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The 6 Best Assets To Inherit · The Jon Sanchez Show

• Jon G. Sanchez: Good Wednesday afternoon to you. Welcome to the John Sanchez show on News Talk 780KOS. Pleasure to be with you on this hump day, the stormy hump day, by all means. I think we're ready for a nice little downpour. it's so great to be with you. And what a day we had in the market today. Cannot wait to give you all the details about it. Strength across the board. We'd like seeing that. Nice broad based rally. Gonna give you all the reasons behind it. But it's Wednesday. You know what that means. It's an estate planning focused day. yeah, and I got a great topic lined up for you today. So here's something I want you to think about before I get to to the estate planning focus of the day. Many of you may or may not realize this, because it it's not something that most people think about a lot. But that is this: not all inheritances are created equal. Some assets can pass to your children with significant tax advantages. Others can create financial headaches, family disputes, and God forbid, unexpected tax bills. Well, today I'm going to be discussing six different types of assets that I've created for you and strategies behind them that can make an inheritance much more valuable and what every family should know before passing on their wealth. You know, this is a very interesting topic. And again, one that the reason why I I created this is it's not one that people think about, right? When you mention inheritance, typically here's what a client will say. All right, here's my my balance sheet, my, you my personal balance sheet, so on and so forth. But by the way, by the way, John, I'm probably going to be inheriting a bunch of money when, you know, my mom dies. My dad's already died when my mom dies. But I'm not counting on it. Yeah, come on. You know you are. It's human nature, right? Especially if it's a significant sum of money. But when you get to the younger generation, especially, right? We got this great wealth transfer going on. $124 trillion, according to Sorellian Associates, $124 trillion. Is going to be transferring from my generation, the baby boom generation, down to the next generation, down to our kids, between now and what's the year, 2040, I think it is. So a significant sum. So this is going to be an issue. Yeah, may not be on the forefront of your concerns at this point. But let me tell you, at some point it probably will be, and definitely your beneficiaries, it will be on their mind. Or at least it should be until they get the tax bill. And that's why I wanted to do this topic today is. Get you start thinking about this a little bit. And again, I invite you to visit my website, specialized trust.com. If you'd like to have a discussion with me about your estate planning needs, by all means, schedule my free 30-minute discovery meeting and we can talk about it. You know, we can create your new estate plan, we can restate your existing estate plan, and bottom line, just have a great discussion with you. Many times I just end up having a discussion, trying to help people out. So visit specialized trust.com and set that appointment with me. Okay, so we'll get to that topic in just a moment. In the meantime, let's get down to the stock market side of things. I gotta get the good news out of the way, right? It's nice to be able to say good news and not bad news for a change. the good news is this: like I said, we had strength across the board today. Matter of fact, the SP 500 notch its third day of winning. NASDAQ was very strong thanks to sp strength in SpaceX and and Tesla that I told you about after the close, and I'll go through more detail. But here's how the major averages finished. For the day, the Dow rose 360 points, 0.69% to a close of 52,856. NASDAQ gained 278 points, 1.05%, closed the day at 26,702, and the SP higher by 44 points, 0.58% to finish at 7,757. Russell 2000 or I'm sorry, yeah, the Russell 2000, pardon me. just a modest gain, seven points, point two seven percent. But what the heck was behind all this? Oil was quiet, bond market was quiet, that always helps. But let me tell you, this news that I shared with you that came out right before the show yesterday, I'm gonna say really was our major catalyst. And that is SpaceX and Tesla. Obviously, both owned by Elon Musk and shareholders. You see, SpaceX released their earnings numbers after the close yesterday, and they were incredible earnings numbers right across the board. I'm not gonna bore you with all the details. But it was what Elon Musk said on the conference call with the Wall Street analysts. That sparked the buying rage in SpaceX and then Tesla. And essentially what it was is this. He has created two boards, one with SpaceX, one with Tesla, to let's just say perform some discovery in regards to the two companies coming together. Now, of course, he did the right thing as a CEO of both of these companies and said, look, I'm not part of the boards. It's up to the boards whether this thing's going to go through. Probably not gonna go through, you know, doing all the typical, you