Q&A Transcript: December 12, 2019
Chat Transcript
This is a transcript of an online chat and has not been edited for spelling or grammar. If you have a question that is not answered here or need more clarification, please contact NARFE’s Federal Benefits experts at fedbenefits@narfe.org.
Question: All else equal …. what might be the cost of a simple will and the cost to set up a revocable trust? Thank you.
Answer: Attorneys in our are charge about $1,500 for will based plan and $3k to $3,500 for trust based plan. That includes POAs, living will, etc. as well -Mark
Question: Are the slides from todays webinar available?
Answer: The entire recording with the Q&A and slides will be available on the NARFE website (www.narfe.org) in about 24 hours.
You must be logged in to access it. -Helen
Question: POA for TSP – Not sure I understood completely. Is the TSP POA form the only option, or can the necessary language go in my personal DPOA?
Answer: It’s my understanding the TSP language can be incorporated into a POA, but using their form is easy -Mark
Question: How will TSP designation work if after spouse you want to leave funds to organizations?
Answer: you can designate organizations, such as charitable entities as a beneficiary. they will receiving a lump sum distribution -Mark
Question: If I have a living trust that was drafted in Florida and now I live in another state, do I need to update it?
Answer: I suggest you have it reviewed by an attorney in your current state -Mark
Question: how do I access the Q&A?
Answer: The Q&A will be posted along with the recording and slides on the NARFE website (www.narfe.org) in about 24 hours.
You must be logged in to access it. -Helen
Question: If trust only covers property, will the beneficiary designations for everything else be okay?
Answer: I didn’t say a trust only covers property. you can title investment accounts, bank accounts in trust as well. But if you have bene designations on other accounts, they’ll pass directly outside of probate too -Mark
Question: Are you taking questions?
Answer: We are taking questions through this interface, but we often have more questions than we have time to answer. Our benefits specialists are always available to answer your questions during the week.
Call 800-456-8410 or reach us by email at fedbenefits@narfe.org -Helen
Question: Are there advantages to making charitable contributions from TSP similar to the advantages to making charitable contributions from an IRA?
Answer: The Qualified charitable donation (QCD) is only permitted from an IRA. -Mark
Question: Had estate plan prepared when lived in another state, do need to have it redone?
Answer: Have it reviewed by attorney in your new state -Mark
Question: I am not married but have an adult son. He is my beneficiary. Where should I go to find out how to set up my assets so he is the primary beneficiary, and then secondary beneficiaries in the event of his death.
Answer: you need to contact the financial institutions you accounts with. For the TSP, you can submit form TSP-3 to update beneficiary -Mark
Question: What affect will a occur for a beneficiary who is receiving Social Security Disability if you don’t have a Trust?
Answer: If it’s SS disability, I don’t believe it will affect. If it’s SSDI though it will likely disqualify them. Talk with an attorney who specializes in that area -Mark
Question: I am a retired FERS employee. I will turn 70 and a half next year (2020) and need to take RMD.
Answer: ok? -Mark
Question: did you say a non-spouse TSP beneficiary participant woudl have to take a lump sum or transfer the entire tsp to an inherited IRA? so the IRA has to be from the same deceased TSP prticipant?
Answer: I said there were two types of participants. A TSP participant and a Beneficiary PArticipant. It’s at the Beneficiary Participant’s death a lump sum distribution is the only option. Only a spouse of a TSP participant can be a Beneficiary participant. As the spouse of the deceased, the Beneficiary participant may transfer the Beneficiary Participant TSP account to an IRA of his/her own. -Mark
Question: Can a longevity annuity I buy with my daughter as owner be used as a way to control money to a apendthrift daughter?
Answer: It’s possible. by longevity annuity I’m assuming you mean an income annuity that’s paying a monthly income for life. In that case the annuity payment is the only thing the person will receive -Mark
Question: Is there a way to convert RMDs from the TSP to a Roth IRA at Vanguard, for example?
Answer: No. RMDs are not eligible to be converted to a Roth IRA. -Mark
Question: If I want to include as TSP beneficiaries my spouse, child, and some siblings, is it best to just include them all as primary beneficiaries and forget the contingency beneficiaries?
Answer: if you want all of them to receive a share of your TSP at your death. Bear in mind, any deceased primary beneficiaries share will be distributed equally among the remaining primary benes -Mark
Question: how would you title a car to avoid probate i am single?
Answer: State by state issue -Mark
Question: Minor children – As an alternative to using revocable trust is another option having provisions in your will that create testamentary trust for minor children (or any other minor that is named as a beneficiary is the will)
Answer: yes, that is an option. Using your will, however, requires probate -Mark
Question: Please provide information on TSP publications again. Thank you.
