Latest / The Financial Exchange Show / The Entire AI Trade Comes Down to One Number

Transcript

The Entire AI Trade Comes Down to One Number · The Financial Exchange Show

• 0:00
  Speaker 1: The Financial Exchange is produced by Money Matters Radio and
• 0:03
  Speaker 1: is hosted by employees of the Armstrong Advisory Group, a
• 0:05
  Speaker 1: registered investment advisor. All opinions expressed are solely those of
• 0:08
  Speaker 1: the hosts, do not reflect the opinions of Armstrong Advisory
• 0:11
  Speaker 1: or anyone else. Investments can lose money. This program does
• 0:14
  Speaker 1: not offer any specific financial or investment advice. Please consult
• 0:17
  Speaker 1: your own financial, tax, and estate planning advisors before making
• 0:20
  Speaker 1: any investment decisions. Armstrong Advisory and the advertisers heard on
• 0:23
  Speaker 1: this program do not endorse each other or their services.
• 0:26
  Speaker 1: Armstrong and Money Matters Radio do not compensate each other
• 0:28
  Speaker 1: for referrals and are not affiliated. This is the Financial
• 0:34
  Speaker 1: Exchange with Chuck Zada and Mark fan Daddy, your exclusive
• 0:39
  Speaker 1: look at business and financial news affecting your day, your city,
• 0:43
  Speaker 1: your world. Stay informed and up to date about economic
• 0:46
  Speaker 1: and market trends plus breaking business news every day. The
• 0:50
  Speaker 1: Financial Exchange is a proud partner of the Disabled American
• 0:53
  Speaker 1: Veterans Department of Massachusetts. Help us support our great American
• 0:58
  Speaker 1: heroes by visiting DAV five Boston and making a donation today.
• 1:03
  Speaker 1: This is the Financial Exchange with Chuck Zada and Mark Fandetti, Chuck.
• 1:10
  Speaker 2: Mark and Tucker with you and not out of line
• 1:14
  Speaker 2: to say that today he's gonna be one of the
• 1:18
  Speaker 2: more exciting days in markets, not because they're necessarily moving
• 1:23
  Speaker 2: a lot. The interesting thing is a lot of times
• 1:26
  Speaker 2: on FED days you might see big intra day volatility,
• 1:29
  Speaker 2: but ultimately markets don't necessarily move a ton once you
• 1:32
  Speaker 2: get to the close. But the big thing is you've
• 1:34
  Speaker 2: got a FED meeting today that is going to have
• 1:38
  Speaker 2: a two o'clock announcement as to FED policy. And then
• 1:44
  Speaker 2: you've got a two thirty pm press conference by Jerome
• 1:46
  Speaker 2: Powell that is very likely to be his last press
• 1:50
  Speaker 2: conference running the FED. So one last purple tie for
• 1:55
  Speaker 2: j Powell. Do we have any predictions on pattern or
• 1:59
  Speaker 2: shade of purple?
• 2:02
  Speaker 3: No?
• 2:02
  Speaker 4: I thought it was the same tie every time.
• 2:03
  Speaker 2: No, it's not the same tie. That's what makes it
• 2:05
  Speaker 2: so great is it's always a purple tie, but different shades.
• 2:09
  Speaker 2: So you could have you know, maybe he wants to
• 2:12
  Speaker 2: go out with a bang, with a you know, a
• 2:14
  Speaker 2: FU show like a bright purple. Maybe he's more of
• 2:19
  Speaker 2: a Colamada purple guy, kind of trying to be a
• 2:21
  Speaker 2: little bit more reserved in that fashion, maybe a nice
• 2:25
  Speaker 2: light plummed usher in the spring, a lot of choices
• 2:29
  Speaker 2: for J. Powell, but in any case, most likely as
• 2:31
  Speaker 2: last press conference. But then after the close, this is
• 2:37
  Speaker 2: where we've got the real meat, which is from four
• 2:42
  Speaker 2: major tech companies reporting earnings, and all four fall into
• 2:46
  Speaker 2: that hyperscaler category. Companies that are spending oodles and oodles
• 2:51
  Speaker 2: of money trying to build data centers in order to
• 2:55
  Speaker 2: win the artificial intelligence race. Microsoft, Amazon, Alphabet, and Meta
• 3:03
  Speaker 2: all reporting after the bell. Only two of those companies
• 3:05
  Speaker 2: have their original names, but Alphabet and Meta we still
• 3:08
  Speaker 2: pop on the list just because well they're almost two
• 3:11
  Speaker 2: trillion dollars in market cap for each one. But between
• 3:15
  Speaker 2: the four companies, you're talking just shy of ten trillion
• 3:18
  Speaker 2: dollars in market cap. I think it went back in
• 3:21
  Speaker 2: time a couple months ago it would have been north
• 3:23
  Speaker 2: of ten trillion, but they've all seen their values drop
• 3:27
  Speaker 2: over the you know, over that time. So I think
• 3:31
  Speaker 2: that this is a pretty big one, just because the
• 3:34
  Speaker 2: key driver in this rebound for equities in the last
• 3:39
  Speaker 2: couple of weeks has been semiconductor stocks. There's no other
• 3:43
  Speaker 2: way that you can slice it. When you look at it,
• 3:46
  Speaker 2: and again, I've looked at this pretty closely over the
• 3:50
  Speaker 2: last couple of days. But when you look at basically
• 3:55
  Speaker 2: what's been driving things month to date, semiconductor stocks depending
• 3:59
  Speaker 2: on the index that you want to look at, are
• 4:02
  Speaker 2: up anywhere from thirty to thirty five percent right now,
• 4:05
  Speaker 2: even after a two day three day now like seven
• 4:08
  Speaker 2: percent pullback, So they're up that much. The S and
• 4:12
  Speaker 2: P five hundreds up nine. You go through and you
• 4:14
  Speaker 2: look at the other sectors in the S and P
• 4:17
  Speaker 2: five hundred, there's nothing else over that time that is
• 4:22
  Speaker 2: even close. It is semis that are driving the thing.
• 4:25
  Speaker 2: And the idea is, hey, about a month ago, you
• 4:29
  Speaker 2: started seeing all these reports popping up that users of
• 4:35
  Speaker 2: AI programs were being rate limited. They weren't able to
• 4:38
  Speaker 2: use them as much as they wanted to. They were
• 4:40
  Speaker 2: running out of what they call their tokens, the ability
• 4:43
  Speaker 2: you know, they say, look, I'm spending X dollars, why
• 4:45
  Speaker 2: can I not get any more you know, access? And
• 4:48
  Speaker 2: it was, well, you've hit your limit for the day
• 4:49
  Speaker 2: or the hour, come back later. And so semiconductor stocks
• 4:53
  Speaker 2: have been bid pretty much relentlessly since then. Through last Friday.
