00:10:27,150 KT: and Suze. Help my son, please. 153 00:10:27,989 --> 00:10:30,569 KT: Actually, this is a good one because you and I 154 00:10:30,580 --> 00:10:35,598 KT: talk often about what can happen. And here's a perfect example. Everyone, 155 00:10:35,900 --> 00:10:40,368 KT: my son bought a house with his fiance two years ago, 156 00:10:40,659 --> 00:10:45,840 KT: ready everyone, both names are on the mortgage and the deed. 157 00:10:45,849 --> 00:10:49,049 KT: Last week they decided to split up 158 00:10:49,390 --> 00:10:53,229 KT: my son will keep the house. My question is can 159 00:10:53,239 --> 00:10:58,890 KT: he remove her name from the mortgage without refinancing? 160 00:10:59,130 --> 00:11:01,770 Suze: That should not be your question. 161 00:11:03,099 --> 00:11:07,439 Suze: You should see KT's face. Because you don't care if 162 00:11:07,450 --> 00:11:10,890 Suze: her name is on the mortgage, right? Because it doesn't 163 00:11:10,900 --> 00:11:13,020 Suze: hurt you one way or the other. It puts her 164 00:11:13,030 --> 00:11:16,809 Suze: in danger. If you stop paying that mortgage, they're gonna 165 00:11:16,820 --> 00:11:19,409 Suze: come after her. However, 166 00:11:20,190 --> 00:11:23,969 Suze: if she's going to make it mandatory, which she should, 167 00:11:23,979 --> 00:11:28,530 Suze: by the way of taking her name off the mortgage, 168 00:11:28,580 --> 00:11:32,739 Suze: then really the only choice your son's gonna have is 169 00:11:32,750 --> 00:11:38,728 Suze: to refinance that mortgage just in his name. But he's 170 00:11:38,739 --> 00:11:43,049 Suze: going to have to show the financial institution that he 171 00:11:43,059 --> 00:11:49,469 Suze: can qualify to make those mortgage payments all on his own. 172 00:11:50,330 --> 00:11:56,669 Suze: But taking the name off the mortgage refinancing the mortgage 173 00:11:56,679 --> 00:12:02,429 Suze: doesn't mean that it takes the name off of the deed. 174 00:12:04,010 --> 00:12:07,000 Suze: So the real question at hand 175 00:12:07,669 --> 00:12:13,369 Suze: is how do you get her name off of the deed? 176 00:12:13,640 --> 00:12:17,369 Suze: That's the question and the answer to that, believe it 177 00:12:17,380 --> 00:12:21,949 Suze: or not, is that the only way to truly do 178 00:12:21,960 --> 00:12:25,849 Suze: that is to get what's called a quit 179 00:12:26,349 --> 00:12:31,099 Suze: claim deed form. And really you can get this form 180 00:12:31,109 --> 00:12:34,380 Suze: from a local of, you know, anywhere real estate office. 181 00:12:34,390 --> 00:12:37,659 Suze: I bet you could even find it online if you 182 00:12:37,669 --> 00:12:40,619 Suze: look for it. And if I were you, I would 183 00:12:40,630 --> 00:12:42,780 Suze: have your son get this form 184 00:12:43,590 --> 00:12:47,320 Suze: and he should fill it out. He will have to 185 00:12:47,330 --> 00:12:52,319 Suze: include the property's legal description the name of his ex 186 00:12:52,330 --> 00:12:55,319 Suze: on it and the name of the person which will 187 00:12:55,330 --> 00:12:59,479 Suze: be him who will remain on the deed. Then they're 188 00:12:59,489 --> 00:13:02,760 Suze: going to have to sign the quick claim deed in 189 00:13:02,770 --> 00:13:03,530 Suze: front of a 190 00:13:03,669 --> 00:13:05,640 Suze: notary. So they're going to have to take it down 191 00:13:05,650 --> 00:13:10,109 Suze: to somebody. They will verify their identities, then sign it 192 00:13:10,119 --> 00:13:13,739 Suze: and have witnesses and all of that. And then they're 193 00:13:13,750 --> 00:13:16,020 Suze: going to have to file the deed with the county 194 00:13:16,030 --> 00:13:21,070 Suze: recorder where they actually kind of submit this notarized quit 195 00:13:21,080 --> 00:13:23,729 Suze: claim deed to the county recorder's office 196 00:13:24,150 --> 00:13:27,500 Suze: where the property is located and there will probably be 197 00:13:27,510 --> 00:13:31,439 Suze: a small fee to do so. But that is what 198 00:13:31,450 --> 00:13:36,209 Suze: your son and his ex is going to have to do. 199 00:13:36,219 --> 00:13:40,020 Suze: But having her name on the mortgage puts her in danger, 200 00:13:40,030 --> 00:13:43,859 Suze: not your son, but having her name on the deed, 201 00:13:44,820 --> 00:13:47,869 Suze: I don't know, you can't sell it without her name. Right. 202 00:13:48,859 --> 00:13:53,280 KT: Next question is from Carol. She said, hello, KT and Suze. 203 00:13:53,289 --> 00:13:56,978 KT: I have a question about CDs and what a workout 204 00:13:56,989 --> 00:14:00,270 KT: date is. I don't know what that is either. I 205 00:14:00,280 --> 00:14:04,598 KT: have to. Is that no, I would say it means 206 00:14:04,609 --> 00:14:07,140 KT: go to yoga or something. 