0:12

He served at the Pentagon as an army jag. He graduated from Notre Dame

0:17

and has two law degrees from Boston University and Georgetown University. He's been practicing

0:23

law for over thirty years. He's your family's personal attorney. It's time for

0:30

the David Carrier Show. Hello, and welcome to the David Carrier Show.

0:35

I'm David Carrier, your family's personal attorney, and you have found a place

0:39

where we talk about a state planning, elder law, real estate, and

0:43

business law. So give us a call. Why don't you what could it

0:46

hurt? Sixty one six seven seven four twenty four twenty four. That's six

0:51

one six seven something four twenty four twenty four. We'll get your question,

0:56

comment or concern on the air, especially if it has to do with wills,

1:00

trusts or probate. That's all that, the state planning stuff. You

1:03

know, people talk about, Oh, let's avoid probate. Huh, that's

1:07

a great idea. Let's save taxes. I like that, and let's make

1:11

it easy for the kids. Ah, that's a bunch of nonsense, all

1:15

of it. Because if you don't do the next one, which is the

1:18

elder law part, which is the take care of your long term care stuff.

1:21

There won't be anything for the kids. Screw the kids. You know,

1:26

if you worry about your kids, you'll die broke anyway, So what

1:30

the hell is the point? I don't get it. Why does everybody?

1:33

Oh, I'm going to do a ladybird dede. Oh, I'm gonna put

1:36

my kids on my account? What what come on? I mean? This

1:42

is Isn't this the twenty first century? Don't we have like elevators now,

1:46

fax machines. Aren't we aren't we beyond the we got beyond very old England?

1:53

You know what I mean? Think about this. Here we are and

1:56

they're talking about now they're talking about robots. Have you heard about this? Robots? You know? Apparently Elon Musk. I don't know about you,

2:05

but what a guy, what a freaking mention? Hey No, I just

2:09

don't want to put a rocket into space. I want to go to Mars.

2:14

I'm going to colonize Mars. Oh, by the way, you want

2:16

it? The only electric car that actually works here you go. Oh and

2:21

by the way, along the way, I'm going to revolutionize industrial production.

2:25

Oh and by the way, along the way, I'm gonna I don't know,

2:29

dig in the earth or something. What is talk about? Talk about?

2:35

A talk about? You know, they say that that beer is proof

2:39

that God loves us and wants us to be happy. You know, I

2:44

wonder if the same couldn't be said of elon Musk. Yes, yes,

2:47

it may be kind of a stretch, but I equated elon Musk with beer

2:52

in terms of God's beneficent intent with regard to the human race. It's possible.

2:55

It's possible. I don't know. You want to discuss the theological implication

3:00

that very easy to do. Give me a call. Sixty one six seven

3:02

seven four twenty four twenty four. Then sixty one six seven seven four twenty

3:07

four twenty four. Now, no, no, I mean, if you're

3:10

if you're doing the Oh I'm gonna avoid probate. Oh I'm gonna say taxes.

3:14

Oh I'm gonna get it the kids. You know, you're you're doing what you are living the sixteenth century English life. Is what you're doing.

3:25

I mean, this is this was the big problem in Europe and Britain what

3:30

have you. Of course, most other places in the world didn't have this

3:32

problem because they didn't have anything, and besides, you didn't know it the

3:38

king did, or the queen or the empress or the whatever. And besides

3:42

it was gonna be convulse and more before you do it. Right, it

3:45

was only let's face it, I mean, where did stuff get handed down

3:49

generation generation in private hands? In the answers Europe? Oh? Sorry?

3:53

Oh does that offend you? Oh? Oh, well where else did it

3:58

happen? Right? Who else? A probate courts? Nobody? Why because

4:01

they didn't need them? Why why why didn't they need them? Because they

4:08

didn't have anything? That's why. Well, anyway, nowadays, let me

4:13

just look at the history of this stuff. Can you look at the history

4:15

for just a second, you know, I mean where did it come from? Whether it's where it came from anyway, The point is you're doing all

4:20

this stuff as if nothing had happened in the last five hundred years. Right,

4:26

what are you thinking? I mean, there's been penicillin, right,

4:29

you ever heard that penicillin? The telegraph? H And you're still doing what

4:33

could be written out on a parchment anytime in the life. Seriously, Seriously,

4:39

if you look at the estate planning that I see every day that people

4:43

bring in, right, you're answering, you're answering the same issues with the

4:48

same techniques, the same tactics, everything else that would not have looked out

4:55

a place to Abraham Lincoln. Abraham Lincoln looked at a will or whatever or

4:59

Billy's speed is his law partner? Whoever was that did the wheels in that

5:02

office. I don't know if honestate did it. But anyway, if you

5:05

look at that, if if you look at what we're doing today, well

5:10

most people are doing today, not me, but most people are doing today.

