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What happens to Google if the DOJ is successful breaking them up? · The Financial Exchange Show

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He's The Financial Exchange with Chuck Zada and Mark Vandetti.
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Speaker 2: Midweek. Here on the Financial Exchange is Chuck, Mark and
1:17
Tucker with you, and our top story today is Hurricane
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Milton continuing to bear down on the west coast of
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Florida and the potential economic impact. Obviously, look, we can
1:29
talk at a personal level just how horrible this is
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likely going to be for a number of people on
1:33
the West coast of Florida, but our show focuses on
1:36
the business impact. So we're you know, clearly going to
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leave you know, our thoughts and prayers with the people
1:42
that are down there, either stuck down there or who
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have chosen to ride out the storm. And you know,
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certainly we hope for the best and that things, you know,
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are again as as there's as little disruption as possible
1:57
is basically what we're hoping for. But this is going
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to be a tough one. But in a story from
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Barons this morning, we have some further proof that, Hey,
2:07
a lot of times if you want to get the
2:09
update on what's coming down the road, just listening to
2:12
the Financial Exchange, a couple of weeks before, and you'll
2:15
have Baron's articles, you know, a couple of weeks in advance,
2:18
because this is all about, Hey, the October Jobs Report
2:20
is going to be impacted by Hurricane Helen and now
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by Hurricane Milton. And we've been talking about this for
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a couple of weeks. Where the data collection period for
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the October Jobs Report is October six through twelfth, and
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so already, look, you've got Helene where if you know
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anyone in the mountains of the Carolinas, I've got a
2:41
couple of folks that are in the Ashville area. I
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know someone else down in Greenville, South Carolina, and you
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know they're still trying to figure out how to get
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power and water on a consistent basis to these areas.
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You are not going to get accurate counts of jobs there,
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very clearly. And now with Milton making landfall right in
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the middle of this period, you've got two storms that
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are going to be completely disruptive to the October jobs data,
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probably the November jobs data as well. And so I'm
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now at the point where, in order to kind of
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get you know, an accurate picture of jobs from the
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jobs report, you're probably looking at the December, January, and
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February jobs data, which means we might not actually know
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what the jobs market really looks like, at least from
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the government jobs data until March.
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Speaker 3: Yeah, it's a good reminder, Chuck, that you should always
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look at long term smooth averages of this stuff. This
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is just an extreme example of how even the littlest blip,
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and this is far from a little blip, but even
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a little disruption to somebody's life can interfere with the
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accuracy with which you complete a survey, the timeliness with
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which you submit that survey to the authorities that they're
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trying to collect the data. Imagine trying to as an
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employ lawyer when your business is and we've all experienced
4:03
this year and in uh, what do we Southern New England,
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in Middle New England whatever, we call this a little
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slice of heaven we occupy. We've all experienced floods.
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Speaker 2: Middle New England is the term I've never heard before.
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Speaker 3: But it sounds like Tolkien, something Tolkien would invent.
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Speaker 2: I'm from Middle Earth and I'm here to help you
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with from spells.
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Speaker 3: I'm from Middle New England.
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Speaker 2: Get the hell out of highway economics. To you, good
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people of Earth.
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Speaker 3: Okay, your fruitcake wizard anyways. Yeah, so those of us
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in middle New England have experienced this in the past
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couple decades. We all know somebody with a business that's
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been flooded. We saw it happen along the Connecticut River, right,
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that was earlier this year.
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Speaker 2: I mean, you talked to anyone up like the Vermont
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in New Hampshire riage in the last two years, and
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they've had all kinds of flooding.
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Speaker 3: So I mention those employers trying to complete it. Or
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household who gets the household survey. I've never actually known
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anyone that does, but they allegedly survey under twenty thousand
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households every month.
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Speaker 2: I would love to get surveyed. Yeah, it's that kind
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of hi one survey. You know, you always have one
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of those calls where you know you're on the phone
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with someone, Hey, please fill out a brief survey afterwards. No, no, click,
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I'm not going to do that. This is if if
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the Bureau of Labor Statistics actually called me.
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Speaker 3: Oh, they would rue the day they called you. Okay,
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mister Ziddath, thank you, that's that's that's really all we needed.