know, cover your butt type of of comments there. Which again, that's what he's supposed to do, especially with all the troubles he's had with regulators that say things he shouldn't say over the years. But the bottom line, those two stocks were really the catalyst to the the the pre-market session and then the strength in the in the pre-market session, specifically on the Nasdaq side, just really continued through the rest of the day. And it just brought a a bit of optimism back to the market, right? Like I said, we didn't have to worry about oil, we didn't have to worry about bonds today. overall earnings numbers are pretty good from other companies. So it was just a really, really nice day. Now here's how SpaceX finished for the day, up $11.49, 7.77% gain to $159.28. Tesla itself, a $12.76 increase, 3.41%, closed at $386.47. now it's also reported some earn Tesla reported some earnings numbers after the close that I'll get to here momentarily. But this brought back again a lot of of confidence, I guess we can say, in the AI space, right? Because obviously SpaceX does own you know many aspects of AI. And so like I said, just had a had a nice lingering effect to everybody. Super microcomputer SMCI had a great day today also tied in with that. Nine point four nine percent gain up three dollars and eight cents to thirty five fifty five. Nvidia was strong, five dollars and thirty nine cent increase, two point four nine percent to two twenty one eighty six. let's go to non-AI related names, and that is United Airlines. This was another one everyone was anxiously anticipating their earnings, and the numbers were good. stock finished up three dollars and ninety cents, three point nine nine percent to one one sixty-seven. They did give some warnings, however, that you know if fuel prices remain where they are, then it could have an impact on their earnings going forward. two stocks that were not quite so fortunate today: Netflix and ATT. Now Netflix reported their numbers. Stock finished down 5.31%, $3.65 loss to $65.04. Disappointing fourth quarter guidance and reduction in full-year advertising revenue outlook overshadowed the earnings beat. ATT, boy, this was a big move for this stock. It usually doesn't move this much. 6.45% loss down $1.51 to $21.91. they exceeded earnings expectation, but they said they basically are dealing with some slowing subscriber. additions so that raised concern about competitive conditions in the wireless industry. And let me tell you, watch these wireless stocks like an ATT, Vodafone, Verizon, so on and so forth. Because back to what I just mentioned a moment ago about SpaceX and and and Tesla, remember Elon Musk is going after these wire these these wireless companies. He wants to dominate the wireless telephone industry. And I think that was something that no one was really talking that much about but I think in the back of investors' minds That's weighing on that. You know, with with obviously Starlink and and its incredible capabilities. I'm a huge user of Starlink. Love it, love it, love it. That's one of the, I think, one of the best inventions of our time. but watch the watch those watch those telephone stocks going forward. Google was another notable drag on the communications sector today. finished down five dollars and forty-five cents, 1.62% loss to $330.95. let's talk a little bit on the again on the the oil side of things today. Like I said, it wasn't a problem, finished down 66 cents, 2.1% lost to 9716 per barrel. in the afternoon, there was a report that came out suggesting that the State Department was preparing to order the departure of certain personnel from U.S. embassies across the Persian Gulf. Now, to be honest with you, I'm surprised there's still personnel there. But State Department spokesperson Tommy Piggott clarified that the order applied only to non-emergency U.S. government employees and their families, specifically in Saudi Arabia. So that calmed things down a little bit, but again, the the damage was done. And lastly, I want to mention Meta. You know, it's it's pretty amazing when when a company's gonna been been I hate to use the word guilty, but I guess there's no other way to say it, basically found guilty in in a case and they're gonna write a You know, what's the number? I think around twenty five billion dollars is the headline that I saw. you know, and and again, the stock goes up. Now I do have to mention they did report numbers after the close today, and so that helped things out. but but yeah, it it's amazing to see what other company could withstand that type of news and the stock. You know, finishes up. but while I'm on that, let's hit the revenues in the earnings side of things. earnings per share for meta today came out at three dollars and eighty-three cents a share. Revenue was sixty-four point six billion. Estimates were sixty-three point three seven billion. So nice beat there. revenue up twenty-six percent from a year ago. Fourth quarter expected revenue of 73 billion to 76 billion. that's about the mid-range of their previous projections. They're seeing incredible success with the Muse AI personal