207 00:14:07,469 --> 00:14:10,218 KT: I have two CDs that I opened with Fidelity and 208 00:14:10,229 --> 00:14:14,409 KT: they both have workout dates. You know, I never heard. 209 00:14:14,429 --> 00:14:17,840 Suze: It's funny. I read this one and I actually responded 210 00:14:17,849 --> 00:14:18,880 Suze: to them directly. 211 00:14:19,429 --> 00:14:20,390 KT: What is it, tell me. 212 00:14:20,719 --> 00:14:25,250 Suze: So, for everybody else, when you buy a certificate of 213 00:14:25,260 --> 00:14:26,049 Suze: deposit 214 00:14:27,010 --> 00:14:30,130 Suze: many times you have a certificate of deposit, that's a 215 00:14:30,140 --> 00:14:37,479 Suze: callable certificate of deposit, which means the issuing financial institution 216 00:14:37,669 --> 00:14:43,700 Suze: has the right to call the CD back before its 217 00:14:43,710 --> 00:14:48,500 Suze: maturity date. And essentially that is the workout date where 218 00:14:48,510 --> 00:14:51,479 Suze: they let you know that on this date, 219 00:14:51,869 --> 00:14:56,020 Suze: they are going to call the CD back. Now. The 220 00:14:56,030 --> 00:14:59,739 Suze: reason that that's important for you to know is that 221 00:14:59,750 --> 00:15:03,820 Suze: a lot of banks are saying you can get 6% 222 00:15:03,830 --> 00:15:07,309 Suze: on this certificate of deposit for X amount of months 223 00:15:07,390 --> 00:15:10,280 Suze: and you just think it's a great deal, but it's 224 00:15:10,289 --> 00:15:14,340 Suze: a callable CD. So you give them all your money 225 00:15:14,799 --> 00:15:17,900 Suze: three months from now if they want to call it 226 00:15:18,309 --> 00:15:21,530 Suze: and take all the money back and give you the 227 00:15:21,539 --> 00:15:25,109 Suze: amortized interest rate of 6% over the three months you 228 00:15:25,119 --> 00:15:28,849 Suze: were in there rather than the year. Oh, they can, 229 00:15:29,229 --> 00:15:29,780 Suze: like I said... 230 00:15:29,789 --> 00:15:30,929 KT: Like a bait and switch? 231 00:15:30,940 --> 00:15:35,679 Suze: It can be. So if I were you at these times, 232 00:15:35,900 --> 00:15:40,849 Suze: I would not be doing callable CDs on any level 233 00:15:40,859 --> 00:15:42,049 Suze: or if it is a workout. 234 00:15:42,304 --> 00:15:44,715 Suze: No, they all, if it's a callable CD, they all 235 00:15:44,724 --> 00:15:48,645 Suze: have workout dates, KT. So that is another reason why 236 00:15:48,804 --> 00:15:53,705 Suze: the one year certificate of deposit from 12 months all 237 00:15:53,715 --> 00:15:57,244 Suze: the way to 17 months and 30 days at Alliant 238 00:15:57,255 --> 00:16:01,145 Suze: Credit Union is not callable and it is something that 239 00:16:01,155 --> 00:16:06,445 Suze: you should look into fabulous interest rate. My alliant.com I'm 240 00:16:06,455 --> 00:16:09,325 Suze: giving him a lot of love today because it's tomorrow. 241 00:16:09,544 --> 00:16:11,525 Suze: I love my credit union. 242 00:16:11,950 --> 00:16:16,409 KT: All right. This next question is from Sue. A financial 243 00:16:16,419 --> 00:16:23,130 KT: advisor cold called me regarding 260,000 in a money market. 244 00:16:23,659 --> 00:16:27,320 KT: And then it says Spaxx 245 00:16:28,219 --> 00:16:32,400 Suze: It's, it's a Fidelity regular treasury government money market fund 246 00:16:32,409 --> 00:16:34,809 Suze: that I usually tell everybody to put their money in. 247 00:16:36,400 --> 00:16:40,309 KT: And said I'm eligible for a premium. MMFZDX. 248 00:16:43,750 --> 00:16:43,929 Suze: That's the... 249 00:16:44,119 --> 00:16:45,280 KT: How do you say that? Say it. 250 00:16:45,729 --> 00:16:48,789 Suze: Well, no, that's the symbol of it. So, but what 251 00:16:48,799 --> 00:16:50,260 Suze: that is is the previous... 252 00:16:53,109 --> 00:16:56,669 KT: Wait, then he recommended putting it into a deferred annuity for 253 00:16:56,679 --> 00:17:03,090 KT: safety and guaranteed income. Before the rates go down, the 254 00:17:03,099 --> 00:17:06,520 KT: money is from a lump sum pension and the other 255 00:17:06,530 --> 00:17:07,599 KT: half is invested. 256 00:17:07,938 --> 00:17:11,359 KT: I'm 60 still working and want to retire in 2 257 00:17:11,369 --> 00:17:14,348 KT: to 3 years, Suze. I don't like the part that 258 00:17:14,359 --> 00:17:16,568 KT: says deferred annuity. 