End of life finances, way over my head

Have a question about your personal investments? No matter how simple or complex, you can ask it here.

End of life finances, way over my head

Postby elha » Sat Aug 31, 2013 6:52 pm

EDITED 7/24/2014:

Hello again, everyone!

Soon it will be six months since mom died and I was bombarded with big decisions. This post is both to ask for your sage advice as well as to leave information for other bewildered (ex)caregivers and young beneficiaries.

I have almost completed the estate process, with just a little paperwork remaining. The financial end of things hasn't been so smooth. Right now mom's IRA is in an inherited IRA account with Vanguard and the ball is in my court to contact them and come up with a plan. The 401k she had at Mass Mutual turned into a mess. I sent in the paperwork, choosing to take the 5-year payout option for the ~$47k. Not an option, they came back and told me. The plan administrator at mom's old job said I had to take a lump sum....which I *really* didn't want to do. I said OK and voila, a week later there was a check in my hands....minus the federal 20% cut and a bit for the state. Almost $11k gone, just like that. Was this ignorance on my part? Was this avoidable? Can you give any advice for future readers to avoid this?

My dilemma is this: I now have that money, plus ~$50k life insurance, and ~$20k from closed estate accounts in my credit union money market account. Around $100k making me a whopping 1.00%. I'd like to put it someplace where it can work a little harder for me, however I need access. I don't know what I'm doing or where I'm going and I'm currently living completely off of that money. I have ~$30k left in student loan debt. I have an inherited house that is falling apart. I don't have any health insurance since I lost the tax credit when mom died (and WOW that sucked). In summary, I can't have it all locked away until I'm 59 1/2 :/ Are there any funds in particular you might recommend for a 28 year-old still stumbling through life? Or a general sense of what I should be looking for as I do my research?

Thank you!


I also wanted to share a link. I spent countless hours searching the internet with the keywords "brain cancer, "finances," and "clueless caregiver." I was disappointed to find so little information--this is in part why I came to this forum. http://itsthetumor.blogspot.com is the link to the blog I maintained while my mother was ill, in which I tried to record some of the more practical issues that come up. I certainly don't intend this as self-advertisement, only for it to be left here as a resource for future caregivers, patients, etc.

_______________________________
EDITED 2/20/2014:

Hello again! Thank you all for the advice and kind words in response to my original post. Shortly after I wrote the original message things began to change and we decided to leave her accounts as they were. She passed away last month and I'm having a bit of trouble sorting out the tax consequences of my various options. (I've read other posts about inherited accounts, however they all seem to involve *much* more money or are inherited by someone who is in a higher tax bracket). Aside from preserving as much as possible, I'd also like to know how accessible the money will be (I have no job, am now paying a mortgage, and have to do some reno before I'm able to sell her house, etc). All of the basic financial information that I gave in August below is more or less the same, and she was still 57 (and hadn't touched the retirement accounts) when she died.

1) The 401(k) is still around $40k. Rollover into an inherited IRA or take a lump sum? With the IRA, can I take distributions for a number of years less than my life expectancy? (Say, over 5 years instead of, oh, the next 40). And I *have* to start taking distributions after 5 years, correct? Or, since I'm currently in the lowest tax bracket, should I take it all now? What is this mandatory 20% I've seen in my research? That seems like a bit much...

2) The IRA. I spoke with Vanguard and it seems that I have only one option, and that is to go the inherited IRA route. Is it then treated the same as above--five years or all at once?

3) On a slightly different note, as the executrix as well as sole beneficiary, it's clear that her estate (her depleted savings, mainly) will not cover her medical bills (her only debt aside from mortgage). All of her accounts had me as a beneficiary, save for her savings/checking, which is now around $5000. I was told that creditors can request that the house be brought back into the estate in order to pay off debt. Is this common? Is it nearly as big a pain as it sounds? The deed to the house hasn't yet been put in my name--would doing that have any effect?

BTW, as far as taxes go, I won't be going back into the workforce and making a lot of $. I would like to get something low-key and part-time while I figure out what on earth I should do next...so my tax bracket should remain low over the next year-ish.

Thank you all!


_______________________________
ORIGINAL POST

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. She was an avid Boglehead and very involved in her finances. She was a single mom working two jobs in order to put something together for her retirement, and to leave something for me. All that has kind of gone to hell. I left grad school (my only source of income) to move home and care for her. The two of us live off her SS disability check and our dwindling savings. In an ideal world, when I'm not shuttling her to appointments or cleaning up after her I'd be reading books on this sort of stuff. But, it's all I can do to drag myself out of bed in the morning, so I'm hoping you all can help me out a bit and forgo the "I've posted this a dozen times" and "read this book first" stuff. Thanks in advance!

Because we're living together, and her assets/debts will soon become mine, I've put us both on here.