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Speaker 2: No, but let me tell you about how many hours
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I worked on Tuesday, just so you know. But yeah,
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this is going to be hugely disruptive to survey collection,
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and so you're going to have you know, probably a
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significant drop just in you know, the percentage of respondents
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that are actually getting their surveys back. On top of that,
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the ones that are returning them might be indicating things
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that are different from how they normally would because there
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are some people who might say, look, I've I've had
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to file for unemployment because the place that I work
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was destroyed by you know, uh, flooding in North Carolina,
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and so I'm on unemployment temporarily and I'm hoping to
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get my job back in a month or two. But
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like the these are the things that are going to
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make it really hard to determine, not just over again
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one month, because remember, you then have to deal with
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the resolution of these impacts going forward. So as an example,
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if someone says, hey, I'm you know, marking myself is
6:13
temporarily unemployed, Well, when they get that job back, you know,
6:17
because the place is fixed up and it reopens, they
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now say, okay, I and I know that this isn't
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they don't survey the same people over and over, but
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they still target you know, same geographic areas who are
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likely going through the same things. And so as such,
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you might have something where, look, the October jobs report,
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I don't know, like it could show anywhere from like
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two hundred thousand jobs created to two hundred thousand jobs lost,
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and I wouldn't be surprised, Like that's that's how wide
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I think the band is it?
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Speaker 1: This?
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Speaker 3: Yeah, we sometimes talk about those error bands because it
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is a sample. We will be testing the limits probably
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of those in the upcoming samples.
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Speaker 2: Yeah, but then in the subsequent months, in you know,
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November and December, you might end up with, hey, look there,
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you know, three hundred and fifty or four hundred thousand
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jobs created because a bunch of people who previously said
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they were unemployed are now saying that they're working, and
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that throws off all of this as well. It's something
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that you have to pay attention to, and so you
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might not have any meaningful signal from the jobs report
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for the rest of the year, like for the remainder
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of the fourth quarter. It could be something where you're
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just well, we don't know if this means anything, and
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we're gonna have to rely on other indicators for the
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next few months in order to figure out what's going on.
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I did make the point mark that one of the
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things that we will be getting this month that will,
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you know, give us a little bit more information than
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if this had been happening, you know, a month before
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or month after, is we're going right into the middle
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of earning season, and so we're gonna be hearing from
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companies directly about what they're seeing in the broader economy
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and how they're adjusting their earnings projections and things like that,
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and so I do think that can at least give
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us some clarity in the short term, not on the
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overall state of the economy. But remember with the market,
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the reason why we care about the economy is because
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it feeds into how stocks potentially perform in terms of
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the overall amount of economic growth. Well, if you're hearing
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right from the companies, it kind of cuts out the
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middle man a little bit. I know, they always try
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to sell you on whatever, but look, it still is
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something where because you're going to be getting this earnings
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data at the same time that we are lacking jobs.
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Data doesn't make up for it, but at least, you know,
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helps to cover some of that.
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Speaker 3: I think, yeah, there could be more attention paid to
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first hand accounts as a result of this, to clarify,
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to confirm or disconfirm some of the unusually noisy, so
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to speak, signals that we're getting from what we know
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will be highly in perfect surveys.
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Speaker 2: In terms of the potential damage to the West Florida
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coast and even look through you know, Inland, where they're
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expected to get twelve to eighteen inches of rain all
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along I four in that area. The projections that we
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are seeing, according to Jeffreys, is that you could see
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in the worst case scenarios, potentially one hundred and seventy
9:08
five billion dollars in insurance losses and somewhere you know,
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conservatively in the fifty to seventy billion dollar range. So
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this is likely going to be one of the most
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expensive storms ever to go through that area, not through
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that area, through you know, anywhere in the United States.
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And as such, for a region that is already beset
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by the problem of hey, we've got insurance that are
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either pulling out of the area or jacking premiums through
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the roof in order to cover massive losses from the
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last several years. This is not going to make the
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problem any better for homeowners that are trying to figure
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out how they can get insurance throughout Florida in the southeast.
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Speaker 3: Yeah, I mean not my area, but sure, hard to
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argue with that. I'm thinking more about impact on to
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your earlier point statistics like GDP. We talked about unemployment,
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but no GDP per se, and there's no obvious immediate impact.
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Because GDP measures the flow of goods and services, it'll
10:11
capture the response to that, it'll capture any immediate recovery
10:16
efforts or decrease in production. Thank god, there's no Uh.
10:22
It seems little crass to point it out because human
10:24
lives are at stake. But it's not going to hit
10:26
a manufacturing center or a major port, which could cause
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major supply disruptions and hit the economy with an inflationary
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and a production shocked at the same time. That would
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be bad news for our fight against inflation. But as
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as far as the impacts on the micro residential market, yes,
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it's hard to argue that there'll be anything but totally devastating.
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Speaker 2: Yeah, it's something where the short term impacts are probably
10:52
pretty significantly negative. Longer term, you get all those relief
10:55
funds that end up flowing through there eventually, but that's
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a process that can take years to fully play out.
