We’ll investment away performing a good Roth conversion for the whole count, and now we could possibly get split it towards the pieces
Susan Travis: Well, you hit on one of the biggest misunderstandings about Roth to start with, and that is people think that they can’t do a Roth conversion because they make too much money. Roth conversions is more how much you can stomach paying the tax now. So, what we do for clients is we look at various scenarios. The important thing is now we are in probably the lowest income tax brackets that we are going to be in. And we can show over a lifetime, whether it’s just 10 years, or if it’s 40 years, how much tax we can save clients by doing Roth conversions now. And oftentimes, that savings gets into the millions of dollars.
Doug Fabian: Great. So, one other aspect of the SECURE Act was some changes regarding 529 plans. Explain those to us.
Susan Travis: Sure, if you’ve ever had an advisor say the 529 plan isn’t for you, it’s time to relook at that. They have become better. Then, of course, K-12 education continues to be available for 529 plans. So, one thing that’s not changing is the price of college continues to go up. The annual growth rate is 6.8%. So, 529 payday loans in WY plans have become even more of an important planning tool for parents, grandparents, aunts, and uncles, anyone that wants to help out with college education costs in the future.
Fund are now able to be used to purchase charges, courses, offers, and you will equipment without a doubt apprenticeship software, as much as $10,one hundred thousand in total, perhaps not annually, are taken to repay student education loans
Doug Fabian: So, let’s talk about the future of tax and estate laws in America. Now, today, we know there are no new tax laws that have been passed by the Biden administration, but there are some proposed changes. In addition, there is a change coming that is under the radar of most families, and that is the sunset provision or expiration of the $11.7 million exemption from estate taxes that exists today. But in 2026, that exemption is going to revert to the old rules, which is approximately 5.5 million.
So, why don’t we initiate there as this is informative. This will be a big change that is factual. Since the I have already been talking to richer family, I think this particular is the changes that folks is thinking about now. Therefore, Susan, matter for you, what is families that have wealth of $10 billion or even more now, and this refers to overall wealth today, what if they be thinking to manage the chance of a coming estate tax accountability?
Susan Travis: Families with 10 million of assets or more, they can consider many different planning avenues. We would say that our primary goal is making sure the client is taken care of. Sorry, Doug, but I’m going to go back to that balance sheet again. We want to put together projections to make sure each client is going to have financial security and freedom. All right, from there, we need to take into consideration many details, and it starts at what state you live in. Is it a common law or a community property state? That, in and of itself, will dictate how your property needs to be titled, and what state documents you’ll need. From there, we need to look at the type of assets you own. Is most of your wealth in qualified accounts? By that, I mean IRAs and 401ks. This will determine what planning is best for you then.