259 00:17:16,598 --> 00:17:19,328 Suze: Now, here's what, let me tell you what I don't 260 00:17:19,338 --> 00:17:24,129 Suze: like in it. So Fidelity does have a Fidelity money 261 00:17:24,138 --> 00:17:29,648 Suze: market premium account, KT. If you have $100,000 or more, 262 00:17:30,359 --> 00:17:33,530 Suze: you can put your money in there. And now you're 263 00:17:33,540 --> 00:17:39,239 Suze: getting about until it changes a 5.17% interest rate. But 264 00:17:39,250 --> 00:17:46,670 Suze: their expense ratio is only 0.30% But minimum of 100,000 265 00:17:46,680 --> 00:17:50,500 Suze: or above where most people have their money is in 266 00:17:50,510 --> 00:17:55,219 Suze: the Fidelity Government Money Market Fund where there is no 267 00:17:55,229 --> 00:17:59,699 Suze: minimum paying right now about 4.90% 268 00:18:00,010 --> 00:18:07,629 Suze: because their expense ratio is 0.42%. So it's a 0.12% 269 00:18:07,709 --> 00:18:13,319 Suze: more than the Fidelity money market premium. So for those 270 00:18:13,329 --> 00:18:15,560 Suze: of you who want to get a higher interest rate, 271 00:18:15,655 --> 00:18:19,435 Suze: because you get a lower expense ratio, you have $100,000 272 00:18:19,444 --> 00:18:23,515 Suze: or more in a money market. With Fidelity, you can 273 00:18:23,525 --> 00:18:28,234 Suze: go to their Fidelity money market premium account against. Symbol 274 00:18:28,244 --> 00:18:32,994 Suze: would be FZDXX. Here's what I don't like. 275 00:18:33,859 --> 00:18:37,839 Suze: This advisor, cold calls you. What does that mean? You've 276 00:18:37,849 --> 00:18:40,660 Suze: never spoken to him before. You have no idea who 277 00:18:40,670 --> 00:18:44,010 Suze: this person is, but he's able to see that you 278 00:18:44,020 --> 00:18:49,609 Suze: have $260,000 in a money market account. Why if he 279 00:18:49,619 --> 00:18:52,438 Suze: really cared about you, why didn't they call you the 280 00:18:52,449 --> 00:18:56,409 Suze: second that you had $100,000 in there? Because the minimum 281 00:18:56,420 --> 00:19:01,188 Suze: was 100,000 to put your money in there? Not 260,000. 282 00:19:01,199 --> 00:19:02,550 Suze: That's number one. But 283 00:19:03,319 --> 00:19:07,660 Suze: so now he's telling you you're eligible for this however, 284 00:19:08,290 --> 00:19:11,139 Suze: more than making that interest rate and keeping that money 285 00:19:11,150 --> 00:19:14,599 Suze: safe and sound. He because you say it's a, he 286 00:19:14,609 --> 00:19:17,659 Suze: wants you to put this money into a deferred annuity. 287 00:19:17,670 --> 00:19:22,819 Suze: Why for safety and guaranteed income before rates go down. 288 00:19:22,829 --> 00:19:26,339 Suze: Scare tactics. Fear. I don't like it. 289 00:19:26,780 --> 00:19:30,599 Suze: However, you tell me in this email that your money 290 00:19:30,609 --> 00:19:34,149 Suze: is from a lump sum pension, which means you took 291 00:19:34,160 --> 00:19:36,899 Suze: a lump sum of your pension and you rolled it 292 00:19:36,910 --> 00:19:42,069 Suze: into an IRA rollover where half of it is invested 293 00:19:42,290 --> 00:19:45,239 Suze: and the other half was just in a money market account. 294 00:19:46,239 --> 00:19:48,859 Suze: Have I not told you that I do not. 295 00:19:49,660 --> 00:19:52,879 Suze: Are you gonna underline that? I do not want you 296 00:19:52,890 --> 00:19:59,030 Suze: within a retirement account to put money in an annuity? 297 00:19:59,050 --> 00:20:02,310 Suze: An annuity has surrendered charges. It has all kinds of 298 00:20:02,319 --> 00:20:06,290 Suze: things and chances are if you did that, he's gonna 299 00:20:06,300 --> 00:20:09,879 Suze: get at least a $10,000 commission to do so. If 300 00:20:09,890 --> 00:20:13,079 Suze: he really cared about that, why doesn't he tell you 301 00:20:13,089 --> 00:20:16,160 Suze: to take this money and do a treasury ladder with it? 302 00:20:16,349 --> 00:20:19,030 Suze: Lock in the interest rates right now 303 00:20:19,670 --> 00:20:22,729 Suze: in a five year treasury, maybe a seven year treasury, 304 00:20:22,739 --> 00:20:26,160 Suze: maybe a 20 year treasury, a 30 year whatever it 305 00:20:26,170 --> 00:20:29,989 Suze: may be. And if interest rates do go down, as 306 00:20:30,000 --> 00:20:33,359 Suze: he's telling you, they're going to, the value of those 307 00:20:33,369 --> 00:20:36,399 Suze: treasuries are gonna go up. Oh, why doesn't he tell 308 00:20:36,410 --> 00:20:40,119 Suze: you that? Because he doesn't really get a commission on it. 309 00:20:40,280 --> 00:20:44,670 Suze: So your question is a deferred annuity a good idea? 310 00:20:48,359 --> 00:20:52,229 KT: See, I knew that that deferred annuity part would get you. 311 00:20:54,920 --> 00:20:58,469 Suze: But not in this situation, but here's what's so great. 