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IRA Beneficiaries And The Ten Year Rule

Finishing Well / Hans Scheil
The Truth Network Radio
May 28, 2022 8:30 am

IRA Beneficiaries And The Ten Year Rule

Finishing Well / Hans Scheil

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May 28, 2022 8:30 am

Hans and Robby are back again this week with a brand new episode! This week's show is all about the new regulations for 2022 with IRA beneficiaries, as well as a discussion on the ten year rule.

Don’t forget to get your copy of “The Complete Cardinal Guide to Planning for and Living in Retirement” on Amazon or on CardinalGuide.com for free!

You can contact Hans and Cardinal by emailing hans@cardinalguide.com or calling 919-535-8261. Learn more at CardinalGuide.com.  Find us on YouTube: Cardinal Advisors.

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Hello this is Matt slick from the match look like podcast or defend the Christian faith and lay out our foundation of the truth of God's word are chosen Truth Network podcasts is starting in just a few seconds. Enjoy it, share it, but most of all, thank you for listening and for choosing The Truth Podcast Network.

This is the Truth Network welcome to finishing well brought to you by Cardinal guy, certified financial planner long shy best-selling author and financial planner helping families finish well over 40 years of finishing well will examine both biblical and practical knowledge to assist families in finishing well, including discussions on managing Medicare IRA long-term care life insurance and investments and taxes. Now let's get started with finishing well, finishing well is a general discussion and education issues facing retirees guide.com are no advisors on trial CFP insurance this show does not offer investment products or investment advice welcome to finishing well, a certified financial planner Hans Schild in today's episode will be different, but I like different so IRA beneficiaries and the 10 year rule.

We got new regulations for 2022 were to talk a lot about a gentleman by the name of Ed slot and and Ed slot is America's IRA expert and Hans is on his team of elite advisors that go to these seminars, you know, a number times a year and I think it's really amazing when when you think about what Jesus brought when he when he came he yeah he definitely was coming to bring his blood and all those kind of things. But he brought new aspects of his word.

That would bring understanding and resilient look in Matthew chapter 5.

He says that even I didn't come to abolish the law. EEC said I came to fulfill it. Which is just a phenomenal statement is like lead and as he goes into this study abandoning goes to explain, you know, you've heard that it was said that an eye for an eye, a tooth for tooth, but I tell you, if you call somebody it it you know you're in trouble and and so he's giving us not just the regulation that we can check off a list somewhere, but to give us an understanding, so it's we have a practical way to use this information, even to the point that is the is the as he goes through the sermon on the mount at the end of the time. You see I can't keep all that stuff all he is going to give you the practical way to do that through his blood well as Hans describes Ed slot. Ed is going to give us because of his thorough understanding of this information. He rises above the regulation gives us practical applications. However, unfortunately, doesn't give you the ultimate way through. I Jesus does but nonetheless Hans, I think it's a great episode where he came to know him through client would we talked about some of the early shows who gave me slot book that he heard them on public TV and he said I want to read this book it already done some things with me. A seller to read this book and what you tell me what you think.

And so I went back there was Dr. Bob several years ago and he ended up purchasing a very large financial plan from me and I told him that I was going to use part of the money that I earned from his business to do two things. One is to join and fly and to go to his class and then secondly he wanted to get Bibles in China and so we talked about all of that before, and how I met Ed slot 10 years ago through a client was a very faithful man is now deceased, that we should set so I got you and I went to Ed slot years ago and I was just amazed by everything that I learned and a lot of that in the book, and we really base a lot of our shows on things that I've learned from Ed slot and so for today's episode, and for the video that we put on you to. I was going to come to give a grocery list of what I've learned and then I thought about that. That's a good bunch of stuff that people so I zeroed it in and we still want to stick with our dealer, teach, and one thing and so today throughout the show to talk about the 10 year rule and the IRS. Greg and how they changed it. But before I do that I want to just give everyone a chance to listen to Ed slot and just at the meeting. I just came back from Kansas City. If you just listen to them for a few minutes now to get talk a lot about life insurance.

She CDs best way to arrange a key zero talking about disability and money to charity auction. The gifts that make getting all tax because most people to stand way you qualify to be 70 1/2 are accusing the IRA. The terrible chair you write to great use anyway. Anytime you can keep your age you're always going to be excluded from income actually better than attacks getting taxing and getting better and exclusion from income is going to be alternatives IRA secure in a coffin or using IRAs for wealth transfer estate planning because of a problem coming to a 10 year window you have the opportunity now to stop whittling IRA came down all of these other alternatives and building up in tax-free territories.