• 4:57
  Speaker 2: It was eighteen straight days that we saw them up.
• 5:02
  Speaker 2: We're now closing in on the third straight day that
• 5:08
  Speaker 2: they are going to be down if they were to
• 5:11
  Speaker 2: in fact close down today, but right now looking at
• 5:15
  Speaker 2: a modest gain, trying to hold some rather high levels.
• 5:20
  Speaker 2: So I think with the hyperscalers, the question is not
• 5:23
  Speaker 2: going to be like, people aren't actually interested in Microsoft's earnings.
• 5:28
  Speaker 2: They're not interested in Amazon's earnings, They're not interested in
• 5:33
  Speaker 2: Google's earnings, they're not interested in Meta's earnings. What they're
• 5:39
  Speaker 2: interested in is how much are you going to be
• 5:41
  Speaker 2: spending on Capex? Yeah, that's what they care about. The
• 5:46
  Speaker 2: earnings this quarter largely irrelevant. Like it's not that you know,
• 5:51
  Speaker 2: they don't matter, but they don't really matter because the
• 5:54
  Speaker 2: reason why these tech companies have the valuations they do
• 5:57
  Speaker 2: right now is not because of their earnings pro jecttions
• 6:00
  Speaker 2: for now. It's because of what they might become because
• 6:02
  Speaker 2: of AI in the next three to five years. And
• 6:06
  Speaker 2: this is gonna have ramifications throughout the tech sector because
• 6:10
  Speaker 2: if they indicate even a pause in Capex, that changes
• 6:14
  Speaker 2: the semiconductor narrative just as quickly as it changed a
• 6:16
  Speaker 2: month ago.
• 6:18
  Speaker 4: Your thoughts, Mark, Oh, I think earnings are not. Yeah,
• 6:20
  Speaker 4: you put it perfectly. Earnings overall, like for the market,
• 6:22
  Speaker 4: are not predictive of future earnings. So it's always a
• 6:25
  Speaker 4: little bit of a head scratcher for me when I
• 6:26
  Speaker 4: see headlines like earnings push stocks higher, stocks are, stock
• 6:30
  Speaker 4: prices are in theory forward stock price changes, excuse me,
• 6:33
  Speaker 4: are in theory forward looking. So we don't care so
• 6:35
  Speaker 4: much about this quarter's earnings. They reflect past activity, the
• 6:39
  Speaker 4: past economic environment. We care more about maybe what they
• 6:43
  Speaker 4: say about a company's ability to turn shareholder capital into
• 6:46
  Speaker 4: something greater.
• 6:48
  Speaker 2: If let me let me, can I dig in on
• 6:51
  Speaker 2: this point just for a second and ask a question?
• 6:53
  Speaker 2: I can. It's our show, of course, I like, no, you're
• 6:55
  Speaker 2: the host. Yeah, well you are too. You know they
• 6:57
  Speaker 2: play your name at the beginning.
• 6:59
  Speaker 4: Oh right, that was just a soop to make me
• 7:02
  Speaker 4: feel better about myself. But yeah, go ahead.
• 7:03
  Speaker 2: In any case, is there a case to be made
• 7:06
  Speaker 2: that from a probabilistic perspective, it's a ten cent word
• 7:11
  Speaker 2: if I've ever seen one that a company. Ultimately, we
• 7:16
  Speaker 2: look at companies through a series of probabilities. What are
• 7:19
  Speaker 2: the probabilities that earnings are going to be x, y
• 7:21
  Speaker 2: and z in the future. It's not binary. It's okay,
• 7:24
  Speaker 2: there's a ten percent probability of X to twenty percent
• 7:26
  Speaker 2: of Y, seventy percent of Z, and that builds you correct.
• 7:31
  Speaker 2: Like in general, that's how the market looks at So
• 7:34
  Speaker 2: is the idea? Is it feasible? Then a company that
• 7:39
  Speaker 2: beats on earnings this quarter, it raises the probability of
• 7:46
  Speaker 2: earnings growth in the future because simply it's taking one
• 7:49
  Speaker 2: data point off of the mark. Ultimately, the more impactful
• 7:53
  Speaker 2: piece is that terminal earnings number. That's where it all
• 7:56
  Speaker 2: ends up coming from. But where I'm going with you
• 7:59
  Speaker 2: and what I'm curious about mark, Is there any evidence
• 8:02
  Speaker 2: of there been any studies done as it relates to
• 8:06
  Speaker 2: companies that beat earnings estimates and what it says about
• 8:12
  Speaker 2: intermediate or longer term prospects.
• 8:13
  Speaker 4: Probably, but I don't. I'd have to look that up
• 8:16
  Speaker 4: and get back to you. My guess would be it's
• 8:17
  Speaker 4: not predictive on average. Sure you could have guessed that too,
• 8:21
  Speaker 4: because if it were, people would be using the information
• 8:23
  Speaker 4: today to outperform, And to my knowledge, that's not among
• 8:26
  Speaker 4: these sort of more proven if you will investment strategies.
• 8:30
  Speaker 4: If there is such a thing, My guess is, Chuck.
• 8:32
  Speaker 4: The short answer is a frustrating answer. It depends on
• 8:35
  Speaker 4: how they did it. In videos lately have been predictive. Sure,
• 8:39
  Speaker 4: their surprises have grown over time. My guess is that's
• 8:42
  Speaker 4: I keep saying my guess, sorry, because I don't really know.
• 8:44
  Speaker 4: I'll get back to you. My guess is that's unusual.
• 8:47
  Speaker 2: Let's take a quick break here before we do a
• 8:50
  Speaker 2: little bit of breaking news that Kevin Worsch's FED chair
• 8:54
  Speaker 2: nomination has cleared the Senate Finance Committee. This after the
• 8:58
  Speaker 2: DOJ drop its investigation. Remember that was what Senator Tillis
• 9:04
  Speaker 2: had indicated was holding up his possible approval vote, and
• 9:09
  Speaker 2: so this a key procedural hurdle. And so it now
• 9:12
  Speaker 2: appears that things are basically cleared for warsh over the
• 9:16
  Speaker 2: next couple weeks to be confirmed to lead the FED.
• 9:21
  Speaker 2: And if that's the case, then in fact, today's J.
• 9:25
  Speaker 2: Powell press conference will in fact be the last Powell
• 9:28
  Speaker 2: one that we get. I'm sure there will be all
• 9:30
  Speaker 2: kinds of questions that come out as to whether he
• 9:32
  Speaker 2: will stay on the Board of Governors after that. So
• 9:35
  Speaker 2: we can still anticipate some of those questions in the
• 9:39
  Speaker 2: press conference, but with that, let's take a quick break.