312 00:20:58,489 --> 00:21:00,150 Suze: She was smart enough to know, 313 00:21:00,244 --> 00:21:03,905 Suze: to write in and ask, you know what that tells me. 314 00:21:03,915 --> 00:21:08,035 Suze: She already knew that it wasn't a good idea. 315 00:21:08,464 --> 00:21:11,814 KT: Ok. My next question. This is a very sweet one. Everyone, 316 00:21:11,824 --> 00:21:13,175 KT: this is from Francine. 317 00:21:13,185 --> 00:21:15,344 Suze: Wait, I have to say something else. I'm so sorry. 318 00:21:15,795 --> 00:21:18,464 Suze: When somebody cold calls you, 319 00:21:19,189 --> 00:21:23,780 Suze: they are given a list of names of people that 320 00:21:23,790 --> 00:21:28,339 Suze: the brokerage firm in this case, Fidelity wants them to 321 00:21:28,349 --> 00:21:31,079 Suze: call you to get you to do something with your 322 00:21:31,089 --> 00:21:36,699 Suze: money that generates a commission. It's not about anything else. 323 00:21:36,839 --> 00:21:42,060 Suze: You never want to invest with somebody who cold calls you. 324 00:21:42,109 --> 00:21:47,170 Suze: They're looking for customers, they're looking for a sale. All right. Ok. 325 00:21:47,550 --> 00:21:51,130 KT: This next question is very sweet and I, I hope 326 00:21:51,140 --> 00:21:54,949 KT: you can help her. It's from Francine and she said, hi, 327 00:21:54,959 --> 00:21:58,280 KT: KT and Suze, hope you're both well. I have a 328 00:21:58,290 --> 00:22:03,479 KT: disabled adult child who receives both social security and Medicare 329 00:22:03,589 --> 00:22:07,099 KT: paid and before I pass away I would like to 330 00:22:07,109 --> 00:22:12,140 KT: set up some sort of funeral arrangements for my child. 331 00:22:12,319 --> 00:22:16,849 KT: What are your thoughts on either a prepaid funeral contract 332 00:22:16,859 --> 00:22:21,889 KT: or a burial insurance policy? So, Francine's child is now 333 00:22:21,900 --> 00:22:24,969 KT: 48 and obviously Francine 334 00:22:25,349 --> 00:22:29,218 KT: hopes that her child will outlive her by maybe 20 335 00:22:29,229 --> 00:22:32,449 KT: or 30 years from now. So she, she wants to 336 00:22:32,459 --> 00:22:35,489 KT: just put a little security blanket in place. 337 00:22:35,500 --> 00:22:40,180 KT: But here's the problem Francine because KT just passed your 338 00:22:40,189 --> 00:22:44,329 KT: email to me and it says at the end, I 339 00:22:44,339 --> 00:22:46,810 KT: have no one to do any of this after I 340 00:22:46,819 --> 00:22:47,930 KT: pass away. 341 00:22:48,369 --> 00:22:51,589 Suze: So I want to do something soon. Who knows how 342 00:22:51,599 --> 00:22:55,349 Suze: much longer I have the truth of the matter is 343 00:22:55,400 --> 00:22:59,639 Suze: none of us know how much longer we have on 344 00:22:59,650 --> 00:23:06,189 Suze: any level age is not the determining factor of that outcome, 345 00:23:06,199 --> 00:23:10,709 Suze: believe it or not. So you could do that. But 346 00:23:10,719 --> 00:23:15,229 Suze: then who is going to be telling the company that 347 00:23:15,239 --> 00:23:16,629 Suze: you did this with 348 00:23:17,109 --> 00:23:20,099 Suze: that? You have this policy and you want to do 349 00:23:20,109 --> 00:23:24,569 Suze: this to take care of your child. Who because if 350 00:23:24,579 --> 00:23:28,260 Suze: you say you don't have anybody and you spend the 351 00:23:28,270 --> 00:23:32,290 Suze: money now to get a burial insurance policy or prepaid 352 00:23:32,300 --> 00:23:33,849 Suze: funeral contract. 353 00:23:34,780 --> 00:23:38,800 Suze: And we're talking about 30 or 40 or longer years 354 00:23:38,810 --> 00:23:40,040 Suze: from now. 355 00:23:41,660 --> 00:23:46,000 Suze: Who's gonna do this? How? So I have to tell you, 356 00:23:46,010 --> 00:23:48,770 Suze: I'm not exactly sure. I don't think I would do 357 00:23:48,780 --> 00:23:53,069 Suze: that unless you had a person that you knew that 358 00:23:53,079 --> 00:23:56,869 Suze: would do that or an irrevocable trust or anything like that. 359 00:23:56,880 --> 00:23:58,719 KT: Couldn't she leave instructions? 360 00:23:58,729 --> 00:24:02,020 Suze: She can? But who's gonna know she even had a trust? So, 361 00:24:02,280 --> 00:24:04,280 Suze: you know, because you have to remember that if there's 362 00:24:04,290 --> 00:24:07,300 Suze: any money even left over, it has to go back 363 00:24:07,310 --> 00:24:11,589 Suze: to the state because those are the Medicaid rules. So 364 00:24:11,599 --> 00:24:14,109 Suze: if you know that you can set this up in 365 00:24:14,119 --> 00:24:15,140 Suze: such a way 366 00:24:15,959 --> 00:24:21,219 Suze: and that, in fact, somebody will do this for you 367 00:24:21,229 --> 00:24:23,420 Suze: and do it correctly. OK? But 368 00:24:24,160 --> 00:24:27,500 Suze: somehow I have a feeling uh you better find that 369 00:24:27,510 --> 00:24:31,919 Suze: person first or that entity or somebody. I don't know. 370 00:24:31,930 --> 00:24:34,139 Suze: I'm not sure I would do it just so you know. 371 00:24:34,150 --> 00:24:34,819 Suze: All right. 