Charitable planning IRA assets to give to charity taxes. You should be identifying your clients that are charitably inclined, or leave it to a charity CRT CRT just Jared and that's okay.

Leave the charity. More money money in basis that so hard since first time ever got to hear him and I may just practical and I mean it's like Mr. TCD himself read about them in the news that they didn't really have an effect to like Dylan learned about it through him, and then on top and a lot of people think there's probably been a lot of donations made to IRAs around, including Dr. Bob people learned it through me and then or through indirectly through Ed slot and then quickly the people are given a lot of their IRA money to the Lord. And that basically gave him the IRA money plus the taxes that would do if they had not TCD or left left.

The church is the beneficiary of the IRA and so I jump into the 10 year rule and talk about what we talk to the secure act was passed in 2019. As we talk about a lot couple years ago and one of the biggies in the secure act was the stretch when away. In other words, if you're the beneficiary of an IRA that is not a raw, and you pass away, keep me here your parents passed away, or whoever elected the money in the IRA owner after January 1, 2020. You now have to empty the entire IRA by the end of the 10 year after the person died so that different than being able to stretch the distributions out over the whole of your life so that was a change in its basically the government want their money on their tax money and so therefore some people to take the money out of the IRAs quicker so we been acting without advising people on death after such and such date and then we've also been advising people that are much younger. Like a lot of our listeners in terms of thinking about how their children are going to inherit their IRA money and what and so what were talking about today's first of all, that 10 year rule within the secure act within the IRS many times takes in this case it took a couple years before they came out with their preliminary regulations where they're going to rule on certain things that were in a new taxable like the secure and so they added something to the 10 year rule. In addition to that they can get rid of what it says in the law they can't do that but they had an interpretation where there is now additional money that you need to take out in years one through nine and, talk about that a little bit in the show and not much. I surely don't want to confuse people by going into a lot of detail, but I also don't have any expectations that I'm going to teach you this bike I was taught that I mean it is the purpose is to make you aware of it and the account of all relative people have a question about this. You know, by all means give me a call and all I can look at your specific situation and tell you about how the 10 year rule applies to you, either as a beneficiary or as an IRA owner leaving your children as a beneficiary is a Hans disciple may be before we even get into that, I mean I would think a good Hans disciple would not want to have me if it if I had an IRA. I want to get the thing emptied before ever pass away because it is a really good way to even set that up visit one of the things I heard at this seminar and it inherit directly from Ed slot heard it from one of the speakers. He said you know IRA is tax and I thought that you invested in what he is really describing that is just not a good wealth transfer vehicle is not, and unfortunately a lot of people view them that way. That IRA money that there for my kit. Okay, but in fact invest so maybe we have think about.

Another way and in the video that you did which gives external advisors on YouTube mentioned that, on the other hand, not a Roth IRA as well. Transfers a lot of pretty sweet deal, especially the way the 10-year-old works on that I have even thought about that but you know will get into that more. The episode two. But the out the Roth IRAs a different volley.

Obama is not tax infested I guess would be the way to set you taxes and you don't want, but we can get a several year plan to turn your traditional IRA or your pretax IRA into a raw and then there will be any taxes due for your heirs or for you if you want to pull money out there that were going get rid of the tax infested working to get the exterminators and exterminated tax.

Well we got to go to a break. The we always want to remind you that this has brought you by Cardinal guy.com where you can get Hans's book the complete carnal guide to planning for and living in retirement as well as contact Hans through email. Get the phone number Harvey want to get that done. It's all there. Cardinal guy.com when we come back and get more into this 10 year rule for the IRA beneficiaries will be right back. Hans and I would love to take our show on the road to your church and Sunday school Christian or civic room.

There's a chance for you to advance the kingdom through financial resources and leveraging Hans expertise and qualified charitable contributions veterans aid and attendance IRA Social Security care and long-term care. Just go to Cardinal guy.com and contact Tom to schedule a live recording of finishing well at your church, Sunday school or civic contact time that Cardinal guy.that's carnal guide.com welcome back to finishing well, a certified financial planner Hans Island today show is IRA beneficiaries for the 10 year rule and Hans picking up where we left off.

Okay so 10 year rule about two years and five months and it really is 10+ year rule because in the year of death that fairly account because in the year of death if there is a minimum distribution doing RMD you have to take it out of the IRA for the person.even death doesn't get you out of RMD that needs to be taken out of the IRA reports distribute you and then the first year of the 10 year rule start really the year after and then you have 10 years to empty the IRA and what is different in the new law is if you wanted to take nothing out leave at all there for 10 years and then take it all out in the 10 year which could, argue his 11 year, then you could do that you have more tax deferral, but you also have a pretty big tax bill in the 10th year because you taken it all out at once so you know hopefully there's not a lot of people planning on doing that, but there are reasons to not take anything out in like your one, two and three.

