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by James Lange, CPA/AttorneyProtect Your Family’s Financial Security—Read Jim’s New Book
The IRA and Retirement Plan Owner’s Guide to Beating the New Death Tax: 6 Proven Strategies to Protect Your Family from the SECURE Act by James Lange, CPA/Attorney is now available on Amazon—both hardcover and digital. Clients should be on the lookout for your complimentary copies in the mail.
The SECURE Act became law on January 1, 2020. It forces heirs to suffer massive income tax acceleration on inherited IRAs and retirement plans within ten years of the IRA owner’s death. While there are some exceptions, including spouses, it will have potentially devastating effects on the hard-earned wealth in IRA and other retirement accounts. Our research and analysis lead to this conclusion, and sparked Jim’s motivation to expose the IRS tripwires buried in the new SECURE Act.
“The SECURE Act will extract a devastating tax from the families of IRA and retirement plan owners, but it doesn’t have to be that way. I wrote this book to provide safe, easy, and 100% legal ways after the SECURE Act, COVID-19, and the CARES Act to keep the reader’s legacy wealth in their family’s hands – and out of Uncle Sam’s – all without raising an eyebrow at the IRS.”
Consider the following scenario: On the morning of December 31, 2019, two elderly men in poor health who each have exactly $1 million in their IRAs are admitted to the hospital. The first man dies within an hour of being admitted to the hospital. The second man dies the following afternoon—January 1, 2020. Each of the men bequeathed his $1 million IRA to his 45-year-old daughter. Both women invest identically, have identical annual expenses and other financial characteristics. However, at age 86, the first man’s daughter still has $2,236,583, and the second man’s daughter is broke.
That jaw-dropping difference—in our hypothetical example—is an all-too-real possibility for the children of millions of IRA and retirement plan owners. What a difference a day makes!
As Jim says:
“I find this tax change particularly infuriating. It’s almost as if Congress were sitting around thinking: What group could we hurt the most? How about taxpayers who pursued the American dream and worked hard for 30 or 40 years and played by the rules?
You dutifully sacrificed and put as much money as possible in your IRAs and retirement plan. The government told you putting money in your IRA and retirement plan was great for you and your kids. Now, late in the game, after relying on their representations, they pull the rug right out from under you. Now, they are attempting to confiscate a third of your IRA or retirement plan after you die. Don’t accept this. Fight back and protect your family.”
Simplifying the Complex
As people try to navigate their way through the labyrinth of tax laws, investment portfolios, and retirement planning, things can get overwhelming. Our book was designed to simplify all that. We cover:
- How to use Roth conversions to minimize taxes
- How to use gifting strategies to maximize family wealth under the SECURE Act
- How to update wills and trusts to protect against the SECURE Act
- How to ensure financial security for the surviving spouse
- Why leaving an IRA to a Charitable Remainder Trust (CRT) can be more beneficial to the wealth creator’s children than leaving the IRA to them outright
- Why couples should reconsider owning jointly held investment accounts after the SECURE Act
- How to combine multiple tax-reduction methods for maximum benefit
Real-World Illustrations
Since minimizing investment costs and taxes are the key elements of any financial plan, Jim uses real-world questions and answers, examples, and illustrations to shepherd readers through the often-intimidating world of taxes and retirement costs.
We are happy to provide our readers with the tools to navigate their own path through the SECURE Act—something that must be done to protect your hard-won assets, not only for the sake of your children and loved ones but also for the charities that are important to you. But we want to stress that clients should feel free to reach out to us for help if they need it. The office staff working on Murray Avenue every day is skeletal, but we are all working—via phone, Zoom, etc.—to help any clients who need our assistance.
All Book Proceeds Will Go to Charity
Charitable giving is important to Jim. There are three chapters (Ch. 8, 9 & 10) on the best way for IRA and retirement plan owners to give to charity. Jim is also is donating all proceeds from the sale of this book to charity: water, one of the non-profit organizations closest to his heart.
“785 million people lack basic access to clean and safe drinking water. By partnering with experienced local organizations, charity: water helps build sustainable, community-owned water projects around the world. If the proceeds from this book help in some small way to end the water crisis, I will feel grateful for the opportunity to have contributed.”
After researching options and securing special shipments from China, Jim has donated more than 5,000 KN-95 masks that he purchased. He also sent at least two masks to every client. (You can read about that effort in our other article in this newsletter. Organizations in need of something more substantial than a cloth face covering may inquire by e-mailing admin@PayTaxesLater.com.)
This Book Can Change Lives, Please Help Us
We hope the analysis proving the benefits of leaving your IRA to a Charitable Remainder Trust (CRT) literally starts a movement to direct a billion dollars to charity. If your child (or children) can end up with an extra $400,000 (based on certain assumptions and you dying with $1 million in your IRA) by naming a CRT rather than naming your child (or children) outright, isn’t that worth exploring? In addition, given the same assumptions, the charity could end up with more than $400,000. If you find this and other aspects of the book compelling, please, don’t hesitate to reach out to us with requests for additional books—hardcover or digital—for family, friends, and colleagues. If you would be willing to add a review on Amazon, we would be extremely grateful. We can’t even express how much your book review would mean to us, and hopefully, thousands of IRA and retirement plan owners like you, as well as all the charitable causes the book will enhance.
We would also like to share this link to a short video of Jim expressing his motivations for writing this book: https://paytaxeslater.com/fromtheauthor.