372 00:24:34,829 --> 00:24:37,300 KT: Ok. Next question is from Vic, 373 00:24:38,030 --> 00:24:42,459 KT: I'm 67 and still working and then it said, but 374 00:24:42,469 --> 00:24:45,698 KT: not for the money. I do not have any debt. 375 00:24:45,709 --> 00:24:50,169 KT: My home and car are paid for my social security 376 00:24:50,180 --> 00:24:55,510 KT: amount as of now will be $3500. If I defer 377 00:24:55,520 --> 00:25:00,739 KT: till 70 I will get 4500. My grandson thinks I 378 00:25:00,750 --> 00:25:04,770 KT: should collect now and pay the one third taxes. 379 00:25:05,849 --> 00:25:09,389 KT: Your opinion is appreciated. What should Vic do? 380 00:25:10,689 --> 00:25:12,459 Suze: I wish you could see my face. 381 00:25:13,630 --> 00:25:18,689 Suze: Your grandson. All right. So maybe if you're 67. So 382 00:25:18,699 --> 00:25:24,170 Suze: your grandson is probably where late teens, maybe 20 or 383 00:25:24,180 --> 00:25:25,209 Suze: 21 384 00:25:25,310 --> 00:25:27,000 KT: Maybe he wants some money from grandpa. 385 00:25:27,069 --> 00:25:30,849 Suze: And your grandson says you should collect it now and you're 386 00:25:30,859 --> 00:25:35,890 Suze: even considering that your grandson may have the correct solution 387 00:25:35,900 --> 00:25:39,000 Suze: for you when you don't have any debt, your home 388 00:25:39,010 --> 00:25:41,750 Suze: and car are paid for you work but not for 389 00:25:41,760 --> 00:25:42,489 Suze: the money. 390 00:25:43,280 --> 00:25:49,250 Suze: Are you crazy? Are you crazy? Should, should wait, wait 391 00:25:49,270 --> 00:25:55,430 Suze: until you're 75. Where else are you going to earn? 8% 392 00:25:55,439 --> 00:25:59,050 Suze: a year guaranteed on your money for the next three years? 393 00:25:59,060 --> 00:25:59,939 Suze: Number one, 394 00:26:00,420 --> 00:26:05,669 Suze: number two, it's not just 8% a year. It's also 395 00:26:05,680 --> 00:26:09,719 Suze: the cost of living increase. Now, vic I don't know 396 00:26:09,729 --> 00:26:13,458 Suze: if you have a spouse, whatever, but if your spouse 397 00:26:13,469 --> 00:26:15,909 Suze: is younger than you and not making a whole lot 398 00:26:15,920 --> 00:26:21,459 Suze: of social security, wouldn't you want to leave them? $4500. 399 00:26:21,609 --> 00:26:25,750 Suze: Are you kidding me? And you also have to remember 400 00:26:25,849 --> 00:26:30,030 Suze: that depending on how much money you are already making 401 00:26:30,319 --> 00:26:34,938 Suze: and your other income and all of that, this 3500, 402 00:26:34,949 --> 00:26:39,218 Suze: if you take it, then could be taxable. And so 403 00:26:39,709 --> 00:26:44,419 Suze: uh grandson? KT, did you pick these today to aggravate me? 404 00:26:44,430 --> 00:26:47,219 KT: No, but I know this. Some of them. 405 00:26:47,430 --> 00:26:50,180 Suze: You do this, you did this on purpose? 406 00:26:50,189 --> 00:26:53,339 KT: I thought the grandson one was kind of fun. 407 00:26:54,250 --> 00:26:57,430 KT: I could, I could see that. Hey, cash it in 408 00:26:57,439 --> 00:26:59,510 KT: now and then he's, and then they have the money 409 00:26:59,520 --> 00:27:00,609 KT: to buy him a car. 410 00:27:01,569 --> 00:27:05,859 KT: Smart kid. So Suze, this is my last question from Sandra. 411 00:27:06,140 --> 00:27:11,030 KT: I am getting a divorce and need $200,000 to pay 412 00:27:11,040 --> 00:27:15,869 KT: off my soon to be ex husband. I have two choices. 413 00:27:15,880 --> 00:27:17,829 KT: One take out a home equity 414 00:27:18,219 --> 00:27:22,800 KT: but get a tax benefit or clear out two small accounts. 415 00:27:22,810 --> 00:27:27,339 KT: One IRA and one pension that are not high earners. 416 00:27:27,449 --> 00:27:31,179 KT: If I liquidate the two, I still have good funds 417 00:27:31,189 --> 00:27:34,199 KT: to live on. What do I need to consider? Am 418 00:27:34,209 --> 00:27:40,948 KT: I missing anything, Suze? So 70. So she's, she's Sandra's 70. 419 00:27:40,959 --> 00:27:44,050 KT: So the house equity is around a million dollars. 420 00:27:44,410 --> 00:27:44,880 Suze: Sandra. 