We need some money advice...

My feeble mind... | 05/18/2002 | MoodyBlu

[MoodyBlu]

We need some advice from any money experts. My mother-in-law, an 86 year old widow who has lived alone for 25+ years, just received a check for $41,000 from the estate of her departed sister.

My MIL receives a small social security check, a small pension from her husband's employer, and some aid from the state (PA) in the way of food stamps and heating assistance. Through the years, she has flat refused to let us help her with any expenses. We have tried to pay her electric bill, property taxes, phone, you name it. I have to admire her independence.

Here's the problem. We believe she is going to have to some how report this money to the "government" and we are unsure how this is going to effect what the "government" now provides. Can anyone provide some advice on how to help the MIL handle her recent fortune? My wife wants to journey home to help with the situation next week and I just know that the great folks of FreeRepublic will have some worthwhile advice/help. I thank you in advance.

MoodyBlu

[Cagey]

It's too bad your post is not over on the main forum because:

A.) Many Freepers could benefit from the many responses it would receive if only more saw your question.

B.) Your question involves taxes which certainly is an issue most conservatives are concerned with.

C.) It's plainly an interesting topic and would get well over a hundred responses on the "old" FreeRepublic.

I really can't help you because I don't have the expertise. However, I'll watch for responses. Why not give it a shot and repost this thread on the main forum and please flag me if you do.

[pubmom]

You have Freepmail.

[MoodyBlu]

Thanks for your input. I'll give it a day or so to see if there is any response in significant numbers. If not, I'll take the hit from the complainers and post it else where. Regards.

[MoodyBlu]

Thanks for the mail pubmom. Sounds as if it could get ugly! Regards.

[Cagey]

I thought you posed an incredibly interesting question but the thing is, your thread will catch so few eyes because most people never bother to look over here. Sadly, those that complained about so called "Vanities" have won and FreeRepulic has lost much of it's "life" in my opinion. Your question is one that many of us will face and has ramifications that certainly fit in the spirit of what this site was created for.

[chaosagent]

Some thoughts:

This money is not taxable. However, if it is invested and earns interest, the interest will be taxable.

If she has to go into a nursing home and Medicare/Medicaid pays for it, her assets, including this money must be used for her upkeep.

Does she need it for her upkeep, or to increase her standard of living?

If so you can look at a series of laddered municipal bonds or CD's Laddered means staggered years. You put some in 1 year bonds or CD's, some in 2 year, some in 5 years, etc.

If not, then you can look at several no-load mutual funds.

One thing to look out for is what she may do if she has complete control of this sum. Is she likely to be talked out of it by some scam artist. (It happens all the time.) You could look at putting this in a trust.

If she decides to give this away, she can give $10,000 per year to any person without tax libilities on either in end.

If it is still in her estate when she dies, and is the bulk of her estate, it can be willed to anyone with no tax liabilities on either end.

Hope this gives you some ideas.

[brat]

I'm not certain, but I think she'll lose her assistance. I believe it goes by not only income, but banking accts too. Of course, at that age, she'll be able to afford the loss and still live better than she did before. I don't know if it can be hidden........we've several wise and talented Freepers aboard tho...maybe they can help.