assistant tool that debuted, debuted in September. That helped out the month of September with their best month on Wall Street since 2022, as far as the the stock performance was concerned. Now, right now in the after our session, the stock is surging up 13.09 percent, a dollar eighty-eight increase to a price of seven ten sixty-one. And like I said, regular hours finished up three dollars and twenty-seven cents to six ninety-seven fifty-two. So This will will absolutely help out the the Nasdaq side of things if this game can hold in the after hours. So like I said, overall, a couple disasters avoided. Things look good. Sit back, enjoy. Hopefully you made a little bit of money in the market today when you check your accounts when you get home. All right. Yeah, when I come back, I'll hit the commodity side, specifically actually interest rates, and then we'll get into our topic today. The six best assets to inherit, whatever family should know. Back at the John Sanchez Show on News Talk 780K, which, as I said earlier, it was a good session today. Finished with a gain of two, excuse me, 360 on the Dow, 0.69%. NASDAQ up 278, 1.05%, SP higher by 45 or 0.58%. All right, before I get to our estate planning topic this Wednesday, the six best assets to inherit. Let me bring up to date on what's going on with Tesla. As I discussed earlier, we had a lot of talk about it yesterday on the SpaceX conference call, earnings conference call. Well, a lot more talk. today, of course, about the maybe the two companies coming together by Elon Musk today on the Tesla conference call. Let's talk about earnings numbers and stock performance. So after the close, the company reported earnings per share of 48 cents a share. Estimates were 43 cents. Revenue 28.05 billion. Estimates 27.9 billion. So, you know, pretty much, you know, right in line. musk when asked about again as I discussed with you earlier, forming the special committees to discuss and start Looking at approval of combining Tesla and SpaceX. He said, I feel like I'm tap tap tap dancing through a minefield. That's what he said yesterday. He said, Do I think it's a good idea? Yep, but in the end of the day, the shareholders have to be supportive on the Tesla side. That means needing a 50% vote of all shares, which is quote a quote high hurdle. All right. on the revenue side, down slightly flat from a year earlier, company generated $28.24 billion. Tesla said it's earning on its earnings call. the core automotive business revenue down three percent from a year earlier to 20.56 billion in the quarter. Energy revenue down 16% to $2.88 billion. Balancing out the declines were gains in Tesla service and other revenue. Sales there climbed 33% from a year ago to $4.61 billion. Net income came in at $787 million, about 22 cents a share, down down from $1.11 billion or 32 cents a year earlier. That's why. You'll hear in a second why the stock is not performing too much. but over overall, there again, there's so many parts of this company. overall, you know, decent number. Shareholders not impressed though. the regular session, as I said, had a heck of a day up $12.76, 3.41% to $386.87. Fortunately, we're giving the vast majority of that back in the after hours. Right now, Tesla in the after hours is trading down eight dollars and seventy three cents, a 2.26% loss to 377.74. All told you it barely budged on the the bond market side of things. Same with gold barely budged up seven tenths of a percent to four thousand one fifty ten. And again, tenure treasury at three basis points there. So, like I said, those are not even an issue today. All right, let's get down to our estate planning topic. Something very excited to talk to you about. Once again, not all inheritances are created equal. So I want to begin this discussion with you by asking you a question, right? I always like to ask a question. If you could leave your children, let's say a million dollars, would it matter to you what kind of assets made up that one million dollars? So think about that for just a second. Now put yourself on the other side. Let's say you're one of your kids. Would you rather inherit a million dollars in cash, a million dollars in a traditional IRA, a million dollars worth of real estate, or let's say a million dollars worth of stocks? Right? This is very common. Well, the first answer you may think is hey, I love the green stuff. Let me let me have the million dollars in cash, right? A million dollars is a million dollars. But here's something I've learned in my 36 year career in the financial services industry. The type of asset you inherit can be just as important as the amount that you inherit. Now, why is that? Because you see, different assets have different tax consequences. Different assets have different distribution requirements, different levels of liquidity, and different legal. Considerations, right? You never think about that. You're like, boy, you know, my kids are lucky they're going to get anything. Well, if after today's show, maybe you can give some thought about what you really want them to inherit and what's the most effective way to do so. Now