Let's say that somebody who is 60 years old inherit an IRA taxes due. There's a 10 year rule work and so there still at a high income.

They don't really need the money and so they might wait until they retire 66 and then after 66 you know if they are six years into it in your 789 10 they might take 25% of it out and spread it in some low tax so we do have a little bit of flexibility in how to plan out the 10 years. Given the fact you don't have any requirements in any one year now that the way we understood it and that's the way the laws written, but that THE IRS COMES IN FEBRUARY 2022 AND THEY PUBLISHED LITTLE ADD-ON AND THEY'RE SAYING OKAY 10 REAR RULE JUST LIKE YOU. JUST LIKE I EXPLAINED IN A MINUTE. GO EXCEPT FOR ONE THING, THE IRA OWNER WHO DIED HAD ARTIE STARTED REQUIRED MINIMUM DISTRIBUTIONS RMD THEN YOU CAN'T LEAVE ALL THE MONEY SITTING THERE FOR ANY NUMBER OF YEARS, YOU NEED TO CONTINUE TAKING RMD'S ARE REQUIRED MINIMUM DISTRIBUTIONS EACH YEAR UNTIL THE 10TH YEAR IN YEARS 12345 ALL ABOUT SO AND FRANKLY MOST PEOPLE THAT DIE WITH AN IRA. NOT EVERY POTBELLY.

MOST OF HER 72 AND OVER SO THIS COVERS A LOT OF PEOPLE AND SO IT'S JUST A WRINKLE AND THEIR PRELIMINARY REGULATIONS, AND COURT ED SLOT FREAKED OUT IMMEDIATELY. I DID WAIT TILL THIS MEETING TO HEAR THIS SEMINAR JUST AMOUNT OF RESUME WITH HIM EVERY MONTH AND WE BEEN NOTICING THIS SINCE FEBRUARY AND THEN FOR PEOPLE THAT HERE WE ARE 2022 LAWS IN EFFECT FOR TWO AND HALF YEARS. WHAT ABOUT THE PEOPLE THAT DIED IN 2020, AND THEY WERE STARTING RMD. DO WE NEED TO GO BACK AND TAKE SOMETHING. WE HAVEN'T DONE ANYTHING YET AND YOU WOULD THINK YOU WOULD NEED TO DO THAT BUT I SLOT ADVICE AND I AGREE WITH THIS IS, LET'S NOT DO ANYTHING BECAUSE THE IRS IS WELL AWARE AND THEY'RE GOING TO COME OUT WITH SOMETHING DURING THIS YEAR TELLING YOU HOW TO HANDLE THOSE BACK RMD ON ON THE REGULAR BENEFICIARY OF AN IRA.

MY SENSE IS THAT IN EFFECT A WHOLE LOT OF PEOPLE THAT WERE TALKING. WHERE IT REALLY AFFECTS YOU. IS YOUR PARENTS ARE STILL ALIVE AND YOU'RE GONNA BE THE BENEFICIARY OF AN IRA WILL ABSOLUTELY AFFECTS YOU VALUABLE TO MY OR WHAT I'M REALLY SPEAKING ABOUT THAT IS IN YOUR PLANNING FOR YOUR IRA. JUST AS I'M DOING A ME I'M PLANNING FOR WHEN MY WIFE AND I ARE BOTH GONE. WHAT CAN I GO TO OUR KID AND WHAT CONTACT IMPLICATION IS ON THAT NUMBER PAREN MY KIDS FOR, BUT I'M ALSO THINKING THROUGH THINGS THAT THE CUNNINGHAM PAY ATTENTION. YOU AND I CAN'T DIE FOR A LONG TIME. DAD AND MOM YOU KNOWING THAT THAT'S ALL FINE AND GOOD BUT I'M DOING PLANNING IN SUCH A WAY THAT MY KIDS ARE CAN HAVE A BIG TAX BILL FOR A BIG PLANNING PROBLEM WHEN THE INHERENT STRUCTURE AGAIN BEING THE MONEY OUT OF ALL THE TRADITIONAL IRAS BEFORE YOU EVER PASS AWAY AND GET IT. EVEN THOUGH THE LIFE INSURANCE OR SOMETHING.

SO, ANOTHER NEW WRINKLE YOU COULD SAY DOESN'T REALLY APPLY THE RAW IRA BECAUSE THE 10 YEAR RULE STILL APPLIES, BUT THERE IS NO REQUIRED MINIMUM DISTRIBUTIONS ON RAW.

