Finally found the “one word”. Portability. If you want to keep us interested, tell us PORTABILITY in the beginning. Then we will stay connected all the way through for the details. Please. The internet has taught us that intrigue is very short lived. People cut out if you don’t get to the point.
I fell asleep around 8 min! 😁 Effective presentations: tellem what yr gonna tellem (preview), then tellem (details), then tellem what u toldem (summary).
As someone not super financially literate but with a good sized estate, I like your style. You say it...explain...then repeat it. I just gave my child $45k for a house. No idea what it means that I exceeded the annual limit. Think I just don't report it?
@Nancy Hollo Not true . . . The annual federal gift tax exclusion allows you to give away up to $16,000 each to as many people as you wish without those gifts counting against your $11.7 million lifetime exemption.
@Nancy Hollo But what you said is still not true. You can give gift $20,000 and it's all not taxable unless you reach the 11.7M threshold. $20,000 gifts are called taxable gifts because they exceed the $16,000 annual exclusion. But you won't actually owe any gift tax unless you've exhausted your lifetime exemption amount of 11.7M
The word by itself doesn't benefit anyone unless they actually filed the estate election paperwork previously (when the first spouse died). I understand why he didn't just give the word it requires explanation.
I ran an asset management company before I retired. I can tell you from experience as I had several clients who, as beneficiaries, had large estate tax bills because the deceased individual never visited an estate planning attorney. Naturally if you don’t have a large estate you may not require a sophisticated estate plan. On the other hand the exercise of forming an estate plan is well worth the cost of visiting with an estate planning attorney.
@@richardkrochmal6028 True, but with loopholes constantly being closed, for example Generation Skipping Trusts closed years ago, the best way to escape taxes is perhaps the least likely to use a lawyer: simply spread your assets out with nominal owners that you intend to benefit after you pass away (but that don't really control anything while you are alive), it's the "Chinese" way of doing estate planning. A lawyer won't really help you here, but you need to have a high degree of trust that the nominal owners won't prematurely abscond with your assets before you die (best that they don't even know they are nominal owners; there are several ways they can be kept in the dark). A trust can do the same thing as above, but it's much more expensive.
@@LunaNosille Yeah, this guy is friendly and knowledgeable, but OMG does he TALK! 😮 Holy s#i+! He could've said everything he needed to say in this sixteen-and-a-half-minute video in about a third of that time.
Thank you!!! My husband died 2 months ago and a CPA friend mentioned this. Looking for some information I found your video and it was very clear. I appreciate it.
A Lawyer that can present a very involved and extremely complicated topic in a manner with such compassion and with such a "user- friendly" narrative creates the opportunity for a larger audience but it still might not be for everyone. Find a little free time...Grab a beverage...kick back in your favorite chair and just enjoy listening. Even if you did not absorb any benefit from this video I think it is unkind to be so critical...He chose to provid a LOT of expensive advice at NO CHARGE and he seemed to enjoy it. Thank you. 👏👏🌹👏👏
Exactly 💯 Nowadays so many people want freebies but they don't want to learn nothing. They wanted handed to him on a gallbladder and they don't care who they hurt.
The main thing people should learn from this story is to avoid attorneys who do everything. If your lawyer does real estate closings, divorces, litigation etc, dont let him handle trust and estate issues! They can make a complete mess.
I disagree with even the so call only "estate planners/elder law" yes they do everything & their name & firm's name is on every other page! I don't trust any of them far as I could throw them.
That's true. My divorce lawyer tried to put my ex to jail that was against my will. Fortunately, I read carefully the petition that he wrote to the court before signing it, force him to remove it. We had problem but would like to resolve it amicably. But lawyer promotes family fighting each other for max benefits to themselves. Be careful when dealing with lawyers!!!
I still think a trust is overrated. A will is fine for most people. I had do everything lawyer draft a new Testamentary disclaim trust pour over will. It’s not perfect but We’re going to spend down to close to zero anyhow before we hit in our 80s.
SO, PERHAPS YOU SHOULD TAKE YOUR TRUST PAPERS AND GO BACK TO YOUR LAWYER AND HAVE HIM UPDATE IT FOR A FEW HUNDRED DOLLARS. BUT IF YOU DON'T LIVE IN HAWAII OR MARYLAND, THEN WHAT THE FREAKS THE PROBLEM? IT ONLY APPLIES TO THOSE TWO STATES!
I always heard that the best way to avoid taxes after death is to die penniless! So if you want to bequeath anything to your heirs, do it BEFORE you die, and spend down (and enjoy) yourself to the end!
Treasury Regulation Sect 20.2010-1 (c) (2) iii = Portability. Upshot is even if estate is below the exclusion threshold ($11.58M in 2020), file an estate tax return and elect ‘portability’ to avail of deceased spouse’s exclusion (year of death) in addition to your exclusion (year of death). You rock Mr. Rabalais!