A Story of Snowballing Masks
by James Lange, CPA/Attorney
My wife, Cindy, is a worrier, but she finds some distraction watching episodes of various reality TV shows. I know she is not alone wanting an occasional escape from our reality! She also listens to what she calls, “a stupid podcast I have listened to for years” called Reality Steve. The host, Steve, mentioned that his father, Nick Carbone, was selling KN-95 masks. He gave his father’s contact info.
For those who are wondering, KN-95 stands for the regulatory standard for filtering face piece respirators that are certified in China and regulated by the Chinese government under regulation GB2626-2006. The masks I bought were marked “not for medical use,” but they are more effective at filtering small particles than a simple surgical or cloth mask.
She asked me what I thought about ordering them because the company required a minimum order of 300. I told her to go ahead and get them. I knew we could easily find people who could use them.
Since we wouldn’t be impinging on the market for medical-grade masks, this seemed like a good way to get better filtration masks for the people we care about.
The 300 masks arrived on May 25th, a month after we ordered them. We distributed those 300 to family and friends, and some to the Squirrel Hill Health Center (SHHC) because they were so helpful to my mother. The SHHC was pleased to receive the masks which were then distributed to patients and their families in support of Governor Wolf’s mandate to wear masks when outside the home. From the response, you would have thought I was distributing manna from heaven.
Then, I decided to order 900 more. I wanted to expand gifts to health care/civic organizations and additional friends and family members. I then decided to send a few to all my clients.
I realized 900 wasn’t going to do it and ordered another 5,000. Squirrel Hill Health Center then requested another 1,500 and I said, “Of course!” I found a website, www.weneedmasks.org, and the total requested for Pennsylvania charities and health care organizations plus the number I wanted to send to my clients was more than I had. So, I ordered more.
Every time I received a shipment of masks, I would instantly decide where I wanted to donate them and would immediately ask Cindy’s supplier if he could order more. So, when I received the 5,000 masks, I asked the supplier if I could get 5,000 more, and he said he was down to his last 4,500. I said, “I’ll take them all.”
I was able to fulfill the demand for multiple charities, expand my gifts to clients, friends, and employees, and have some in reserve.
For roughly $35,000, I got 10,700 masks delivered and sent out. All but about 500 are distributed, roughly half to charities and health care organizations, including organizations that serve the Black community, and half to family, friends, and clients.
As of just a few days before writing this newsletter, similar masks are becoming available on Amazon. As the virus continues to ravage the country, the supply chain is becoming more robust. But it pleases me greatly that I was able to distribute as many as I did when people and organizations were scrambling to find what they needed. I feel good about helping people. And those of you who know me know I love getting a great bang for my charitable buck. Buying these masks has been the bargain purchase of my lifetime.
How many cases of COVID-19 did the distribution of those 10,700 masks prevent? Who knows but even if it was just one, it still seems like a great thing to do. And what if it was 100? I feel fortunate to have had the resources for both finding a source and having the funds to provide some help.
One final note: As the lead article in this newsletter indicates, my ninth book, The IRA and Retirement Plan Owner’s Guide to Beating the New Death Tax: 6 Proven Strategies to Protect Your Family from the SECURE Act, is available on Amazon, and if you want to get the biggest bang for your charitable buck, I suggest you read Chapters 8, 9 and 10 on charitable giving. (Clients, please be assured that your complimentary copies will be arriving in the mail shortly.)
Stay safe and healthy,
Ginger-Lemon Chicken with Spinach
This is a true chicken dish for the soul. When you are feeling a bit run down and need a nourishing meal to warm you from the inside out, look no further than your kitchen and this recipe to nurture your body, mind, and spirit.
Serves: 4
Prep. Time:20 minutes
Cook Time:1 hour
- One 2-inch piece ginger, peeled and minced
- Sea salt
- 3 tablespoons grapeseed oil
- One 3 ½ pound whole chicken
- 2 lemons, 1 sliced into thin rounds, 1 cut into wedges for serving
- 9 ounces baby spinach
- ¼ teaspoon crushed red pepper flakes
Preheat oven to 425⁰F.
In a small bowl, use a spoon to mash together the ginger, 2 tablespoons of sea salt, and 2 tablespoons of the oil. Set aside.
Pat the chicken dry with paper towels. Using your fingers, gently loosen the skin from the chicken breasts. Being careful not to tear the skin, spread half of the ginger-salt paste evenly between the skin and the meat; put the skin back down. Rub the remaining paste inside the chicken cavity. Tuck the entire sliced lemon into the cavity.
Tie the chicken legs together with cotton kitchen twine; tuck the wing tips underneath. Rub the chicken with the remaining 1 tablespoon oil. Place the chicken, breast-side up, in a roasting pan.
Roast the chicken, occasionally basting with the pan juices, until golden-brown, 50 to 55 minutes; an instant-read thermometer inserted in the thickest part of the thigh should read 165⁰F. Transfer the chicken to a cutting board and tent with foil, reserving the hot baking sheet; allow the chicken to rest for 10 minutes before carving.
Scatter the spinach over the pan juices on the baking sheet. Place the pan back in the oven until the spinach has begun to wilt, 2 to 3 minutes. Toss the spinach on the hot pan until it is fully wilted and dressed in pan juices. Season with a pinch of salt and the red pepper flakes. Carve the chicken and serve with spinach and lemon wedges on the side.