THAT'S WHY I PUT MOST OF MY MONEY AND BECAUSE THERE ARE WHEN I GET TO BE 72 I DON'T HAVE TO TAKE ANY MONEY OUT. I WILL BE BUT I DON'T HAVE TO.

AND SO WHEN I DIE. IF THERE'S ANYTHING LEFT IN THE RAW. BUT MY WIFE AND SHE SUBSEQUENTLY DIES SHE HAS HER OWN RAW IT'S GOING TO GO TO WORK YET ANARCHICAL STILL BE UNDER THE 10 YEAR RULE.

THEY JUST WON'T HAVE ANY MINIMUM DISTRIBUTIONS TO KEEP TRACK OF BECAUSE THERE ARE NONE IN IRAQ IS ALSO NO TAXES. I LOVE YOU TOM YOU COOLED THE 10-YEAR-OLD KIND WORKS TO YOUR FAVOR BECAUSE IF YOU, THE BENEFICIARY IS THAT THINGS CAN CONTINUE TO MAKE RETURNS OR INTEREST WHATEVER WHATEVER IT IS TO DO TO GROW INSIDE THAT IRA. IT'S NOT TAXABLE EITHER. AND SO, AS IT GROWS YOU DON'T HAVE TO PAY TAX ON IT THERE EITHER DOUBLE IN 10 YEARS. YOU DON'T NEED THE MONEY. SAY ONE OF MY KIDS THAT NEED THE MONEY AND YOU KNOW HOPEFULLY MANY YEARS NOW AND THEN HE INHERIT TAKE ANYTHING OUT OF THE RAW FOR 10 YEARS AND THEY CUT EMPTY AT THE END OF THE 10 YEAR BALANCE PROPERLY INVESTED COULD DOUBLE IN 10 SO HE INHERIT $300,000 IN A RAW IF HE WAITS TILL THE 10TH YEAR THAT COULD BE $600,000 AND HE TECHNICALLY TAX ON ANY OF THAT'S JUST SO YOU KNOW, THE 10-YEAR-OLD KIND WORKS IS BEAUTIFUL BOY AND FORTUNATELY A LOT OF YOGA: MIDDLE-AGED ADULT GRAYING ADULTS WHO ARE THE BENEFICIARY OF THEIR ELDERLY PARENTS WHO PASSED AWAY AND ATTENDED TAXABLE IRA, OR ANY KIND IRA.

A LOT OF THEM JUST TAKE ALL THE MONEY IN THE FIRST YEAR BECAUSE THEY NEED THE MONEY THEY NEED DIFFERENT THINGS AND IT IS NOT THEIR MONEY THAT THEY EARN. THEY FEEL LIKE THEIR MONEY BECAUSE THEY RIGHTLY INHERITED AND NO 40% TAXES OR SOMETHING LIKE THAT ARE NOT THAT BIG OF A DEAL BECAUSE NOW HE INHERIT $300,000 IN TAXES ARE ALL DUE AND THEY GET A CHECK FOR 180 WHEN THEY HAD NOTHING THREE MONTHS AGO YES, SEND ME A CHECK FOR THE 180 SO A LOT OF THE 10 YEAR RULE BUSINESS IS IS IS FINE AND IT IS A GOOD BOY IRS LET YOU PLAY WITH THIS THING FOR 10 YEARS WAS A UTILITY STRETCH FOR YOUR WHOLE LIFE.

IT DOESN'T APPLY TO A LOT OF PEOPLE BECAUSE A LOT OF BENEFICIARIES JUST COME INTO ME SAY, SEND ME A CHECK AND THERE GOES JUST EVERY SINGLE TIME.

