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Phil has good points. Keep the money in your name, or maybe fund her IRA with it. Whether or not it's community money may be the least of your problems.

4. She has to have income equal to the amount contributed to the IRA. She has worked in the past but is now working for her fiance and I'm not sure exactly how it's all getting reported. I don't think this is an issue but something to be careful with.

If she does get married this year she will probably be eligible to make a full contribution to an IRA. If she doesn't have enough earned income then her husband's income can count. (If he doesn't have over $6000 in earned income then I'd say he's definitely cheating on his taxes.)

- Can't be touched for purposes other than downpayment or retirement (or any of the other allowed IRA distribution).

Keep in mind that contributions to Roth IRAs may always be withdrawn, so this may not be the best way to protect the money from your sister. On the other hand most people don't know that, so you could probably decieve her about it.

Perhaps you could put the money in something confusing like I-bonds? If she's not likely to know how to get at it then it's somewhat safe?

There may be some rigamarole where you and your parents could give her the money now, and then borrow it back from her to be offered at the time she needs it, but I have no idea how/if that would work.

529 plans are transferable, so you could open one for her that could then be transfered to the children (but this doesn't help you with the downpayment thing).

Personally I'm a big fan of the idea that gifts shouldn't come with strings. If you want to give money to your sister, give money to your sister. Otherwise set it aside in case she needs help later.

Best wishes to you and your sister!
- Megan
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