87 Year Old Grandmother Has $600,000 In the Bank

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acemanhattan
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87 Year Old Grandmother Has $600,000 In the Bank

Post by acemanhattan »

This money is currently spread across three bank accounts and is used, along with a trust that owns rental property, to support my fiance's 87 year old grandmother. I am still figuring out all of the particulars (it just came to my attention that the money is invested in this way) but I estimate that the trust generates $2k-$5k per month worth of income and that the remainder of her approximately $8k per month expenses are paid for from the $600,000.

It would be ideal if the money could be used to generate a return for the family that remains after she passes, but obviously it needs to be in secure enough investments so that, at minimum, it can be available to take care of her for the next 5-10 years. Any suggestions?
inbox788
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by inbox788 »

acemanhattan wrote:This money is currently spread across three bank accounts and is used, along with a trust that owns rental property, to support my fiance's 87 year old grandmother. I am still figuring out all of the particulars (it just came to my attention that the money is invested in this way) but I estimate that the trust generates $2k-$5k per month worth of income and that the remainder of her approximately $8k per month expenses are paid for from the $600,000.

It would be ideal if the money could be used to generate a return for the family that remains after she passes, but obviously it needs to be in secure enough investments so that, at minimum, it can be available to take care of her for the next 5-10 years. Any suggestions?
How much is the property worth? Is the rental property generating $2-5k/month? Why the high variability? Who manages the property? Who manages the trust? Are the collecting big fees? Am I understanding correctly that on top of the rental property, she's got $600,000 cash in bank accounts? What are the returns on those? $8k - ($2-5k) ~ ($6-3k). That's 10-5% return by my simple math, which given today's rates makes me think it's not CDs/bonds.

How much cash can be freed up? This might be one of those rare cases where an annuity might be a good thing. At her age, $100,000 buys around $800-1200/month. How does this compare to her current return?
http://www.immediateannuities.com/infor ... tep-1.html
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Watty
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by Watty »

acemanhattan wrote:This money is currently spread across three bank accounts and is used, along with a trust that owns rental property, to support my fiance's 87 year old grandmother. I am still figuring out all of the particulars (it just came to my attention that the money is invested in this way) but I estimate that the trust generates $2k-$5k per month worth of income and that the remainder of her approximately $8k per month expenses are paid for from the $600,000.

It would be ideal if the money could be used to generate a return for the family that remains after she passes, but obviously it needs to be in secure enough investments so that, at minimum, it can be available to take care of her for the next 5-10 years. Any suggestions?

It was not clear if you had been asked for help so any suggestions might not be very well received.

The only issue that I see is that it would be good to make sure that the money split between accounts so that it does not exceed the FDIC insurance limits so there than that just putting all the money into things like bank CD's is fine since she has no need to take any additional risks.
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by john94549 »

Watty wrote:

It was not clear if you had been asked for help so any suggestions might not be very well received.
My thoughts, exactly.
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acemanhattan
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by acemanhattan »

Thanks for the responses so far.

The trust/properties/money is managed by my fiance's mother. She recognizes she might not be making all the right decisions and asked my fiance and I to take an interest (since the trust is intended to also benefit my fiance (and I, it turns out) down the road); that is to say, she would not be offended by suggestions.

In prying further it seems the two properties the trust owns generate $12,000 in monthly rents. I am not sure the full value of the properties, but they are commercial/industrial. In addition the trust owns logging property which is not producing income. The, perhaps, interesting news is that the grandmother's expenses are actually covered by the monthly rents, so the $600,000 isn't actually being tapped to cover that in any way. In that case it isn't as imperative that it be instantly available, just that it be invested in such a way that my fiance's mother and uncle could benefit from it when the grandmother passes away. At this point it sounds like it is just earning < .05%.
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Peter Foley
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by Peter Foley »

If they are open to suggestions I would be inclined to simplify if the tax consequences were not too great. There may be a lot of long term capital gains that could receive a stepped up basis at some point in time. This would complicate the calculation.
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by Lafder »

If grandma is only comfortable with banks, CDs would return more than simple savings or checking accounts.

