February 09, 2023
Listen to Podcast Episode:
On this episode of Ask Suze & KT Anything, Suze answers your questions about inheriting, converting Series I Bonds to T-Bills, monitoring your investments, splitting assets during a divorce and more!
KT: Good morning, Suze.
Suze: Are you settled down?
KT: I'm ready to go. It's you. That takes forever. Just put the green light on. Let's go push it.
Suze: I gotta tell you something. I had the green light on the whole time, this was recorded. February 9th, everybody, Suze O and KT here.
KT: She's really being tricky today, everybody February 9th,
Suze: ...2023 and welcome everybody. As I started to say a second ago, KT, welcome everybody to the...
KT: Women and Money podcast
Suze: and everybody smart enough to listen. This is the...
KT: Ask KT and no.. ask Suze anything. KT will read your questions and ask Suze everything you want to know.
KT: How's that?
Suze: Are you proud of your disclaimer. Is that... is that?
KT: No, I'm just trying to sound a little more professional like, Robert. Robert, our producer, everybody is so good. He's like the perfect radio voice. He he has everything down. I mean, he's been doing this all his life and Suze and I, Suze is much better than me, but I'm terrible.
Suze: No you're not.
KT: Well compared to robert, everyone's... Robert like is like.. he's a man that he has a man voice, but he has a he's professional, he knows when to stop talking. Okay, let's get on with it. I have, I have a great questions. I'm so proud of everyone out there because you sent me short questions. So I picked lots of them.
KT: You ready? Alright, let's do it first question from Nancy says, Hi Suze. My dad is 81 he has Parkinson's, he is not prepared for burial expenses. I want to know of a website that you had suggested in the past that would give the best term life insurance policies and burial insurance. Thank you, Nancy.
Suze: Nancy Nancy Nancy at 81. Your father is too old to get term insurance because the premiums will be far too expensive. Term insurance is only purchased for a term, a period of time and it's usually purchased by those who are younger to protect their family or those who are financially dependent upon them
Suze: in case they were to pre decease those people. Therefore
Suze: term insurance at 81 you really don't want to do that. The website, however, that I did tell everybody to go to was select quote dot com for those of you who are in your twenties, thirties or forties, maybe even in your fifties and you're looking for life insurance to protect your family or your financially dependent ones for a very short period of time.
Suze: When it comes to burial expenses if he hasn't planned for that meaning he doesn't even have enough money for that.
Suze: I'm sorry to say but, you can watch one of those tv commercials on tv that says no matter what you can get $2 and get insurance but it will be like 1000 or $2000. It's just not worth it, what you should be doing is saving for it now out of your own money
Suze: so that when something happens to him you will have the money to do that which he wishes to be done with.
KT: So Suze maybe she might want to check to see if her dad served full term in the military. 00:04:23
Suze: Or something like that. So all those little things can help. But
Suze: I'm not a big fan of burial insurance just so you know.
KT: Okay, next question. Hi Suze. This is from Cindy. Hi Suze, podcast listener and proud owner of must have documents. She said, I love you and KT, I'm in California and selling a property and buying another, I expect to make 200 to 250,000 from the sale.
KT: I lived there 15 years and rented it out last year. How much time do I have to enter into escrow on the new property to avoid capital gains and of course, anything else I need to consider.
Suze: Cindy Cindy Cindy. If you've been listening to the women and money podcast, you would have heard me say many, many times that if you've lived in your primary residency for two out of the past five years,
Suze: then you get a $250,000 exemption. So if you're telling me that your property has increased $250,000 from what you purchased, it at.
Suze: Then you're not going to owe any capital gains tax whatsoever. So you're confusing old rules where you had X amount of time to do things. No, you are fine. There is no time that you have to buy something else. You get $250,000 as an exemption.
KT: So, Susie, what about escrow? She's asking that question.
Suze: No. None of that applies to her, KT. None of that's even important. All that's important is she did live in that property for two out of the past five years. She has sold it even though she didn't live in it for the last year. She did live in it for two out of the past five. She's fine. All right.
KT: Hi KT and Suze, my husband and I are both in our fifties. We want to buy cds with our $100,000 in savings. We noticed five year CD rates fell right after the Fed raised the rate a quarter percent. We're nervous, five year rates will fall further. Should we buy now or continue to wait? Please help. 00:06:48
Suze: Did you notice that the day after the rates fell,
Suze: the very next day the rates increased. Did you happen to look at that?