421 00:27:45,339 --> 00:27:49,540 Suze: The simple answer to this obviously is I would do 422 00:27:49,550 --> 00:27:54,319 Suze: a home equity line of credit. I would not take 423 00:27:54,329 --> 00:27:58,688 Suze: money from a pension or an IRA for you to 424 00:27:58,699 --> 00:28:05,050 Suze: pay off $200,000 after taxes to your ex, you would 425 00:28:05,060 --> 00:28:10,859 Suze: probably have to take out at least $400,000 pay taxes 426 00:28:10,869 --> 00:28:14,119 Suze: on those and then have $200,000 left. 427 00:28:14,390 --> 00:28:17,810 Suze: I don't think if you did a home equity line 428 00:28:17,819 --> 00:28:22,359 Suze: of credit, it would cost you that much. Therefore, you 429 00:28:22,369 --> 00:28:25,550 Suze: are to do a home equity line of credit. However, 430 00:28:25,739 --> 00:28:29,650 Suze: I need you to also make sure that if you're 431 00:28:29,660 --> 00:28:33,020 Suze: going to pay him off, that there is a way 432 00:28:33,030 --> 00:28:36,849 Suze: that his name is taken off the deed 433 00:28:37,229 --> 00:28:40,500 Suze: so that this house at that point before you hand 434 00:28:40,510 --> 00:28:44,739 Suze: over $200,000 to him that this house is in your 435 00:28:44,750 --> 00:28:52,260 Suze: name and your name alone. Got that girlfriend. Just that simple. All right KT, 436 00:28:52,270 --> 00:28:53,349 Suze: guess what time it is 437 00:28:56,099 --> 00:29:01,050 Suze: And what's good about quizzy time everybody is it's not 438 00:29:01,060 --> 00:29:04,180 Suze: just can KT get the question right? 439 00:29:05,530 --> 00:29:07,000 KT: Usually not. 440 00:29:07,010 --> 00:29:12,719 Suze: Or wrong, it's do you know the answer to these 441 00:29:12,739 --> 00:29:17,880 Suze: quizz questions because it's important that you do most of 442 00:29:17,890 --> 00:29:19,280 Suze: the quizzys that I pick. 443 00:29:19,530 --> 00:29:22,689 Suze: I picked them because it's probable that one day you 444 00:29:22,699 --> 00:29:26,410 Suze: might be in this situation and you need to know. 445 00:29:26,890 --> 00:29:31,689 Suze: From Linda. My brother lives in my parents house in Florida. 446 00:29:32,260 --> 00:29:35,209 Suze: He took care of them for a few years before 447 00:29:35,219 --> 00:29:36,790 Suze: they passed away. 448 00:29:37,689 --> 00:29:41,560 Suze: My two brothers and I are to split the sale 449 00:29:41,569 --> 00:29:47,369 Suze: three ways when it sells, right? So my brother still 450 00:29:47,380 --> 00:29:51,510 Suze: lives in the house. He is 78 years old and 451 00:29:51,520 --> 00:29:56,209 Suze: still in fairly good health. We have to make the assumption, 452 00:29:56,219 --> 00:30:01,390 Suze: KTe that sometimes shortly or whenever 453 00:30:01,760 --> 00:30:05,750 Suze: he will be selling the house so that all three 454 00:30:05,760 --> 00:30:11,510 Suze: kids can divide the money equally. At that time, we 455 00:30:11,520 --> 00:30:15,390 Suze: also have to make the assumption that the house is 456 00:30:15,400 --> 00:30:21,359 Suze: currently in all three of their names. We have to 457 00:30:21,369 --> 00:30:23,540 Suze: make that assumption. 458 00:30:24,040 --> 00:30:27,380 Suze: Now, what we don't know, is it in their three 459 00:30:27,390 --> 00:30:31,810 Suze: names in joint tenancy with right of survivorship or is it 460 00:30:31,819 --> 00:30:35,060 Suze: in all three of their names in tenants in common? 461 00:30:35,770 --> 00:30:42,290 Suze: Which means that it goes to their beneficiaries according to 462 00:30:42,300 --> 00:30:46,170 Suze: their will or trust versus going to the other sibling. 463 00:30:46,329 --> 00:30:49,250 Suze: So we're going to have to make an assumption here 464 00:30:49,869 --> 00:30:55,109 Suze: that it's in all three names held in tenants in common. 465 00:30:58,560 --> 00:31:02,400 Suze: Wait don't answer yet. She goes on to say so 466 00:31:02,410 --> 00:31:06,579 Suze: I did a will and wrote it when it sells 467 00:31:06,589 --> 00:31:10,540 Suze: and I pass away my portion will pass on to 468 00:31:10,550 --> 00:31:14,930 Suze: my two children. Do I have to do a living 469 00:31:14,939 --> 00:31:17,500 Suze: revocable trust also? 470 00:31:18,729 --> 00:31:19,859 KT: Yes. 471 00:31:19,869 --> 00:31:20,939 Suze: Without even thinking, you said that. 472 00:31:20,949 --> 00:31:23,589 KT: No, I've been thinking about this when you're reading the 473 00:31:23,599 --> 00:31:26,910 KT: whole thing. It's like if you have the trust, your 474 00:31:26,920 --> 00:31:30,310 KT: one third portion isn't gonna have to go into probate. 