Thank you for another educational video. I hope lawyers, who practice is focused in other than Estate Planning, keep an eye on your channel. Not all lawyers (even in the same specialty) are created equal. I hired a lawyer to start the probate process of my relative estate, and he did not know ANYTHING about it, worse, he represented that he was capable of taking my simple case. I didn’t know any better, but things were not progressing and he kept telling me he was “researching”, so I grew suspicious. I went to a recommended lawyer for a second opinion, and the minute my appointment started, the lawyer began to ask all kind of questions related to the estate, was able to check what the other lawyer had been filed (which was nothing) and basically, she found nothing done related to my case. At that point, I hire her, but it cost me to pay the other lawyer $500.00 dls for nothing! I had to pay, because I had signed a contract for his services and could not get out of it, unless I took him to court, which would had cost me even more. At the end, the second lawyer, a Estate Planning lawyer, was so efficient and the process was a breeze. The lesson learned: Hire the right person for the job.
Always hire the right person for the job. In every profession there unknowledgable, lazy, troubled, competent individuals. If you hire a lawyer to represent you in court who had never done a trial, you made a mistake. If you hired a lawyer to do your estate planning in Miss. or LA before trusts (intervivos trusts) were taught in law school or before those states changed the laws and became community property laws, you made a mistake. 10% of the general population die with a will. Only 50% of the lawyers die with a will. Sort of suggests that most people procrastinate, make the assumption that they will never die or trust that other people will clean up the messes.
Thank you ... these vids are awesome. I am an attorney and even though these are targeted at non-attorneys, they still dig into serious topics. Love it. Thanks for the effort.
“Long story short.........” Use the Portability election on the Estate Tax Return when Barry dies. Refer: Treasury Regulations Section 20.2010-1(c) (2) (iii)
Just to clarify.....when one makes the portability selection, do they have to pay ANY estate tax on estate of the deceased spouse at the time of this selection?
@@billyoung8118 seriously? Wow that's disgusting! The way I see it that's when people show who they really are. If they need it that bad... Go ahead I won't be a part of that... Deal with karma.
I now have watched several videos in this series. PORTABILTY is something I was not familiar with, and it could be highly critical ... with fluctuations in estate tax law. Thanks for explaining this excellently!
I think it’s a good sign that you are a smart young lady and you realize there is a lot to learn in this world. Never stop learning! You never know how you will be able to help yourself, your family, or your friends some day far in the future, because of what you learned when you were diligently applying yourself. You go girl! Best wishes to you.
Tell your parents about it!! There are so many "hidden" assets sometimes, they might not even be aware of how much they have in assets. More importantly, we don't know what the tax laws regarding this will be at the time of their deaths!
Its not going to be 12M by 2026. It will be closer to 6M. If someone has a business or real estate or an IRA or 401K when combined with the surviving spouses' assets could easily get beyond that. Using the portability election will preserve that estate for other surviving beneficiaries.
Thank you for talking about this. I'm 73, my husband passed 16 months ago. He named his grown kids executors, thinking we might pass near the same time. Your video is the FIRST I've heard of portability. The kids hired a probate attorney who didn't ask about portability . They skipped it. NOW I'm having my CPA look into it. They do it automatically for their clients' surviving spouses. This is likely to be an issue for me (though there's a special 2-yr deadline I will proably qualify for). It's unlikely I'll have that kind of large estate when I pass, but who knows ... So, thank you!
@@robertcasey probably right and the 15mins still cost the hour, dentist's are the same, pull a tooth £300 it only took 15mins, aren't professional people cute with the invoice 😂👍
As the family solicitor here's my advise to you As the family solicitor here's what I'm going to do. For six and eight (old English money) I'll put you straight if anything goes wrong, for I contend you must pretend that life is one sweet song, So sing a little and dance a little regail a little and cry a little take your troubles more and more to the family solicitor,, It's from the musical, me and my girl ❤️👍
This and your other videos are so very helpful in navigating issues in the estate planning and financial spheres that I have not learned about from attorneys or financial planners!! Really appreciate your channel!!!!
I love how you explain everything so well and maybe for some it is not their cup of tea but I really can watch this multiple times myself. Thanks for posting!!!!
@8:40 Portability.... that's the one work. Y'all welcome. Only applies to estates for both spouses totaling $2M-$12M. File the estate tax whether you need to or not claim portability because you might win the lottery and your kids will need the tax break is my guess.
Non of this applies to me as I'm not American or live in USA but still love to watch you sir explain your laws. The simplicity of explanation is just Brilliant. Thank you for sharing your knowledge 👍
You really have a lot of good information on Estate Planning. However, it takes you 20 minutes to give 7 minutes of information. I am 73 years old and I don't have a lot of spare time to indulge in a long winded stories.