Answer: Two important documents to read A Guide For Beneficiary Participants
www.tsp.gov/PDF/formspubs/tspbk33.pdf
Tax Information About TSP Withdrawals and Required Minimum Distributions for Beneficiary Participants
www.tsp.gov/PDF/formspubs/tsp-776.pdf -Helen
Question: So what is the point of the TSP Special POA form if you want to use the order of precedence?
Answer: A POA permits someone to make financial decisions on your behalf while you are living. The order of precedence determines who gets your TSP when you die. -Mark
Question: Just want to make sure I understood what you said at the end. It doesn’t matter what is in your divorce decree. What is important is what is on the beneficiary designation?
Answer: yes. There is a case dealing specifically with that issue. -Mark
Question: Do TODs for real estate eliminate a second residence from that state’s probate? i.e primary residence in TX, vacation in CO
Answer: If the state allows a TOD deed, then yes, you could use that even if that’s not your state of domicile. -Mark
Question: I am single with no spouse or children but own property which is paid, who get property when die?
Answer: That’s something you have control over if you have a will and designate beneficiaries. Otherwise state law will dictate who gets your probate assets and assets, such as the TSP that have an order of precedence will payout according to their order of precedence. -Mark
Question: Thank you for the information. It was a very good session. I’m in Georgia. How do I find a financial planner like you?
Answer: you can check the CFP board’s planner search. Another resource is the FPA, which is the financial planning association. they have a planner search as well. Ask for referrals and interview several -Mark
Question: What about instructions for body disposition? In NC these go in a section of the health care POA and are especially important if you want your body cremated.
Answer: will vary by state -Mark
Question: My Q is regarding how to set up Inherited IRA for my adult kids . What is the process
Answer: you don’t set up an inherited IRA. That’s only something that can be done when you die and they receive their share. -Mark
Question: please expand on cost basis step up when distributing from a living trust.
Answer: The living trust doesn’t affect the basis step up . A living trust is essentially a look through entity, so the assets are still registered in your SSN while you are alive. When you die, the assets’ cost basis will step up to the fair market value on the date of your death. -Mark
Question: I have an uncle now in nursing home. His pension benef stmt is in ‘Estate of Bob ‘Smith” – should i encourage him to change back to simply Bob Smith? We just finished an updated will for him.
Answer: not sure why it would be estate of when he is living, but that’s a question for his attorney. -Mark
Question: Can you explain what happens when you remarry and your new spouse also has children. How are tsp benefits affected upon participants death and then spouses death?
Answer: As long as it’s a TSP participant (not a beneficiary participant who remarried), then the TSP participant’s spouse beneficiary will receive the deceased participant’s TSP as a beneficiary participant tsp account and have the ability to transfer to his/her own IRA. If the TSP particpant’s beneficiary was a non-spouse, they would have the ability to transfer to an inherited IRA. Remember, only when a Beneficiary Participant dies is a lump sum distribution required -Mark
Question: Married for 3 years.. Divorced. We both signed that neither would receive Any of the others moneys. When I retire, as a single federal empl., can I leave my money (FERS, TSP) to say, a boyfriend?
Answer: you may name anyone a beneficiary. -Mark
Question: I have a significant other. We both have kids from past marriages. I want the bulk of my assets to go to my kids, and he wants the bulk of his to go to his kids. The exception would be our home, which we’d want to make sure the survivor would get to stay in. I’m guessing we need a Trust for all that?
Answer: Depends. If you the bulk that you want to go to the kids is to go when you die (as opposed to when your significant other dies), then you could name your kids as primary bene on the bulk and your significant other as primary bene on the remainder. Then your assets are distributed to the kids and significant outright when you die. Hard to articulate this in text. sorry -Mark
Question: I have a revocable trust named as beneficiary for my IRAs. Now that my three children are all over 21, should I name them directly as beneficiaries of my IRAs? The trust assets all get split three ways for the three children. If my trust is beneficiary, can the children still do inherited IRAs?
Answer: I prefer to name individuals as bene when there’s no desire to control the money from the grave. In other words, they get the money outright at your death. If they inherit your IRA through the trust, they will still be able to transfer their share to inherited IRAs, but hey will all have to take RMDs based on the oldest’s life expectancy. If the law is changed and non-spouse bene are required to distribute an inherited retirement account within 10 years, this is a moot point. -Mark
Question: Is it recommended to file the TSP Special
Answer: hey Walt. yes, assuming you want to give someone the ability to manage your TSP if you can’t. -Mark
Question: Who should be designated as administrator or trustee if do not want family or friends to take care of affairs when die?
Answer: There are companies who do this. -Mark
Question: Can you write your own will, and download POAs, Living Will, etc. and have it notorized?
Answer: Check the rules in your state -Mark
Question: I was told that vehicles should not be titled in a living trust. Is this correct?
