One of the great things about family leaders, the membership level group at the BoomX Academy is that people come and they ask questions and they are willing to share their stories on the podcast to help people. Join us today as we answer a question from a family leader about retirement account, how can we use them in the estate plan to also avoid unnecessary estate tax?
Welcome, BoomXers. Let's throw out the old playbook. It's time to tear down the traditional way of looking at your life and money. And leverage the laws of money to our advantage. That's right. There are laws of money and those who learn and leverage the laws of money win and sometimes win big. Stay tuned as asset protection, attorney Darol Tuttle, educator, and leader of the BoomX Nation shows us how. Beginners, investors, entrepreneurs, fellow attorneys, are you ready? Are you ready? Let's arm this bomb. Now here's the BoomX show, the laws of money.
So when I pass what happens to my retirement account? Well, in your case, one of two things, just like any other asset it can either do a spousal rollover, or it can go into the spousal protection trust. Okay. And then, because the spousal protection trust in your case for the benefit of your spouse has accumulation trust language.
Now in your case you have a financial advisor, so that's good. We've reached a point now where there needs to be time spent with the custodian correctly modifying the beneficiary designations. Correct. So that it's wired correctly. Yeah. Now what my experience has been clients do not like to pay the fees to the attorney to help with that.
And so most of 'em just try it by themselves. Another problem is financial advisors, I just had a conversation on this topic something similar via email yesterday. And like the financial advisors have really no training, no experience, zero in tax law. They have no idea. And they don't know anything about retirement plans really.
And so when you say to them, we need to change the beneficiary designation. When we say you need to help the client change the beneficiary designation to this. I've had financial advisors literally say, I have never heard of this Darol. I'm just like, I'm not gonna do it right now. I need to check cuz I've never heard of this.
My response is, well, I'm not surprised. I'm not surprised because your industry doesn't have any educational requirements. All you have to do is take a test and you're a financial advisor. How about this? Why don't you just believe the attorney? Because the client does, but they get nervous about it.
And so at that point, it needs to step in and you gotta explain, look, the beneficiary designations of the retirement account needs to have this language in it. I've even encountered Steve in some cases, in which the plan administrator would not allow any customized beneficiary designation because they were 100% dependent upon their cut and paste forms.
Yeah. You've seen, 'em like, it's a form. And it says who's the primary beneficiary. And it has two lines for the name. What we need is something that says in your case for example a personal representative can make a Clayton election. And so, if the personal representative makes a Clayton election for the retirement account to transfer into the spousal protection trust, make that happen.
I think that's what you said is gonna happen. Well, I, yeah. Yeah, and it cannot happen. One thing I have learned is that when it's a 401k with the big fancy employer, it really can't happen. They won't allow it. Because the employer, it just takes the position, we are not in the business of estate planning.
You're gonna work at Boeing and you're gonna contribute and we're gonna contribute. And that's it. Just tell us who your wife is and tell us who your kid is. Kids are, and that's it. But that's why everybody has to do a rollover because at the rollover level, Schwab, Fidelity, Vanguard, whoever those guys are, they want your business.
So that's when they allow customized beneficiary designations. Yeah. And I know that my retirement account trust says it's not funded until my death. Right. So do you have a, have you ever worked up a roadmap for how to fund, you got one here, a beautiful one for how to fund a spouse protection trust. You have one for how to fund a retirement account trust?
I don't yet. It's. It's in my brain, obviously. Okay. In the comment that I had made, I don't think you had joined yet is. These legal guides are not articles. They're heavyweight, and so they take, yeah, they take time. Susan had asked for this publication two or three months ago, at least maybe longer.
Okay. And that's how long it took me to get it out. So yeah, this is great. So that you just did that June. Yesterday, right? Yeah, you completed. Wow. Does it mention anything about retirement account trust in there? Kinda, it has this section. Can you see my screen? Yeah. See, here's the whole section on tenancy in common tendency and entirety.
Okay. Now, it does just have this little section right here. But don't worry. I'll get something out there. Yeah. In your case oh, wait, see, here's a big all section on retirement accounts.