5:14

It's it's it's indistinguishable. It's the same, it's the same sort of

5:16

thing. Right, and in the meantime, what you know, oh,

5:20

there have been a couple of world wars. Okay, I don't see that

5:24

military technology has has lagged behind. I don't see that. You know,

5:29

medical technology is lag band communications technology is lagged behind. Right. Uh,

5:33

you're living in a house with central heat and plumbing plumbing, think about that.

5:40

You're doing this state planning using techniques that were that were that were cornte

5:48

that were that were that were a good idea back when you had to go

5:53

to the outhouse and use the sears catalog. Think about that. What and

6:00

you're doing it and they're selling it to you. That's the worst part.

6:04

They should know better. They do know better, you know, the idiots

6:09

who are still selling you wills. I just saw another one of these ads.

6:12

We'll do a will and truss for one hundred and twenty nine dollars.

6:15

Are you freaking kidding me? The paper costs more than that. You do

6:18

it right? You can't. It's like, oh, you know, and

6:24

here's the thing. Here's the thing. Oh, it's modern technology. They're

6:28

delivering the same old crap. Okay, it ain't modern technology to the loo.

6:35

I mean, seriously, what if you went to a big model Get

6:39

this. This is what it's like. It's like you go to the doctor,

6:42

right, and it's in a big modern facility with air conditioning and elevators,

6:47

and they got a TV there for you to sign in right to for

6:51

your appointment and whatever. And then and then I've got to be culturally sensitive

6:58

here. How can I do that? Oh? I don't know. Then

7:00

you see the guy in one of those plague masks, you remember those from

7:03

the Black Death. You know, you can picture them with the big beak

7:06

right or they're gonna they're gonna bleed you like they used to do you know

7:13

they would bleed. People want the evil spirits out, you know, or

7:15

the bad humors, or to balance the humors is what they you know,

7:18

the black bile and the yellow bile and all. Well, I mean really

7:24

really, you go to a modern hospital, it's got all the accouterments of

7:28

a hospital, and that you go in there for them to uh, you

7:31

know, to shake a rattle at you, and uh, of course,

7:36

you know it's interesting in some places that's what they want. They actually want

7:44

that. Well, you know, okay, fine, if if you want a guy in a mask, you know, like those like those plague doctors,

7:49

or you want them to bleed you, which is what used to happen,

7:54

you know, that's if that's your idea of medicine, then go do

7:57

the will and the lady birdid and all the rest of the silly nounce go

8:00

ahead. I mean, it won't work any better than that stuff does.

8:03

But but that's up that's really up to that's up to you. But there

8:07

you go anyway. So I mean, why should you you know what you

8:11

think we haven't figured out other stuff since then? Huh? Huh? You

8:16

think you think you think there aren't people who have figured this stuff out there

8:22

are Okay, there are not everybody's losing all their stuff to long term care.

8:26

Not everybody is, you know, wasting the stuff. You know,

8:31

not everybody has ignored the developments in the law. Well, you think the

8:35

law hasn't developed, really, really, you think criminal law is the same

8:39

as it was in Charles Dickens time, you know, when he's writing about

8:43

Bob Cratchit and Tiny Tim. You think it's the same thing. It could

8:48

be the same thing, because you could take I'm serious about this now,

8:52

you could take the will that Ebernezer Scrooge dead right, the will that Eberne's

8:56

are in. I know he's a fictional character. Don't write me about that

9:00

anyway, the will that Eberstonezer Scroogs would have done if Iberneza Scoogs was a

9:03

real person, you could take his will and go. If Ebernezer went to

9:09

any laws, any big law firm, right, he'd get the same frickin

9:11

thing. It would be completely recognizable. Now it gets spit out on a

9:16

laser printer, that's true, and he might get an electronic copy of it

9:20

maybe, and all the rest, but the techniques, the sophistication, it's

9:24

the same. It's the same. What else is the same? Are chairs

9:30

the same? Right? I mean, does Bob Cratchitt have to get buying

9:33

one lump of cool anymore? You know? The scrivener is there for the

9:37

for the bartlebee, the scrivenor, you know, scribbling scribbling away? I

9:41

mean, is that is that the same? I think things are different.

