elha wrote:So, my mom has brain cancer. It's aggressive and incurable, but currently being treated to extend life. Odds are against her being around too much longer, though...
Because we're living together, and her assets/debts will soon become mine, I've put us both on here...
Rollover IRA: $120k ($4k VMMXX [prime money market] , $116k VTTVX [target 2025]) (at Vanguard)
401k: $41k (at Hartford/Mass Mutual)
Money Market: $6k (at Capitol One)
Mutual Fund: $16k (PRUAX) (at Wells Fargo Advisors)
Life insurance: $50k
Income: $19500/yr SS disability
Her desire: to put everything she has into her Vanguard account. I don't know if she's thinking clearly anymore, though. Is this wise? Will there be many fees/tax consequences? Is the money accessible there?
1. My main concern is that fairly soon she will have to go into an assisted living facility. No doctor can tell us how long she has. Six months, six years...everyone is different. Her disability check will cover, most likely, half the monthly expenses. We need to draw from her funds to make up the difference. Which one? How?
2. I also need to sell her house. The upkeep and repairs are too much for me on top of everything else. Where should that money go? [I'll be renting something cheap nearby].
3. My student debt. Do I pay off all or part of it now (with her funds and permission) and avoid the interest?
4. When she's gone, what can the hospitals come after?
My sympathies for what you are going through. Hopefully this will provide a little bit of a roadmap for you.
First, do you have the appropriate documents made out, signed, witnessed and notarized per NC statutes: Mom's Last Will and Testament, Power of Attorney, PoA for Healthcare, and Living Will? Next, don't lose sight of the fact that you and your mother are legal distinctions - she has her assets and estate and you have yours. Next, isolate the retirement accounts from the non-retirement accounts. The 401k can be rolled over to the VG "rollover IRA" already in existence. No tax consequence there and VG will do all the work for you after the forms are completed.
The MM account at Capital One could be closed and those assets moved to a MM fund at VG. I didn't look at the Wells Fargo Mutual Fund, but it is probably a high expense ratio fund and should be transferred over to VG to the MM fund for now. This should give you a fair amount of cash-on-hand. I'm presuming that she files her taxes with you as her dependent and there is little to no tax liability each year. The savings account could be moved to the VG MM fund as well. But sure to set yourself as the beneficiary of all the accounts you set up at VG.
Any money made on the selling of the house should be put in the VG MM fund for now.
When your mom's time comes, anyone with a claim against her estate for unpaid debts may make their demands and you'll have a legal obligation to pay them (I'm presuming that you'll be the one settling your mom's estate?) The hospital(s) and others will want to be paid. If your mom gets SS disability, does she also get Medicare? If so, it sounds like she may qualify for Medicaid as her secondary and between the two there shouldn't be other medical bills going forward.
If your mom agrees, you could pay off your student debt, but if she runs out of money to live on too soon as a result, will you be prepared to support her? It is tough to know what is the right thing here. When she goes into assisted living, you'll be getting a job?
Lastly, you might look around and see if there is a "legal aid" society near you - many of these operate without charge and can help quite a bit. Also, check with your local library and inquire as to whether there is a tax / financial assistance group nearby; many times there are retired financial folks who like to keep their fingers in it and will help out folks like you at no charge.
Best to you in this really difficult time.