Answer: State specific. -Mark
Question: Is it recommended to file TSP Special POA even if TSP accepts a traditional POA ?
Answer: TSP won’t accept a traditional POA without the TSP language. -Mark
Question: Will the slides be make available?
Answer: The entire recording with the Q&A and slides will be available on the NARFE website (www.narfe.org) in about 24 hours.
You must be logged in to access it. -Helen
Question: I am an active federal employee with $350K in my TSP. I currently have a beneficiary designation of my spouse, if living, and then our four children in equal amounts. I already told my spouse that if I die, he needs to transfer his TSP beneficiary account to an Inherited IRA so that when he dies, our four children don’t have to take a lump sum distribution. Do I need to tell my children to do the same (i.e., transfer to Interited IRA) in the event they become primary beneficiaries if my husband and I die together? I don’t want my children to have to take a lump sum distribution in that event.
Answer: Very smart. No, your children will have the ability to transfer their share to an inherited IRA if your husband predeceases you (or you die simultaneously) and they become primary. -Mark
Question: Thanks for a great and cear presentation. Does TSP non spouse beneficiary have choice other than lump sum payment on the death of participant ?
Answer: Yes, if its the TSP participant who died and not the Beneficiary TSP participant. -Mark
Question: Excellent presentation. And very glad to see prominent mention of the F-100 at the end. An up to date F-100 is an essential document
Answer: Thank you for your feedback! We appreciate your participation. -Helen
Question: HIPAA release form – You didn’t mention this. I have been told it is important to have one of these for each of your health care agents so they will be allowed access to your medical records
Answer: Great point. -Mark
Question: it seems like maintaining the TSP in retirement only complicates your estate plan – why not just move to an IRA to make
Answer: That’s subjective and depends on the circumstances. Many TSP participants have no issues with the beneficiary structure. -Mark
Question: what are the tax implications of a transfer on death title, for the person to whom the asset is transfered?
Answer: There are no tax implications. -Mark
Question: If after spouse, want to leave large % of estate to charity, is it best to do that be designations? If not, will it all go through probate and what are the downsides of that?
Answer: I would name the charities as bene’s on anything that has a beneficiary designation. you can even use PODs and TODs to accomplish this for non-retirement assets. Will make for a smoother process. -Mark
Question: Thank you for lots of good information!
Answer: Thank you for joining us! -Helen
Question: In listing beneficiaries for tsp, son and daughter, what if you wish to leave them unequal amounts?
Answer: you may specify the percentage you want each to receive. -Mark
Question: What happens when you don’t have an exector for a will? I have beneficiaries for my mutual funds and bank accounts, but do not know anyone who can administor it.
Answer: There are companies who you can name executor -Mark
Question: Do you think a real benefit to using a Trust is that it all remains private?
Answer: Some may view it as a benefit. Depends on the estate and circumstances. -Mark
Question: Mark your presentation was very informative. Thank you for the knowledge in-regards to TSP
Answer: Thank you for joining us! -Helen
Question: I’m married with 4 children and 7 grandchildren. So, if one of my children would pre-decease me; it would be best to not have a TSP Beneficiary Designation on file, if I did not want my grandchildren dis-inherited … correct?
Answer: If your children are named primary beneficiaries, then you could name your grandchildren as contingent. -Mark
Question: Great presentation! If all of my non-real estate assets have beneficiary designations, do any of these assets need to go into my revocable trust?
Answer: Maybe not. If you’re using the trust to control assets from the grave, then you would want the assets to either be in trust, or go into the trust be naming the trust as the bene -Mark
Question: If a participant’s TSP contributions are all in Roth, are there any rules for how the beneficiary must withdraw the funds?
Answer: Roth TSP is subject to RMDs during the TSP participant’s lifetime. When a non-spouse inherits a Roth account – either Roth TSP or Roth IRA, they will transfer that to an inherited Roth IRA and they must take required minimum distributions -Mark
Question: RE: TSP- is making spouse Beneficiary #1 and Living Trust #2 acceptable?
Answer: yes -Mark
Question: That was a great presentation and very helpfull to me.about TSP and benificiaries. I believe I have done it right but will contact you/NARFE to make sure. Would be too long here. Thank you Mark
Answer: Thank you for your feedback! We appreciate your participation. -Helen
Question: I missed it…where can I download the Be Prepared for Life’s Events (F-100)?
Answer: Log in to the NARFE website and look for the Online Reports and Forms link on the left hand side of the page in orange. You will get a list of NARFE publications and the F-100 is in that list. -Helen
Question: Mark, Thank you so much for your knowledgeable, well-organized and presented session. I will be watching the available replay in order to digest all of your great information.
Answer: Great! Thank you for attending. We’ll have the recording available on NARFE’s website in about 24 hours. -Helen
Question: how do I add TSP POA to existing POA?
