Tony Bennett, Irag, Seattle discussed on Money Matters with Ken Moraif
From rags students. I would say. Good may be empty. And of course, it is Tony Bennett with rags to riches and, you know, estate taxes and probate, and all that kind of stuff it's actually designed to do the exact opposite. It's assigned to. Take you from richest Irag. And we do not want that to happen to you. So every week at this time we have our estate tip of the week now this week, we're going to talk about the charitable remainder trust charitable. Remainder trust. So just like the name implies charitable remainder. Right. So what that means is, is that whatever's left in the trust the remainder goes to charity of your choice. Okay. Now, let's talk about why distrust can be so interesting. Let's say that you have an asset and investment, a piece of real estate, for example, or let's use real estate, Seattle piece a real estate. And let's say you bought that piece of real estate for one hundred thousand dollars ten years ago. And now it's worth one million dollars. Okay. So you bought it for one hundred thousand ten years ago. It's fantastic, Lee. Well you bought it in a perfect spot. It's worth a million dollars. Now, you want to sell it, and you want to get an income from that piece of property from the proceeds of the sale for the rest of your life. That's what you wanna do. Well, let's, let's do the math here so you sell the property and you've had it for a hundred. You're selling it for a million, so you made a nine hundred thousand dollar prop profit. Right. And capital gains. Let's say you're twenty percent. So you made that you got to pay one hundred eighty thousand dollars in capital gains taxes. So now you're million is down that hundred eighty thousand. So now you've got what is that seven hundred eighty thousand dollars left for eight hundred twenty thousand and now you've got to take the income off that reduced amount Now, Dan upon your death because what happens to the money that still left from your investing? You have to pay taxes on it potentially from an estate tax standpoint. Now I'll turn. Number two, is a charitable remainder trust. So what you do is you take that piece of property that million dollar property and you put it into the trust. Now, the trust is a charity. So it sells that piece of property for you how much tax charities pay zero. So we've just saved a hundred and eighty thousand dollars in capital gains taxes. Now you say to the trust. I want to receive income from this for the rest of my life. So now you're getting the income on the entire million, not on the hunt, eight hundred twenty thousand that was left. Otherwise, so you get a higher income, the trade off all of this is that upon your death whatever's remained remaining in the trust must go to charity. Okay. That's the downside if you have heirs that you wanna leave money too, so you would put money in the charitable remainder trust that your greedy unwashed undeserving errors will not get okay because upon your death, the income stops and the remainder goes to charity. And so you choose your charity. So this is a kind of trust at. Could be very interesting for those of you who have, you know asset of appreciated a lot since you bought them, and you're concerned about selling them, because of the capital gains taxes, will, this is the way of getting rid of that getting a nice income and benefiting charity. Yeah, you like apples. How about them apples? So now one of the things I think I mentioned to you is that we are firm, our firm is called retirement planners of America. And so as the name implies, we, we work with people who are over the age of fifty who are retired or retiring soon. So that is you we would love to meet with you, and see if we can help you if we can do something to help you. We have two goals. One is for you to have financial peace of mind, and Secondly for your money to last as long as you do. One of the things we say, we're not here to make you rich quick. We're here to keep you from becoming poor. Dorothy it. Absolutely is not too wonderful to be true, because it is true that those articles and therefore, if.