475 00:31:30,420 --> 00:31:33,939 KT: She gets it right away. She needs the trust and 476 00:31:33,949 --> 00:31:37,459 KT: the will. It's like love and marriage. She needs the 477 00:31:37,469 --> 00:31:38,869 KT: trust and the will. 478 00:31:39,089 --> 00:31:40,410 Suze: Why does she need a will? 479 00:31:40,560 --> 00:31:41,829 KT: Well, the will is 480 00:31:42,079 --> 00:31:47,209 KT: to specify the contents or art or personal effects in 481 00:31:47,219 --> 00:31:51,060 KT: the real estate or whatever one wishes to leave, that 482 00:31:51,069 --> 00:31:53,810 KT: isn't necessarily in the trust. 483 00:31:53,819 --> 00:31:56,910 Suze: And why aren't those things in the trust? 484 00:31:56,920 --> 00:32:01,729 KT: A trust is there to specify assets that are titled 485 00:32:01,780 --> 00:32:03,729 KT: or bank accounts. Things like that. 486 00:32:03,739 --> 00:32:05,089 Suze: Like real estate, things 487 00:32:05,170 --> 00:32:08,510 Suze: like that. Right. Not your dishes. Right. 488 00:32:08,520 --> 00:32:12,060 KT: Well, maybe mine really good. 489 00:32:12,520 --> 00:32:17,459 Suze: Maybe her dishes. That's true. So everybody, KT is ding, ding, ding, ding, 490 00:32:17,469 --> 00:32:22,890 Suze: ding yay. I'm in such shock. Although that, that was 491 00:32:22,900 --> 00:32:25,280 Suze: a relatively easy question. 492 00:32:25,390 --> 00:32:26,310 KT: You know why? 493 00:32:26,520 --> 00:32:27,030 Suze: Why? 494 00:32:27,040 --> 00:32:28,270 KT: I am smarter, 495 00:32:29,010 --> 00:32:33,939 KT: I'm older and wiser and smarter this week. 496 00:32:33,949 --> 00:32:38,380 Suze: You are, you are smart. That is so true. So 497 00:32:38,390 --> 00:32:42,119 Suze: everybody just to be clear on that, the reason that 498 00:32:42,130 --> 00:32:45,550 Suze: you need both a trust and a will 499 00:32:46,359 --> 00:32:50,520 Suze: is that a trust will help you avoid probate. And 500 00:32:50,530 --> 00:32:54,719 Suze: if you happen to own this home, the three of 501 00:32:54,729 --> 00:32:57,410 Suze: you as tenants in common, 502 00:32:58,170 --> 00:33:01,750 Suze: which means that your assets go again to those that 503 00:33:01,760 --> 00:33:06,800 Suze: you leave it to versus automatically going to the other 504 00:33:06,810 --> 00:33:11,079 Suze: people you own the property with who by the way, 505 00:33:11,089 --> 00:33:14,250 Suze: if you owned it and join tenancy, KT with right 506 00:33:14,260 --> 00:33:17,750 Suze: of survivorship, the three of them, she dies, 507 00:33:18,140 --> 00:33:23,989 Suze: it now will then automatically go without probate to her siblings. 508 00:33:24,130 --> 00:33:28,030 Suze: But if they die and their will or trust says 509 00:33:28,040 --> 00:33:33,150 Suze: it goes to their kids, she's just disinherited her own kids. 510 00:33:33,160 --> 00:33:36,819 Suze: So it's important that it's not joint tenancy with right 511 00:33:36,829 --> 00:33:41,430 Suze: of survivorship that it is tenants in common, but you 512 00:33:41,439 --> 00:33:44,079 Suze: could have a trust be the tenant 513 00:33:44,630 --> 00:33:49,880 Suze: of that property. So that upon death, it goes to 514 00:33:49,890 --> 00:33:54,969 Suze: her kids without probate. So tenants in common would probably 515 00:33:54,979 --> 00:33:58,449 Suze: be the best way to set up the trust for 516 00:33:58,489 --> 00:34:02,540 Suze: a property owner that has quite a few children that 517 00:34:02,550 --> 00:34:06,329 Suze: want to go to their children versus going to the 518 00:34:06,339 --> 00:34:11,330 Suze: other people she happens to own it with. So hopefully 519 00:34:11,340 --> 00:34:13,850 Suze: you have it set up as tenants in common 520 00:34:14,080 --> 00:34:18,419 Suze: and hopefully your tendency is in the name of your 521 00:34:18,429 --> 00:34:23,389 Suze: living revocable trust, which obviously it's not because your question 522 00:34:23,399 --> 00:34:27,120 Suze: is asking, should you have a trust? And the answer 523 00:34:27,129 --> 00:34:31,610 Suze: to that question is absolutely. But you have, you look 524 00:34:31,620 --> 00:34:33,379 Suze: like you have another question for me. 525 00:34:33,459 --> 00:34:36,799 KT: So she already has a will. Is that legal? Is 526 00:34:36,810 --> 00:34:39,810 KT: that binding? Is that how does that get honored? 527 00:34:39,879 --> 00:34:43,820 Suze: Yeah. Well, what's interesting... And that's actually a great question 528 00:34:44,120 --> 00:34:46,149 Suze: because a lot of people think all they have to 529 00:34:46,159 --> 00:34:49,979 Suze: do is write on a piece of paper where they 530 00:34:49,989 --> 00:34:53,270 Suze: want everything to go and just leave that piece of 531 00:34:53,280 --> 00:34:59,120 Suze: paper for everybody to find. Not that easy. First of all, 532 00:34:59,129 --> 00:35:03,899 Suze: everybody for a will to be legally binding. 