Me:
Debt: ~$30k student loans
Tax status: Single
Tax rate: I don't even know. That's how out of my depth I am.
State: NC
Age: 27

Roth IRA: $6k [target 2050] (at Vanguard)
Savings: $5k


Mom:
Debt: ~$85k mortgage @ 4.375%, ~$12k medical bills (as of right now, may very well increase)
Tax status: Single
Tax rate: see above
State: NC
Age: 57

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)
Savings: $11k
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?


I had an introductory meeting with a trusted financial planner, but I'm not sure if that's the way to go. Is our situation so complicated that I should pay someone else to take care of it? I certainly leaning toward that option...what do you think?

I hope I didn't make too much of a mess of all that. I'm not sure you can possibly understand how much your advice will be appreciated!
Last edited by elha on Thu Jul 24, 2014 1:09 pm, edited 4 times in total.
elha
 
Posts: 7
Joined: Sat Aug 31, 2013 5:51 pm

Re: End of life finances, way over my head

Postby BolderBoy » Sat Aug 31, 2013 10:51 pm

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...

Mom:
Age: 57

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)
Savings: $11k
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.
BolderBoy
 
Posts: 945
Joined: Wed Apr 07, 2010 1:16 pm
Location: Colorado

Re: End of life finances, way over my head

Postby Levett » Sun Sep 01, 2013 10:02 am

Elha,

I am speaking from family experience (twice)--not in the abstract.

You say your mom hasn't long to live. Has her dr. confirmed that prognosis?

If the answer is clearly "yes," then consider at least two things (I don't want to get hung up on finances):

1. Does your mom want continued treatment? I assume it's chemo. If it is obviously palliative, she has the right to decide whether she wishes to continue treatment.

2. If your mom has six months or less in the dr.'s judgment, you should consider hospice. That would be, by far, the most humane setting under qualified professional caregivers.

As hard as all this is, you must not forget yourself. There is nothing inherently contradictory about you taking good care of yourself as well as loving your mother.

I know what you are going through.

There is good help out there.

Lev
Levett
 
Posts: 3347
Joined: Fri Feb 23, 2007 3:10 pm

Re: End of life finances, way over my head

Postby elha » Sun Sep 01, 2013 12:50 pm

Excellent advice from both of you. Thanks!

BolderBoy--she doesn't yet qualify for Medicare (there is a 24 month wait period after disability benefits go into effect, we're only a few months in). I hadn't thought to look for legal aid groups in the area, but I'm sure they're around. We've got three law school within 30 miles of us so I'm sure there is something available. Thanks!

Lev--the docs have not confirmed anything. They can't, really. I try my best to get straight answers out of them but every patient is different and there is no predicting how they will respond to treatment. We're nearing the average life expectancy, if that helps. She still wants treatment. In her mind there is room to improve, that she might "get better." Only rarely does she realize that this is what is going to kill her, and sooner rather than later. I am definitely a proponent of bringing hospice is in as soon as possible. In my reading, nearly everyone says "I wish we had thought of hospice sooner." But without a doctor saying she has 6 months or less (whatever the hospice cut-off is), it isn't an option. Plus, she can get around okay. I just have to keep her locked up like a dementia patient.

Thanks both of you for taking the time to respond!
elha
 
Posts: 7
Joined: Sat Aug 31, 2013 5:51 pm

Re: End of life finances, way over my head

Postby BolderBoy » Sun Sep 01, 2013 12:58 pm

... and don't overlook your county social services department. They've likely seen this scenario before and can offer some suggestions or even provide help, perhaps.

In October, the ACA exchanges start up. If NC is opting into the Medicaid expansion, your mom may qualify based on income with you as her dependent.
BolderBoy
 
Posts: 945
Joined: Wed Apr 07, 2010 1:16 pm
Location: Colorado

Re: End of life finances, way over my head

Postby Minot » Sun Sep 01, 2013 3:14 pm

Elha,

Boulder Boy and Levett have given you some good advice. I, too, have been in your situation, and I have some further thoughts.

To Boulder Boy's list of things to do first, I'd add make sure that the beneficiary on the life insurance policy is in order. This will make sure that the money passes directly to the beneficiary and is out of reach of any creditors. Also make sure that any premiums are paid up.

There's no need to be in a rush to move your Mom's account to Vanguard, but it will be simpler for you if most everything is in one place. (Your Mom's recommendation to do this was a good one.) When you're ready, call Vanguard and they will walk you through the whole process and make sure that all the IRA rules are followed. There shouldn't be any fees involved, except possibly for the PRUAX with Wells Fargo. It's likely that there will be capital gains taxes if you sell this fund. If they are significant, you might want to leave the account where it is, and put it on the "spend last" list, since the cost basis resets at her death. The higher expense ratio on this fund isn't a big concern, given that her life expectancy is limited.