Suze: So, I think what's really important is I'm somebody who believes that rates are going to be going up even further than where they are now. That is why I have said to everybody, why not get a three or six month Treasury bill or certificate of deposit. I would not be worried about it if I were you also five year rates right now are lower than
Suze: and two year rates or one year rates or six month rates or three month rates. So you might want to look into three or six months treasury bills and for whatever reason you don't want to do that. In the next few weeks we will be offering three and six month certificates of deposits where that rate will match whatever the Treasury bill is paying at the
Suze: that time, the three and six month treasury bill. That is open by the way to everybody. New members, Old members, members that are not part of the ultimate opportunity savings account. Everybody, if you are a member at Alliant Credit Union, go to my alliant dot com, you will be able to purchase the three and six month certificates of deposits.
KT: Perfect. Now Suze, this next one
KT: is a great listener. This is from Janet and Janet, you are a fabulous listener because listen to this email. Hi Suze, my husband and I are happily married. Of course we don't anticipate divorce but I don't want to be one of your stories. so I'm trying to plan ahead.
KT: This one made me really happy when I read it. We both have elderly parents and sadly will each probably inherit half a million to $1 million dollars in the next few years. I know you say to keep this money separate but what
KT: if we want to buy a house or do something with it. We're in good financial shape with retirement savings etcetera, is there a way to have an agreement where we each get our inheritance amounts back should we divorce? 00:09:10
KT: So Janet is a real what ifs kind of gal, I like that.
Suze: She's kind of like you.
KT: Yeah, I'm like that Janet.
Suze: KT asked me all the time what happens if this, what happens if that what happens if you leave me? What happens if I leave you? She's always asking.
KT: I always have everything. All the the I's dotted the T's crossed.
Suze: And what do I tell you? You could have everything.
KT: She says you can have it all, KT, you want it right now you can have everything.
KT: And I say no, I just want to make sure we're not. What ifs okay.
Suze: Alright, so
Suze: I'm glad that you're asking this question Janet because there have been times where I've known couples that I thought had the most incredible relationship ever. And there were serious what ifs. So here's what's important.
Suze: I have my own trust. KT has her own trust, separate trust. In that trust, you can leave the money to whoever you want. He can leave the money to ever he wants. Now hopefully your very first person that you're leaving it to the beneficiary is is but you could do two things, you can put this money in an account that's just in your separate trust name.
Suze: So can he, when you buy the property, you can buy it in your separate trust. Now, a lot of people buy property with joint tenancy with right of survivorship. If you want to protect yourself against the what ifs you would purchase it in tenants in common
Suze: so that if you die, everything is governed by your trust. It doesn't automatically pass over to him as joint tenancy with right of survivorship would be. Now one of the reasons I just have to say this is very, very important:
Suze: Is that the two of you love each other. You own everything. Joint tenancy with right of survivorship, the inheritance. You had the inheritance. He had no problem.
Suze: However, you now are killed in a car crash or you die
Suze: and your husband as much as he loves you, gets remarried a year or two later. Don't think it doesn't happen. It happens all the time. Now he takes everything
Suze: and he marries another woman and he now owns another home. And all of the money is in joint tenancy with right of survivorship. And now he dies. All that money goes over to his new wife. Your children
Suze: from that previous marriage, meaning your marriage and his marriage now could very well be disinherited. So that is why many times you need to be very careful how you hold your assets. KT and I to this day do not have one joint account.
Suze: And while it is true, we own our one condo in joint tenancy with right of survivorship. It's like okay, it can go to you or anybody. You wanted to go to KT, I don't care. You have to think about this. So tenants in common when buying a home
Suze: individual trust for each of you.
KT: Next is from Myrna and Suze, this is in keeping with the advice you just gave because listen to this. Hi Suze and KT, can you please help me understand how to get my two adult boys' name off a timeshare deed. I didn't realize what a burden that is to leave as a legacy. At first it seemed right but after here
KT: what you said in a podcast, I'm so sorry. Now I did it. Help.
Suze: I can't even believe that you're not sorry that you didn't do it for yourself girlfriend. But alright, a typical mama who wants to make sure that her kids are okay. First you have to review the timeshare contract and you really have to look for any provisions that allow for the transfer or removal of ownership because your timeshare may not allow that to be done.
Suze: Then you need to check the state laws because some states have specific laws regarding timeshare ownership and transfer and you better really make sure that you know what they say, then you have to contact the timeshare company. If you're unable to find this, whatever it is in your contract or the state law that allows you to transfer or remove the names of your kids, then you can try to contact the 00:14:09
Suze: time share company directly to inquire about the process that you would have to go through for removing the names from the deed and last but not least. I would hire an attorney if the timeshare company is unwilling to assist you.
Suze: That's what you may need to do. Now. The reason KT, that I spent so much time just answering that question is because I really don't like timeshares.
Suze: They are so complicated. You can't make changes in most cases. It's just a headache. Don't do it, don't do it. Don't do it and you're stuck.