Okay. In fact, I even have yeah. So this right here, man, this is amazing. This is exactly it. So I'm gonna take it back. I do have. I do have a guide. Okay. So this section answers your question right here. The section I have highlighted, because what it's saying is now in this case, whatever the trigger event is.
So, if my spouse is over age 85, then it goes to the trust. So the trigger event that we chose for this example, this is an example if you're over 85 and or disabled and or currently receiving long-term care and by you, I mean, if the surviving spouse is over 85 disabled or receiving long-term care, then I even name or in a care community, such as an adult family home assisted living facility or nursing home, that's pretty specific right then to the son, as trustee of the Tuttle family, the spousal protection trust, essentially. That's the language right there.
Okay. And then I have an explanation of what I mean by contingent beneficiary, and I even have a section on how to fund the survivor's trust after the first spouse dies. Okay. Which, so there you go. Yeah. And so this is good. I was just, I was under the impression that, my retirement account went into, after I die, went right into a retirement account trust, but you're saying it doesn't, it goes, it'll go into the spouse protection trust, and the retirement account trust has language when Faith dies. Right. They can take the money that's in the qualified retirement accounts in the spouse protection trust and create separate trusts. Okay. And that's the case for Susan too. Okay. So that's exactly that work so that having it set up, so that, that makes it a little bit easier. So they don't have two different.
The silo is gonna be the spouse protection trust at the first spouse death. Right. Yeah. And the retirement account trust is for the benefit of children so they can have the benefit of spreading out the conduit type. Right. Create a trust for themselves.
I need to do a better job of letting you know, when I publish articles and stuff. I haven't cause there's gonna be more and more of 'em and what happened this week because even when it's not an article or something for example I'm just finished finally, every automatically every third Saturday will be a webinar on asset protection and you don't need to wait for the email.
You can just go on and sign up. That's new. I also just posted a new 20 minute section from the last asset protection masterclass as kind of like an example. And I'm gonna do more presentations on very specific things. For example, spousal lifetime access trust is on my list of things.
Oh, I also have the schedule for monthly meeting. The topics that we're gonna talk about in the monthly meeting, so I'll send you a link to that. And so every week you should get an update of all the stuff that I did that week. So you're not cuz I did, I've done quite a bit this week. Okay. Now, any questions, any other question?
If you ever do a roadmap for the retirement account trust so it would be probably something like for the survivors, right? It's like, you've got all this, all these accounts in the spouse protection trust, and the last spouse dies. And they would usually inherit everything other than the retirement accounts. Correct? So the retirement account, the qualified retirement account, then they'd put the retirement account trust into action for themselves, but all the rest of the money, brokerage accounts, savings accounts, anything else other than qualified retirement accounts, that's in the spouse protection trust would just be divided up into three ways. Correct?
And so do you make your, do you make your own videos because going through some of those classes the roadmap and the other class the videos were pretty good. It's like almost like a Anthony Bourdain for, oh fuck. Yeah. Retirement. Every single one of those videos I made by my little self really that's, every single one.
That's yeah. They're good. And professionals are just so lame. It's a little weird, the background's a little bit weird here in this space. I went out and bought a thousand dollar camera. So I look better than the webcam. I don't look that good anyway, so anything I could do to help me.
I'm gonna do, and I bought a microphone, right. But here's all these professionals using their iMac with the built in mic and the built in webcam, they look like crap. They sound like crap. You can't hear 'em, you know, I'm like so when you say they look good, it's like the bar is so high that . I'm trying to compete with Dave Ramsey.
And I think he's kicking my butt so far, cuz I only have 150 followers on YouTube. And he has probably 5 million. But one thing I've got going for me that he does not, when I answer a legal question, it's correct.
And that concludes this episode of the BoomX Show, laws of money podcast. I'm your host Darol Tuttle.
As a reminder, you can go to boomxacademy.com. Membership is absolutely free. And best of all, you can enroll in the BoomX Show companion course. That's all for now until next time. Remember, yes, you can learn and leverage the laws of money to your advantage.