I would also recommend that you consider exchanging some or all of the Target Retirement fund for VG's MM or a VG short term bond fund. The VTTVX is 70% equity, which means it could take a real hit if we get another downturn like 2008. Unless you expect to clear enough from the sale of the house to make it unlikely that you'll need to use the VTTVX for her expenses, this should be a consideration.

You asked about using some of her funds to pay down your student loans. This could be problematical. If it turns out that her money runs out and you need to qualify her for Medicaid coverage of long-term care, her 'gifting' you this money is likely to delay her eligibility right when you need it. Also, if there are any other possible beneficiaries of her estate, this might be a problem. (This is also true if you change or add a beneficiary on any of her accounts. I'd probably want some legal advice if there's anyone who might contest things.)

I'd also suggest that you contact hospice sooner rather than later. Even if your mom isn't presently eligible, the likelihood is that she will be and it could be fairly sudden. Having at least the beginnings of a relationship with the hospice people may make it a little smoother at that point. Also, they may be able to give you referrals to other help, they may have some advice about how to talk with your mom about her situation, and they may help you in deciding when it is time to call them in, and how to work with the doctor(s) regarding when she's eligible and what does and does not constitute palliative care. You could also ask them for a referral to a caregiver's support group.

I hope this is helpful. I know how hard and scary this is--and I was in my 50's when I went through it the first time and my 70's the second time.
Minot
 
Posts: 274
Joined: Sat Jan 29, 2011 3:35 pm

Re: End of life finances, way over my head

Postby ieee488 » Sun Sep 01, 2013 4:21 pm

BolderBoy wrote:The MM account at Capital One could be closed and those assets moved to a MM fund at VG.

This may or may not be a mutual fund. If it is a money market bank account, then I would not move it to Vanguard.
Dell Precision M6300 (Ubuntu Linux 12.04 + Windows 7), Dell Precision M6300 (Windows 7), Dell Latitude D530 (Windows Vista), Dell Latitude D531 (Windows Vista)
ieee488
 
Posts: 1517
Joined: Thu Dec 10, 2009 9:57 am

Re: End of life finances, way over my head

Postby ieee488 » Sun Sep 01, 2013 4:28 pm

elha wrote:So, my mom has brain cancer. It's aggressive and incurable, but currently being treated to extend life.

Just went through this 4 years ago with my father who had a brain tumor.
He was fine until the month before his death.
One resource I wish I had found sooner was http://www.brainhospice.com, a website by a woman whose father died from brain cancer specifically GBM.

The legal documents that Boulder Boy mentions are very important.
One decision we had to make was regarding DNR. This wil be important for the hospital or any medical facility she may enter.
Dell Precision M6300 (Ubuntu Linux 12.04 + Windows 7), Dell Precision M6300 (Windows 7), Dell Latitude D530 (Windows Vista), Dell Latitude D531 (Windows Vista)
ieee488
 
Posts: 1517
Joined: Thu Dec 10, 2009 9:57 am

Re: End of life finances, way over my head

Postby donall » Sun Sep 01, 2013 5:15 pm

NC is not the poster child for health insurance, but I would look into ACA (Affordable Care ACT) sign-up for you and your mom that can be effective January 1. Pre existing conditions cannot be used for determining eligibility or premiums and I'm sure that you had low income last year (and hopefully filed a tax return) so you may be eligible for a subsidy. Mom may even be eligible for Medicaid, if NC is participating in the expansion of Medicaid part of ACA.

Please start contacting social service agencies and hospice, so that you and mom can take care of all that is available, especially the health insurance.
donall
 
Posts: 529
Joined: Tue Mar 13, 2012 7:45 am

Re: End of life finances, way over my head

Postby Browser » Mon Sep 02, 2013 7:11 am

Cancer survivor here, and I know you and your mother must be living a nightmare right now. My heart goes out to you and your Mom. She's too young to be dealing with this stuff. I was diagnosed at age 52 with very poor prognosis but I'm still kicking many years later. This stuff can be beat no matter how bad it looks. Don't forget to take care of yourself. People are willing to help. There are attorneys and other professionals willing to offer pro bono services. Wish I had something more substantial to offer right now, but wanted to send you both my best wishes.
If we have data, let’s look at data. If all we have are opinions, let’s go with mine. – Jim Barksdale
Browser
 
Posts: 3086
Joined: Wed Sep 05, 2012 5:54 pm

Re: End of life finances, way over my head

Postby Professor Emeritus » Mon Sep 02, 2013 7:24 am

Been there, done that and you have my complete and total sympathy and support.
1) be careful about selling the house if it has a large capital gain. You will pay taxes that you would not pay if you inherited the house. Google stepped up basis at death.
2) check for an elder law clinic in your area. Its one of the most common pro bono activities for retired lawyers. They are experts at these end of life issues.
Some are affiliated with law schools and use students. .