533 00:35:04,750 --> 00:35:09,419 Suze: It has to meet really KT, certain requirements such as 534 00:35:09,620 --> 00:35:12,330 Suze: you have to be at least 18 years of age, 535 00:35:12,340 --> 00:35:15,370 Suze: which she is, you have to be of what they 536 00:35:15,379 --> 00:35:20,169 Suze: call sound mind, meaning that you understand the nature of 537 00:35:20,179 --> 00:35:23,929 Suze: what you're writing. So somebody could be older than 18. 538 00:35:24,340 --> 00:35:28,770 Suze: But if they're incapacitated if they're not mentally stable, whatever 539 00:35:28,780 --> 00:35:32,729 Suze: it may be, their will isn't going to be considered valid. 540 00:35:33,120 --> 00:35:37,939 Suze: However, so here she is, she wrote a legal document. 541 00:35:37,949 --> 00:35:43,239 Suze: Just remember, it's got to be written. Very few jurisdictions 542 00:35:44,030 --> 00:35:47,919 Suze: honor what's called an oral will where somebody hears, you've 543 00:35:47,929 --> 00:35:51,759 Suze: said something and therefore they're going to honor it. So 544 00:35:51,770 --> 00:35:55,810 Suze: a written will is absolutely far more secure. However, 545 00:35:56,510 --> 00:36:00,610 Suze: she must sign the will. She can't have somebody else 546 00:36:00,620 --> 00:36:03,409 Suze: sign it for her. She has to sign it herself, 547 00:36:03,719 --> 00:36:08,709 Suze: but she needs witnesses if she signs it because most 548 00:36:08,719 --> 00:36:12,969 Suze: states require at least two witnesses who are not beneficiaries 549 00:36:12,979 --> 00:36:16,468 Suze: of the will and they have to watch you sign 550 00:36:16,479 --> 00:36:19,449 Suze: the will and then sign it themselves to confirm 551 00:36:19,860 --> 00:36:23,810 Suze: that they witnessed her signature. You know, KT, how we 552 00:36:23,820 --> 00:36:27,429 Suze: would redo things and every time we redid it, it 553 00:36:27,439 --> 00:36:30,629 Suze: was how did we do the will than the trust 554 00:36:31,120 --> 00:36:36,159 Suze: because the will required two witnesses, they had to sign it. 555 00:36:36,169 --> 00:36:39,030 Suze: We have to have, it was a mess. All right. 556 00:36:39,330 --> 00:36:43,439 Suze: And while it's true, most states don't require that you 557 00:36:43,449 --> 00:36:45,520 Suze: notarize the will KT 558 00:36:45,919 --> 00:36:50,939 Suze: but it makes it less likely to be contested. So 559 00:36:50,949 --> 00:36:53,939 Suze: if I were you, I would have your will notarized. 560 00:36:54,209 --> 00:36:57,699 Suze: And that's just what you need to know. So really 561 00:36:57,709 --> 00:37:02,379 Suze: just signing a piece of paper doesn't necessarily mean that 562 00:37:02,389 --> 00:37:05,000 Suze: it is going to hold up what we have and 563 00:37:05,010 --> 00:37:07,948 Suze: it needs to be the original document, correct. It needs 564 00:37:07,959 --> 00:37:11,909 Suze: to be the original document. And if you cross out 565 00:37:11,919 --> 00:37:13,620 Suze: something on your will 566 00:37:14,179 --> 00:37:18,120 Suze: and you write something else, it automatically invalidates it. So 567 00:37:18,129 --> 00:37:20,500 Suze: if you're gonna update your will or do a new will, 568 00:37:20,510 --> 00:37:22,509 Suze: if I were you, I would rip up the old 569 00:37:22,520 --> 00:37:26,919 Suze: one and just do this process all over again with 570 00:37:26,929 --> 00:37:31,129 Suze: the new one. And that's what I would do. But 571 00:37:31,139 --> 00:37:35,320 Suze: you did pretty good my little smart, 72 year old. 572 00:37:36,219 --> 00:37:37,110 Suze: How does it feel? 573 00:37:37,120 --> 00:37:38,310 KT: You don't have to say that. 574 00:37:38,449 --> 00:37:44,069 Suze: I do. It makes me feel older and wiser because 575 00:37:44,080 --> 00:37:45,199 Suze: I'm one year, 576 00:37:45,659 --> 00:37:48,600 Suze: you have one year till your RMDs start. But that's 577 00:37:48,610 --> 00:37:53,310 Suze: a whole another podcast. Take us out my dear wise one. 578 00:37:53,659 --> 00:37:58,389 KT: So, Suze, there's only three things, everyone needs to remember and 579 00:37:58,520 --> 00:38:03,300 KT: that is people first, then money, then things. 580 00:38:03,729 --> 00:38:06,679 Suze: And if they do that, what happens and they stay safe, 581 00:38:06,689 --> 00:38:08,360 Suze: they will be what KT? 582 00:38:08,370 --> 00:38:09,060 KT: Unstoppable! 583 00:38:09,469 --> 00:38:13,520 Suze: You heard it right from the birthday girl. See you soon. 584 00:38:13,530 --> 00:38:14,320 Suze: Bye bye.