here's what I mean. A million dollars in a traditional IRA could create hundreds of thousands of dollars in taxable income for your beneficiaries. Because remember, they got to start taking that money out. A million dollars in appreciated stock, hey, that might receive a great. actually very significant adjustment in the cost basis when you pass away. Now remember, let's say you bought a stock at twenty bucks and it rises to a hundred and you die. Well normally if you would have sold that while you were alive, you would have had a $80 capital gain, right? $80 per share capital gain. And multiply that times the amount of shares that you have and long term, short term capital gains, on and on. There's a lot of taxes that pro potentially could be due there. But guess what? When your kid, I'm just going to use your kid as an example, When your kid inherits that, right? You bought it at twenty, you die when it's at a hundred. Your kid now has a one hundred dollar cost basis. They sold that stock at a hundred dollars, zero tax liability, no capital gains. So you see how different that can be compared to, you know, let's say you give your son the stock that has, you know, very low cost basis, nice gain in there, but you give your daughter the IRA. Is that really fair? Maybe not. How about real estate? A million dollar home might create a wonderful inheritance, right? Hey, house has paid off, and here you go, son. Or it can be an enormous headache. When let's say you have numerous children, say you've got three of them, three kids inherit it, and bottom line, they can't agree what they want to do with it. One wants to keep it, one wants to be cashed out, another wants to rent it. What do you do? That's where estate planning comes into play. Because you see, a properly structured trust is Will help protect the inheritance from certain creditors, lawsuits, divorces, fi poor financial conditions. I've seen this a lot. This week, for some reason on on various trusts that we're doing in in reviews, a lot of them do not have any of the the proper credit protection. Because see, if you inherit an asset and it doesn't go through the proper channels, it's subject to divorce, the the the the other spouse if you get a divorce, creditors, so on and so forth. So again, you gotta be really specific and and have certain verbiage in your estate plan to make sure that doesn't happen. So let's talk about the first asset class, the cash, right? The simplest asset to inherit. But I'll tell you, in real life, I'm not seeing hardly anybody leaving cash to their beneficiaries. Very few. And if they do, it's not significant. You know, five, 10 grand, something like that. But I've yet to see one that says, I want to leave X amount, you know, hundreds of thousands of dollars or millions of dollars to my beneficiaries. Primary reason most people, if they're prudent, they don't have that amount of cash on hand. But if they did, would they want to leave the cash to it? Well, unlike real estate or privately owned businesses, beneficiaries don't have to find a buyer for cash. They don't have to get an approval. They don't have to deal with, you know, financial advisors and real estate people and tax professionals and attorneys and so on and so forth. They just get the cash. So, what are the five advantages of receiving cash? Doesn't create any taxable income simply because you inherit it as long as you're under the unified credit amount, which again is $15 million per person. So Most people that's not an issue. So no taxable income. It's value, it's immediately known. One of the challenges we have is when a client dies and they leave their taxable brokerage account to multiple children. Again, then we have to have the discussion how are we going to break it up? The trust may say a third, a third, a third. But do you give a third of how do you how do you break it down and give a third to one child? And they're gonna come back and go, hey, you know what? My siblings. They they just got Tesla and Nvidia and Microsoft and all these stocks that, you know, probably have a great future ahead of them. You know, I ended up with, you know, PGE and and you know, an airline stock and a utility and in other words, the conservative side of the portfolio. Right? You see how that goes? So it's very, very difficult from our standpoint as a financial advisor to help kind of play mediator with the family and say, here's how you break that up. I'll d cut right to the chase. Usually the easiest thing. In your estate planning documents, have the account liquidated. Right. Again, if it's done properly, there should be very little, if any, capital gains tax because you're you're gone. The kids get the stepped up basis. And just sell it and distribute the cash. Because I've seen way too many family are family arguments over my career for the reasons I just said. No one there's no way to have a a very equal splitting of the assets when it comes to an investment portfolio. It's it's virtually impossible. Fourth reason. It improves immediate liquidity for family needs, right? Maybe your kid's been waiting for you to pass away so they can put