• 9:41
  Speaker 2: When we come back, we'll talk Open AI when we return.
• 9:45
  Speaker 1: Smart Financial Talk. Whenever you want find The Financial Exchange
• 9:49
  Speaker 1: on YouTube. Hit that subscribe button and keep up to
• 9:52
  Speaker 1: date on daily business news from New England and around
• 9:54
  Speaker 1: the country. This is the Financial Exchange Radio Network. Fine
• 10:00
  Speaker 1: daily interviews and full shows of the Financial Exchange on
• 10:02
  Speaker 1: our YouTube page. Like us on YouTube and get caught
• 10:06
  Speaker 1: up on anything and everything you might have missed. This
• 10:09
  Speaker 1: is the Financial Exchange Radio Network.
• 10:26
  Speaker 2: We got a piece here from Bloomberg Opinion. It's titled
• 10:31
  Speaker 2: an Open AI bubble is not an AI bubble And
• 10:40
  Speaker 2: basically what it's talking about here is so there was
• 10:44
  Speaker 2: a Wall Street Journal report I think it came out
• 10:48
  Speaker 2: yes like month, it was yesterday that open ai had
• 10:52
  Speaker 2: missed some internal benchmarks for growth. And quite honestly, can
• 10:57
  Speaker 2: we talk about this a little before we uh go
• 11:01
  Speaker 2: into this piece, just because some of the stuff that's
• 11:03
  Speaker 2: in there is kind of wild and I don't think
• 11:06
  Speaker 2: we covered it in depth. Well I don't know. I
• 11:08
  Speaker 2: wasn't on the show yesterday. Did you cover it in depth?
• 11:11
  Speaker 3: Yeah, A good chunk, yeah, I would say.
• 11:13
  Speaker 2: Did you cover the part where they're expecting their twenty
• 11:16
  Speaker 2: dollars a month subscriptions to drop by seventy five percent
• 11:20
  Speaker 2: this year and be replaced by their eight dollars a
• 11:24
  Speaker 2: month subscriptions being picked up by one hundred and twelve
• 11:27
  Speaker 2: million people worldwide instead.
• 11:31
  Speaker 4: No, I think we overlooked that or it wasn't available
• 11:33
  Speaker 4: at the time.
• 11:34
  Speaker 2: So I did the math on this, and do you
• 11:36
  Speaker 2: know how much money you make if you have one
• 11:38
  Speaker 2: hundred and twelve million people getting charged eight dollars a
• 11:42
  Speaker 2: month for twelve months? Do you do you? No, I'm
• 11:47
  Speaker 2: not that good, do you? It's about ten point seven
• 11:51
  Speaker 2: billion dollars a year, which is not nothing like, it's
• 11:54
  Speaker 2: not no revenue. But you don't have five hundred billion
• 11:58
  Speaker 2: dollar CAPEX plan because you can get ten billion dollars
• 12:01
  Speaker 2: in revenue. The math doesn't make sense. You can't make
• 12:05
  Speaker 2: money selling ten billion dollars of product on five hundred
• 12:08
  Speaker 2: billion dollars of buildout. I know this because I know math.
• 12:13
  Speaker 2: So ultimately, what you end up with here is i'll
• 12:18
  Speaker 2: quote here again talking about this Wall Street Journal piece.
• 12:23
  Speaker 2: OpenAI then struck a reassuring tone in a statement that
• 12:26
  Speaker 2: it was still quote firing on all cylinders which is
• 12:29
  Speaker 2: interesting because open ai doesn't have any cylinders. They don't
• 12:32
  Speaker 2: use internal combustion engines. Still, the Kneesric reaction was an
• 12:35
  Speaker 2: indication about closely the fate of open aiy is tied
• 12:38
  Speaker 2: to the perception of the AI industry's future. Circular financing
• 12:42
  Speaker 2: has made those conclusions understandable. But open AI's execution struggles
• 12:45
  Speaker 2: shouldn't be allowed to speak for the sector as a whole. No,
• 12:49
  Speaker 2: they don't. But here here's the deal. And I've talked
• 12:51
  Speaker 2: about this a lot, like when you actually get down
• 12:53
  Speaker 2: to the math, because ultimately math is what matters for
• 12:58
  Speaker 2: companies being able to stay in business. If you are
• 13:04
  Speaker 2: looking at a situation where your hyperscalers this year are
• 13:10
  Speaker 2: spending six hundred billion dollars in capex, eventually you have
• 13:14
  Speaker 2: to depreciate that capex over time. It's how it ends
• 13:17
  Speaker 2: up filtering through your different financial statements. And the different
• 13:21
  Speaker 2: companies use different depreciation you know, standards, but they're generally
• 13:25
  Speaker 2: for what we see for data centers somewhere in the
• 13:27
  Speaker 2: ballpark of like six to eight years of depreciation because
• 13:31
  Speaker 2: that asset has a usable lifespan, and after that you
• 13:34
  Speaker 2: need to replace the technology in it because it's no
• 13:36
  Speaker 2: longer usable. Okay, chips wear out, you've got to replace
• 13:39
  Speaker 2: cooling towers, you know, all this stuff like it happens.
• 13:43
  Speaker 2: Anyone who's ever owned a home knows that, you know,
• 13:45
  Speaker 2: you have upkeeping, so you have to, like things depreciate
• 13:48
  Speaker 2: over time. It's just how it works. So here's the deal.
• 13:52
  Speaker 2: Let's use just make the mass simple and say it's
• 13:53
  Speaker 2: a six year depreciation schedule. Now you've got one hundred
• 13:57
  Speaker 2: billion dollars hitting of depreciation that hits this year. And
• 14:01
  Speaker 2: in order to overcome that, Okay, you don't just need
• 14:04
  Speaker 2: one hundred billion dollars in revenue, because revenue in and
• 14:07
  Speaker 2: of itself doesn't all just flow through. There's a cost
• 14:09
  Speaker 2: to that as well, and so you might need like
• 14:12
  Speaker 2: two to three hundred billion in revenue in order to
• 14:15
  Speaker 2: cover that one hundred billion in depreciation. But remember that's
• 14:18
  Speaker 2: just for this year's buildout. The Hyperscalers are projected to
• 14:22
  Speaker 2: spend trillions of dollars the next few years in order
• 14:25
  Speaker 2: to actually build out the capacity they want, So each
• 14:29
  Speaker 2: one might have three or four hundred billion dollars a
• 14:33
  Speaker 2: year in depreciation that's hitting. Where is the trillion dollars
• 14:37
  Speaker 2: in revenue going to come from in order to cover that.
