Reply to Do you use a “wealth manager” or DIY?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I'm the PP who said not having someone to help with tax planning can cost you $200K. In my case my mom was a window and moved to Maryland so she could be in the same assisted living as a friend. When she died a few years later she had about $6M in her estate, to be split between 3 kids. Almost all of that $6M was in an IRA (so kids now have to pay the taxes within 10 years - we are all in high tax brackets). Because she died in Maryland with more than $5M in her estate, we had to pay about $200K in estate taxes - even though the estate is actually worth far less than $5M given that her kids will have to pay federal income tax on the estate. if we had a full service wealth manager, they would have caught the MD estate tax issue, my mom could have withdrawn more from her IRA before she died, paid the taxes herself and brought the value of the estate below the $5M estate tax limit in MD. But since none of her kids had ever lived in MD we had no idea this was even an issue (including my sister who was the executor and is an accountant).

Separately, there was just a thread here about the best way to buy a house in retirement -- take money from traditional IRA? Roth IRA? borrow against brokerage account? traditional mortgage? These are the kinds of things where (I would guess) a wealth manager can help you think it through given your specific situation. The actual investing is the easy part![/quote]

This makes no sense. When she moved to Maryland she should have hired a MD trust attorney to review her trust. It works be significantly less.

We paid $5k for our trust, through an attorney. She said when we move to Virginia when we retire to meet with a lawyer there to review the docs. That’s her advice!

I’d rather work with an attorney who will get it right than someone on a wealth management team. And, save the $$ which is what you’re concerned about! You still will spend $200k in 8 years, then another $200k or more, in the next 8 years! [/quote]

I'm the PP you are referring to. We did not know what we did not know. None of us had lived in a state with a state estate tax before and we did not realize it was a possibility. I did not have access to info on my mom's accounts since I was not the executor and my sister who was is a CPA but works on corporate tax issues so missed it too. Luckily we are all doing well and can afford to just shrug it off - but it definitely taught me a lesson to be careful with my own financial plans (which are now more complicated due to having an inherited IRA). We also got lucky in that my mom's estate essentially doubled because she randomly took all her money out of the stock market in Feb 2020 while transferring accounts  to a new mutual fund company and put the money back in right after the market dropped due to COVID. So you win some and you lose some!!! [/quote]

I'm pp and if it makes sense for you, then it makes sense. My only point was that you wanted to save money, specifically $200K. If you want to do that, there's a much cheaper way to manage this instead of spending $200K to save $200K.  [/quote]

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