the money down on a house or whatever needs they may have. So you get immediate liquidity if you inherit cash. And it doesn't require your heirs to manage complicated investments or property. You're leaving it up to them. Do with it, do with the money what you want to do with it. So cash, a lot of advantages from an inheritance standpoint. When we come back though, let's start getting a little bit more complicated. Life insurance and cash equivalents. We're discussing. The six best assets to inherit. Welcome back to the John Sanchez Show on News Talk 780 KOH. Once again, a very strong session in the market today. Nice to be able to say that for a change. We finished with a gain of 360 on the Dow Jones Industrial Average, 0.69%. NASDAQ 278, 1.05%, SP up 45 points or 0.58%. Excuse me for laughing, but you know, there's a lot of advantages to being rich. Coming across the newswires, CNBC specifically, while we are at break, the headline says the following Zuckerberg, Mark Zuckerberg. Agrees to stay in California for eight years as part of a creation of a new class of meta shares. So open up the story. I was going to read it. It's very just a couple paragraphs. It just makes you laugh, but it also says, you know what? When you have money, you can do whatever you want to do. Mark Zuckerberg is not a fan of California's Proposition 40, otherwise known as the California wealth tax. Meta says that CEO could leave California if that statewide ballot measure becomes law. Zuckerberg, quote, could become liable for a significant multi-billion dollar tax payment based on his ownership of stock of the company, a meta SEC filing said. Meta was able, I guess today, to convince Zuckerberg to stay in California by offering him a new stock plan, the filing noted. The filing explains that Zuckerberg committed to remaining in California or any other jurisdiction in which the company maintains its corporate headquarters for eight years. Quote, unless There are material, unforeseen circumstances that would render it prudent or advisable for Mr. Zuckerberg to recite elsewhere. I think some hotshot attorney wrote that last portion to kind of give him an out. But evidently it's news, it's making the news. Again, the stock already moving because of the the stronger news numbers, but pretty amazing. Pretty amazing. All right, here we go. Let's get back to our topic: the six best assets, asset classes or assets, I should say, to inherit. So we covered cash. I I do want to just mention before I go on to my second asset to remember or or to to mention, remember cash that is owned in a bank account that is titled under the trust usually is very simple, again, to pass on to your beneficiaries, right? Very, very simple. but again, if it's not under the trust, there's a good chance that account could go to probate, something you don't want to deal with and definitely your kids don't want to deal with. So You can do payable on death or what we call POD or TOD. but again, that can create some issues if you become incapacitated before you pass, and so on and so forth. So the bottom line, cash is pretty simple. Really no tax consequences. There could be, pardon me, some estate planning issues again, unless that account is properly titled in the name of the trust. Okay, you get the picture. Cash is good. All right, let's go on to the second asset: life insurance and cash equivalents. So Why is life insurance a powerful inheritance strategy? it is because it does one thing that only it can do. It can pass the death benefit, usually one hundred percent state and federal tax free to your beneficiaries. You get immediate liquidity or your beneficiaries do. If you have the proper beneficiary designations, generally allows the proceeds to bypass, bypass probate completely. Proceeds, of course, can help pay debts, support a surviving spouse, equalize inheritances, like we were talking about at the last segment. And bottom line, this is how the wealthy will use life insurance from an estate planning standpoint. They'll use it in a lot of different ways, but one basic way. It helps the families from selling illiquid assets at an unfavorable time. I think I've shared this story, but if not, I'll mention it more time. This goes years ago, probably 20 years ago, somewhere around there. The owner of the Miami Dolphins, he and his team did not do, you know, he owned waste management at the time. Wayne, was it Wayne? I forget his last name, but obviously a multi billionaire. He didn't do proper estate planning. He dies, leaves us you know, multi billion dollar estate. And his kids had to do a fire sale. They to sell the Miami Dolphins, they to sell waste management, they had to sell a lot of assets. Because remember, at death, if estate taxes are due, they're due nine months after you pass. Well, when you're talking a multi-billion dollar estate like Wayne Harsek, I think that's it. That obviously the tax side could be massive, right? Well, if you don't have liquid assets like cash, what are the kids gonna do? They're going to put things on the fire sale list, right? And people know, right? And that's when the vultures will come