There are certainly a number of conservative investment options if she is willing to change what she has done for ? years now. Such as Life strategy Income, Wellesley, and 3 fund portfolios more heavy in bonds.

I hear you are also asking what level of risk would be appropriate in this case since the $ is likely more than grandma needs, so it is more for your mother in law and your husband in the future which is longer time line than grandma needs. Yes that would be a factor.

It seems likely that trying to change things too much may not be worth the stress for her. Only you and her family can sort out if it is worth nudging for change, or best to let it be.

Who is managing the rentals? Are they at fair market value rents or have they sat at the same rents for years and years as her bank accounts seem to have done? That could be a way to increase income without rocking her security boat of cash at the bank, spread out to get the FDIC insurance.

Best wishes.
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harmony
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by harmony »

What is the amount of your fiance's grandmother's social security check and does she have any long-term care insurance?
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by inbox788 »

harmony wrote:What is the amount of your fiance's grandmother's social security check and does she have any long-term care insurance?
Given age, $12k/month income and $600k cash and current $8k in expenses, these are relatively minor items. Consider the $600k as a 6 year emergency fund.

She lived through the Great Depression, the Great Recession, and unless another huge financial black swan comes along, she looks like she'll do fine for the rest of her life. She seems to be happy and secure with the current situation, so don't rock the boat too much. No reason to add stress to anyone all around.
stan1
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by stan1 »

I think she should be using some CDs rather than a savings account, but an 87 year old widow with $600K could end up needing a good chunk of that. If she had $2M I'd say she could invest some of that for her heirs -- but at $600K she's still investing for herself. Heirs can invest it how the want if/when they inherit.

Put another way: you don't want to be the one who gave the family the advice to put money into the stock or bond market and see it lose 10-50%.
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by dolphinsaremammals »

I would take a look at how well the rental property is being managed in terms of honesty, but unless something wrong turns up, I would be inclined not to change anything.

I would be very, very cautious about making changes to benefit her heirs that might result in putting her in a poorer financial situation. You aren't even married to the granddaughter, and, even if you were, this starts not to pass the smell test.
MN Finance
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by MN Finance »

I would not get involved in this. You have no upside.

What purpose do you think the 600k serves? An 87 year old is sitting on cash and you are wondering what she can do to better invest the money for her family? The answer is, nothing. Should you recommend something else, you will almost assuredly be putting grandma in a worse spot. She needs liquidity, she has it as long as she stays in cash. You want inheritance? Great, you have property. Stay out of grandma's cash.
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by Longdog »

acemanhattan wrote:This money is currently spread across three bank accounts and is used, along with a trust that owns rental property, to support my fiance's 87 year old grandmother. I am still figuring out all of the particulars (it just came to my attention that the money is invested in this way) but I estimate that the trust generates $2k-$5k per month worth of income and that the remainder of her approximately $8k per month expenses are paid for from the $600,000.

It would be ideal if the money could be used to generate a return for the family that remains after she passes, but obviously it needs to be in secure enough investments so that, at minimum, it can be available to take care of her for the next 5-10 years. Any suggestions?
She is 87 years old. She can take $60,000 per year for the next 10 years, bringing her to 97, without any risk. I say, leave it but make sure that it is properly insured by FDIC. If you feel the need to do something, put it in a rolling CD ladder to pick up a little more risk-free interest. Or TIPS. But really, it does not need to grow - it needs to support her grandmother, and with that amount, it surely can.
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by 2stepsbehind »

MN Finance wrote:I would not get involved in this. You have no upside.