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It does in terms of, you know, all of the
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rebuilding that you end up doing. Let's take a quick
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break here. When we come back, let's talk a little
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bit about the Google Ay, or Google as it's more
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commonly referred to, DOJ saying hey, here's what we think
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should happen as a result of you being found guilty
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of anti competitive practices. We'll cover that when we return.
11:25
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12:23
Speaker 2: Mark is Google your search engine of choice?
12:26
Speaker 3: Always?
12:26
Speaker 2: Yes, Tucker, what about you?
12:28
Speaker 5: Yeah?
12:28
Speaker 1: Yeah?
12:29
Speaker 2: Either of you ever use anything else?
12:31
Speaker 4: No?
12:31
Speaker 2: Try, try trying.
12:33
Speaker 3: It's okay.
12:33
Speaker 2: See you bing something?
12:35
Speaker 4: I tried duck duck go just out of curiosity.
12:38
Speaker 2: And if you're saying it in the past, did you
12:40
did you? Did Mark Mark bing something? Or did he
12:44
bong something? Binged bing bong binged binged? You can't bong something. No,
12:50
that's different.
12:51
Speaker 4: No, that's a very different.
12:52
Speaker 5: Got it?
12:53
Speaker 2: Anyways, Google, The DJ yesterday said a put fourth a
12:57
filing basically outline the remedies that they are proposing for
13:02
Google being found guilty of anti competitive practices, and I'll
13:06
quote here from the Wall Street Journal. The filing said
13:08
the government is considering a full range of tools to
13:10
restore competition, including structural changes to Google's business that would
13:15
prevent it from using products such as as Chrome Browser
13:18
or Andrite operating system to advantage Google's engine search. Google
13:23
responded in a blog post, of course they did it
13:25
in a blog post that the Justice Department's initial proposal
13:28
for reforming the search engine market is radical and sweeping.
13:31
It could have negative, unintended consequences for American innovation in
13:34
America's consumers. Let's talk about this just a little bit,
13:39
because if there's one place where I think it's hard
13:41
to make a case that Google is not a monopoly,
13:43
it's in search, where they control just a huge amount
13:47
of the market. And in such circumstances, you could actually
13:52
make a case that radical and sweeping change is exactly
13:55
what is needed in order to restore competition so that
13:58
you can get the innovation that has kind of been
14:00
lacking in search. I mean when we talk about search engines.
14:05
The reason why Google is the most popular search engine,
14:09
by the way, is because they actually competed and they won.
14:12
Back in the early two thousands. They weren't the first
14:15
company to do search. Y'all out there, you remember Alta
14:19
Vista and likeos and ask Jeeves, and I mean even
14:23
freaking Yahoo, which is still floating around as you know,
14:25
just a shell of what it used to be. These
14:27
were the big names in search in the nineties and
14:29
early two thousands, and then Google said, no, we've got
14:32
a better algorithm that helps you find the information that
14:35
you want. And people chose it. It wasn't that they
14:38
were forced upon it. That's what Googled it after in
14:40
order to keep people there by paying Apple sixteen billion
14:44
dollars a year to be the default search engine and
14:46
stuff like that. But people chose Google. Like, let's not
14:49
lose light of the fact that the reason why Google's
14:51
in the place it is today is because people really
14:54
liked it in the early two thousands.
14:56
Speaker 3: Yeah, I guess the argument is they use the profits
14:58
from that to secure an unfair advantage on certain platforms
15:02
relative to competitors and thus became a monopoly, right, Isn't
15:07
that is all?
15:08
Speaker 2: And I think look at like, look at your experience
15:11
with Google now, and how often do you, you know,
15:14
put something into Google and you're like, this isn't giving
15:17
me what I want? Like, these aren't the answers that
15:19
I'm I'm looking for on this and are you being facetious?
15:23
Speaker 3: Do you find that happens more frequently?
15:24
Speaker 5: I do, I, oh, you are.
15:25
Speaker 2: I find that I get all kinds of AI created
15:28
crap that gets returned in like the top three search results.
15:31
Now where in greated. It's not for important stuff, you know,
15:36
it's it's for dumb stuff. I'm like, oh, what are
15:38
the lyrics of this song mean? And I just get
15:40
the top articles like a, I, well, this song is
15:44
important because it's important. It's like, what the what the heck?
15:48
Like this is just stupid.
15:49
Speaker 3: So they've already been found to be a monopoly. Right,
15:51
that's in the past. We're not going to be able
15:53
to undo that question.
15:54
Speaker 2: Know what the appeal process is on that?
15:56
Speaker 6: I know.