Again , good luck.

My MIL died at 57. Get help for yourself.
Professor Emeritus
 
Posts: 1850
Joined: Mon Aug 13, 2012 7:43 am

Re: End of life finances, way over my head

Postby elha » Wed Sep 18, 2013 6:03 pm

First of all, thank you for the advice and kind words. I've done a bit more research and I wanted to run the following by all of you savvy investors:

The primary concern right now is that our income is limited to SS Disability and my mom will soon need assisted living. Assuming ~$3500/mo for a facility, paid in part by SSDI of $1624/mo, that leaves $1876 we need to draw monthly from her funds. This doesn't, of course, include health insurance (we're 16 months short of Medicare eligibility), payments on her medical bills, or the mortgage.* Another thing to consider is that the estimated 5-year survival rate is about 10%, and we've just passed the 1 year mark; we're not planning for a lengthy "retirement."

We'd both like a simple way for her to receive a monthly distribution while softening the blow. The idea is to put her 401(k), money market, and mutual fund in VTTVX. Here are my assumptions: 1) since she is on disability we can avoid the 10% additional tax for early withdrawal, 2) her income is so low that we won't pay taxes for moving any of that money, and 3) a target retirement fund is no worse or better a spot than a managed payout or income fund. And here are my questions: 1) if the above plan is at all sensible, do we stay with VTTVX (2025) or bump up "retirement" by going to VTENX (2010)? 2) Or, if the above plan is not sensible...?

I had originally thought about dumping this whole thing on the "wealth management" firm that the rest of our family uses, but I'd prefer to do it myself if possible. I've been trying to soak up as much information as I can from the board, the wiki, the books, etc. I'm very much of the mind that, given a little research and the proper tools, there is nothing my mechanic can do for my car that I can't do myself. Convenience is another thing! Do tell me if my attitude is absurd and I should let a professional take over :)

Thank you!

*If and when she goes into a facility I will be able to go back into the workforce. The tentative plan is to stay in the house and pay the mortgage, fixing it up to get it ready for sale.
elha
 
Posts: 7
Joined: Sat Aug 31, 2013 5:51 pm

Re: End of life finances, way over my head

Postby lhl12 » Wed Sep 18, 2013 8:07 pm

1) You have told us that there is $85K of debt on the house, but how much will it sell for when the time comes? The amount of equity in the home could change the answers to your questions, potentially significantly.

2) You've referred to the "rest of your family". Is your father in the picture? Do you have any siblings?

3) Your student loans are your personal liability. Your mother's assets are her assets. Her assets cannot be used to discharge your liability. If she makes a gift of her assets to you then you can use that gift to pay off your loan, but not otherwise. Given her spending constraints, I think you need to assume that your student loans will remain outstanding for the remainder of her lifetime. When she is gone, then you can evaluate how much of your inheritance you might want to use to pay off the loans, but until then I think you should leave the loans in place, unchanged.
Last edited by lhl12 on Wed Sep 18, 2013 8:44 pm, edited 1 time in total.
lhl12
 
Posts: 276
Joined: Mon May 27, 2013 9:24 am

Re: End of life finances, way over my head

Postby Fallible » Wed Sep 18, 2013 8:34 pm

I am sorry to hear of your situation and hope the good advice provided here thus far will be of help.

Someone may already have mentioned it here and I missed it, but do you have an elder law attorney? A good attorney can help you in almost every area you've mentioned and you will need every bit of that help, even after your mother is gone. Also remember to take care of your own health, at least with regular medical checkups. Caregivers are under enormous stress, which can take its toll in ways you may not be aware of. Good luck.
"Common sense and a sense of humor are the same thing, moving at different speeds. A sense of humor is just common sense, dancing." -William James
Fallible
 
Posts: 3924
Joined: Fri Nov 27, 2009 5:44 pm

Re: End of life finances, way over my head

Postby Peter Foley » Wed Sep 18, 2013 8:37 pm

Sorry to hear about your situation - do check into hospice care. My mother had Alzheimers and was in hospice care the last year of her life. It was a very caring environment and being in hospice held the expenses down. I do not know the rules with respect to medicare eligibility - are disabled persons of your mother's age eligible? I believe that in my mother's case (she was over 90) that medicare paid for some of her hospice care.

Simplifying while your mother can help with the process would be a good step. It might also be a positive experience for your mother as she would be contributing to your wellbeing just as you are now contributing to hers.

While you mother's income is so low you might consider converting some of her rollover IRA to a Roth IRA. You may be able to do this without incurring any tax liability if her income is low enough. In addition if she has long term capital gains in the PRUAX fund, that fund can be sold and the proceeds moved to Vanguard (a simplification move). She is likely in the 15% tax bracket so she would pay no tax on the capital gains.