• 14:41
  Speaker 2: And this is the part where I just I struggle
• 14:43
  Speaker 2: to make the math work because it's obvious to me
• 14:46
  Speaker 2: that there is way more demand for computing power than
• 14:49
  Speaker 2: there is out there today for supply. We see this
• 14:52
  Speaker 2: because everyone who's trying to use caud code is getting
• 14:55
  Speaker 2: rate limited right now, there's just not enough compute to
• 14:58
  Speaker 2: go around. But ultimately, even with you know, Anthropic Okay,
• 15:04
  Speaker 2: so their their revenue has gone from you know, three
• 15:07
  Speaker 2: billion dollars annualized to thirty billion annualized in the last
• 15:10
  Speaker 2: few months. Okay, well, now you've got to take that
• 15:13
  Speaker 2: up another ten x and then another ten x to
• 15:16
  Speaker 2: make the math work industry wide. And if they're the
• 15:19
  Speaker 2: ones that are picking up revenue while open ai is missing,
• 15:23
  Speaker 2: I just don't know how you get to a point
• 15:25
  Speaker 2: where you can actually pay for all the compute that's needed,
• 15:28
  Speaker 2: Because it's gonna be you're gonna have to raise the
• 15:30
  Speaker 2: price through the roof. And when you do that, this
• 15:34
  Speaker 2: is the part that I think that I struggle with.
• 15:36
  Speaker 2: It no longer makes it so that, oh I can
• 15:39
  Speaker 2: do all of this with a twenty dollars a month
• 15:41
  Speaker 2: called pro subscription. If I now need a two thousand
• 15:45
  Speaker 2: dollars a month CAUD pro subscription, because that's the math
• 15:48
  Speaker 2: that has to make it work from you know, a
• 15:51
  Speaker 2: revenue perspective, Well, gee, maybe maybe that's not for me.
• 15:55
  Speaker 2: Then maybe maybe there's that's not gonna actually work.
• 15:58
  Speaker 4: How much are people willing to pay? What is the
• 16:00
  Speaker 4: demand curve of Look.
• 16:01
  Speaker 2: Like it's it's not going to be individuals, it's going
• 16:03
  Speaker 2: to be companies.
• 16:04
  Speaker 4: Well, yes, consumer's excuse.
• 16:05
  Speaker 2: Because if the if the premise is, hey, I can
• 16:08
  Speaker 2: replace that fifty thousand dollars a year person with a
• 16:11
  Speaker 2: two hundred dollars a month subscription. Yeah, Like, guys, I'm sorry,
• 16:18
  Speaker 2: we're all vulnerable to that. Like if if someone can
• 16:20
  Speaker 2: replace you at a tenth of the cost you're at,
• 16:23
  Speaker 2: what CEO wouldn't say yes when it becomes hey, I
• 16:29
  Speaker 2: can replace you at fifty thousand dollars with claud or
• 16:34
  Speaker 2: open A or chat GPT or Gemini at forty thousand.
• 16:38
  Speaker 2: But I still need an engineer to oversee that that's
• 16:42
  Speaker 2: not as attractive. And this is where I'm having trouble
• 16:45
  Speaker 2: with the math.
• 16:46
  Speaker 4: The shape and the nature of demand and what people
• 16:52
  Speaker 4: are consequently willing to pay. Is what's interesting to me,
• 16:55
  Speaker 4: particularly as alternatives that are cheaper that do ninety percent
• 16:58
  Speaker 4: or eighty percent, but that that's enough. Like you might
• 17:01
  Speaker 4: not want to replace me Chuck in two years with AI,
• 17:05
  Speaker 4: but you might say, we're not hiring anybody else, and
• 17:08
  Speaker 4: I expect you to be more productive because we're making
• 17:10
  Speaker 4: a small investment in AI. That to me is a
• 17:13
  Speaker 4: more realistic scenario, or at least for financial services and
• 17:15
  Speaker 4: probably for similar professions where you do need an experienced
• 17:19
  Speaker 4: person overseeing the result. But what are you, as a
• 17:21
  Speaker 4: business owner willing to pay? And will you wait for
• 17:25
  Speaker 4: something that's seventy percent is good, especially when complimented with
• 17:28
  Speaker 4: an experienced person, but it is it is eighty percent cheaper.
• 17:32
  Speaker 4: I'm just drawing. I'm making those chops up.
• 17:34
  Speaker 2: But these are the questions that are going to determine
• 17:38
  Speaker 2: what happens with AI the next few years because it's undeniable.
• 17:41
  Speaker 2: There is not enough compute capacity now, but it's also
• 17:46
  Speaker 2: getting close to the point where in my mind it's
• 17:48
  Speaker 2: undeniable that you can't build out the additional capacity without
• 17:51
  Speaker 2: dramatically raising the cost for users to use the service.
• 17:56
  Speaker 2: And if that's the case. What happens to demand and
• 17:58
  Speaker 2: then do you need that whole like it's it's the
• 18:01
  Speaker 2: it's the interaction between these forces and it's sorry, sorry,
• 18:05
  Speaker 2: interesting to me.
• 18:06
  Speaker 4: If you raise that cost, you reduce my as a
• 18:08
  Speaker 4: business owner, yours a business owner's profits.
• 18:10
  Speaker 2: Well, it's it's one thing. If it's okay, Mark, if
• 18:13
  Speaker 2: I can take you and make you one hundred percent
• 18:16
  Speaker 2: more productive by adding ten percent more cost to you know,
• 18:20
  Speaker 2: you're all in comp If I view you know, using
• 18:24
  Speaker 2: AI as part of your comp effectively, okay, finely, great,
• 18:28
  Speaker 2: I can do that. If I can make you one
• 18:31
  Speaker 2: hundred percent more productive, but it raises your cost by
• 18:34
  Speaker 2: eighty percent. I don't know if I want to necessarily
• 18:38
  Speaker 2: do that, you know, like it's that's not where the
• 18:41
  Speaker 2: math works. So we're gonna have to see. But again,
• 18:46
  Speaker 2: until hyperscalers come out and say we are cutting capex
• 18:51
  Speaker 2: or we are you know, not increasing capex anymore, it's
• 18:55
  Speaker 2: also tough to say that the cycle's ending, like that's
• 18:58
  Speaker 2: what's gonna try. It keeps like being like, oh, it's
• 19:01
  Speaker 2: looking at in videos earnings this month. You don't have
• 19:03
  Speaker 2: to look at in videos earnings now They're gonna be
• 19:05
  Speaker 2: spectacular until the hyperscalers say no, we're not buying anymore. Agreed,
• 19:11
  Speaker 2: you know, like you can just you know, put in videos,
• 19:13
  Speaker 2: earnings to the side and call to day. Basically, let's
• 19:16
  Speaker 2: take a quick break when we return. A lot of
• 19:19
  Speaker 2: fun Wall Street Watch coming up, and Todd Lutsky joins
• 19:24
  Speaker 2: us for Ask Todd, get your estate planning questions ready? Next.