What purpose do you think the 600k serves? An 87 year old is sitting on cash and you are wondering what she can do to better invest the money for her family? The answer is, nothing. Should you recommend something else, you will almost assuredly be putting grandma in a worse spot. She needs liquidity, she has it as long as she stays in cash. You want inheritance? Great, you have property. Stay out of grandma's cash.
+1. This is the OP's fiance's grandmother. S/he isn't even married into the family yet and notwithstanding what his/her purported future mother-in-law suggests, it is unlikely that s/he is beneficiary of the trust. At least I sure as heck wouldn't add in-laws not to talk about prospective ones as beneficiaries of my trust. OP, at most you should give a list of the top 2-3 savings account which accept trusts and perhaps the best cd rate that accepts trusts although the vast majority of that money really ought to be liquid in case of emergency.
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by wander »

SteveM wrote:She is 87 years old. She can take $60,000 per year for the next 10 years, bringing her to 97, without any risk. I say, leave it but make sure that it is properly insured by FDIC. If you feel the need to do something, put it in a rolling CD ladder to pick up a little more risk-free interest. Or TIPS. But really, it does not need to grow - it needs to support her grandmother, and with that amount, it surely can.
+1. It's her money and serves her well.
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by derosa »

Just went back and rescanned the posts and I am still not sure I have seen anything about what grandma wants? Did I miss that?

What I do see are the heirs (daughter / uncle / granddaughter / fiance / is there anyone else not mentioned???) trying to figure out what theymight do with the money now that they might get later on. And the OP still has to marry the fiance? Maybe the fiance's mother is trying to do something? Who knows?

I think the OP needs to take a big step back here.
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by VictoriaF »

Addressing a woman you don't know as "grandma" is demeaning. It strips her of any personality and achievements, except the fact that she has grandchildren. The OP has properly identified the woman in question as his fiance's grandmother. In all follow-up discussions, she should be considered a 87-year old investor.

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acemanhattan
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by acemanhattan »

Thanks for all of the input.

My fiance and I have always held the position that the only thing we care about is that the trust and assets are managed in such a way that her grandmother was taken care of first, and secondly her and I don't have to incur a large cost to support her mother as she ages--though her grandfather was, more or less, her father growing up and there is no question he intended for her to benefit from the trust. That's neither here nor there though; her and I are living/investing/working as if we won't ever benefit from it.

As someone who just purchases a Target Fund and is 30+ years away from touching it, I hadn't thought at all about how to invest at the stage of life the grandmother is in. It sounds like all the mother should really do is make sure the money is not over FDIC insurance limits.

Also, in response to why the grandmother's wants aren't mentioned: she suffers from severe dementia (though she is incredibly fit physically). Her family loves her greatly though and has spared no expense on making sure she receives the best care possible.
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by Grt2bOutdoors »

acemanhattan wrote:This money is currently spread across three bank accounts and is used, along with a trust that owns rental property, to support my fiance's 87 year old grandmother. I am still figuring out all of the particulars (it just came to my attention that the money is invested in this way) but I estimate that the trust generates $2k-$5k per month worth of income and that the remainder of her approximately $8k per month expenses are paid for from the $600,000.

It would be ideal if the money could be used to generate a return for the family that remains after she passes, but obviously it needs to be in secure enough investments so that, at minimum, it can be available to take care of her for the next 5-10 years. Any suggestions?
IMO - Mind your own business, did the 87 year old grandmother ask for your advice, did she ask for her granddaughter's advice? The money belongs to the grandmother she hasn't passed on yet, remember? If anything happened to that money like it somehow evaporated due to market losses, who will be on the hook for her well-being? Will it be you or will you absolve yourself? You're barking down the wrong path here.
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acemanhattan
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by acemanhattan »

Grt2bOutdoors wrote:
acemanhattan wrote:This money is currently spread across three bank accounts and is used, along with a trust that owns rental property, to support my fiance's 87 year old grandmother. I am still figuring out all of the particulars (it just came to my attention that the money is invested in this way) but I estimate that the trust generates $2k-$5k per month worth of income and that the remainder of her approximately $8k per month expenses are paid for from the $600,000.