You got a lot of good advice already - I guess what I am adding is to keep income tax and inheritance tax implications in mind if you sell assets as part of the simplification process.
User avatar
Peter Foley
 
Posts: 2335
Joined: Fri Nov 23, 2007 11:34 am
Location: Lake Wobegon

Re: End of life finances, way over my head

Postby john94549 » Wed Sep 18, 2013 8:57 pm

Most County Bar Associations have elder-law specialists on referral panels. While you probably wouldn't get a "freebie", you might well qualify for a reduced rate, given your situation. This is not a DIY. Don't even consider it.

Many counties also offer counseling services (medical, hospice, in-home volunteers, etc.). The last time my Mom was home recuperating from a hospital/nursing-home stay, the County social worker paid a visit and had a long list of contact numbers.

This isn't something you need to deal with alone. Delegate the financial and legal (insofar as possible) so you can spend quality time with her.
john94549
 
Posts: 2905
Joined: Tue Jul 26, 2011 9:50 pm

Re: End of life finances, way over my head

Postby Fallible » Wed Sep 18, 2013 9:29 pm

john94549 wrote:Most County Bar Associations have elder-law specialists on referral panels. While you probably wouldn't get a "freebie", you might well qualify for a reduced rate, given your situation. This is not a DIY. Don't even consider it.

Many counties also offer counseling services (medical, hospice, in-home volunteers, etc.). The last time my Mom was home recuperating from a hospital/nursing-home stay, the County social worker paid a visit and had a long list of contact numbers.

This isn't something you need to deal with alone. Delegate the financial and legal (insofar as possible) so you can spend quality time with her.


I agree with this advice and it is a main reason I recommended an elder law attorney. A good one can advise beyond the legal and will be familiar with the various services available.
"Common sense and a sense of humor are the same thing, moving at different speeds. A sense of humor is just common sense, dancing." -William James
Fallible
 
Posts: 3924
Joined: Fri Nov 27, 2009 5:44 pm

Re: End of life finances, way over my head

Postby lethean46 » Wed Sep 18, 2013 10:12 pm

See "Will a beneficiary get Medicare coverage"?

http://www.ssa.gov/disabilityresearch/wi/medicare.htm

It seems that SSDI is an automatic qualification for Medicare coverage - after a 24 month qualifying period.

My best to you and to your mother.

ML
lethean46
 
Posts: 276
Joined: Sat Nov 17, 2007 11:52 pm
Location: OH

VITAS

Postby Taylor Larimore » Thu Sep 19, 2013 12:20 am

Elha:

You have received many very good suggestions for a very difficult situation.

My wife recently died while in VITAS hospice care in our home. I can only say the VITAS caregivers (in Miami) were wonderful and I am therefore happy to recommend the company. This is a link:

VITAS Innovative Hospice Care

It was mentioned above, but I want to emphasize the importance of postponing the sale of your mother's assets that have appreciated in value. This is because all capital-gain taxes will be cancelled when she passes. Her home appreciation is likely to be exempt from a capital-gain tax if the gain is less that $250,000 but there are exceptions outlined here:

Will You Have to Pay Capital Gains Taxes on the Sale of Your Home?

Your mother is fortunate to have a caring son who is doing all that a son can do.

We are fortunate to have son like you. Michael and his wife, Joyce, will be attending the Boglehead Conference next month with me.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
User avatar
Taylor Larimore
Advisory Board
 
Posts: 20116
Joined: Tue Feb 27, 2007 9:09 pm
Location: Miami FL

Re: End of life finances, way over my head

Postby SnapShots » Thu Sep 19, 2013 11:46 am

You've gotten a lot of good advice.

Hospice will help you by providing information even if they are not needed for patient care at this time.

Considering your mother has no health insurance and too much in assets to qualify for Medicaid, I suggest before paying any medical bills you find a medical billing advocate to scrutinize those bills.

You could also use a healthcare advocate to help you through the healthcare industry maze.

My mother was in and out of hospitals and skilled nursing facilities the last years of her life and I felt like I was in a constant battle. And, I'm from a family of healthcare providers who had connections.

Reaching out and getting help, as you're doing, will help get you and your mother through this painful and heartbreaking time.

Best to you and mom....
the best decision many times is the hardest to do
User avatar
SnapShots
 
Posts: 907
Joined: Wed May 09, 2012 1:39 pm

Re: End of life finances, way over my head

Postby elha » Thu Sep 19, 2013 3:17 pm

lhl12 wrote:1) You have told us that there is $85K of debt on the house, but how much will it sell for when the time comes? The amount of equity in the home could change the answers to your questions, potentially significantly.


It is appraised at 175000 so we are, I think, exempt from capital gains tax, unless you are referring to something else.

lhl12 wrote:2) You've referred to the "rest of your family". Is your father in the picture? Do you have any siblings?