out and give you cents on the dollar dollar as a as a as a beneficiary and say, look at y you know, we know what the tax liability is. You got nine months to pay it to the IRS or substantial penalties become applicable. So guess what? I'm gonna give you a 50 cents on the dollar. And the kid's gonna go, you what? I don't have a choice. Gotta take it. So life insurance. So there's a lot of great strategies we can use when it comes to estate planning/slash life insurance. I want you to visualize something for me. And again, you don't have to be a multi-billionaire to utilize this strategy. Again, this is not applicable right now because the unified credit is so high. Remember, that means. You and your spouse each can have $15 million worth of assets in your estate. So a total of $30 million before any inheritance taxes become due for your beneficiaries. So if you had $31 million, okay, a million of that's going to be subjected to the inheritance tax. Generally, that's going to start around 45% and go up from there. So the strategy we use this a lot when the unified credit was significantly lower. And remember, I just want to throw this out there. Dependent upon future election results, typically the Democrats, one of the first things they do is they try to bring that unified credit amount lower. Remember, there was the estate planning industry was up in arms. I mean, a lot of people made a lot of money during that time period before Trump got elected because the Democrats were talking about bringing it down to two or three, four million somewhere around there. Well, that's not a lot when you consider the wealth that this country is developing. And also what people always forget. Your life insurance proceeds, right? A lot of you have million dollar plus policies. That gets counted towards the estate. So to hit that two, three, four million, it wasn't hard. So what do we do? Again, not prevalent right now because the credit's so high. But what we do is we we create what's called an islet, an irrevocable life insurance trust. So here's what I want you to visualize. Draw a big circle in your mind. Right now, all of your estate, all your assets are inside of that. Okay. You die. IRS says, okay, what's the value of that estate? Well, if it's over, again, 30 million if you're married, anything over that is subject to inheritance tax. And as I said a moment ago, that those life insurance policies, they get thrown into that big circle. Okay. So how do we lower that unified credit amount? Well, what we want to do, or the taxable amount, what we want to do is let's say you got a, I don't know, two, three, four million dollar life insurance policy. So we create what's called an irrevocable life insurance trust. We go by the acronym ILIT. It's a little circle that sits outside the big circle. All it does is it owns your life insurance. So when you pass away, instead of the death benefit being paid to the big circle to your estate, it's paid to the little circle, the irrevocable life insurance trust. And therefore it's not counted towards your overall estate value. So really simple strategy. Again, not popular right now for most people, unless, you know, again, you have a very, very large estate. But it's it's wonderful. But really the main benefit of using life insurance as an inheritance tool is really simple. It's tax-free. There's nothing else out there like that. Right. The minute you die, your beneficiaries contact the or your successor trustee contacts the insurance company, you send in the death certificate, they send you some paperwork, you sign it, you send it back, and next thing you know, you either get a check or you get a access to typically for large distributions now what insurance companies will do, they'll kind of set up like a money market type of an account and you draw on it or tell them to send you the whole thing, whatever you want to do. But it's really simple. But the beautiful thing about it is again, it's income tax-free. So remember, the purpose of my discussion today is not all inherited assets are the same, right? So this is right there with cash. It really is. Takes a little bit longer than cash, but again, no tax ramifications, tax-free, as I said, on and on and on. So once again, as you're thinking about disp dispersing your your estate to your various children or whomever you're gonna leave your estate to. You really have to give a lot of caught a lot of thought. This is one thing we do is we really sit down with the client and say, okay, what are you gonna who's who's gonna get what and how are they gonna get it? And you want, you know, most people that I'm seeing, they want it to be fair. If they got three kids, a third, a third, a third. If they two kids, fifty-fifty. But remember, different assets, different inheritance is treated significantly different. It's not they're all not equal in value. Okay, so there's that one. Now let's go on to my third point. brokerage accounts. I touched on this briefly earlier, but I want to go into a little bit more detail. So remember, under IRC 1014, qualifying inherited assets generally receive an income tax basis equal