It would be ideal if the money could be used to generate a return for the family that remains after she passes, but obviously it needs to be in secure enough investments so that, at minimum, it can be available to take care of her for the next 5-10 years. Any suggestions?
IMO - Mind your own business, did the 87 year old grandmother ask for your advice, did she ask for her granddaughter's advice? The money belongs to the grandmother she hasn't passed on yet, remember? If anything happened to that money like it somehow evaporated due to market losses, who will be on the hook for her well-being? Will it be you or will you absolve yourself? You're barking down the wrong path here.
As mentioned above the grandmother has dementia and isn't in position to ask for advice. The mother is herself in, sort of, early stages of failing health and recognizes this which is why she asked us to take an interest. We are not her only resource and I am not the only input, they just know I have a specific interest in Financial Mathematics and have asked me to do some research. My initial impulse was that probably very little should change and it sounds like that is the case.
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by cheese_breath »

acemanhattan wrote: It would be ideal if the money could be used to generate a return for the family that remains after she passes, but obviously it needs to be in secure enough investments so that, at minimum, it can be available to take care of her for the next 5-10 years. Any suggestions?
I concur with the other suggestions to stay out of it. But if you decide to proceed anyway at least make sure you're putting her welfare first, not the family's potential inheritance.
The surest way to know the future is when it becomes the past.
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acemanhattan
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by acemanhattan »

cheese_breath wrote:
acemanhattan wrote: It would be ideal if the money could be used to generate a return for the family that remains after she passes, but obviously it needs to be in secure enough investments so that, at minimum, it can be available to take care of her for the next 5-10 years. Any suggestions?
I concur with the other suggestions to stay out of it. But if you decide to proceed anyway at least make sure you're putting her welfare first, not the family's potential inheritance.
Thanks for the input.

I realize it's easy to say, but in this case everyone's primary interest is the grandmother's well-being. In fact, just this week they moved her to a care facility that was $2,000/month more expensive than the one she had been at for the last 5 years because it offered things like smaller ratios, gardens, pets, and homemade bread. They could have just as easily kept her at the previous facility for fear that the $2k would come at the expense of their future selves, but it wasn't even a question for them.
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by cherijoh »

acemanhattan wrote: As mentioned above the grandmother has dementia and isn't in position to ask for advice. The mother is herself in, sort of, early stages of failing health and recognizes this which is why she asked us to take an interest. We are not her only resource and I am not the only input, they just know I have a specific interest in Financial Mathematics and have asked me to do some research. My initial impulse was that probably very little should change and it sounds like that is the case.
At some point this money may be needed to pay for care for the grandmother, so a very low risk portfolio is indicated. If the money is in savings accounts, then a CD ladder with a big chunk of the money would still be very low risk while increasing the income. Since your future MIL has asked for advice, I think this would be something you could propose without any down-side potential.
harmony
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by harmony »

My question earlier was directed toward the OP. I should have said why I was asking about the amount of the social security check and whether your fiance's grandmother has long-term care insurance. (I think the reason for my question may have been misunderstood by another poster, which is certainly very understandable, since I didn't mention why I was asking it.) OP, you have mentioned that your fiance's grandmother has severe dementia and her family is giving her the best of care, but we don't know if this care is being provided in someone's home (perhaps by her daughter whose physical health is also failing) or in a care facility.

Combined, the two sources of income (SS check and LTC insurance) would affect your fiance's grandmother's cash flow in the future (even if it would all flow toward the nursing home). In that case, funds could be invested in some longer term CD ladders without "rocking the boat". The answer to the question I raised earlier helps to clarify the extent of the need for liquidity.