• 19:41
  Speaker 1: Like us on Facebook and follow us on Twitter at
• 19:44
  Speaker 1: TFE show. Breaking business news is always first rank here
• 19:48
  Speaker 1: on the Financial Exchange Radio Network till now full Wall
• 19:53
  Speaker 1: Street Watch tracking the stocks, the dato, and the headlines
• 19:56
  Speaker 1: driving markets so far today. Right here on the Financial
• 20:00
  Speaker 1: Exchange Radio.
• 20:01
  Speaker 3: Markets are quite ahead of a busy afternoon ahead, where
• 20:04
  Speaker 3: investors will be watching the final press conference from FED
• 20:08
  Speaker 3: Chairman Jerome Powell following the Central Bank's decision on rates
• 20:11
  Speaker 3: at two o'clock. All eyes will then turn to big
• 20:14
  Speaker 3: tech after the bell, where Alphabet, Amazon, Microsoft, and Meta
• 20:18
  Speaker 3: will unveil their anticipated first quarter results. Right now, the
• 20:21
  Speaker 3: Dow is down four tenths of a percent, SMP five
• 20:24
  Speaker 3: hundred up only two points, NASDAC up about a tenth
• 20:28
  Speaker 3: of a percent. RUST two thousand down, about a tenth
• 20:30
  Speaker 3: of a percent. Ten youre Treasure Reeled is up three
• 20:33
  Speaker 3: basis points at four point three nine to two percent,
• 20:36
  Speaker 3: and oil jumping nearly five percent higher, trading at one
• 20:39
  Speaker 3: hundred and four dollars a barrel. Starbucks jumping seven percent
• 20:44
  Speaker 3: after the coffee chain posted a six point two percent
• 20:47
  Speaker 3: rise in same store sales in the previous quarter. CEO
• 20:50
  Speaker 3: Brian Nichols said its sales rebound is picking up steam
• 20:53
  Speaker 3: in its turnaround effort. Meanwhile, online brokerage Robinhood reported a
• 20:57
  Speaker 3: quarterly profit that fell short of street expectations, sending shares
• 21:02
  Speaker 3: down by thirteen percent. Elsewhere, shares in Cgay Technology rallying
• 21:07
  Speaker 3: thirteen percent after the data storage company b third quarter
• 21:10
  Speaker 3: estimates on the top and bottom lines, while its revenue
• 21:13
  Speaker 3: outlook also impressed. Other data storage names are seeing gains
• 21:17
  Speaker 3: in reaction, and Jack Daniels maker Brown Forman is shedding
• 21:21
  Speaker 3: nine percent after France's pernod Recard said it ended its
• 21:26
  Speaker 3: pursuit of the US liquor company. I'm Tucker Silva and
• 21:32
  Speaker 3: that is Wall Street Watch.
• 21:35
  Speaker 1: This is ask Todd on the Financial Exchange Radio network.
• 21:38
  Speaker 1: If you have an existing estate plan or in the
• 21:41
  Speaker 1: market for one. Todd Letskey is here to answer your
• 21:43
  Speaker 1: questions and help you plan for later life. Ask Todd
• 21:46
  Speaker 1: is presented by Cushing and Dolan, serving Massachusetts and New
• 21:49
  Speaker 1: England for more than thirty five years, helping families with
• 21:52
  Speaker 1: the state and tax planning, medicaid planning, and probate law.
• 21:56
  Speaker 1: Visit Cushingdolan dot com. Now Here's Todd.
• 22:02
  Speaker 2: As promised, Todd Lutsky now joins US four Ask Todd.
• 22:07
  Speaker 2: This is your chance to ask Todd your estate planning
• 22:10
  Speaker 2: questions live on air. Phone lines are open at eight
• 22:16
  Speaker 2: eight eight to zero five two two sixty three. That
• 22:20
  Speaker 2: is the number to call to ask Todd your estate
• 22:22
  Speaker 2: planning questions live right now. Eight eight eight to zero
• 22:26
  Speaker 2: five two two six three. We can usually get to
• 22:30
  Speaker 2: somewhere in the ballpark of two or three questions, so
• 22:32
  Speaker 2: if you've got one, get call on early to make
• 22:35
  Speaker 2: sure we get to you. Eight eight eight to zero
• 22:38
  Speaker 2: five two two sixty three is the number. Mister Lutsky,
• 22:42
  Speaker 2: how are you doing today?
• 22:43
  Speaker 5: I've been a little better little I'm gonna gut through
• 22:46
  Speaker 5: it though, but I'm okay, You're okay, kind of okay.
• 22:48
  Speaker 4: I'm you.
• 22:49
  Speaker 2: I had a tough day yesterday.
• 22:50
  Speaker 5: Yeah, I do.
• 22:51
  Speaker 2: You might not know this. I uh I. My my
• 22:54
  Speaker 2: night job is as a plastic surgeon. Well here, yes, fancy,
• 22:58
  Speaker 2: I know, thank you. Uh but I had a patient
• 23:00
  Speaker 2: yesterday and I really messed up his surgery.
• 23:04
  Speaker 5: How do you do?
• 23:04
  Speaker 2: I'll never forget the look on his elbow. That's not good, Todd.
• 23:09
  Speaker 2: I want to talk to you a little bit about
• 23:12
  Speaker 2: beneficiary naming. Let's say that someone has not done any
• 23:16
  Speaker 2: estate planning, no will, no trust, know nothing conventional wisdom
• 23:22
  Speaker 2: in terms of naming beneficiaries on financial accounts best practices?
• 23:27
  Speaker 2: What does that look like?