to the fair market value of the data death. That's the fancy term. Let me put it in plain simple terms. When you die, whatever the value is of your taxable investment account, those investments receive that stepped-up cost basis. So let me give you an example. Okay, let's say dad's got a $750,000 investment portfolio. Dad bought these stocks years ago, right? His original cost, all in, was about $150,000. But his value at death, as I said, was $750,000. So there was unrealized appreciation, or what we call unrealized gains, of $600,000, right? $600 plus the $150 he started with brings the value to $750. If I'm if that's my dad and I'm the only kid that's gonna receive this money, guess what? My cost basis on the stock, which is gonna determine my taxable amount, it's not the original purchase cost of 150. No. My my tax basis is gonna be what we call the stepped up basis, which is the value of that portfolio on the date of his death. That's why if you are a successor trustee or you're involved in managing of any type of an estate, you wanna make sure. That you obtain those values as soon as you can of the of the portfolio upon death and also make sure that you let your accountant know about it. Back to the John Sanchez show on News Talk 780K at which we've been discussing the six best assets to inherit. I think I'm on number three. But as a reminder, if we can help you with your estate planning needs, please visit my website, specialized trusts with an S, specialized trust.com for trust creation, trust review, restatement, etc. Love to meet with you. And I give you a 30 minute discovery meeting. No charge, no obligation. I hate saying that. Sounds so cheap. All right, let's talk about I I wanna wrap up actually, one thing on on My my last one, the the the stock portfolio. So I think everybody gets it. We know about stepped up basis, right? So again, the key is don't screw around and wait to sell the portfolio. I see this happen a lot with people. You know, dad dies and they, you know, turn around a year or later and then they sell the portfolio and they think they're gonna sell everything tax free because they got the stepped up basis. Well, those investments rose in value. Not a bad thing, but if you're expecting zero tax, you want to get rid of those right away after dad passes in this example. Now remember, a couple of little misconceptions also. Traditional IRAs, 401ks, annuities generally do not receive a step-up basis. So you don't get that advantage there. certain irrevocable trust arrangements, they may not receive a basis adjustment either. And things can get a little complicated when we have community property rules that can produce different basis, different results, et cetera. So again, I don't have time to get into all that, but just keep in mind, biggest thing on that is. IRAs 401k. They don't get a stepped up basis. Okay, so now let's go to number four, the Roth IRA, one of the most tax-advantaged inheritance, probably right behind the life insurance. So here's an example. So we're going to talk traditional IRA versus the Roth IRA from an inheritance standpoint. Let's assume mom passes away. She leaves her daughter, I don't know, half a million dollar retirement account. I want to give you two scenarios. One, scenario A, it's a traditional IRA. So the daughter inherits the $500,000 traditional IRA. Well, remember, under the Secure Act, that was passed a few years ago, most adult children must fully distribute an inherited IRA by the end of the tenth year following the owner's death. So the daughter. must get rid of all this money in that half a million dollar IRA or whatever the value is, you know, through growth, hopefully, by the end of the 10th year. So she can defer it, not take a dime out until the 10th year, or she can take a little bit out at a time, or she can take the whole thing out. So that's what we call a stretch IRA. So those rules have changed where before it used to be significantly longer over someone's life expectancy. Well, think about this. Let's say the daughter makes a good living. Let's say she's making, I don't know, 150 grand a year. Those taxable IRA orjaws could absolutely push her into a higher income tax bracket. But scenario B, the Roth IRA, let's say mom leaves her daughter a half a million dollar Roth IRA. If the Roth IRA satisfies the five-year rule, right, which means Money's been in there for at least five years and over 59 and a half. The daughter can generally withdraw the funds income tax free. So the tenure inherited IRE distribution rule still generally will apply, but the federal income tax consequences obviously significantly different. The other assets, I'm running out of time, assets held in a trust. Again, that protects the inheritance side. So put those applicable assets in there. And then let's see, what's my other one? Yeah, that's about it as far as the good ones are concerned. Hopefully that was helpful. Again, if you need further discussion, please reach out to me. Love to have a discussion with you about your estate planning needs. God bless, have a great afternoon. We'll see you tomorrow on the John Sanchez show.