15:56
Speaker 3: I think that's a fund I think that is a
15:58
finding of fact, and that is that responsibility resides with
16:02
lower courts. I think higher courts will determine whether or
16:05
not the remedy was too severe, Like if the judge
16:09
in this case in charge says, break it up, sure,
16:12
which is I guess the most severe thing you can do,
16:14
which is what the government wants. Well, so that fixed
16:17
the problem that you cited.
16:18
Speaker 2: So I don't know, and it's like, it's tough to
16:22
figure out. You think about why Google has the power
16:26
that it does, and it's just it's so normalized. Is
16:29
just what you do for search? I mean again, you
16:31
say I'm going to google something. You don't say I'm
16:32
going to search for something online. You literally say I'm
16:35
going to google it.
16:36
Speaker 3: I'm with you, but it's detractors. I don't agree with them.
16:39
But this is the argument it was apparently successful back
16:41
in August when they deemed it to be a monopoly.
16:43
Is that they secured that advantage through unfair, anti competitive means,
16:48
paying off Apple, paying off others to be the default.
16:51
You and I probably would have chosen it anyway, at
16:52
least I would have.
16:53
Speaker 2: But that's the argument so here and again, I've suggested
16:57
this before for Amazon, and I know that I'll say
17:00
this and people be like, well, what does that even mean?
17:05
I think it would be really really interesting to break
17:08
up Google's search business based on geography.
17:12
Speaker 3: Chuck, what does that even mean?
17:14
Speaker 2: Thank you, Mark, I'm glad you asked hold on, let
17:17
me google it. Here's what I mean by this. I'm
17:20
not saying, Okay, if you want to google something about
17:23
New England that you have to go to like the
17:24
New England search engine. But what I am saying is, look,
17:27
you know, Google knows where its revenue comes from and
17:31
where its users come from. Break it up based on
17:35
the geography of that, so that you have I don't know,
17:38
eight to ten Googles, mini Google's baby Googles, just like
17:41
the baby bells, you know back in the yay we
17:42
do with Standard Oil and AT and T do that
17:45
and then look, hey, you guys can compete to expand
17:47
your territory and try to attract users from other places places,
17:51
and we'll see who ends up being the best one,
17:54
and you'll have how to improve your product.
17:55
Speaker 6: To do so.
17:56
Speaker 3: Unlike with AT and T and Standard Oil, you can't
17:58
segment the customers by geography. So how would you prevent
18:01
me from hitting.
18:02
Speaker 2: I can, though, because I know where the revenue the
18:04
revenue is.
18:04
Speaker 3: Can you prevent me from No?
18:06
Speaker 2: I can't prevent you from going somewhere else. But this
18:08
is what I'm saying is, hey, one of those is
18:11
going to then have to innovate in order to be
18:13
the best one. Otherwise you'll just you know, keep using
18:16
you know, whatever, whatever one you're using before and you know, okay,
18:21
you've got ten Google, so it's Google New England Google,
18:24
you know, Southeast Google and Midwest and so on and
18:27
so forth. And those companies are going to have to
18:30
compete each other against each other in order to build
18:33
the best product to see who wins all that market share,
18:37
and in doing so you also open it up to
18:40
additional competition that's smaller that now is on the same
18:42
scale as these smaller mini Googles, And I just think
18:47
it would be interesting to see what happens there and
18:49
how it plays out.
18:50
Speaker 3: I guess the other remedy is if they don't go
18:53
with a rather, it seems pretty Dracronian to me. The
18:56
actual breakup is force them to share enough so that
18:59
others can and compete. That's being contemplated as well.
19:02
Speaker 2: Which if you're gonna do that, you might as well
19:03
just turn them into a regulated utility. And it's like, okay,
19:06
you know what are we doing here? Then then you're
19:09
definitely not getting any innovation. That feels worse to me.
19:12
Speaker 3: You know, I don't know, I would try yours because
19:17
we don't know.
19:18
Speaker 2: Yeah, look, the worst thing that happens is well everything,
19:21
but I don't know. This is why I'm not a regulator.
19:25
Speaker 3: But I think, Oh, they're winging it too, Chuck. Let's
19:27
not pretend they have any go ahead.
19:29
Speaker 2: It's true. Let's just get some more competition in the space.
19:31
Quick break Wall Street Watch and ask Todd our next.
19:41
Speaker 1: Like us on Facebook and follow us on Twitter. Act
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TFE show. Breaking business news is always first right here
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on the Financial Exchange Radio Network. Time now for Wall
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Street Watch, a complete look and what's moving markets so
19:56
far today right here on the Financial Exchange Radio.