9:45

I think things are different. I think people have more stuff than they ever

9:48

did. Okay, they have more stuff, and they want to leave it

9:52

to their kids. But what has developed in the meantime which everybody seems to

9:56

ignore for some reason? You know, And I look, if people are

10:01

ignoring a problem, and they're making money ignoring the problem, it's not evil

10:07

to observe that they're making money ignoring the problem. That's not bad. Okay,

10:15

that's not horrible. That's just it's just basics. Isn't that basic?

10:20

How's that not basics? Anyway? So if you want to avoid probate,

10:24

safe taxes, get it to the kids. I'm all in favor of that

10:26

stuff, but not as the goal, not as the purpose, not as

10:30

the function. All right, The goal is to make sure that your stuff

10:33

lasts. As long as you do that, your stuff serves you that you

10:37

live the life your spouse lives, the life that you've worked for. That's

10:41

the point, that's the key. If you're not doing that, if you

10:43

don't know how you're doing that, you're wrong. You're just wrong. And

10:46

whoever advised you to do that is wrong also wrong. Wrong. There you

10:50

go. I said it. Well, I've only been saying it for twenty

10:54

years. I mean, why should that come as a surprise. You've been

10:56

listening to the David Carrier Show. I'm David Carrier, your families personal attorney.

11:18

This hour of the David Carrier Show is pro bono, so call in

11:22

now at seven seven four twenty four twenty four. This is the David Carrier

11:26

Show. And what's on the radio. It's the David Carrier Show. Of

11:33

course, give us a call. Why don't you have six one six seven

11:39

seven four twenty four twenty four. That's sixty one six seven seven four twenty

11:43

four twenty four. What a week? Huh? This has been a week,

11:46

hasn't it. I've learned things this week I have. You know,

11:50

you say they can't teach an old dog new tricks, Yeah, well keep

11:54

your eyes open. Their new tricks all the time. You know what I

11:58

learned. I learned that in order to be a university president. Now you

12:03

would think these people were smart people. I'm sure they're very very smart,

12:07

very smart people, very smart people. But what I have learned is that

12:11

these people are so smart is there studying so much and impresent one another?

12:15

You know with their smartness that none of them have ever had like cockroaches in

12:20

the house. They've never had They've never had to deal with cockroaches. That's

12:24

the thing, right, They've never They've never had children. None of these

12:26

people have had kids. Apparently, none of them. They've none of them

12:31

have had children. Apparently none of them have either done a lawn or even

12:37

gone to the next level raising of having a garden. You've never done that.

12:41

These people have never ever done. They've never had bugs in the house,

12:46

They've never had children, They've never had a garden. They haven't even

12:50

done a lawn from what I can tell. You know, how do you

12:54

know that? Well, if you have an insight on that one, then

12:58

give me a call, if you would please. Six ones, six seven

13:01

seven four twenty four twenty four. That's six one, six seven seven four

13:05

twenty four twenty four see if you can explain how an adult who's had any

13:09

experience. Oh oh, and they've never had automobiles either, right, they've

13:13

never had never had a car, or what else? What else haven't they

13:18

had? They've never made a meal, they've never cooked anything, right,

13:22

And how do you know? How do you know? It's very easy these

13:26

people, these people who are educating your kids. Now, now, if

13:31

you wanted your kids to go at Ivy League school right now, Oh,

13:35

little Jimmy's gonna get into Harvard number one, Little Jimmy ain't getting into Harvard.

13:39

Okay, you may anyway not going there. But anyway, little Jimmy

13:43

ain't getting at Harvard. Uh little uh little anyway, he's not going to

13:50

Harvard. But anyway, the point is, I had a I have a

13:54

nephew went to Harvard. See, here's the here's the here's my disconnect.

13:58

Right. I know he's a smart guy, he's like a super smart guy.

14:01

And what he said was that the people, well he's in mathematics.

