Financial loopholes that sound illegal, but aren’t

Finance expert and podcast host Nicole Lapin shares financial loopholes that sound illegal, but aren’t.
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[@MitchellEdelman]

Her 3 points. 1. Use a Backdoor Roth, if you make over $220k, and want to make a Roth. 2. Dont pay short term Capital Gains. 3. Use a trust to separate your assets from yourself.

[@findyourpassion8722]

Nice summary, thanks!

[@Omar-nd6lh]

Who do set as trustee when you dont trust anybody?

[@kristichun2585]

Dangerous DIY advice. For example: If you have other Trad IRA and try to do back door Roth conversion and do not convert 100% of IRAs you’re in for a nice tax surprise. Not to mention an Irrevocable Trust is IRREVOCABLE. There’s a reason people hire professionals to do this stuff.

[@power2me1]

Zero of this basic, valuable stuff is taught in our schools. Crazy.

[@jacobjohnson8686]

She actually said $161k if single, $240k if married. Or did I misunderstand something?

[@lakersin556]

Good info. I have to go listen to her pod.

[@d.carter3850]

Great suggestions for those who already have extra money to invest. For the rest of us, this advice is useless.

[@power2me1]

Spend less on Hulu, icloud and starbucks. Make dinner, no more doordash. It's not hard to come up with $100 a month if you're an adult.

[@H3erobrineNotch]

She has a cute smile

[@smartanajones4u]

At 2:35 that’s interesting about the irrevocable trust. Does it take the place of a will?

[@toddritter159]

It’s similar to a will. Big difference is wills are public and trusts are private.

[@power2me1]

@@toddritter159 A will doesn't protect your assets, it's just your wish list. A trust protects your assets.

[@jonapcline]

Also, if you operate from a will probate court can still easily get involved, costing time (6+ months) and money (potentially thousands of dollars). Using a trust helps greatly mitigate going to probate court.

[@smartanajones4u]

Thank you all for your explanations!

[@angelav4253]

Trusts are like a box where you put all your assets and wishes (ie: power of attorney, guardian nominations for children, etc.) in for safeguarding from probate (after death) and potentially lawsuits while living. The actual trust information recording the things “in the box” along with your wishes is compiled within documents prepared by an attorney. In my research, irrevocable trusts are better for those trying to completely separate themselves from their assets and have no control over them. They are oftentimes used for elderly people trying to qualify for Medicaid and not have to wipe out everything they planned to leave their children. The problem is that they are like the name says irrevocable or cannot be changed. On the other hand, revocable trusts separate you from your assets but you can still maintain control over them. After the trust is set up, the trust is usually assigned as the owners of financial accounts, life insurance polices, listed on property deeds, etc. This way when the person passes and the trust document is presented to the court and validated, the rightful heirs can be granted access to the accounts without probate. I learned this information following CMS Law Firm and Estate Planning Mom and a few others. Sorry this is long but hope it helps!

[@toddritter159]

Thumbs down - these topics are too important to give fast talking sound bites. It’s not informing people only promoting her podcast.

[@dannyholmes9562]

I claim generational wealth starting now and forever 🙏🏾🤞🏾🙌🏾.

[@rosemalibu6477]

If you’re getting financial advice from GMA you probably have no money.

[@sharetac9296]

Thank you

[@janelane1912]

I'm so financially illiterate, I still don't know what she was talking about lol buuut I'll start to look into the 8606 form...

[@RaunakThomas]

That form won’t explain anything, instead just google backdoor Roth or watch a KZbin video on it

[@kaohsiung99]

If you earn the high incomes that she mentioned, then you should look into it....

[@bonwatcher]

She doesn't explain why an irrevocable trust, one which is pretty much set in stone once created, vs a revocable trust is preferable. Living trusts are revocable trusts and what most people use because life changes throughout the years. Marriage, children and your own living needs change over time.

[@ISpitHotFiyaa]

There's a major caveat on the Backdoor Roth in that if you have a traditional IRA with pre-tax money then you have to abide by the pro rata rule. You can't just make a nondeductible contribution and convert just that. You have to convert some of your untaxed contributions too and then pay taxes on them. A better option (if it's available to you) is the Mega-Backdoor Roth which is something you can do with your 401k.

[@koreyb99]

Good stuff!

[@ChicaSuperFly]

I need Nicoles outfit 😅

[@toddritter159]

I need to know more about her backdoor.roth.

[@kaohsiung99]

Super conservative & super cute!!!

[@jasondraper1479]

Irrevocable trust? Really? No way! Revocable trust all the way.

[@amdave76]

This is such basic stuff. So many people are clueless about basic personal finance.

[@johndelossantos1572]

Not true. Personal finance isn't taught in schools. Only post high school if you choose.

[@48162342]

It's made for people who probably have little to no interest in financial tips but can be useful, plus there's always some new laws

[@TobinOsusky]

She is adorable

[@Omar-nd6lh]

Can you backdoor a portion of a trad IRA into a roth or does it have to be the whole thing?

[@Spunday1]

You can do a partial conversion into a Roth. Just have to be aware that you'll have to pay taxes on the portion that you convert to the Roth.

[@bpython]

Would recommend the whole thing … no reason not to

[@Omar-nd6lh]

@@bpython Taxes. The more you convert the more tax needs to be paid for that tax year.

[@DRventura333]

Unfortunate for a Roth you must be a salaried employee (or whatever the IRS deems as a waged income) ; cannot use your Pension or Social Security to open a Roth

[@DRventura333]

@power2me1 Oh my, thank you, we were then given wrong information by a Financial person; they told us only W2 income working; we cannot use SS or Pension or ecommerce sidehustle income

[@Lenny-cs9vl]

I feel like if more people know they'll get rid of it for that reason

[@dialac1]

Most people have no interest in knowing these things so you don’t have to worry about it going away. Only 10% of my friends ever want to discuss finances and retirement even tho we are in our 30s

[@Another_Bad_Creation]

A trust is taxed at 37%

[@power2me1]

Somebody is lying to you. There is no set tax rate for trusts. It depends what's in it and who is filing taxes.

[@shawnrentfro1668]

Must be nice to have money.

[@hernana123]

Teresa!!

[@Vincent67337]

If you screw up it will be a taxable event and there is no redo.

[@333nosilla]

Hi

[@user-ms5uu7ig3l]

Mind your own business, she’s a stalker and she’s so entitled and ingrained to think she knows other people that are not in her life, I hate her so much with a burning passion.

[@user-ms5uu7ig3l]

You don’t know anything stop being ingrained to think you know a random person that’s not in your life!!!

[@user-ms5uu7ig3l]

Mind your own business