19:59
Speaker 4: Netw Following yesterday's winning day with a strong performance from
20:03
the tech sector, Marcus today are trading modestly higher as
20:07
investors look toward FED meeting minutes due out this afternoon
20:11
at two o'clock. At the moment, Dow was up by
20:14
about a quarter percent, or eighty four points. SMP five
20:17
hundred is up by ten points, and the NAZAC up
20:20
another quarter percent as well. Russell two thousand is up
20:23
nearly a third of a percent. Ten year Treasurealed is
20:26
flat at four point zero three percent, and crude oiled
20:30
down again today another two and a half percent, trading
20:33
just below seventy two dollars a barrel. Alphabet shares down
20:36
one and a half percent after the Justice Department submitted
20:39
a court filing yesterday that gave a federal court a
20:42
range of options, including setting restrictions or ordering a breakup
20:45
to Google to end what it called an unlawful monopoly
20:49
in search. Meanwhile, shares and Boeing down by three percent
20:53
after the planemaker withdrew a pay raise offer it had
20:57
made to striking factory workers, saying the union demands far
21:01
in excess of what can be accepted. Ratings firm SMP yesterday,
21:06
es tomated the strikes could cause Boeing one billion dollars
21:10
a month, and minor Rio Tinto agreed to buy Arcadium
21:14
for six point seven billion dollars. The deal will make
21:17
Rio one of the top producers of a key commodity
21:20
used in batteries for electric vehicles. Rio shares down by
21:24
one percent, while Arcadium stock is surging by thirty percent.
21:30
I'm Tucker Silvan, that's Wall Street Watch.
21:33
Speaker 1: This is asked Todd on the Financial Exchange Radio Network.
21:37
If you have an existing estate plan or in the
21:39
market for one, Todd Lutsky is here to answer your
21:41
questions and help you plan for later life. Ask Todd
21:44
is presented by Cushing and Dolan, serving Massachusetts and New
21:48
England for more than thirty five years, helping families with
21:51
a state and tax planning, Medicaid planning, and probate law.
21:54
Visit Cushingdolan dot com. Now here's Todd Lutsky.
22:00
Speaker 2: And we are now joined by mister Todd Lutsky from
22:04
the law firm of Cushing and Dolan. We call the
22:09
segment Ask Todd because it's your chance to ask Todd
22:11
your questions about your state plan. Phone number here eight
22:17
eight eight two zero five two two sixty three. That
22:20
is the studio line to uh get in line to
22:22
ask Todd your questions. UH again. Normally we can get
22:26
through two to three calls, so do get call on kids.
22:28
Last week we had four fourth person didn't get hurt
22:31
and it was very, very sad. So we we want
22:33
to make sure that we get to you if possible again.
22:36
Eight eight eight to zero five two two sixty three.
22:40
That is the number to call to speak now with
22:43
Todd Lutsky one more time. It is eight eight eight
22:46
to zero five two two six three. Mister Lotsky, How
22:50
are you today?
22:51
Speaker 5: I am never better? How how are you doing.
22:53
Speaker 2: Uh, tough day yesterday.
22:55
Speaker 5: Yeah, what happened?
22:55
Speaker 2: Got fired from the pasta factory.
22:57
Speaker 5: It's a pasta factory. Yeah.
22:59
Speaker 2: Why why is that made a focilly mistakes of silly mistakes? Yeah,
23:04
I get it. It was a tough day, but we're
23:07
bouncing back. Todd. Let's talk a little bit about naming
23:11
beneficiaries on iras specifically.
23:13
Speaker 5: Yeah, that's a.
23:15
Speaker 2: Niche topic, but I think there's some some meat in
23:18
this niche here.
23:19
Speaker 5: Oh yeah, a lot of meat.
23:21
Speaker 2: Historically, the guidance that I've heard on I rays and
23:25
naming beneficiaries has been name individuals as beneficiaries on irays,
23:31
don't name trusts or estates. Does that fit with kind
23:34
of what the historical pattern has been.
23:36
Speaker 7: Yeah, And I think starting with the historical pattern makes
23:38
a lot of sense because for a very very long time,
23:42
you know, the primary beneficiary rule of thumb, and even
23:46
today a lot the primary beneficiary rule of thumb is
23:51
surviving spouse. Yep, that's what you would go with, you know, generally,
23:56
and then over time, and it's been going on now
23:59
for a while. File that that if you've done your
24:02
estate plan and you still would name the surviving spouse
24:08
the primary beneficiary, but your contingent beneficiary might be your
24:13
family revocable trust. If you know, if you want to
24:18
ensure that the assets ultimately flow through a trust, and
24:22
when you would do that is is if you if
24:25
your revocable trust has language in it that says I
24:29
want to protect my children from future divorces and future creditors,
24:35
and you know, maybe they're not great with money or
24:38
whatever reason you're holding assets in the trust. Remember when
24:41
I say assets in the trust, all of your other
24:43
estate planning assets are in the trust.