KT: You are stuck. Really stuck. It's hard to get out of. Okay, next question from Catherine, Suze and KT Help. Okay, okay, we're here. I put $10,000 in a Series I bond last January now that I'm past the one year requirement,
KT: I'm considering taking this out and putting it into three month. Treasuries keep cycling the money every three months. I think she means recycling right? Keep recycling the money every three months. What hit would I take for this? And do you think we should start doing this with series I bonds yet?
KT: Thank you. Love you two. She wants to know the actual number. I don't know if you can.
Suze: I can give her the actual number: it will be three months of what your latest interest rate is that you happen to be getting
Suze: bottom line, here's what I want to tell you. You are so denied. You are not going to do this under any level. You are going to leave that money in the Series I bonds. You are not going to take it out until you hear me say. Maybe it's a good idea to take it out. But for the next five years, most likely, that
Suze: that money is to stay right there. Do not do not do not do this.
KT: Suze Suze, you sound like the Suze Orman Show and that brings me to approved in tonight. All of you should be watching the Suze Orman Show on freevee. We have almost 600 episodes. The most amazing
KT: episodes of the Suze Orman Show. So go and tune in. It's going to be a rainy weekend. Watch them or a cold weekend. So great.
Suze: Why I allowed freevee to have these 600 episodes is it doesn't cost to watch them. So watch...
Suze: You have kids? You want them to experience it. The answer in those episodes still apply to this day. Go back and have a financial feast.
KT: Yeah. Have a great Suze Suze show weekend. Okay, this one's from Tina. I love this email because it kind of goes back to where you were in the beginning with the woman that wants to make sure that she's not a story of Suze's story ready?
KT: Hi Suze. I've been a viewer reader and listener of yours for years. I'm in a same sex relationship and my wife and I are going to get separated and probably divorced. We both still care about each other but I'm scared that this is going to turn ugly.
KT: We have young kids, two businesses and real estate together. How do we get smart fast about what we should each do to protect ourselves, support our children and support each other. I don't trust her 100%. She says we don't need lawyers. She doesn't want me to tell my family or friends. And then Tina says again, I'm scared.
KT: I will lose my savings which are currently in a joint investment account. I'm super scared that we will be fighting over the kids. I hate that she decided to end things. I had an accident a year ago and I've been out of work. I used to make a quarter of a million dollars a year. Now I make nothing.
KT: My most immediate question is; how do we disentangle our financial lives? Mostly everything is in a joint account. Business accounts are in her name alone. All debt is in both of our names. But she's always been the bigger spender. How do we decide what's fair? Before you answer this, I just want to remind everyone listening three times. Tina said I am scared.
Suze: She didn't just say KT that she was scared. She said she was super scared. Tina listen to me and listen to me closely now that you are in a situation where you're not able to work, you are going to qualify for alimony. Now I don't know how much money your ex to be makes. But obviously it is more than you
Suze: And anything is more than nothing. That's number one. Number two I don't like that the businesses are just in her name but the debt and everything else is in joint tenancy. I don't like that.
Suze: I don't like that she doesn't want you to tell your friends, your parents or anybody you should be wanting to tell anybody and everybody so that you could get the emotional support that you obviously need. Therefore
Suze: the fact that she told you you don't need or we don't need a lawyer to solve this. I don't like that.
Suze: Here's what I want you to do.
Suze: I want you to be stronger than you have ever possibly been and I want you to make appointments with every fabulous lawyer that is in your area, divorce lawyer. Okay. And I want you to either go see him or her or have an appointment over the phone
Suze: and then you will decide now which one you would like to use. The reason that I want you to go and see every single one. Many go and see them all if you want, is because when she finds out that you've hired a lawyer she may get angry then she will go and try to find a lawyer and if that lawyer has already heard from you,
Suze: he or she has a conflict of interest and they cannot represent her. So this is now what actions you take in order for you to feel secure for somebody to seriously represent you in your business interests, in all the interests that you have.
Suze: That, my dear Tina is my advice to you. I seriously suggest that you follow it. Next question KT.
KT: Ok, this is from C. K. and M. K.
KT: C. K. and M. K. Hi Suze and KT. I'm 57 and my husband is 62. I'm retired receiving a pension. My husband is currently working and not retiring until he's 70 to receive his social security.
KT: We are debt free except for our 15 year mortgage. We will be fully funding our 2022 2023 H. S. A. and Roth Iras, we have a 12 month emergency fund. We have an extra 20,000 in cash and would like to know should we invest in I bonds for each of us.
Suze: All right, this is a pop quizzie. Everybody, did you just listen to the question that KT asked should this woman and her husband, she's going to work for another seven years. Everything is great. They're funding everything should they do what KT?
KT: Invest in I bonds for each of them.
Suze: Should they? Or shouldn't they?
KT: Yea. Why not? Yeah. Why not?
KT: Why you why not?
