- 11,280
Candid Camera
- Thread starter Mr. Bill
- Start date
I don't know who the BOR was for my father in laws account.
I disagree with your premise that CD's are the only choice (if that is what you are saying). Placing all your money in an FIA would not be prudent neither is having all your money in CD's. Contrary to what the media has you believe, seniors are not doing that bad.
We can all muddy the water and talk taxes on the death benefits.
"The beneficiary may be taxed on distributions made from an annuity after the owner's death. Under a special exception to the distribution at death rules, if the beneficiary is the surviving spouse of the owner, the annuity contract may be continued with the surviving spouse as the owner.
Amounts paid under the five-year rule are taxed in the same manner as partial withdrawals or full surrenders, and amounts paid under an annuity option are taxed in the same manner as annuity payments. For variable annuity contracts issued on or after 10/29/79, and for all fixed annuity contracts, there is no "step-up" in basis for income tax purposes and the beneficiary pays income tax on the earnings. However, the beneficiary is entitled to deduct a portion of estate tax paid on the annuity for income tax purposes. "
Without a Trust in place are CD's included or excluded in probate? Can that CD be won in a suit against you? Is the annuity at arms length from creditors? So many questions and so little time for Dateline to really ask the questions. But hey.....they really never wanted to ask if there were any benefits.
It can all be very easy or all be very, very complicated. I have a book sitting on my shelf that cost me $150 to buy in 1995. It is titled Tax Planning for Family Wealth Transfers, by Zaritsky. It is a real tome, measuring over 3 inches thick. It boggles the mind when you consider all the many different ideas, methods and reasons to do something in life. From taxes to probate. So when I hear people say something is totally wrong, I ask why?
It is akin to the depression people saying, "never invest in the stock market." It is an opinion based on their bias and emotion.
Now the honest agents are going to be skewered because of the bad apples. Question: is there any busineess or organization that doesn't have some bad apples? Sigh.
I disagree with your premise that CD's are the only choice (if that is what you are saying). Placing all your money in an FIA would not be prudent neither is having all your money in CD's. Contrary to what the media has you believe, seniors are not doing that bad.
We can all muddy the water and talk taxes on the death benefits.
"The beneficiary may be taxed on distributions made from an annuity after the owner's death. Under a special exception to the distribution at death rules, if the beneficiary is the surviving spouse of the owner, the annuity contract may be continued with the surviving spouse as the owner.
Amounts paid under the five-year rule are taxed in the same manner as partial withdrawals or full surrenders, and amounts paid under an annuity option are taxed in the same manner as annuity payments. For variable annuity contracts issued on or after 10/29/79, and for all fixed annuity contracts, there is no "step-up" in basis for income tax purposes and the beneficiary pays income tax on the earnings. However, the beneficiary is entitled to deduct a portion of estate tax paid on the annuity for income tax purposes. "
Without a Trust in place are CD's included or excluded in probate? Can that CD be won in a suit against you? Is the annuity at arms length from creditors? So many questions and so little time for Dateline to really ask the questions. But hey.....they really never wanted to ask if there were any benefits.
It can all be very easy or all be very, very complicated. I have a book sitting on my shelf that cost me $150 to buy in 1995. It is titled Tax Planning for Family Wealth Transfers, by Zaritsky. It is a real tome, measuring over 3 inches thick. It boggles the mind when you consider all the many different ideas, methods and reasons to do something in life. From taxes to probate. So when I hear people say something is totally wrong, I ask why?
It is akin to the depression people saying, "never invest in the stock market." It is an opinion based on their bias and emotion.
Now the honest agents are going to be skewered because of the bad apples. Question: is there any busineess or organization that doesn't have some bad apples? Sigh.
- Thread starter
- #43
- Thread starter
- #44
You need an education on FIA's. Cap rates are a function of a lot of factors, not just option prices. Cap rates can change year to year, but the longer the term contract the more money the insurance company can allocate towards buying options. With more options you get higher cap rates.
I'm doing about 5 things at once.....eeeee, can't think! But aren't most annuities, no matter of their title, a pass through without probate?
- 11,280
As long as there is a named beneficiary it avoids probate.
- 924
As far as CDs avoiding probate, you have to be real careful about what state you are talking about. Some states allow payable on death designations or beneficiary designations that may or may not avoid probate under state law. My own state allows POD designations, but in a very small amount and I don't know of any bank that offers PODs even though they are allowed by statute.
In my state, I can safely tell people that a CD has to go through probate while an annuity does not (assuming a living, named beneficiary). A POD here, even if you can find a bank that offers it, merely means the CD is not frozen and can be accessed. It still goes through probate.