You have a great personality for a live audience presentation (I’m a professional broadcast and live audience presentation coach). But online, you need to give short nuggets of valuable information, of which you’ve got lots! Hope that helps.
what? 11.7million dollars free, if you have it. A family will be fine with that amount. This country doesn't need a wealthy gentry. And over 11.7 million, if you have it, you pay 40%. So if you have an extra million you keep 600,000! You keep it. Relax.
You work to increase your livability and you end up paying the government money that they didn’t work for. Really doesn’t give people incentive to improve their lot in life.
YOU ARE A GENIUS. I wish I had found this video 5 years ago. It’s ridiculous that clients are expected to do the work their CPA’s should be doing. I could go on and on, but I’m suffering the consequences of a family who had no idea about the content of this video. Had an attorney, had a CPA, and still took me doing my OWN research to figure this out 😡 families pay PROFESSIONALS to take care of this, yet it’s amazing they still doing. Bravo to you for bringing it to public attention! Let me know if I can contribute anyway from a CA perspective (also a community property state).
Paul, that was a great video. To the audience. Yes this is a long video with a story to get to the main point. But it's worth every moment if you are needing to do an estate plan. If you don't have the discipline to keep focus then you probably don't need to learn this anyways.
im looking at receiving an estate in a few years and your videos have been very helpful for everybody to understand what is what and what the estate should look like. we all thank you.
For all those people moaning about shortening the video, how confident are you that 95 % of the viewers, in their wretched throes of grief, will recall and understand what this man kindly shared with us if instead he shared a few terse sentences. He needs to make an impression that will survive your grief.
Sooooo….Bottom line, if I understood your discussion, if your spouse dies you should ‘always’ complete an estate form with the ‘portability’ option. The only negative would be you are paying for the form to be completed by your lawyer. Correct? Great video thx!
Awesome Video! Very intriguing to find out what the one word was. Your examples were real-life examples and worth listening to the end. Thanks for all you do to help us understand the laws and how to protect ourselves.
One problem with wills: they mean nearly nothing if the executor doesn't bother reading it or is in cahoots with the lawyer that prepares it. Parents wanted several charities to get a little bit of money (total ~$3000) which they had and most siblings agreed. Executor was oldest brother and didn't agree, told lawyer to ignore any directive other than "equal" split of estate. Guess who got the house and land? Too sad it ended up being sold at a loss.
By 2026 with the way inflation is heading, 6m will be just above the poverty line. I still remember when an $8,000 a year salary paid your bills, owned a new car and had no credit card debt living in New York. Albeit that was before the turn of the last century.
Here is a hint, just don't talk to an attorney. If your estate is worth 1 dollar or 11 million, make sure you talk to an accountant or the person you file your taxes to make sure all IRS requirements are met if your spouse has died. No matter what you must submit a final tax return, basically to inform the IRS the taxpayer is no longer alive. The IRS doesn't know and will presume the person has failed to submit their yearly tax return.
New sub here. I was unaware of the huge difference of exemption amounts from now until 2026, I think you said ”inflation adjusted ” which makes me think 2025 will be the year for minimized estate taxes of large estates because I don't think that we will be seeing negative inflation anytime soon. I would still rather have the people be alive though...
@George Southwick And if you live in the Western World, don't get the money given directly to you! Have the check made put to a corporation you control, otherwise you will only get to keep $325,000 and end up with the taxman taking the rest! Don't need to believe ME! Just ask the first winner of the TV show Survivor! He won the million dollars then ended up in prison for income tax evasion! In all honesty he thought they had paid the tax before he got his money like employers do....!
Yeah I agree. If any of my lawyers took this long to answer a simple question I would lose patience and get another lawyer. This was painful to watch while he repeats I'm sorry so and so died 3 times while rambling on and on.
Thank you. Your educational videos provide a great service and I hope you take pro bono credit in some way for this work. Some commenters here attack IRS in response to the information you provide, but IRS simply implements laws made by elected Congress members and courts. Taxes are necessary, but corrupt, disingenuous, overcomplicated tax laws, are not. It might help relieve current confusion and division to discuss how a much-simplified tax code might affect our lives, and perhaps reduce waste, political vulnerability and confusion, and hidden tax law inequities now burdening all of us, lawyers included.
Jesus H christ that was painful, painful torture. Skip to 8.30 to get the word. Yes, he blathers on for an incredible 8 and a half minutes without imparting any information, incredible.
Damm, I have been looking for info like this for years. Your right on time with crucial information. Please don't stop making these informative video's.