Parents have long been divorced (and dad is in worse financial shape than mom). No siblings. By rest of family I mean my uncle and grandparents.

lhl12 wrote:3) Your student loans are your personal liability. Your mother's assets are her assets. Her assets cannot be used to discharge your liability. If she makes a gift of her assets to you then you can use that gift to pay off your loan, but not otherwise. Given her spending constraints, I think you need to assume that your student loans will remain outstanding for the remainder of her lifetime. When she is gone, then you can evaluate how much of your inheritance you might want to use to pay off the loans, but until then I think you should leave the loans in place, unchanged.


I understand and agree. Months ago I had an initial meeting with that financial advisor who, looking at the big picture, said it was an option. I thought it worth mentioning to you all.

john94549 wrote:Most County Bar Associations have elder-law specialists on referral panels. While you probably wouldn't get a "freebie", you might well qualify for a reduced rate, given your situation. This is not a DIY. Don't even consider it.


Thank you for the tip! I've found an elder law attorney in the area who offers an initial consultation for under $50. What exactly do you warn against me doing myself? Do you mean moving the money as I outlined or something else? My mom has always been fiercely independent and raised her daughter to be the same ;)


All of you have been extremely helpful. I still would like opinions on the idea of moving everything into that target retirement fund.
elha
 
Posts: 7
Joined: Sat Aug 31, 2013 5:51 pm

Re: End of life finances, way over my head

Postby lhl12 » Thu Sep 19, 2013 4:34 pm

My father died after a three month struggle with cancer when I was 22, leaving my mother (who was incompetent in the entire financial arena) and three younger siblings. I (and many others on this board, I am sure) know how difficult this all is, so please know that you have many sympathetic, supportive people here with you who will help you with all this in any way they can.

You are asking all the right questions, are getting good answers, and are taking the right steps. Keep asking and probing whenever you are unsure.

It is very important for you to take good enough care of yourself that you are able to take good care of your mother. It is easy under these circumstances to sacrifice your own physical and mental health for hers - even if only temporarily. That does no good for anyone. Your mother has every reason to be proud of you and grateful for all you are doing for her. She would not want you to sacrifice your own health for her benefit, so be sure not to do that. Eat well, exercise, get plenty of rest, and get out of the house enough to keep your head clear.

I would not move everything into the target retirement fund. You are in a volatile situation, that could last much longer or shorter than you anticipate. I think it would be better to leave things roughly as they are for now, and then adjust periodically as the situation evolves.
lhl12
 
Posts: 276
Joined: Mon May 27, 2013 9:24 am

Re: End of life finances, way over my head

Postby lhl12 » Thu Sep 19, 2013 4:43 pm

elha wrote:
lhl12 wrote:1) You have told us that there is $85K of debt on the house, but how much will it sell for when the time comes? The amount of equity in the home could change the answers to your questions, potentially significantly.


It is appraised at 175000 so we are, I think, exempt from capital gains tax, unless you are referring to something else.



Your mom has a lot of equity in the house, so you might look into the possibility of getting a Home Equity Line of Credit. You and she probably won't need it, but it might give you some peace of mind to know that the possibility is there just in case.
lhl12
 
Posts: 276
Joined: Mon May 27, 2013 9:24 am

Re: End of life finances, way over my head

Postby TSR » Thu Sep 19, 2013 5:05 pm

From your description, I'm assuming you're closer to the research triangle than the piedmont triad, but Wake Forest has an elder law clinic that offers free services geared directly toward elder law. Might be worth a look.

Best of luck in this difficult time.
TSR
 
Posts: 289
Joined: Thu Apr 19, 2012 10:08 am

Re: End of life finances, way over my head

Postby Helloeeze » Fri Sep 20, 2013 2:21 am

if she is a widow of a Veteran who served in a war and she hasn't remarried she can get some money from the US govt. I looked into this for my aunt who was a widow of a WWII veteran. It's not a lot of money but it's something, up to around 1K a month. It's called Aid and Attendance benefit.
Helloeeze
 
Posts: 144
Joined: Thu Jun 16, 2011 12:47 pm

Re: End of life finances, way over my head

Postby Paul78 » Fri Sep 20, 2013 2:41 am

Honestly I would pay off ALL the debt you currently have (30k student loan and if you have anything else add that).

Why? Cause when you mother does pass on I doubt there will be any money left. This will be one way for her to give you something when she is still alive.

Clearly it is too late in the game for her just to give you all of her assets (creditors would still end up getting the money because it would be clear what you mother's/you motivation would be with this move- ie to avoid paying the creditors). BUT it seems possible for her to give you some amount (ie 30k for the student loan).
Paul78
 
Posts: 150
Joined: Sat Dec 12, 2009 12:17 pm

Re: End of life finances, way over my head

Postby SnapShots » Fri Sep 20, 2013 12:16 pm

lhl12 wrote:
elha wrote:
lhl12 wrote:1) You have told us that there is $85K of debt on the house, but how much will it sell for when the time comes? The amount of equity in the home could change the answers to your questions, potentially significantly.