24:45
Speaker 5: Already, but not your era.
24:47
Speaker 7: But let's say you have, you know, a million dollar IRA,
24:51
Well you might not want to say, you know, And
24:54
I've got my trust over here with another couple million
24:56
in of assets protected from my kids.
24:59
Speaker 5: I got a million dollar IRA not in there.
25:03
Speaker 7: Maybe I don't want to list the kids as the
25:04
contingent beneficiary because then it will what come out to
25:07
them directly over ten years. I get it, that's the
25:11
new rule. But the point is it's coming out to them,
25:16
not protected, not sheltered from creditors, not you know. And
25:20
so if you're saying, you know what, I really want
25:22
to make sure that those assets find their way to
25:26
the protection of the trust for the kids. Then the
25:29
contingent beneficiary should be the trust. Okay, So that's been
25:33
sort of the evolution, and that's for people who've done
25:36
revocable trust planning, never mind irrevocable trust.
25:39
Speaker 2: Talking with Todd Lutsky from the law firm of Cushing
25:41
and Dolan. If you've got a question that you'd like
25:43
to ask Todd during this segment here studio line is open.
25:48
It eight eight eight to zero five two two six three.
25:52
That number again is eight eight eight two zero five
25:56
two two sixty three. In order to chat with mister
25:59
Todd one more time, it's eight eight eight two zero
26:03
five two two six three. Todd, is there anything that
26:06
you can do in terms of beneficiaries or contingent beneficiaries
26:09
on iras that impacts how they're viewed from a medicaid
26:13
perspective where you're still kind of in a tough spot
26:16
with that, and there's not much you can do well.
26:19
It is a tough spot generally.
26:21
Speaker 7: But now with the Secure Act two point zero that
26:24
I believe came out in about twenty twenty two, seemingly
26:27
getting to be long ago. But you can name the
26:34
estate the beneficiary, but there's a lot of rules you
26:37
got to follow. You would generally do it only if
26:40
you're a married couple number one, and you'd kind of
26:43
want to be seventy three to do it. And then
26:47
by naming the estate the beneficiary, which is remember as
26:50
you said, the iras are assets I cannot protect in
26:53
advance from the nursing home generally, but if you qualify,
26:58
you can name the estate the benefit fishery, and then
27:01
you can protect these assets from nursing homes for the
27:06
surviving spouse. And the real key is without a five
27:10
year waiting period.
27:12
Speaker 2: Huge talking with Todd Lutsky from the law firm of
27:14
Cushing and Dolan. Again, if you've got a question for Todd,
27:17
studio line is open at eight eight eight to zero
27:19
five two two six three. Still have a little bit
27:22
of open space there on those lines, So please, if
27:25
you got a question for Todd, this is your chance
27:28
to ask him that question again. Eight eight eight to
27:31
zero five two two sixty three. We're gonna go to
27:34
a quick break here, but it's right to your questions
27:36
when we return. That number again is eight eight eight
27:40
to zero five two two sixty three.
27:43
Speaker 1: Ask Todd with Todd Lutsky every Wednesday at ten thirty
27:47
only here on the Financial Exchange Radio Network. You're listening
27:53
to Ask Todd with Todd Lutsky on the Financial Exchange
27:57
Radio Network.
28:02
Speaker 2: All right, Tod, we got callers lined up for you.
28:04
Let's get to them with Paul in Sandwich kicking things off. Paul,
28:07
you're on with Tom Lutsky.
28:09
Speaker 8: Hey, good morning, how are you?
28:10
Speaker 5: Good morning?
28:12
Speaker 8: Can you help me understand if I set up in
28:15
the irrevocable trust and the beneficiaries are my children who
28:21
are who are married?
28:22
Speaker 5: What you know?
28:25
Speaker 8: God forbid that the marriages don't last, But in this
28:28
day and age, a lot of marriages don't last. What
28:30
rights do the spouses or ex spouses have.
28:35
Speaker 7: So this is a great question because it applies, and
28:38
I want to answer it for a lot of listeners.