The timing on the video was perfect. This is an extremely complex topic, and the practical examples stuck in my mind. Given the audience, this subject matter was broken down so that someone without a knowledge of the tax code can understand it. I just do not understand why people are so compelled to constantly criticize and find fault with everything.
Great video thanks. My father passed recently and our accountant was all over this but this video helped my mother understand not only the estate exemptions but portability as well. Keep it up.
My husband and I aren't worth as many millions as Pam. Actually, we have zero millions at the moment. ☹️😊 Nonetheless, I decided to share this video with my husband regardless. Our circumstance may change in the future, you never know. It's best to educate yourself and pass on critical information to your spouse while you're still here to do it. After you die, it will be too. No matter your age, plan ahead and plan now because you never know when your time is up 🤔🙂 I just found your channel today and I'm very glad I did. Thank you for sharing your knowledge.
Yes, I have millions in my estate. No , I am poor, so I do not have to worry about someone fighting for my assets. Thanks for the valuable advise. Keep up the good heart called : sharing.
Does the portability selection have to be re-filed every year? Or does 'Pam' keep that original filing on record with her heirs and they refer back to that return upon her death ?
This example may further assist some with their estate planning. My wife and I have total assets of about 3.6 million. In that, I have about 1.6 million in Vanguard IRAs and wife has 0.9 million. We were each listed as primary beneficiaries and our 2 sons were listed as secondary. We just changed that so our sons are also listed as joint primary beneficiaries, 40/40/20 split of my account and 35/35/30 for her account. If they just inherited after we both pass, they would have to take distributions within 10 years, likely pushing them into predatory tax brackets. As beneficiaries, seems they can spread out RMDs based on their own estimated longevity; hopefully taking out more depending on how much room there is on the up-side of their current tax bracket. Leaves plenty for surviving spouse and accelerates transfer of wealth to our sons (and unlikely even after further growth to exceed the tax exclusion levels you discussed).
Could you or have you addressed time shares. The into perpetuity clause has me sleepless. We have two sons and to saddle them with this obligation is making me crazy. Could you expand preferably how to get rid of it before our deaths. Neither child wants or can afford it. Thank you
I live in Florida, and without my husband designating a beneficiary, and us making wills, it was not a given I would get his retirement and such. We are community property here, but it was not a done deal.
My husband has a separate bank account. So do I. If you don't specifically designate a beneficiary, the state gets it. I just went thru this explanation with my daughter opening her first account. It is Community property here, but being married to someone is not a guarantee of inheriting the goods if he/she passes. Be prepared better. Don't assume it to be true.
Mr. Rabalais, my understanding was that portability was automatically elected and applied on an estate tax return and that a client would actually have to opt-out of portability. What is your experience with this?
There's really no excuse for not educating yourself about financial matters. We all concern ourselves about earning a living but too often fail when it comes to learning how to use our money and protect it from loss. Our government wants it. Crooks and scammers want it. Relatives often want it. It's better to think ahead, plan ahead. We may not encounter death soon but serious sickness or disability is also a possibility. It's important to educate ourselves and consult with financial professionals and examine several different scenarios. We worked hard to earn our money and we should be willing to work to protect what we earned.
Charity org./s want your money as legacy for your loved ones. I am not broke but I am barely making it. My gosh.... Then listening to this, he is talking millions, I am lost.... Tax is something I need to pay to support the government; it is the same across the board...; we are all taxed, right?
@@mbords01 Knowledge is our first line of defense. There are many smiling, friendly, helpful people out there who will "help" us but we won't know if they are really helping unless we become knowledgeable about finance, law, and many of the details that can help protect our assets.
@@mbords01 The nature of government is to make laws regulating the behavior of people and to tax them "for the greater good" according to the lawmaker's determination. Here's one example: my 1998 Ford F-150 pickup, bought used in 1999 for $20,500. Sales tax in our part of California was about $1906 at that time. If it had been sold once each year, with a 5% depreciation, it would have generated total sales taxes of $24,460.93 although the current value after 20 years would be about $7,735. The cost of yearly registration & license would take the total much higher. I still have it and it still runs very well. The maintenance & repairs during the past 20 years have totaled much less than the depreciation.
before I retired as a police officer, I always advised the violator that on a moving violation, to keep it off their record, "Defensive Driving" class is always an option. Besides refreshing the driver of the same old driver's Need to know stuff, they Also inform you on the newest traffic laws that were recently passed and are now being enforced, like "Passing an emergency vehicle with lights flashing, you are required to either change lanes (Away from the vehicle) or reduce your speed by 20 M.P.H. under the posted speed." Every year, a new law is either passed or on the books to be passed soon, so Any advice is great!
medicaid look back funds for five years. Transfer to others or a trust before the five year look back period if going to fund hospital and nursing home by medicaid.