It is appraised at 175000 so we are, I think, exempt from capital gains tax, unless you are referring to something else.



Your mom has a lot of equity in the house, so you might look into the possibility of getting a Home Equity Line of Credit. You and she probably won't need it, but it might give you some peace of mind to know that the possibility is there just in case.


You don't need to hurry and do anything. You've got enough money to deal things at hand. No one knows what the future holds. Go to the elder lawyer and stop reading this thread. Sometimes you can get too much advice. :beer
the best decision many times is the hardest to do
User avatar
SnapShots
 
Posts: 907
Joined: Wed May 09, 2012 1:39 pm

Re: End of life finances, way over my head

Postby elha » Thu Feb 20, 2014 2:19 pm

Desperate for a second round of advice--I've edited my original post at top.
elha
 
Posts: 7
Joined: Sat Aug 31, 2013 5:51 pm

Re: End of life finances, way over my head

Postby Laura » Thu Feb 20, 2014 10:21 pm

I am so sorry to hear about your mother. It sounds like the last few months were difficult. Before making any suggestions I would like to clarify one thing you wrote

it's clear that her estate (her depleted savings, mainly) will not cover her medical bills (her only debt aside from mortgage).


To make sure I understand, her total medical debts are greater than the total value of all the investment assets you list (I calculate $194k)? In addition, she also had a mortgage on the home? Am I understanding your situation correctly?

Also, she had a $50k life insurance policy. Are you the named beneficiary?

Laura
Laura
 
Posts: 7026
Joined: Mon Feb 19, 2007 8:40 pm

Re: End of life finances, way over my head

Postby Flobes » Sat Feb 22, 2014 5:04 pm

My deep and sincere condolences. Loss of a mother is very profound. Spend ample time to grieve.

...way over my head... as the executrix as well as sole beneficiary

When my mom passed suddenly, I was the executor. And way over my head, too. Here's the lifesaver: The Nolo Executors Guide. Nolo is the highly-regarded publisher of self-help legal books (and software). The book covers so much, written for executors who are non-lawyers and non-accountants. It was my best friend. Especially helpful to sort out what needs doing, by whom, in what order, with what deadlines. How all the processes and procedures work. It might be a worthwhile small investment for a big resource for you; saved me lots of hours and even more lots of dollars. It even clarified and raised the issues to be resolved by the lawyers, so I was intelligent in that conversation.
http://www.amazon.com/The-Executors-Guide-Settling-Estate/dp/1413319734/ref=sr_1_3?ie=UTF8&qid=1393101876&sr=8-3&keywords=executors+guide

The 401(k) ... The IRA...

Basically, you have three options: take it all at once now, take it over the next five years, create Inherited IRAs. With the Inherited IRAs, you will be subject to RMDs (Required Minimum Distributions) based on your life expectancy. But you can always take more from your Inherited IRAS, as much as you want in any year. So the Inherited IRA gives you the most options going forward in your life. Whatever your choice, you will pay income taxes on the distributions in the year in which you take the money.
User avatar
Flobes
 
Posts: 301
Joined: Tue Feb 16, 2010 1:40 am

Re: End of life finances, way over my head

Postby Laura » Sat Feb 22, 2014 7:05 pm

If the debts are more than the value of the estate, I do not believe you would get any of the money with the exception of the life insurance if you are the beneficiary. The IRAs and all accounts would most likely be used to pay the debts of the estate and you would only get anything that is left at the end. You need to figure out debts and assets to cover those debts very quickly for your own financial situation. It sounds like you are counting on some of these assets to help you out for a while and that my not be possible.

Laura
Laura
 
Posts: 7026
Joined: Mon Feb 19, 2007 8:40 pm

Re: End of life finances, way over my head

Postby AlaskanWolf » Sat Feb 22, 2014 7:14 pm

Elha,

I am so very sorry to hear of your loss!! I just lost both of my parents myself. My thoughts and prayers are with you.
User avatar
AlaskanWolf
 
Posts: 34
Joined: Sat Feb 22, 2014 4:04 pm

Re: End of life finances, way over my head

Postby TexasPenny » Sun Feb 23, 2014 12:27 am

Laura wrote:If the debts are more than the value of the estate, I do not believe you would get any of the money with the exception of the life insurance if you are the beneficiary. The IRAs and all accounts would most likely be used to pay the debts of the estate and you would only get anything that is left at the end. You need to figure out debts and assets to cover those debts very quickly for your own financial situation. It sounds like you are counting on some of these assets to help you out for a while and that my not be possible.