28:40
I'm going to expand the answer to include not only revocable,
28:43
not only irrevocable trust, which is what you asked for, Paul,
28:47
but revocable trust. So I don't care if you've done
28:50
revocable trust planning or you've done irrevocable trust planning. You know,
28:54
I always tell people, Yeah, you know, sheltering assets for
28:58
state taxes and probate avoidance. All that is is important,
29:02
but that's kind of the noise, right. The family behind
29:05
the estate plan is really why we're doing this, and
29:08
that is when you pass away, you can actually control
29:12
the assets as to how they get to the beneficiaries,
29:15
in this case protection from future divorces. And so you
29:20
put language in the document that does that and basically,
29:23
in a nutshell to answer your question is they will
29:26
have no right to the assets when the divorce comes.
29:30
So I'll just tell you how it works quickly. You
29:32
put language in that says if it said I divide
29:35
my assets equally to my kids and I give it
29:37
to them, well, then you can imagine that five years later,
29:40
after you're dead, when the divorce comes, whatever you gave
29:43
your children is now going to be gone. There is
29:46
going to be cut in half on a good day
29:48
subject to that divorce. And it does happen by not
29:52
giving it to them. And I'm going to sort of
29:53
put the pen back here into the trust bucket and
29:56
hold it. If you hold it in trust, you put
29:59
language in there it says things like, you know your
30:02
kids can be trustee, your kids can have the power
30:06
to appoint a disinterested trustee, and even remove and replace
30:11
the disinterested trustee. So no problem there. But language says
30:15
that when distributions come out, the only job the disinterested
30:18
trustee has is to authorize distributions to that kid or
30:22
to that to that kid's kids, your grandkids. And so
30:27
your child as general trustee is doing everything and the
30:30
disinterested trustee is doing very little. But you know, every
30:34
time the child says, you know, we're going on a
30:35
family vacation, We're taking a family trip. We need a car,
30:39
you know whatever, the disinterested trustee authorizes the distribution. Now,
30:44
the child, five years after your dead gets a divorce
30:47
and the surviving the soon to be ex spouse says,
30:51
I want half of what's in that trust we've been
30:53
taking money out of over the last five years. And
30:56
your child says, that's a really great idea, But you
30:58
got asked the disinterested trustee. Oh see how that works.
31:02
It's protected, and it's not just protected because the disinterested
31:06
trustee can say no. Think about it from an ownership perspective.
31:09
From an ownership perspective, the individual your child never owned
31:14
what's in that trust, So if they don't own it,
31:18
it's really not a marital asset to begin with, so
31:21
you simply tell the other side that it's not a
31:24
marital asset, so you know, no, it's not available. So
31:28
really provide some great protection and that can be in
31:31
a revocable trust or an irrevocable trust, because remember, once
31:35
you die, all trusts are irrevocable. Now, folks, speaking of that,
31:42
that's one way to protect assets.
31:44
Speaker 1: One of the.
31:44
Speaker 7: Assets that's tough to protect is an IRA. And that's
31:47
why we're doing a guide in this case to go
31:49
to Paul's situation. By naming the trust the beneficiary of
31:53
the IRA the trust at least then it would be
31:56
protected from these future divorces that I just discuss. So
32:00
naming the kid outright might not be the way to
32:03
go for everyone. In addition, folks that specifically want to
32:08
add nursing home protection to their estate planning and are married,
32:12
and there's a lot of other restrictions. You can learn
32:15
how to name your state the beneficiary of the IRA, which,
32:19
as Chucker mentioned earlier, is very much outside the norm.
32:24
It will avoid pro it will allow you to shelter
32:27
assets for these iras from the state taxes. It will
32:30
allow you to not have any adverse income taxes and
32:35
without a five year waiting period can protect it from
32:38
the nursing home. But you need a couple it with
32:40
a testament of trust. Get the guide, folks, learn how
32:42
to do it with your IRA eight six six eight
32:46
four eight five six ninety nine or Legal Exchange Show
32:50
dot com again eight six six eight four eight five
32:54
six nine nine or Legal Exchange Show dot com.
32:57
Speaker 2: Todd, I've got another caller for you here. Let's go
32:59
to Jerry in the hunt. Jerry, what is your question
33:03
for Todd?
33:04
Speaker 6: My question is I own a lot of real estate
33:07
and everything's in LLCs, so each individual warehouse or buildings
33:12
I own are in LLC. So now I'm at fifty
33:15
four years old, and now I get to get a trust,
33:18
every revarokable trust, some type of trust, a team together
33:22
that can put this together. Unfortunately, I'm either between ten
33:27
million dollars in real estate or over on the assessed values,
33:31
I could be up to tent sure. So I don't
33:34
know how to number one tax defer it some of
33:38
the situation that I have put everything in a trust
33:42
because I'm at fifty.
33:43
Speaker 9: Four years old now, and are you married sixty and.
33:45
Speaker 6: Sixty years I'm married, I have five kids, So I
33:49
really I've been listening to you guys for a while.