A case in point would be my brother-in-law in his mid-seventies, a single retired physician, suffering from mobility issues and cognitive impairment, who is currently in a nursing home. It makes a huge difference that he has a large Social Security check and unlimited long-term care insurance coverage. This greatly affects how his POA-F manages the rest of his assets. If his LTC coverage were limited to 3 or 5 years, the POA-F would be managing his assets so they could be used when his LTC coverage ends.

Even if there is no LTC coverage, one needs to be aware of how the cost of care is likely to increase as the impairment progresses since the cost for caregivers changes throughout the progression of this disease. People with cognitive impairments may wake up while the in-home caregiver is still asleep. Your fiance's grandmother may soon need 24/7 care if she is not needing it already.
Last edited by harmony on Mon Aug 25, 2014 1:20 pm, edited 2 times in total.
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acemanhattan
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by acemanhattan »

harmony wrote:My question earlier was directed toward the OP. I should have said why I was asking about the amount of the social security check and whether your fiance's grandmother has long-term care insurance. (I think the reason for my question may have been misunderstood by another poster, which is certainly very understandable, since I didn't mention why I was asking it.) OP, you have mentioned that your fiance's grandmother has severe dementia and her family is giving her the best of care, but we don't know if this care is being provided in someone's home (perhaps by her daughter whose physical health is also failing) or in a care facility.

Combined, the two sources of income (SS check and LTC insurance) would affect your fiance's grandmother's cash flow in the future (even if it would all flow toward the nursing home). In that case, funds could be invested in some longer term CD ladders without "rocking the boat". The answer to the question I raised earlier helps to clarify the extent of the need for liquidity.

A case in point, would be my brother-in-law in his mid-seventies, a single retired physician, suffering from mobility issues and cognitive impairment, who is currently in a nursing home. It makes a huge difference that he has a large Social Security check and unlimited long-term care insurance coverage. This greatly affects how how his POA-F manages the rest of his assets. If his LTC coverage were limited to 3 or 5 years, the POA-F would be managing his assets so they could be used when his LTC coverage ends.

Even if there is no LTC coverage, one needs to be aware of how the cost of care is likely to increase as the impairment progresses since the cost for caregivers changes throughout the progression of this disease. People with cognitive impairments may wake up while the in-home caregiver is still asleep. Your fiance's grandmother may soon need 24/7 care if she is not needing it already.
Thanks for clarifying.

She does not have long term health coverage and, though I don't know the amount she receives in SS, I suspect it is a small amount, since she was primarily a homemaker her whole adult life. It may be noteworthy that she already receives 24/7, all inclusive care. So while her expenses might go up as prices normally inflate, they wouldn't likely make a huge jump.
harmony
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by harmony »

I would just add then that one should make sure that her accountant makes maximum use of her qualified medical expenses to take full advantage of the Schedule A medical expense deduction. Alzheimer's diesease is one of the qualifying conditions for a chronically ill individual, so this makes that person's long-term care expenses fully deductible.
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by Herekittykitty »

Assuming she is claiming her social security income based on her husband's earnings record, and if he had a significant earnings record, her social security income may not be insignificant.

Whether or how the exact number would play into any decisions made by the trustee, I don't know.
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toto238
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by toto238 »

I would seek out a couple high yield savings accounts and give that information to the appropriate parties. They still have FDIC insurance and usually the only restriction is that you can only take money out 6 times per month. These accounts are paying around 0.75%-0.95% around the Internet right now. Provides a little more inflation protection for if she lives longer than anticipated.

A CD ladder may be appropriate, but if she does need it she would incur penalties by breaking the CD early. It's not completely liquid. This is one of those cases where you have to question if it's your best interest or hers that are the motivation.
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acemanhattan
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by acemanhattan »

harmony wrote:I would just add then that one should make sure that her accountant makes maximum use of her qualified medical expenses to take full advantage of the Schedule A medical expense deduction. Alzheimer's diesease is one of the qualifying conditions for a chronically ill individual, so this makes that person's long-term care expenses fully deductible.
Great, thank you for this information. My fiancee isn't convinced her mother knows this so it will be good to address it.
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by harmony »

When one is investing huge sums in a CD for the maximum term available, it may be useful to use this tool:

http://www.depositaccounts.com/tools/br ... lator.aspx

In the current low interest rate environment, this is a way to maximize yields while waiting for interest rates to rise. It may become possible to get a better rate when rates go up, despite having to pay an early withdrawal penalty. However, If one doesn't have a huge sum and doesn't invest for the maximum term available, then this tool isn't nearly as helpful.