In my state, I can safely tell people that a CD has to go through probate while an annuity does not (assuming a living, named beneficiary). A POD here, even if you can find a bank that offers it, merely means the CD is not frozen and can be accessed. It still goes through probate.
I thought I should share this with you because you are making a blanket statement. Just as did the Dateline show. Just as not all Annuities are created equal neither are all CD's. According to the SEC you can lose principal in CD's.
Now if you have a problem with the SEC I would advise you call them and let them know about it.
Please take note in the SEC notation:
1. Under Research Any Penalties for Early Withdrawal -
That means you would have to sell the CD at a discount and lose some of your original deposit –despite no "penalty" for early withdrawal."
2. Under Investigate Any Call Features -
So if interest rates rise, you'll be stuck in a long-term CD paying below-market rates. In that case, if you want to cash out, you will lose some of your principal.
From the SEC:
Certificates of Deposit: Tips for Investors
"Here's how CDs work: When you purchase a CD, you invest a fixed sum of money for fixed period of time – six months, one year, five years, or more – and, in exchange, the issuing bank pays you interest, typically at regular intervals. When you cash in or redeem your CD, you receive the money you originally invested plus any accrued interest. But if you redeem your CD before it matures, you may have to pay an "early withdrawal" penalty or forfeit a portion of the interest you earned.
Investigate Any Call Features – Callable CDs give the issuing bank the right to terminate-or "call"-the CD after a set period of time. But they do not give you that same right. If interest rates fall, the issuing bank might call the CD. In that case, you should receive the full amount of your original deposit plus any unpaid accrued interest. But you'll have to shop for a new one with a lower rate of return. Unlike the bank, you can never "call" the CD and get your principal back. So if interest rates rise, you'll be stuck in a long-term CD paying below-market rates. In that case, if you want to cash out, you will lose some of your principal.
Research Any Penalties for Early Withdrawal – Deposit brokers often tout the fact that their CDs have no penalty for early withdrawal. While technically true, these claims can be misleading. Be sure to find out how much you'll have to pay if you cash in your CD before maturity and whether you risk losing any portion of your principal. If you are the sole owner of a brokered CD, you may be able to pay an early withdrawal penalty to the bank that issued the CD to get your money back. But if you share the CD with other customers, your broker will have to find a buyer for your portion. If interest rates have fallen since you purchased your CD and the bank hasn't called it, your broker may be able to sell your portion for a profit. But if interest rates have risen, there may be less demand for your lower-yielding CD. That means you would have to sell the CD at a discount and lose some of your original deposit –despite no "penalty" for early withdrawal."
Now if you have a problem with the SEC I would advise you call them and let them know about it.
Please take note in the SEC notation:
1. Under Research Any Penalties for Early Withdrawal -
That means you would have to sell the CD at a discount and lose some of your original deposit –despite no "penalty" for early withdrawal."
2. Under Investigate Any Call Features -
So if interest rates rise, you'll be stuck in a long-term CD paying below-market rates. In that case, if you want to cash out, you will lose some of your principal.
From the SEC:
Certificates of Deposit: Tips for Investors
"Here's how CDs work: When you purchase a CD, you invest a fixed sum of money for fixed period of time – six months, one year, five years, or more – and, in exchange, the issuing bank pays you interest, typically at regular intervals. When you cash in or redeem your CD, you receive the money you originally invested plus any accrued interest. But if you redeem your CD before it matures, you may have to pay an "early withdrawal" penalty or forfeit a portion of the interest you earned.
Investigate Any Call Features – Callable CDs give the issuing bank the right to terminate-or "call"-the CD after a set period of time. But they do not give you that same right. If interest rates fall, the issuing bank might call the CD. In that case, you should receive the full amount of your original deposit plus any unpaid accrued interest. But you'll have to shop for a new one with a lower rate of return. Unlike the bank, you can never "call" the CD and get your principal back. So if interest rates rise, you'll be stuck in a long-term CD paying below-market rates. In that case, if you want to cash out, you will lose some of your principal.
Research Any Penalties for Early Withdrawal – Deposit brokers often tout the fact that their CDs have no penalty for early withdrawal. While technically true, these claims can be misleading. Be sure to find out how much you'll have to pay if you cash in your CD before maturity and whether you risk losing any portion of your principal. If you are the sole owner of a brokered CD, you may be able to pay an early withdrawal penalty to the bank that issued the CD to get your money back. But if you share the CD with other customers, your broker will have to find a buyer for your portion. If interest rates have fallen since you purchased your CD and the bank hasn't called it, your broker may be able to sell your portion for a profit. But if interest rates have risen, there may be less demand for your lower-yielding CD. That means you would have to sell the CD at a discount and lose some of your original deposit –despite no "penalty" for early withdrawal."
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- 1,704
Good Rebuttal!