• 23:29
  Speaker 5: I'm not sure you can use the word best practices
• 23:32
  Speaker 5: with name practices. That seems like an anomaly. So I
• 23:38
  Speaker 5: think the way to do it is if you're going
• 23:41
  Speaker 5: to name a beneficiary while we can talk about it
• 23:43
  Speaker 5: two ways, because there's two types of assets. There's qualified
• 23:45
  Speaker 5: assets where you definitely need to name a beneficiary, sure,
• 23:49
  Speaker 5: and then there's non qualified assets. Let's just stay with
• 23:52
  Speaker 5: banks and brokerage accounts. Sure, So non qualified accounts, can
• 23:57
  Speaker 5: you name a beneficiary? Yes? Does it always work as
• 24:01
  Speaker 5: the best way to avoid probate? Well, it will avoid
• 24:03
  Speaker 5: probate every time. But is it a good way to
• 24:07
  Speaker 5: avoid probate? Well, yes and no. I mean if you're
• 24:10
  Speaker 5: going to if you're going to have a trust in place,
• 24:12
  Speaker 5: and you're not going to retitle the name of the
• 24:14
  Speaker 5: asset to the trust, the brokerage account or the bank account,
• 24:18
  Speaker 5: at least name the beneficiary the trust, so then it
• 24:20
  Speaker 5: would get to the trust and then it would fund
• 24:23
  Speaker 5: it at death and make sure your assets, you know,
• 24:25
  Speaker 5: go where they're supposed to go and be sheltered first
• 24:27
  Speaker 5: ay taxes. So that would work great. But if you're
• 24:31
  Speaker 5: not going to have a trust and you're going to
• 24:33
  Speaker 5: use designated beneficial thinking it's cheaper and easier than using
• 24:36
  Speaker 5: a trust, then you have to be careful because if
• 24:38
  Speaker 5: it's if the beneficiaries each other as a spouse and
• 24:42
  Speaker 5: it's just joint well that doesn't save anything fir state
• 24:44
  Speaker 5: taxes at all. Everything just passes to the spouse and
• 24:48
  Speaker 5: you waste exemptions that you could be sheltering assets for.
• 24:51
  Speaker 5: And if it's if you're single and you're starting to
• 24:54
  Speaker 5: name children as beneficiaries, then be careful because if you
• 24:58
  Speaker 5: don't name all the children, you name one child on
• 25:01
  Speaker 5: certain accounts and one child on another account. The likelihood
• 25:04
  Speaker 5: is you're not going to be treating them equally, and
• 25:06
  Speaker 5: you might want to, so that's a concern. But with iras,
• 25:11
  Speaker 5: you do need to name a beneficiary because those you
• 25:14
  Speaker 5: cannot title to the trust while you're alive, cannot retitle
• 25:19
  Speaker 5: the owner, but you need a beneficiary. So in that case,
• 25:22
  Speaker 5: if you're married, obviously the first one is always espouse.
• 25:25
  Speaker 5: It's the best of both worlds when you're doing the
• 25:28
  Speaker 5: state planning ideally, and then secondly you could name kids.
• 25:34
  Speaker 5: But again if you're going to do a trust, I
• 25:36
  Speaker 5: would name a trust as the contingent generally, because I
• 25:39
  Speaker 5: don't want assets going out right to my kids, especially
• 25:42
  Speaker 5: if I have a large IRA. I want those assets
• 25:44
  Speaker 5: to be you know, sheltered and divorce proofed and generation
• 25:47
  Speaker 5: skipping benefits and whatnot, which is probably what I'm doing
• 25:50
  Speaker 5: with my trust assets. So then I might as well
• 25:52
  Speaker 5: add it to the trust when I die to get
• 25:55
  Speaker 5: those added benefits.
• 25:56
  Speaker 2: Talking with Todd Lutsky from the law firm of Kushingan
• 25:59
  Speaker 2: Dolan's still do have a bit of room on the
• 26:02
  Speaker 2: phone lines at eight eight eight to zero five two
• 26:05
  Speaker 2: two sixty three. That's the number to call to Ask
• 26:07
  Speaker 2: Todd your estate planning questions eight eight eight to zero
• 26:12
  Speaker 2: five two two six three. We are going to take
• 26:15
  Speaker 2: a quick break, but when we come back, it's right
• 26:18
  Speaker 2: to your questions with Todd Again. That number is eight
• 26:21
  Speaker 2: eight eight to zero five two two sixty three.
• 26:26
  Speaker 1: Ask Todd with Todd Lutsky every Wednesday at ten thirty
• 26:30
  Speaker 1: only here on the Financial Exchange Radio Network. You're listening
• 26:36
  Speaker 1: to Ask Todd with Todd Lutsky on the Financial Exchange
• 26:39
  Speaker 1: Radio Network.
• 26:52
  Speaker 2: All right, let's get right to your questions with Todd Letsky.
• 26:55
  Speaker 2: First in the queue, we've got Bill in Wakefield. Bill,
• 26:58
  Speaker 2: what's your question for Todd?
• 27:02
  Speaker 6: So, my wife and I retired, and I have served
• 27:05
  Speaker 6: a multifamily houses and several kids, and right now I'm
• 27:08
  Speaker 6: using the income for my retirement, but at some point
• 27:12
  Speaker 6: and I will leave one house to each of the kids,
• 27:16
  Speaker 6: So I'm trying to avoid the capital game. But I
• 27:19
  Speaker 6: also know at some point I might not be able
• 27:22
  Speaker 6: to maintain the houses myself, so i'one Right now, they're
• 27:27
  Speaker 6: in a revocable trust which the kids is the beneficiaries.
• 27:31
  Speaker 6: But is there a certain point I should go to
• 27:34
  Speaker 6: an irrevocable trust? And is that the best way to
• 27:37
  Speaker 6: handle it to keep the income and past the house
• 27:40
  Speaker 6: without realizing capital play. I've been having to play the
• 27:43
  Speaker 6: capital game test.
• 27:44
  Speaker 5: So let me just hang on. Let me ask you
• 27:46
  Speaker 5: a couple of clarifying questions as we go through this. So, like,
• 27:50
  Speaker 5: right now, how much would you say the value of
• 27:53
  Speaker 5: your overall estate is more or less than the Massachusetts
• 27:56
  Speaker 5: combined two million dollar exemption each, which would be for million.
• 28:01
  Speaker 6: Yes, it's more than that, okay. In my wife and
• 28:05
  Speaker 6: I have a trust each, and then the trust the
• 28:08
  Speaker 6: kids is trust that goes to the kids.
• 28:11
  Speaker 5: Well, that seems a little confusing. Issued you could each
• 28:13
  Speaker 5: have a trust, but it depends on how large your
• 28:15
  Speaker 5: estate is. Probably one joint revocable trust would be good
• 28:18
  Speaker 5: if you're not over the fifteen million dollar federal exemption.
• 28:22
  Speaker 5: Are are you up that high?
• 28:25
  Speaker 2: No?