Caveat: read all the fine print about the penalties, etc.

If the fiance's grandmother lives with dementia for a long time, and it could happen, I think it makes sense to plan well for her.
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by Fallible »

harmony wrote:...If the fiance's grandmother lives with dementia for a long time, and it could happen, I think it makes sense to plan well for her.
Agree and the OP's mention that the grandmother is in good physical health also could further indicate a longer life.
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by RunningRad »

I have two comments…

1. In my experience with older family members with sizable nest eggs, they have acquired them and are generally comfortable with how they are invested. So long as they are not getting ripped off, their needs are met, and they are not taking excessive risk, I do not offer unsolicited advice.

2. The best way to make your fiancée into your ex- fiancee is to meddle in her grandmother's financial affairs.
Few decisions in life motivated by greed ever have happy outcomes--Peter Bernstein, The 60/40 Solution
harmony
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by harmony »

In general I agree with most of the posters who are recommending caution about giving advice for this grandmother's financial affairs. All of this advice comes from a great wealth of wisdom and real concern for nurturing peaceful family relationships.

Amongst my elders I have seen it both ways.

One of my older relatives was coherent until the day he died . . . going about his normal business one day, he just dropped over and died. No one would have considered advising him on his affairs, unless asked.

Another older relative had full-blown dementia for a number of years already when a son-in-law noticed that the estate tax threshold had changed and many of the heirs would likely be taxed on 20+ years of capital gains increase in the value of farm land which had been in a by-pass trust for that long. This son-in-law informed his wife, who informed her brother who had POA-F, who then took this new information to their mother's lawyer and it was fixed; but in a way that affirmed the family relationships.

The OP has told us that his fiance's mother would not be offended by any suggestions, but how was this determined? Did the mother initiate this request (a good sign) or did the OP and fiance bring this up to her (more questionable)? The fiance has an uncle, who could either be the son of the grandmother or the son-in-law of the grandmother. In either case, this uncle would be more closely related to the mother and the grandmother. Even though the mother said she would not be offended, this uncle is also a beneficiary. Does the uncle (assuming a son) have good communication with his sister? Has your fiance's mother asked the uncle for advice, and if so, what was his response? If your advice has been actively solicited by the mother, would the uncle also be receptive to it? I can imagine even though you may offer very good advice, it might not be as welcome coming from a fiance. Any piece of advice that could potentially enrich you later on could be looked upon with skepticism, so do tread very cautiously.
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by Bfwolf »

I agree with the general advice that meddling may not be seen advantageously and that keeping the money liquid (which it is) makes sense anyway.

I do like the suggestion of at least moving a big chunk (say $500K) to a couple of savings accounts where she can earn higher interest. I hardly think that would be considered meddling since the money's still liquid, you may just send Internet links to your fiance's mom with a couple of the better savings account offers.
Saving$
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by Saving$ »

As has been suggested, a CD ladder could work. Depending upon the monthly spend rate, would suggest $100-$200k go to a high yield savings, and the rest into CD ladder.