14:05

But anyway, the people there were super smart people too, right, So

14:09

what is it that twists these people? Okay, what is it? What

14:13

is about the university? I think it's because they never had to deal with

14:16

bugs, They never had to deal with a garden, They never had to deal with any of this stuff that normal people have to deal with because they

14:22

think that if something's going bad, then the thing to do is to ignore

14:26

it and'll get better. So if you've got a bunch of you've got a

14:31

bunch of clowns who are camping on the campus, right, camping on the

14:33

campus right and protesting and stuff, the way to handle that is to ignore

14:39

it, right. And you know what you should also do. You should

14:43

also pretend that it's students who are doing this. Why don't you pretend that

14:48

it's students who are camping on the campus protesting whatever the hell it is they're

14:52

protesting. And let's pretend that those brand new tents, nobody had to buy

14:56

them. And let's pretend that the rental trucks have piled up pull up with

15:01

all the supplies and stuff. Nobody had to buy that either. And let's

15:03

pretend that the kids who went in Portland to the to the local handy andy

15:09

or wherever it was and got all the stuff to combat the police right who

15:13

are coming into the library, Let's pretend they stole it all. Yeah,

15:18

that's right, right, they have palettes of stuff and they you know,

15:22

it just magically appeared, right, let's pretend all that. Okay, so

15:26

let's let's just pretend. But then let's let's super pretend that well, and

15:31

because it's the only way you can figure it out, right, these people must never have figured out that if you don't go after the cockerroaches when you

15:39

see the cockerroaches, pretty soon you're gonna have a house full of cockerroaches or

15:43

a barn full of mice. Testify, you gotta get some cats anyway.

15:52

You know, bad things happen, you know. You know from raising your

15:58

garden. You know that if you don't get in there and yank out the

16:00

crab grass, pretty soon it takes over, right, Yeah, yeah,

16:03

you get rows and rows of plants if you don't weed it, you know,

16:08

and you go back three weeks later, expect tomatoes. You're gonna be

16:12

disappointed because it doesn't work that way. Nothing works that way in the real

16:18

world. What does that tell you about the super smart people who are running

16:23

you know, Harvard and Dartmouth and Cornell and you know all the rest of

16:29

these idiots. I mean, how freaking stupid. How intensely dumb do you

16:36

have to be? Now, my assumption, my working assumption there is that

16:41

you actually want your university to succeed in teaching people and all the rest of

16:47

it. Of course, I'm open to the suggestion that you know, there's

16:52

a saying is that the system is what the system does. Okay. In

16:56

the Bible they say, you know, you know the tree by the fruit,

17:00

right, judge of the tree, by the fruit of the tree.

17:03

You know, that's how you know it. That's how you know it's a

17:06

good person, bad person. I don't know. They do good things or bad things. It seems pretty obvious, right, Well, what the hell

17:11

are these universities doing? Why did they deserve billions of dollars billions of dollars

17:18

in endowments? Why? Why should we why should we cut them a break?

17:22

Are they helping us out? Doesn't seem like it doesn't seem like it

17:26

seems like as soon as there's a new student loan or a student whatever,

17:30

they raise their rates so that they suck it up. Seems like they want

17:34

to do that. That seems like that seems like a thing. Okay,

17:40

I mean, what is it exactly that they're you know, what is it

17:42

exactly that they're doing? You know, And here's the worst part about these

17:47

university presidents. I mean I blame them. I totally blame them, you

17:51

know, because you have examples where the president didn't tolerate it. You know,

17:56

the university president just didn't tolerate it, and it didn't happen. You

18:00

know why it didn't happen, because it's not organic. Do you think the

18:06

students walk up one morning and said, Hey, I think I'm going to

18:08

defend a whole bunch of rapists. Hey, I'm gonna I know that if

18:14

there's a group of people out there who are represented by another group of people

18:18

who who took gleeful pictures of them doing bad things, those are the people

18:25

I want to support. But we've got Tom on the line. Hello Tom, Welcome to the David Carrier Show. Oh hi David, how are you

18:30

today? I am just perking and working and having a ball. I'll tell

18:34

you tell the beautiful day on Earth. I have a couple of questions for

18:38

you. Direct your estate planning ideas and so forth using a terrible remainder trust

18:52

or a donor churchill remainder trust, and particularly being able to how are you

19:00

to put higher a money into that and maybe save some taxes along the way.