Laura


I think it's important to distinguish what was in the estate vs what was paid out to the beneficiary. In the updated OP it states that only the house and checking/savings account did not have a beneficiary. Therefore, my understanding is THAT is the estate. Anything with a beneficiary is paid out separately and is never part of the estate. You should check with an estate attorney and make sure you're not paying more out of the estate than needed.
TexasPenny
 
Posts: 30
Joined: Mon Oct 28, 2013 10:40 pm

Re: End of life finances, way over my head

Postby Laura » Sun Feb 23, 2014 11:49 am

Thanks Texas Penny. That is my point exactly. It is not completely clear to me what falls into which category.

Laura
Laura
 
Posts: 7026
Joined: Mon Feb 19, 2007 8:40 pm

Re: End of life finances, way over my head

Postby elha » Sun Feb 23, 2014 12:27 pm

Thanks for the information! I meant to clarify that I was listed as the beneficiary for the IRA, 401(k), and the Capital One account--so those pass directly to me. Unfortunately, she didn't put me on the Wells Fargo account, so that goes into the estate. The house passed to me upon death and typically isn't a part of the estate, but it can be pulled "back in" from what I understand. So, the estate right now is her checking/savings and the Wells Fargo--roughly $20k. I do think that will be enough to cover the medical bills and will save me from dealing with selling the house to settle debts.

So I seem to get the impression that the inherited IRA is the best plan, perhaps taking larger distributions now while my tax bracket is low?
elha
 
Posts: 7
Joined: Sat Aug 31, 2013 5:51 pm

Re: End of life finances, way over my head

Postby AlaskanWolf » Sun Feb 23, 2014 12:34 pm

“Come to the edge.' 'We can't. We're afraid.' 'Come to the edge.' 'We can't. We will fall!' 'Come to the edge.' And they came. And he pushed them. And they flew.”

― Guillaume Apollinaire
User avatar
AlaskanWolf
 
Posts: 34
Joined: Sat Feb 22, 2014 4:04 pm

Re: End of life finances, way over my head

Postby SimonJester » Sun Feb 23, 2014 1:46 pm

My condolences on your loss.

I would suggest you consult with a probate / estate attorney, given the fact that you may be dealing with an insolvent estate it would be best to have a professional handle the estate.

Your state law dictates which bills are paid and in which order. I would keep in mind just because the house could be clawed back into the estate doesn't necessarily mean it will be. So it is very important that all the creditors get properly notified in the proper time frames.

Again all deepening on state laws; creditors will have so many days to file a claim against the estate, then if there is not enough money in the estate the executor denies the claim, the creditor then has so many days to request additional estate assets be brought into the estate.

The house is a secured asset so the mortgage company gets first dibs on proceeds from a sale in order to satisfy the mortgage, only then would any remaining money from the sale of the house go into the estate. You mentioned paying the mortgage, be sure you document that as you should be paid back for that from the sale of the house.


Again so sorry for you loss...
"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." - Benjamin Franklin
SimonJester
 
Posts: 480
Joined: Tue Aug 16, 2011 1:39 pm

Re: End of life finances, way over my head

Postby Colorado13 » Sun Feb 23, 2014 10:18 pm

I am sorry for your loss. Sending deepest sympathy.
Colorado13
 
Posts: 520
Joined: Thu Apr 07, 2011 5:58 pm
Location: Colorado

Re: End of life finances, way over my head

Postby mnvalue » Mon Feb 24, 2014 3:39 am

elha wrote:perhaps taking larger distributions now while my tax bracket is low?

I think the ideal case is that you don't take anything more than RMDs until your own retirement. In any event, you're going through enough now that you probably don't want to make any decisions you don't have to. So take it as an inherited IRA, make sure RMDs will happen properly, settle the estate, grieve, and then worry about this later.
mnvalue
 
Posts: 803
Joined: Sun May 05, 2013 3:22 pm

Re: End of life finances, way over my head

Postby elha » Thu Jul 24, 2014 12:59 pm

I've again edited the first post. Looking for feedback now that things have developed a bit.
elha
 
Posts: 7
Joined: Sat Aug 31, 2013 5:51 pm

Re: End of life finances, way over my head

Postby Gill » Thu Jul 24, 2014 2:19 pm

elha wrote:...a week later there was a check in my hands....minus the federal 20% cut and a bit for the state. Almost $11k gone, just like that. Was this ignorance on my part? Was this avoidable? Can you give any advice for future readers to avoid this?

You can claim this as a credit on your 2014 income tax. If you have little other income you'll receive most or all of it back.
Gill
Gill
 
Posts: 1038
Joined: Sun Mar 04, 2007 9:38 pm
Location: Florida


Return to Investing - Help with Personal Investments

Who is online

Users browsing this forum: Bing [Bot], eschaef, goingup, jwtietz, mass_biker, ruralavalon, wanderer, Yeti and 90 guests