Otherwise, the only thing I would say you should encourage changing is that 0.05% return on the cash. There are plenty of financial institutions offering >0.9% return, and even up to 1.05%. If the $600k is not in a trust, it is a no brainer to put $200k in each of three high paying accounts.
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by nisiprius »

The average life expectancy of an 87-year-old woman is 6 years.* (Or plug in your own numbers if you like, as you'll see it doesn't matter much). In that time frame, a lot of things, even inflation, can be taken as close to flat, but... let's assume 4% per year for inflation which is a lot more than current and is seems like a reasonably conservative allowance even if inflation takes off. Let's also assume that the money earns nothing, which you say is the case at present. Then the back-of-the-envelope calculation is that

she can draw 8K with 4% COLA each year for 6 years and have $547,000 left
...for 12 years and have $480,000 left
...for 20 years and still have $361,000 left.

I just don't see the problem here.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by sadie wess »

VictoriaF wrote:Addressing a woman you don't know as "grandma" is demeaning. It strips her of any personality and achievements, except the fact that she has grandchildren. The OP has properly identified the woman in question as his fiance's grandmother. In all follow-up discussions, she should be considered a 87-year old investor.

Victoria
Correct.

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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by joe8d »

RunningRad wrote:I have two comments…

1. In my experience with older family members with sizable nest eggs, they have acquired them and are generally comfortable with how they are invested. So long as they are not getting ripped off, their needs are met, and they are not taking excessive risk, I do not offer unsolicited advice.

2. The best way to make your fiancée into your ex- fiancee is to meddle in her grandmother's financial affairs.
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by donocash »

[Post removed --admin LadyGeek]
I strongly disagree (Edited)

This young person has shown nothing but respect for an elderly prospective relative, and being asked for advice, he has come to this forum to seek advice.

He has been put in an uncomfortable position, but he is trying to do his best.

He has shown no self-interest in this woman's estate.

The admonition to be careful about giving advice even when asked is wise; the accusation of greed and laziness (focus on acquiring your own wealth?) is unkind at a minimum.
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by countdown »

Aceman wrote:
'The trust/properties/money is managed by my fiance's mother...since the trust is intended to also benefit my fiance (and I, it turns out) down the road);'

I stand by my comments donocash.
You may have missed the above and his/her other comments about the trust potentially supporting fiance AND the OP.

I feel sad for the matriarch.
It's all quite offensive I think.
To each his/her own.
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by cheese_breath »

countdown wrote:Aceman wrote:
'The trust/properties/money is managed by my fiance's mother...since the trust is intended to also benefit my fiance (and I, it turns out) down the road);'

I stand by my comments donocash.
You may have missed the above and his/her other comments about the trust potentially supporting fiance AND the OP.

I feel sad for the matriarch.
It's all quite offensive I think.
To each his/her own.
I raised a similar concern earlier in this thread about making sure " you're putting her welfare first, not the family's potential inheritance." I was satisfied with
acemanhattan's reply as assurance this was being done.
acemanhattan wrote:
cheese_breath wrote:
acemanhattan wrote: It would be ideal if the money could be used to generate a return for the family that remains after she passes, but obviously it needs to be in secure enough investments so that, at minimum, it can be available to take care of her for the next 5-10 years. Any suggestions?
I concur with the other suggestions to stay out of it. But if you decide to proceed anyway at least make sure you're putting her welfare first, not the family's potential inheritance.
Thanks for the input.

I realize it's easy to say, but in this case everyone's primary interest is the grandmother's well-being. In fact, just this week they moved her to a care facility that was $2,000/month more expensive than the one she had been at for the last 5 years because it offered things like smaller ratios, gardens, pets, and homemade bread. They could have just as easily kept her at the previous facility for fear that the $2k would come at the expense of their future selves, but it wasn't even a question for them.
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by LadyGeek »

I removed an off-topic post. As a reminder, see: Forum Policy
We expect this forum to be a place where people can feel comfortable asking questions and where debates and discussions are conducted in civil tones...

Attacks on individuals, insults, name calling, trolling, baiting or other attempts to sow dissension are not acceptable.
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Re: 87 Year Old Grandmother Has $600,000 In the Bank

Post by countdown »

Best wishes to many of you. Please close my account.
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