19:07

Yeah, here's so. Here's so those are really kind of two different

19:10

ideas, right, the idea behind the chart. All right, let's talk

19:12

about what a charitable remainder trust. A charitable remainder trust is. Charitable remainder

19:18

trust is for folks who have appreciated property, have property that's gone up in

19:23

value, so if you go to sell it, you're gonna get whacked with

19:26

the tax. And now, of course, you know, I tell you

19:30

what I think Joe Biden is trying or excuse me, oops, some politicians

19:33

somewhere is trying to make charitable remainder trust much more popular because last week they

19:38

announced, Hey, we're gonna go to what forty nine percent or something like

19:41

this capital gain tax rates and we're going to tax unrealized appreciation. Okay,

19:49

we're gonna start doing that. Well, if they start doing that, then

19:53

we go back to where we were under George H. W. Bush,

19:57

where the capital gain time act rates were very high. They were very high,

20:03

and so that is what incentivizes people to do the charitable remainder trust.

20:07

And here's how it works I've got, I've got less than a minute.

20:11

You might hanging on through the news because really it takes it takes a bit

20:15

to explain it. Okay, super yeah, the charitable remainder trust, self

20:22

directed funds. Super love those ideas. Use them a lot because they do

20:27

work very, very well if they're implemented correctly. You've been listening to the

20:32

David Carrier Show. I'm David Carrier, your family's personal attorney. Something David's

20:56

got the how to you're looking for. Just call seven seven twenty four twenty

21:02

four. This is the David Carrier Show. We welcome back to the David

21:11

Carrier Show. I'm David Carrier, your family's personal attorney. You have found

21:15

the place where we talk about a state planning, elder law, real estate

21:21

and business law. We've got Tom on the line. Tom's got a question

21:26

about self directed charitable distributions from iras as well as charitable remainder trusts. If

21:36

you want to get your question on board, that's easy to do. Six one six seven seven four twenty four twenty four. That's sixty one six seven

21:44

seven four twenty four twenty four. Okay. So the problem with both the

21:48

problem that both of these are solutions to Okay, the self directed IRA and

21:53

the basically and the charitable remainder trust are taxes, Okay, taxes are in

22:00

charitable intent are what motivate these two techniques. So here's the tax situation with

22:07

a charitable remainder trust. Why you would think about it. Let's say you

22:11

had you would accumulated some residential real estate, and let's say you had depreciated

22:19

that down. Okay, So but you don't dare sell it because if you

22:23

sell it now, you've got to pay all the capital gain taxes on it.

22:26

Are you with me on that one? Yep, right, okay?

22:30

Or you bought Tesla when elon nobody knew what was up with that guy?

22:34

Okay, and now it's whoa, Now it's way up okay. And you're

22:38

thinking, man, I'd love to sell it, but if I sell it

22:41

now, I got to pay all the tax on it. Holy toledo.

22:45

I don't want to do that. So how am I gonna end? By

22:49

the way, I would like an income now, I would like an investment

22:53

based income. Okay, fine, But if I sell it then I lose

23:00

all the money. I lose a lot of the money that I would otherwise

23:03

have invested to provide my income for my golden years. Okay, that's the

23:10

idea, all right, So how do I save the tax? Well, the answer with the Charitable Remainder trust is I'm going to take that money and

23:19

put it into a charitable trust so I don't have to pay the income tax

23:25

right now. I don't have to pay the tax right now. So I'm going to put it into this charitable trust, and I'm going to take an

23:30

income from this trust, right and when I die, whatever is left is

23:37

going to the charity. Now here's the thing. Here's a little couple of

23:41

let's get the basics right first. So I'm taking the stock that if I

23:47

or the real estate or whatever it is, that if I sold it myself,

23:51

I would take a big tax hit on it, and it's gonna double

23:53

a triple or something in the future. But anyway, so it gets worse.

23:57

So this technique becomes better in the future because the higher the tax,

24:00

the more the technique is worth doing. So the idea is, so I,

24:06

if I sold it and I invested the money that was left, oh

24:11

bad for me because I don't have very much income now because they took all

24:14

that money away in taxes. So what the Charitable Remainder Trust says is,

24:19

I'm going to give whatever's left after I take my income whatever, I'm going

24:26

to give that to a charity. And they say, oh, well,

24:30

Tom, how old are you eighty years old? Eh? Okay, Well

24:34

you have a twelve year life expectancy. Okay. And so what we're going

24:38

to do is we're going to say, all right, what is the value

24:41

of a gift twelve years in the future. Well, it's not the same

24:45

as the value of a gift today, that's true, but it's got some

24:49

value. Now here's the other part of it. You have to decide you.