• 28:25
  Speaker 5: No, so you know, but you're over four but somewhere
• 28:27
  Speaker 5: under fifteen. So you know Whether or not nursing home
• 28:30
  Speaker 5: planning is important. I can't tell from this. I would
• 28:33
  Speaker 5: need to know what how much income is being generated,
• 28:35
  Speaker 5: and whether or not you know you want the irrevocable
• 28:38
  Speaker 5: trust for a nursing home planning or not. That would
• 28:40
  Speaker 5: require probably a sit down to really analyze, you know,
• 28:43
  Speaker 5: whether or not yourself insured or you or you aren't
• 28:47
  Speaker 5: and and if you aren't, then yes, we could do
• 28:49
  Speaker 5: irrevocable and it could be two and you could put
• 28:52
  Speaker 5: these assets in them and you wouldn't need to worry.
• 28:54
  Speaker 5: And that's a great question though about step up and basis.
• 28:56
  Speaker 5: The irrevocable Medicaid trust planning that we do for folks
• 29:00
  Speaker 5: gives you the step up in basis when you die.
• 29:02
  Speaker 5: So if you don't sell these rental properties before you die,
• 29:06
  Speaker 5: not only will they avoid probate and be preserved for
• 29:09
  Speaker 5: a state tax and nursing home protection, when the kids
• 29:13
  Speaker 5: actually inherit them, they will get a brand new basis.
• 29:16
  Speaker 5: So if they sold them there'd be no capital gain,
• 29:18
  Speaker 5: or if they chose to rent them, they would pay,
• 29:21
  Speaker 5: you know, be able to depreciate them with a new
• 29:23
  Speaker 5: basis over twenty seven and a half years against their rent.
• 29:27
  Speaker 5: So that's a huge win for them. So don't know
• 29:30
  Speaker 5: if that's right or wrong for you, but that definitely
• 29:32
  Speaker 5: can be done. The only the comment I would have
• 29:34
  Speaker 5: for you is if if you are worth less than
• 29:37
  Speaker 5: fifteen million, maybe a joint trust if it's revocable if
• 29:40
  Speaker 5: you're not going irrevocable, would be simpler and provide the
• 29:44
  Speaker 5: ability to shelter more assets on the first death than
• 29:48
  Speaker 5: dividing the assets between the two of you. That said,
• 29:51
  Speaker 5: the only other comment I might have is multi family
• 29:53
  Speaker 5: units probably should be owned in an LLC. If they're
• 29:58
  Speaker 5: in an LLC, then you're going to give you yourself some
• 30:00
  Speaker 5: creditor protection against potential lawsuits. So I would think about that.
• 30:04
  Speaker 5: But yeah, sounds like you probably need a good sit
• 30:07
  Speaker 5: down with an estate planning attorney and really overview, look
• 30:10
  Speaker 5: at your overall plan to see if if a change
• 30:13
  Speaker 5: is right for you. And you know what, that's funny
• 30:16
  Speaker 5: because that's exactly what are you know. One of the
• 30:18
  Speaker 5: things we talk about in our guide is right, how
• 30:20
  Speaker 5: do you leave assets to beneficiaries? Well, you want to
• 30:23
  Speaker 5: leave these assets to the kids. I heard one house
• 30:25
  Speaker 5: to each kid. Be careful because you end up, you know,
• 30:29
  Speaker 5: not treating everybody equally when you do that. There's other
• 30:32
  Speaker 5: ways you can treat them equally and still ensure that
• 30:35
  Speaker 5: they get you know, what houses you want them to get.
• 30:38
  Speaker 5: Maybe a first right of refusal, maybe make each other
• 30:41
  Speaker 5: buy each other out. Uh, there's there's many ways to
• 30:44
  Speaker 5: think about it, and folks, there's other things too. You
• 30:46
  Speaker 5: run into when you're leaving assets to children. You know,
• 30:50
  Speaker 5: do we want to divorce proof them? Do we want
• 30:52
  Speaker 5: to credit or protect them? Do we have special needs children?
• 30:55
  Speaker 2: You know?
• 30:55
  Speaker 5: Do we you know? We don't want to just rely
• 30:57
  Speaker 5: on jointly owned assets. The question is great about planning,
• 31:01
  Speaker 5: but the family behind the estate plan is also very important.
• 31:05
  Speaker 5: So get the guide. It's coming up on the end
• 31:07
  Speaker 5: of the month. Here it's going to go away eight
• 31:10
  Speaker 5: six six eight four eight five six nine nine or
• 31:14
  Speaker 5: Legal Exchange Show dot com and get the guide as
• 31:17
  Speaker 5: to how to leave your assets to your beneficiaries again
• 31:19
  Speaker 5: eight six six eight four eight five six nine nine
• 31:23
  Speaker 5: or Legal Exchange Show dot com. And you can always
• 31:25
  Speaker 5: go to our Instagram page Cushing Dolan PC for much
• 31:29
  Speaker 5: more information.
• 31:30
  Speaker 2: Todd, I got another one for you here. Let's go
• 31:32
  Speaker 2: to Jeff in Sutton, Massachusetts. Jeff, what is your question
• 31:37
  Speaker 2: for Todd?
• 31:39
  Speaker 7: Yeah? Hi, good morning, Todd morning. I have a process question.
• 31:44
  Speaker 7: My wife and I are going to create you revocable
• 31:46
  Speaker 7: trust for our family. We have three children, they all
• 31:50
  Speaker 7: get go long. Well, the will's going to state that
• 31:54
  Speaker 7: they will receive equal share. My question is should we
• 31:59
  Speaker 7: appoint all three children for trustees or would it be
• 32:04
  Speaker 7: easier for the process to have just one shell as
• 32:08
  Speaker 7: a trustee. So many pros and calls on that idea.
• 32:11
  Speaker 5: I do so so the the the trust language. When
• 32:17
  Speaker 5: you're leaving it equally to the kids, is the trust
• 32:20
  Speaker 5: going to simply say divide it and pay it out,
• 32:23
  Speaker 5: give it to them they walk away, or you're going
• 32:25
  Speaker 5: to be holding it back in trust for you know,
• 32:27
  Speaker 5: for some reason credit or protection, divorce proof, et cetera.
• 32:32
  Speaker 7: No, our plan was to divide it equally in the
• 32:35
  Speaker 7: case about demise and go from there.
• 32:38
  Speaker 5: But upon your death, is the trust going to say
• 32:41
  Speaker 5: divide it and give it to them outright or hold
• 32:46
  Speaker 5: it in trust?
• 32:46
  Speaker 7: What was your thought, Well, we were just going to
• 32:51
  Speaker 7: divide it out right, give it to them.