SCARY THAT MY YOU KNOW MY SIBLINGS WITH MY FATHER BECAUSE THAT'S EXACTLY WHAT HE DID. THE DEAL IS LEAVE YOUR TAXABLE IRA MONEY TO THE CHURCH AND GIVE IT AWAY REPUTED CDS DURING YOUR LIFETIME AND THEN OR PULL OUT DURING YOUR LIFETIME, PAY THE TAXES AND PUT IT IN A SAVINGS ACCOUNT OR PUT IT IN A RAW AND THEN GIVE THAT MONEY TO YOUR KIDS SO ALL THE STUFF THAT HAS IMPACTED YOU GIVE BACK TO THE CHURCH. VISITORS THEN PAY TAXES THEY GET THE FOLLOWING AND IT EVEN COUNTS AS A REQUIRED MINIMUM SO SWEET AND SO A LOT OF PEOPLE ARE MIXED UP ABOUT THAT AND MY MOTHER-IN-LAW WAS A SHEET SHE LEFT MONEY JUST OUT OF HER MONEY MONEY YOU NOTE TO THE CHURCH. THE SIZABLE AMOUNT AS SHE LEFT THE IRA TO MY WIFE AND HER AND SHE LEFT THE MONEY MIAMI IS NOT LIKE SHE ONLY REMAINING BUDGET THAT WHOLE THING SWITCH AROUND WOULD'VE BEEN SWEETER TO JUST GIVE THE CHURCH ALL THE MONEY OUT OF THE IRA AND THEN GIVE THE OTHER MONEY ALL THE BECAUSE THEY DON'T HAVE THAT WAITED ON TAXES RIGHT RIGHT DR. BOB EVEN USED A LIFE INSURANCE STRATEGY TO RATHER THAN JUST CONVERTED TERRACE. HE DID BECAUSE IT WIFE WITH BENEFICIARY OF ALL OF HIS IRAS OKAY AND BODY CHANGE AFTER HE MET WITH ME. HE CHANGED A BUNCH OF STUFF HE MADE HER THE BENEFICIARY OF THE BIGGEST IRA AND THEN HE BOUGHT LIFE INSURANCE TO PAY THE PREMIUM AVP BOUGHT LIFE INSURANCE SECOND TO DIE AND HE IS NOW DECEASED. HIS WIFE STILL ALIVE AND THEN WHAT CAN HAPPEN IS HE USING THE MINIMUM DISTRIBUTIONS THAT SHE HAS TO TAKE PAYING THE TAXES AND PAYING THE PREMIUM ON THE LIFE INSURANCE AND THEN GIVE THE KID WILL GET TAX-FREE LIFE INSURANCE INSTEAD OF IRA MONEY WHICH IS TAXABLE WHEN THEY GOT YOU GOT AND THEN HE TOOK THE SECOND BIGGEST IRA AND CHANGE THE BENEFICIARY TO THE BIBLE'S CHINA MISSION THAT I'VE SENT THE MONEY ON AND THEN THE THIRD IRA THIRD.

INSIDE HE BOUGHT THAT LONG-TERM CARE LIFE INSURANCE THING THAT I TALK ABOUT ALL THE TIME WITH IRA MONEY AND BY THE TIME SHE DIED THAT SOLOMON BE CONVERTED OVER THAT BE TAX-FREE TO SO EEE FOLLOWED A LOT OF GOOD ADVICE AND I FOLLOWED HIS ADVICE AND THAT BUSINESS OF BIBLE'S CHINA ROOM. COURTNEY STEWARDSHIP ID IS JUST SLOW OUT OF THIS THAT YOU KNOW YOU THINK ABOUT YOUR SPONSOR IRS REGULATIONS ARE AS MUCH OF THIS THAT THE OTHER BUT THEN I'LL USE YOU SEE WOW ALL THESE OPPORTUNITIES TO TRANSFER WEALTH ENOUGH IN THE KINGDOM IS BEAUTIFUL AFTER YOUR PARENTS ARE, AND THEY HAVE A DESIRE TO GIVE MONEY AND GIVE SIGNIFICANT MONEY TO THE CHURCH AND THEN HAVE A DESIRE TO GIVE MONEY TO YOU WITH THEIR BENEFICIARIES. I CAN HELP THEM SET UP ALL THE STUFF SO IT GETS MORE AND YOU'LL GET IT AGAIN. WOW ARE RUNNING OUT OF TIME BEFORE WE RAN OUT A SHOW BUT WERE SO GRATEFUL FOR ALL THIS TO FRED SLOT AND PROBABLY NOT AS PROVIDED IN THE WAY OF INFORMATION, AND STEWARDSHIP IDEAS. THEY'RE ALL there@cardinaldie.com as well as Hans's book as we talked about complete cardinal guide to planning for living in retirement and again you all the contact information. Is there a cardinal guide.com and a beautiful longer version of all this is a video that is done at cardinal advisors on their YouTube channel. You don't want to miss that. And wow, great show.

Hans thanks thank you finishing well is a general discussion and education of the issues facing retirees cardinal guide.com cardinal advisors upon trial CFP some insurance this show does not offer investment products or investment advice. We hope you enjoyed finishing well you buy cardinal guide.com visit cardinal guide.com for free downloads of the show previous shows on topics such as Social Security, Medicare and IRAs, long-term care, life insurance, investments and taxes as well as Hans best-selling book, the complete cardinal guide to planning for and living in retirement and the workbook once again for dozens of free resources past shows get Hans book go to cardinal guide.com if you have a question, comment or suggestion for future shows.

Click on the finishing well radio show on the website and send us a word. Once again, that's cardinal guide.com cardinal guide.com this is the Truth Network


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