24:55

Tom have to say, you know, I would like a certain number

24:59

of docs dollars, certain number of dollars to come out of this trust every

25:06

year, every month, every week, whatever, whatever it is you decide.

25:10

Actually I think it's a month and year. But anyway, the point is I want ten bucks a week for the ten bucks a month for the

25:18

rest of my life. Well, then you calculate that, you say,

25:21

okay, I got one hundred thousand dollars, I'm going to pay Tom one

25:26

hundred bucks ten bucks a month for the rest of his life. How old

25:30

is he He's eighty, which his life expected about twelve years. Okay,

25:33

fine, calculate. Calculate. That means that when Tom dies, given the

25:38

current interest rates, and the IRS tells us what interest rates to use,

25:42

given the current interest rates, there should be, however much money at the

25:48

end of the day. Okay, when you die. Now, we don't

25:52

know when you're gonna die, so we just if you're a healthy guy,

25:55

you say, ooh, I'm going to beat those twelve years. Or if you're sickly, you say, I don't want it. I don't want to

26:00

do it for my lifetime. I want to do it for a term of

26:03

years because I'm not I'm feeling kind of poorly right now, right, I'll

26:07

do it for five years and then it will pay off. So you can

26:11

do it for lifetime. You can do it for a term of years.

26:14

And the other thing you can do is you can say I want a certain

26:17

number of dollars every month, or you can say I want a certain percentage.

26:22

So if you say I want the dollars a definite amount of dollars every

26:27

month because you think the stock market's going to go down, See if the

26:33

stock market goes down your investments are going to go down, then you want

26:37

the dollars because then you know that you're going to get that many dollars.

26:41

If you think, on the other hand, that because of inflation and everything

26:44

else, investments are going to go up, well then you want a percentage.

26:48

So the first one is what we call a charitable remainder annuity trust.

26:52

That's where it pays you a certain number of dollars. The alternative is what

26:56

we call a charitable remainder. You need trust unit trust, we don't say

27:03

uni unit trust, and then you get a percentage of whatever the value is

27:11

on an annual basis. Okay, Well, depending on which one of those

27:15

techniques that you want and what the percentage is, then there'll be a certain

27:21

amount left at the end of your life expectancy or the term of years,

27:26

the term certain there'll be a certain amount of money. And then if you

27:30

crank that back right, you do what's called a present value calculation. Say,

27:36

okay, if I give that lady who sings about the dogs, if

27:41

I give her this calculation says that there'll be one hundred thousand dollars in twelve

27:47

years when I die. Okay, if I calculate that back. What is

27:52

that worth today? Well, it's not one hundred thousand because it's got twelve

27:55

years to go, right, But maybe it's fifty thousand. Let's say so

28:00

you get a charitable deduction today for like fifty thousand, because that's the present

28:07

value of the future gift. Right now, this can really work out.

28:11

And okay, it's so good, so good. Right, So that's got

28:18

right now, there's so that's the charitble unit trust, the Charitable Remainder,

28:22

charital remainder unit Trust, Child Remainder annuity trust. Now, the big charities

28:32

love when you do these, okay, because and you lock it because they'll

28:37

do it for you. Oh, you don't have to do this yourself. We'll do it for you. Yeah, we'll do all the paperwork. Yeah.

28:41

And what they do is they lock themselves in as the beneficiary. And

28:47

you know what they do within twenty four hours, maybe ten minutes, as

28:51

soon as you sign the papers, they sell it. They say there's a

28:55

market for this, okay, they sell it. They don't wait for you

28:59

to die, and then they get their money. They go right to the

29:02

secondary market and they say, I gotta, I gotta, you know,

29:07

in twelve years when Tom kicks off, I'm expecting to get X amount of

29:11

dollars. Who'll give me whatever for it? Right, and then they sell

29:15

them, especially if they're controlling the investments, it's great. It's a great