• 32:52
  Speaker 5: So if you're just going to divide it, and again,
• 32:54
  Speaker 5: there's no right or wrong answer here, folks, It's just
• 32:56
  Speaker 5: what's right for your family. So if you're going to
• 32:59
  Speaker 5: divide an out allocated and pay it out, then there's
• 33:02
  Speaker 5: no reason for sure to have three kids as a
• 33:04
  Speaker 5: trustee because what's going to happen is the trust is
• 33:07
  Speaker 5: going to end right away, and the trust has to
• 33:09
  Speaker 5: do exactly what the trustee, excuse me, has to do
• 33:13
  Speaker 5: exactly what the trust says, which is simply divide it,
• 33:16
  Speaker 5: pay it out, trust over. Everybody walks away. So I'm
• 33:20
  Speaker 5: going to say one child is ample in your situation.
• 33:25
  Speaker 2: Hope that helped Todd. We've got another one for you here.
• 33:28
  Speaker 2: Let's go to Ken in Maine. Ken. What is your
• 33:32
  Speaker 2: question for Todd?
• 33:35
  Speaker 7: Hi?
• 33:35
  Speaker 8: How you guys doing. Yeah, I have a unique situation
• 33:40
  Speaker 8: and you guys kind of alarm mea just a few
• 33:43
  Speaker 8: minutes ago that the iras cannot have a beneficiary of
• 33:47
  Speaker 8: a trust. I'm thinking about starting a trust. I'm kind
• 33:51
  Speaker 8: of new to this. I'm fifty nine and a half
• 33:53
  Speaker 8: years old. My wife is sixty. I am currently retired.
• 33:57
  Speaker 8: She works, makes about fifty with the Jessic gross income
• 34:02
  Speaker 8: of about eighteen, have about two million in a tax
• 34:05
  Speaker 8: deferred and she has about three quarters of a million
• 34:08
  Speaker 8: in a tax deferred both rollover IRA and I have
• 34:12
  Speaker 8: about three hundred in a ROTH. And it seems that
• 34:16
  Speaker 8: I'm going to be putting myself up against a very
• 34:18
  Speaker 8: difficult challenge of transferring a lot of that traditional rollover
• 34:23
  Speaker 8: IRA to a roth that in the next ten to
• 34:25
  Speaker 8: twelve years before the R and D is taken. But
• 34:27
  Speaker 8: it kind of alarmed me when you said a few
• 34:29
  Speaker 8: minutes ago that the trust cannot be the beneficiary of
• 34:32
  Speaker 8: the iris. So do I continue going as far as
• 34:36
  Speaker 8: the rough conversions or do I have something created that
• 34:39
  Speaker 8: I could do that alternatively.
• 34:41
  Speaker 5: Do so this is this is going to be an
• 34:43
  Speaker 5: easy quick fix for you. So what you misheard was
• 34:47
  Speaker 5: that the iras cannot be owned by the trust while
• 34:52
  Speaker 5: you're alive. They cannot be owned. You got to keep
• 34:55
  Speaker 5: the ownership in your name. It's an individual retirement account,
• 34:59
  Speaker 5: so it's in your or in your wife's name. I
• 35:02
  Speaker 5: did not say the beneficiaries could not be the trust.
• 35:04
  Speaker 5: The owner cannot be. The beneficiary absolutely can be the trust.
• 35:09
  Speaker 5: It's just a matter of looking at your overall estate
• 35:12
  Speaker 5: plan and sort of trying to figure out whether or not,
• 35:17
  Speaker 5: you know, we should make the trust the beneficiary or
• 35:20
  Speaker 5: the kids the beneficiary. That's a function of what you're
• 35:22
  Speaker 5: doing with your estate plan. But if the goal perhaps
• 35:26
  Speaker 5: unlike Jeff in his situation, he was just going to
• 35:28
  Speaker 5: give the assets out right. But if you're saying, no,
• 35:31
  Speaker 5: I want to try to hold these in trust. I
• 35:32
  Speaker 5: want to protect them from creditors. I want to you know,
• 35:35
  Speaker 5: protect them from my kids' future divorces, and you know,
• 35:39
  Speaker 5: maybe make it down a generation to the grandkids after
• 35:42
  Speaker 5: my kids die and get it there estate tax free.
• 35:45
  Speaker 5: It's called generation skipping tax planning. Well, if that's the case,
• 35:49
  Speaker 5: then all your other assets, not the iras, can be
• 35:54
  Speaker 5: owned owned by the trust right away. Do that now,
• 35:58
  Speaker 5: and then the primary beneficiary likely would be the spouse
• 36:05
  Speaker 5: and that's okay, primary beneficiary on the IRA or the
• 36:10
  Speaker 5: other qualified plan assets that you have, and then the
• 36:14
  Speaker 5: contingent beneficiary, instead of being the kids, could be the trust.
• 36:19
  Speaker 5: That way, not only are the assets that you currently
• 36:22
  Speaker 5: own in the trust, but when you die, the other
• 36:26
  Speaker 5: two million, two million, seven fifty if I heard the
• 36:29
  Speaker 5: numbers right, find their way to the trust to be
• 36:32
  Speaker 5: sheltered and paid out for your kids over time. Again,
• 36:35
  Speaker 5: the ten year payouts still going to exist either way,
• 36:38
  Speaker 5: and then what will happen is the IRA will just
• 36:40
  Speaker 5: be just reach into the IRA and pull out some
• 36:42
  Speaker 5: money and put it in the trust over ten years.
• 36:46
  Speaker 5: So that's the way I would do it. If you're
• 36:48
  Speaker 5: going to go ahead and do your estate plan and
• 36:51
  Speaker 5: try to protect all of your assets. Beneficiary contingent beneficiary
• 36:56
  Speaker 5: can be the trust, but not probably not the primary.
• 36:59
  Speaker 2: Mister Gickie, thank you so much for joining us today.
• 37:03
  Speaker 5: Well, thank you. It's always a pleasure.
• 37:05
  Speaker 1: This has been Asked Odd on the Financial Exchange Radio network.
• 37:09
  Speaker 1: Ask Todd with Todd. Lutsky has been presented by Cushing
• 37:12
  Speaker 1: and Dolan, serving Massachusetts and New England for more than
• 37:14
  Speaker 1: thirty years, helping families with the state and tax planning,
• 37:17
  Speaker 1: Medicaid planning, and probate law. Call eight hundred and three
• 37:20
  Speaker 1: nine three four thousand and one or visit Cushingdolan dot com.
• 37:24
  Speaker 1: The views expressed in this segment are solely those of
• 37:26
  Speaker 1: Cushing and Dolan. Armstrong advisor. He does not provide any
• 37:28
  Speaker 1: legal or tax advice. Please consult with your illegal or
• 37:30
  Speaker 1: tax advisor on such matters. Cushing and Armstrong do not
• 37:33
  Speaker 1: endorse each other and are not affiliated.