Q. I’m thinking of creating a revocable trust. Do I need to include jointly held accounts?
A. You should speak with a lawyer who specializes in trusts about this matter. Both benefits and drawbacks exist. One benefit, for instance, would be avoiding probate. However, there are drawbacks as well. For instance, altering the trust’s conditions after it has been created would be difficult and costly. Before incorporating joint accounts into a revocable trust, you should obviously seek the counsel of an experienced lawyer.
Q. You mentioned in a recent piece that holding money-market accounts in a state that levies state income taxes on money-market revenue would put you at a tax disadvantage. I am aware that you are eligible to receive credit for the U.S. government securities that you have invested in your money market account. Is that right?
A. Ed Slott, a certified public accountant with experience in this area, reviewed your inquiries. He concurred that securities kept in a money-market account that are issued by the US government are eligible for a credit. At the end of the year, certain financial institutions let investors know what proportion of the securities in their money market portfolio are issued by the US government. Other financial firms, like Vanguard, keep this information up to date and make it available to shareholders on their websites, but they don’t explain it to them. In order to reduce your state income taxes, you should ask your financial institution if it offers this information to you if you have money-market account income and reside in a state that levies state income taxes on income from securities.
Q. Since I am not yet obligated to take minimum distributions from my IRA, I am unsure of the benefits, if any, of using qualified charitable distributions (QCDs) to make charitable contributions once I turn 70 1/2. I’ve read many conclusions. There are no tax benefits, according to certain sources. You have mentioned that there are tax benefits in your columns. Which is right?
A. There are unquestionable tax benefits. Ed Slott notes that you can deduct the amount of your QCD contribution from your modified adjusted income when you use it to donate to an eligible charity. This effectively lowers your taxes by multiplying the amount of your QCD by your marginal tax bracket. The IRS agrees.
Q. You recommended in a recent editorial that readers get in touch with their representatives in Congress to propose legislation that will increase Social Security’s income in order to prevent future benefit cuts. Is it accurate to say that Social Security regulations were unaffected by the current legislation?
A. That’s right. However, Social Security payouts grew by hundreds of millions of dollars annually as a result of the law that repealed the Government Pension Offset (GPO) and Windfall Elimination Provision (WEP) at the end of 2024. The new law that was passed in 2025 did not give Social Security participants any more benefits, but it also did not give the government any new revenue streams related to Social Security. It’s very possible that Social Security payouts will eventually need to be cut unless there are major adjustments made to the program’s rules in the coming years.
You can contact Elliot Raphaelson at [email protected] with any questions or comments.