33:51
I really think that you're the right choice. I just
33:54
need a team of you know, tax lawyers and everybody
33:59
else they can put this together. Well, I don't know
34:02
nothing about it. I just know that I do real
34:04
estate and I collect rent.
34:05
Speaker 7: And that's I can tell you certainly that we have.
34:09
You know, pick, you needed a lawyer of some of
34:13
for sure, you need an estate planning attorney. With that
34:15
kind of an estate and married in five kids, so
34:18
who you pick up to you? But certainly one you
34:21
need one. Two, Yes, an estate plan to help you shelter.
34:24
And again, remember folks, the federal estate tax exemption is
34:27
going to drop to about seven million in a year
34:29
and a half or so, so you know ten million,
34:32
you're looking at fifty percent estate tax on the amount
34:35
over prefer federal and state. So there's a lot of
34:37
money right there. I love, Jerry, the fact that you
34:39
have iras. I'm sorry that you have LLC's in place
34:43
for your real estate, right that is really a great,
34:46
a great idea. But now you need to take the
34:49
shares of the LLC and put them into probably a
34:52
revocable trust, whether you can get away with a joint
34:55
or not. Would really need to sit down and learn
34:57
about the size of your estate, whether we need one
34:59
trust too. So we'd take the LLC shares, put them
35:03
in there. You would always be able to then, and
35:05
we put your other assets in there, and I will
35:08
look at your LLC's and see if there's a way
35:10
to you know, you know, sort of fine tune how
35:13
you own those a little bit. But yes, I think
35:15
in a state plan is in order to get your
35:17
shares in there, to get your other assets in there,
35:20
and then structure it to reduce really eliminate your federalist
35:24
attax completely and then significantly reduce your mass tax while
35:28
also providing for your family and maybe even within a
35:31
state this large, protecting those five kids from their future
35:34
divorces and creditors, et cetera.
35:36
Speaker 5: I would certainly want to do.
35:37
Speaker 2: That, Todd. I've got one more for you. Let's go
35:40
to Peter and Worcester. Peter, we've only got about a
35:41
minute and a half, so we got to speed run
35:43
this one a little bit. What's your question for Todd?
35:45
Speaker 9: All right, Todd, thanks for thinking the call. Hey, listen,
35:47
I set up trust about five years ago. I'm retired
35:51
state and boie.
35:55
Speaker 5: Is it an irrevocable trust.
35:57
Speaker 9: It's a it's a revocable trug.
35:59
Speaker 5: Go ahead.
36:00
Speaker 9: My two daughters A twenty three and twenty six, and
36:03
I'm looking at right now. Haven't looked at again. I
36:07
have a four to fifty seven with the state that
36:09
I started way back when in the eighties.
36:11
Speaker 5: Yep.
36:11
Speaker 9: There's probably about a million bucks in there. Yeah, and
36:14
that's going through.
36:15
Speaker 5: What's the question? Get right to the question. What's the question?
36:18
Speaker 9: Okay, here's here's what I want to do. I was
36:21
thinking about making my oldest daughter the trustee, and I
36:24
don't know if that's a good idea.
36:26
Speaker 5: Okay, well it can be when you you mean, when
36:30
are you married.
36:31
Speaker 9: I'm not divorced, So when you.
36:33
Speaker 7: Pass away, I don't want the trustee to be your daughter. Now,
36:37
you should be the trustee because it's a revocable trust.
36:40
And and then you could you when you die, you
36:43
certainly can have your daughter as trustee. That's not not
36:46
a problem. Ever, if, on the other hand, based on
36:49
as you get older, you want to do irrevocable trust planning,
36:52
it's also not a problem to have your daughter as trustee.
36:55
But you know you don't have to have a daughter
36:58
as trustee, so you need to think about that. So
37:00
if that's the question, no real problem there. Todd, thanks
37:03
so much for joining us today. We appreciate it.
37:05
Speaker 5: Thank you always a pleasure.
37:08
Speaker 1: This has been asked Todd on the Financial Exchange Radio network.
37:11
Ask Todd with Todd. Lutsky has been presented by Cushing
37:14
and Dolan, serving Massachusetts and New England for more than
37:17
thirty years, helping families with the state and tax planning,
37:20
Medicaid planning, and probate law. Call eight hundred and three
37:22
nine three four thousand and one or visit Cushingdolan dot com.
37:26
The views expressed in this segment are solely those of
37:28
Cushing and Dolan Armstrong advisor. He does not provide any
37:30
legal or tax advice. Please consult with your legal or
37:33
tax advisor on such matters. Cushing and Armstrong do not
37:35
endorse each other and are not affiliated