A fiduciary is a financial professional who is legally and ethically obligated to put the client’s interests ahead of their own. This means making recommendations that are solely in the client’s best interest, with full transparency and loyalty.

 A Qualified Charitable Distribution (QCD) is a charitable giving strategy that allows an individual age 70 1/2 or older to make charitable gifts directly out of their IRA. The amount given counts toward the individual’s Required Minimum Distribution (RMD) but is excluded from taxable income, making it a highly tax‑efficient way to give.

 A Required Minimum Distribution (RMD) is the minimum amount the IRS requires you to withdraw each year from tax‑deferred retirement accounts — such as traditional IRAs, SEP IRAs, SIMPLE IRAs, and most 401(k)/403(b) plans—once you reach the mandated starting age. RMDs exist to ensure that taxes are eventually paid on funds that have grown tax‑deferred over time.

RMDs begin based on your birth year, following the SECURE Act 2.0 rules:

• Age 73 if you were born between 1951 and 1959. 
• Age 75 if you were born in 1960 or later. 
  These ages mark when you must start taking annual Required Minimum Distributions from most tax‑deferred retirement accounts.

The RMD amount is calculated by taking the value of your retirement account on December 31 of the prior year and dividing it by the IRS‑assigned life‑expectancy factor for your age. This formula ensures you withdraw the minimum amount required annually based on your projected lifespan.

Here’s a clear example:

At age 73, the IRS Uniform Lifetime Table assigns a distribution period of 26.5 years.
So, if someone has a $1,000,000 Traditional IRA on December 31 of the prior year, their RMD ($1,000,000 account  / 26.5 life expenctancy) would be $37,735.85.

 A Roth conversion is the process of moving pre‑tax retirement funds into a Roth IRA, paying taxes now in exchange for future tax‑free growth and withdrawals. It can be a powerful strategy when you expect your future tax rate to be the same or higher than it is today.

Roth conversions can be used to reduce future Required Minimum Distributions, position assets to enhance estate planning flexibility, provide tax diversification, and hedge against possible rising future tax rates.

Additional fact: Kentucky currently allows up to $31,110 of retirement income per person to be excluded from state income tax, and this does include IRA withdrawals or Roth conversions, as long as the income qualifies as “retirement income” under Kentucky law.

Tax loss harvesting is a strategy used to sell an investment at a loss for the purpose of realizing a capital loss. The loss can be used to offset realized capital gains and or can also offset up to $3,000 of ordinary income per year, and any remaining losses can be carried forward to future tax years.

A donor advised fund (DAF) is a charitable giving account that allows individuals to make a tax‑deductible contributions, receive an immediate tax benefit, and then make future distributions referred to as "grants" to qualified charities. Donors can contribute cash or assets, invest the funds for potential growth, and distribute gifts to charities at their own pace.

Yes, the IRS does places a deduction limit on contributions to a Donor Advised Fund. Cash contributions are deductible up to 60% of AGI in a tax year. Contributions of long‑term appreciated assets (e.g., stocks) are deductible up to 30% of AGI.

Yes - you can make charitable gifts in‑kind, meaning you donate investments directly rather than selling them first.

Common in‑kind gifts include publicly traded securities, real estate, business interests, collectibles, and other appreciated property. Donating appreciated assets can be especially tax‑efficient because you typically receive a charitable deduction for the fair market value of the asset and you avoid capital gains tax that would be due if you sold it first.

IRMAA stands for Income‑Related Monthly Adjustment Amount. It’s an extra charge added to Medicare Part B and Part D premiums for individuals and couples whose modified adjusted gross income (MAGI) from two years prior exceeds certain thresholds. 

 A revocable trust is a trust the grantor can change, amend, or dissolve at any time during their lifetime, giving them full ongoing control of the assets. In contrast, an irrevocable trust generally cannot be changed or terminated once established, meaning the grantor gives up control of the assets—often in exchange for benefits such as asset protection, tax advantages, or estate‑planning efficiencies.

 A community property trust is a special type of trust in which a married couple elects to treat assets placed in the trust as community property, even if they live in a non‑community‑property state. This structure allows both spouses to be treated as equal owners of the entire asset, often resulting in a full step‑up in cost basis at the first spouse’s death, which can significantly reduce capital gains taxes for the survivor.

The following states allow for community property trusts: Alaska, Arizona, California, Florida, Idaho, Kentucky, Louisiana, Nevada, New Mexico, South Dakota, Tennessee, Texas, Washington, & Wisconsin.

Baird makes available to its clients various distinct products and services, and there are important differences between those services and the duties and obligations owed to clients in connection with provision of those services. Baird and Baird Financial Advisors do not act as fiduciaries nor is a fiduciary duty owed to a client when providing certain products and services. For more information about the products and services Baird makes available as well as the duties and obligations Baird and a Baird Financial Advisor may have to you in connection with the provision of products and services, please contact our office.