Answer: talk with an attorney -Mark
Question: What about using a Transfer on Death Deed, allowing transfer of real estate to beneficiary w/o having to go through probate?
Answer: I believe I mentioned that -Mark
Question: What was the link for the publications to transfer tsp to your children’s ira’s. Tsp.gov/forms/didn’t get the rest. It was almost at the end of the seminar
Answer: I think this is the information you were looking for…
Two important documents to read
A Guide For Beneficiary Participants
www.tsp.gov/PDF/formspubs/tspbk33.pdf
Tax Information About TSP Withdrawals and Required Minimum Distributions for Beneficiary Participants
www.tsp.gov/PDF/formspubs/tsp-776.pdf -Helen
Question: What would be a minimum $ estate amount that is needed to consider setting up a revocable trust? Thank you.
Answer: Not as much a minimum $ as it is asset structure. -Mark
Question: Based on your presentation and the lump sum distribution from TSP after death, it sounds like it is wise if you have a large TSP balance, to definitely transfer the TSP balance to an external IRA – correct?
Answer: The lump sum distribution is only a requirement for a Beneficiary TSP participant’s beneficiary. In that case, it’s something I would seriously consider. -Mark
Question: Is it possible to get a written copy of your presentation? Thank you for your very helpful presentation!
Answer: We don’t have a complete transcript, but the entire recording with the Q&A and slides will be available on the NARFE website (www.narfe.org) in about 24 hours.
You must be logged in to access it.
Also, don’t forget to read Mark’s column Managing Money in NARFE Magazine each month. -Helen
Question: Is there a charge for calling & talking to the benefits specialists?
Answer: Not for NARFE members. Our benefits specialists are always available to answer your questions during the week.
Call 800-456-8410 or reach us by email at fedbenefits@narfe.org -Helen
Question: Where is the F-100 document located on your website?
Answer: If you go to www.narfe.org and log in, navigate to the NARFE member home page. You’ll see an orange box on the left that says Officer Resources, then Online Reports and Forms. Click that link. There will be a list of forms, and the F-100 is in that list. -Helen
Question: For questions with Answer pending will you guys be going back and add the answers before making the webinar, slides & Q/A be provided within 24hrs?
Answer: We often have more questions than we have time to answer. Our benefits specialists are always available to answer questions during the week.
Call 800-456-8410 or reach us by email at fedbenefits@narfe.org -Helen
Question: does NARFE have a list of attorneys that give Fed discounts?
Answer: Unfortunately, no, Diane. But we’d love to hear from some that do! -Helen
Question: why can’t I get the Q&A? I am a NARFE member
Answer: The Q&A Transcript will be available online 24 hours after this session ends. -Helen
Question: How often do you recommend updating a trust even if no major life events have occurred?
Answer: I would have it reviewed at least every 5 years. updates may not always be necessary. -Mark
Question: I apologize if I missed this but what is the best vehicle, if a married son does not have a prenup to ensure that any inheritance from me remains as separate property and not subject to a divorce settlement if it happens.
Answer: Some states have strong non-marital property rules and wouldn’t divide an inheritance in the event of divorce…some don’t. Passing the assets to him in trust may be the solution. -Mark
Question: If the answer is pending will the answer be posted when the recording is, or will I need to follow up? Thanks for the information.
Answer: Deborah, we’ll do our best. We often have more questions than we have time to answer. Our benefits specialists are always available to answer your questions during the week.
Call 800-456-8410 or reach us by email at fedbenefits@narfe.org -Helen
Question: Is there an outline?
Answer: You might find the slides helpful — you will be able to download them from www.narfe.org within 24 hours, from the Federal Benefits Institute section of the site -Helen
Question: Is the Q/A the webcast?
Answer: It’s text based. You can catch the recap of all Q&A when we post this to the web at www.narfe.org within the next 24 hours. -Helen
Question: I asked my question early on…..still unanswered……should I ask it again?
Answer: Hi Bonnie, Mark is answering them as fast as he can. I will check the queue. We often have more questions than we have time to answer. Our benefits specialists are always available to answer your questions during the week.
Call 800-456-8410 or reach us by email at fedbenefits@narfe.org -Helen
Question: test…..i think my texts are unseen…..
Answer: I see you Bonnie. We often have more questions than we have time to answer. Mark is doing the best he can to answer the many questions that came in. Our benefits specialists are always available to answer your questions during the week.
Call 800-456-8410 or reach us by email at fedbenefits@narfe.org -Helen
Question: Is the PowerPoint part of this presentation available in 24 hrs via pdf
Answer: The entire recording with the Q&A and slides will be available on the NARFE website (www.narfe.org) in about 24 hours.
You must be logged in to access it. -Helen