29:19

deal for them. So most of my if you if you have IRA money

29:26

that you have to pay taxes on when you cash it in, can you

29:30

donate IRA money to one of these self directed or whatever type of type of

29:37

a trust and then be able to take not to pay the taxes on it,

29:41

let them or where else pays the taxes if you have to pay taxes

29:45

on it and then you get you don't get taxed on it then, which

29:48

you would have to do if you're going to cash it in and donate money

29:51

to a charitable organization, that's right, you're right, you're right. You

29:55

want to do it direct from the IRA so you don't wind up paying any

29:59

tax at all on it, doesn't monkey with your Medicare payments and all the

30:02

rest of that stuff, and what you want to do. I'm aware of

30:10

that you can take out of an IRA to put in there. Not that

30:12

I'm aware of. No, I don't. I don't believe it is it's

30:17

it's just a charitable it's a it is a charitable direction. But but what

30:21

you're talking about is a self directed fund. And I got less than a

30:23

minute. So if the music starts, I apologize. But the thing I

30:29

tell you what, just hang on if you don't mind hanging on again,

30:33

And if you have to hang up, that's fine too, because there's a

30:36

whole thing, with the whole self directed funds and the charitable foundations and all

30:40

the rest that we really ought to go into. Okay, okay, great,

30:44

Thanks You've been listening to the David Carrier Show. I'm David Carrier,

30:48

your family's personal attorney. David's working and working and taking your calls. Now.

31:08

This is the David Carrier Show. Welcome back to the David Carrier Show.

31:14

I'm David Carrier, your family's personal attorney. Now's the time give us

31:18

a call. Six one six seven seven four twenty four twenty four. That's

31:22

six one six seven seven four twenty four twenty four. Tom has some really

31:26

good questions about how do I be a charitable guy with my appreciated real estate,

31:33

appreciated stocks, whatever things that have gone up in value so that if

31:37

I paid him Uncle Sam would stick it to me, and I'd rather I'd

31:42

rather use that money first of all to benefit myself my family. And then

31:45

at the end of the day, yeah, we'll get well, you know,

31:48

charity can have it because I'm done, I'm done using it. That

31:52

kind of makes sense, right, And then the second question has to do

31:56

with with how about charitable donations and self directed funds and all the rest of

32:01

that, and which I'm a I'm a huge fan of the Well, Tom,

32:08

did I get that right? So far? I'm I tracking if you

32:14

want is gone to donate? Uh? So say, say you donate one

32:19

hundred thousand dollars to a charitable donor, UH trust like this? Uh do

32:25

you do? Do you get one hundred thousand dollars deduction off of your Texas

32:30

as a terrible gift or what percentage of that do you get to take off?

32:36

Uh? And then I think the rest of the thing runs pretty much

32:38

like you were talking. After that, Now these are really very different.

32:43

You can't you can't get the charitable deduction when you donate to your teritriable remainder

32:49

trust. For that, it has to go to a charity. And I'll

32:52

double check that. But That's that's the way I've always understood it. That's

32:55

the way we've always done it. If you want to make a A you

33:00

can't use the you can't avoid the you can avoid the capital gain tax,

33:05

but you can't avoid the personal income tax using the the Charitable Remainder Trust.

33:10

Okay, I was I was a different things stuff that I read on it.

33:15

Uh that uh the A percentage of it. Uh that was that would

33:21

end up going to the UH at least a minimum of the uh percentage of

33:25

it that was going to the trust that they're going to get from it.

33:30

That that would be as a minimum, uh, something that you could not

33:35

include as income in your tax your taxes. Well, what you're concerned about

33:42

with the I R A is that it not be uh you don't have to

33:45

pay the Medicare tax on it. That's what you're that's what you're concerned about.

33:51

Okay, it doesn't it doesn't jack you around for your Medicare premiums.

33:54

So that's why you make a direct direct distribution from the IRA directly to the

34:01

charity. And you didn't taxes on it because it's an IRA, so you

34:07

didn't pay income tax on that. Is there income tax due on that.

34:12

Then as soon as you take it out of the IRA and put it in

34:15

the terrible gift annuity or how are you going to set that up? Do

34:19

you pay a personal income tax on that as as income like you would if

34:22

you took it out and kept it and then donated it to a charity.

34:29

So those are two different things, right if you if you give it directly,

34:34

see if you take the money, if you just take the money out

34:36

and donate it, now you're limited by the you know, you got to

34:39

itemize and all the rest of that stuff. Okay, you wind up paying

34:43

more more income tax on the and isn't it limited like the three hundred dollars

34:50

of cash or something like that? Anyway, you don't like that. So

34:53

what you do is you make it direct from the IRA to the charity,

34:59

and that can inc glue to a community foundation, a charitable community foundation.

35:04

And what the community foundation then does, or what you do with the community

35:08

foundation is you do what's called a self directed fund where our donor advised fund,

35:14

where you tell the community foundation where you want the money to go.