Suze: Alright. Here's what I would be telling you. C. K. and M. K. You have everything that's going for you absolutely brilliantly.
Suze: However you still have a mortgage and I want you in a situation once you are in your retirement years and you retire, that you no longer have a mortgage. Now, I don't know the interest rate that you're currently paying on your mortgage.
Suze: But if it were me before I bought series I bonds, I most likely, especially if you're going to be keeping that house, I would absolutely be taking that extra $20,000 and paying down my mortgage.
Suze: Because again, you never know right? You're retired, you're receiving a pension right? However your husband is going to work. But what if he's in an accident? What if something happens? You don't quite have the money right by by paying down the mortgage and possibly owning your home outright sooner. That will be far better in my opinion to do.
KT: Yeah. They'll feel really free. Alright, the next is Edna.
Suze: I'm so impressed. Katie didn't even like wimp about getting that one wrong.
KT: No, I figured why not? Anyway. I recently rolled over my 401Kk) from previous employers to my TD Ameritrade account. I bought E. T. F. S. Do I have to monitor it like stocks or do I leave it alone and just check it once a month.
KT: Check her E. T. S.
Suze: So E. T. F. S. Everybody are exchange traded funds and hopefully you, Edna bought an exchange traded fund in something that's really diversified. Like the Standard and Poor's 500 of Vanguard Total Stock market index ETF where you're totally diversified and you should not just be making a one time investment.
Suze: So if you rolled over, let's just say $12,000 or $24,000, I personally would have wanted you to take $1,000 a month and invested dollar cost averaging or $2,000 a month.
Suze: It is possible that you invested all of it in this E. T. F. Depending on the E. T. F. Yeah. You have to monitor it. You have to watch what it's doing because you don't want to see something go all the way down 30 40 or 50%.
Suze: And the economy is horrible. You don't know what to do and then have to wait 10 or 15 years for it to come back to be even. So if you're dollar cost averaging, don't monitor it and just keep doing it. If however you invested a lump sum in it all
Suze: now you have to monitor it. That's what I would say. Or maybe what you want to do is take some of the money out of it. Put it in high interest account that the brokerage firm has and then dollar cost average back into it. That's probably what I would do if you did a lump sum. All right. KT...
KT: That's a wrap, Suze.
Suze: So no, KT. This isn't a wrap because I just want to address one other thing, which is this.
Suze: I got a message on the women and money community app from somebody by the name of Morgan. And Morgan really was a little upset at me seriously, because I said that you know, a lot of banks offer high interest rates and they're suckering you in and there it's a false rate. Alright, let me just correct that for a second. Banks can be fabulous. Truthfully.
Suze: And if you find a place that has a high interest rate and you want to do that, that's absolutely where you should go. All right. The reason why I started with Alliant Credit Union and did the ultimate opportunity savings account, was that they were the only financial institution and I went to a lot that we're willing to allow people to deposit just $100 a month
Suze: and after 12 months of consecutive $100 deposits, Alliant would give them $100. They also, at the time, if you remember they were giving all of you .6% interest when that was far higher than any bank or any other financial institution out there.
Suze: So if you did the math on that, for people who only could afford $100 a month, that was coming out to 16 or 18% - fabulous deal. After many of you decided to do that.
Suze: You know, then we created other investment vehicles for you. So Morgan, here's what I would tell you and everybody else. If you really want to get high rate, high interest rate, far higher than any bank or credit union can give you.
Suze: Why not get certificates of deposits or Treasury bills? Why settle for 3.35% or 3.75% just to keep your money liquid, especially if it doesn't need to be liquid
Suze: when you could easily get three month or six month treasury bills for 4.8%. Especially the six months - same thing with the offer that's coming with Alliant Credit Union for certificates of deposits. Their three month and six month certificate of deposit will absolutely match
Suze: as close as possible. The interest rates on three and six month treasury bills. So if you're really looking for the highest interest rate, that's what you should be doing. Other than that. Hey, you are all free to go anywhere anywhere you guys... to do what? Find the highest interest rate possible for your money.
Suze: So yeah, I like Alliant credit.. people are fantastic. And I like that. It's not just about the interest rates that they pay, it's about the car loans, the mortgage rates, the service, they give their people all kinds of things like that. The care, the care. So I hope Morgan that answered your question.
Suze: I hope you feel that you can trust me because honest to God..., if you can't trust you can't trust me. Yeah, we're in trouble. But I like that. You questioned it and I hope this answered your doubt. Alright, KT Take us out:
KT: Okay, Suze. So wherever we go
KT: today, we're going to be sure we create a peaceful, joyful and loving world.
Suze: Who's we, KT?
KT: You and me, Suze.
Suze: And everybody listening to the women and money podcast. Now you stay safe. And remember you are all unstoppable.
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