35:19

Now, you can't say my brother, you know, my kids. You

35:22

can't do that. But what you can do with the self directed fund.

35:25

And I'm a big fan of this, especially even if you're leaving money after

35:30

you die, leave it to the leave it to the charitable foundation, to

35:35

the community foundation, which is a charity. And then because it's a donor

35:42

advised fund, you can say where you want it to go. Because here's

35:45

the thing. Charities come and go. You know, the organization. You

35:50

give a bunch of money to an organization and then they're rich for the next

35:53

year, but then boom nothing. So set it up that there's a continuous

36:00

income stream to the organization, all right, and endowment. And then you

36:06

say, and I wanted to go to a no kill animal shelter. Okay,

36:09

let's say that that's what you want to do. Then you say no

36:12

kill animal shelter, and you know, PD's Pause charity, whatever is my

36:19

favorite one, presumptively go to PD's Pause. Let's just say, but what

36:24

if PD's Pause goes out of business? Okay, then give it to Tommy's

36:29

Tomcats or something. I don't care, you know what I mean. With

36:31

a With a self directed fund, it's your overall it's your overriding charitable intent

36:37

that governs where the money goes as opposed to I'm just giving it to this

36:43

particular organization. Okay, So if you're going to leave money to a charity

36:49

number one with the IR, make it direct from the IRA to the charity.

36:53

That's good, Okay, that'll avoid unnecessary taxes and consequences for your medicare.

37:00

But then when you die, also directly to the to the charitable foundation.

37:06

But I've never I've never done one where we the charitable remainder trust unit

37:13

trust. Also there's charitable lead trusts, which is the same idea, except

37:17

you give it to the charity first and then you get it for your kids.

37:20

There's a lot of these techniques out there, but those are mostly dealing

37:23

with appreciated property. And when you're in a state tax situation with regard to

37:29

the IRA, what you want to do is you can make the IRA the

37:35

beneficiary of the IRA, make that the charity or but while you're alive,

37:42

you don't want to take the money yourself and then give it to the charity.

37:45

You want that to be a direct transfer to avoid the tax consequences to

37:50

that. Right, right, That's that's what I was thinking, right exactly, Yeah, absolutely right, that's absolutely right. But you're not avoiding all

37:57

the income tax the way you are avoid all the capital gain tax with a

38:01

charitable remainder trust. Okay, charitable lead trust, either one that you did,

38:06

if you were going to do either one, but those are I'm glad you're thinking about that because you know those very expensive to set up. What's

38:13

the cost to set up one of those trust and U? And then does

38:16

it cost something to operate it yearly or whatever? You do have to file

38:23

You do have to file an annual tax return on the thing. So there's

38:27

a couple hundred bucks right there to set it up. If you if you

38:30

budgeted ten thousand dollars, all right, you're way over, You're way over,

38:37

okay, But budget ten thousand dollars okay, and then when it comes

38:40

into half of that, you'd be, oh, hey, good deal,

38:45

because look at the big picture. The charitable remainder trust is a very very

38:52

valuable tool, right, very valuable tool. So but but my you get

38:59

in trouble, But my advice is, don't don't go with the charity.

39:01

Don't let the charity do it. The free ones are the most expensive,

39:06

right, because they're going to sell it. They're going to sell the remainder

39:09

interest and so they you're thinking, oh, I'm leaving one hundred thousand dollars

39:14

to the cancer and it's like they just sold it for fifteen because they want

39:17

the money now today. And your whole thing with the charitable remainder trust is,

39:22

hey, I'm planning, I'm looking out for the future. So what you do is you retain the right what's called power of appointment. You retain

39:30

a power of appointment to change who the charitable beneficiary is. It's got to

39:34

be a charity, right, but you can change it. That's what you

39:37

want to do. Now you've got some Now you just decide, you know,

39:42

as time goes by, who your beneficiary is going to be. You

39:45

still get invitations to the receptions, they get their money to the charity then

39:52

is not sold as such because you're directing, yes, that they get bingo

39:58

exactly right, exactly right. You retain control. All right, Thank you

40:04

very much, Thank you, Tom, thanks for calling. You've been listening

40:07

to the David Carrier Show. I'm David Carrier, your family's personal attorney.

40:13

Now, those things are really good toolists if you're in a situation to use

40:16

them. I want a lot of touch. I want somebody. Little spencer

40:24

time, not common called. I want somebody.