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Greetings.

My parents have sold some real estate, and my mom (noting my vast experience of 3 yrs at the Fool) wants me to manage the money. Actually, what she said was "Take it and pay for your son's college. Invest it. Do something with it, I don't know what to do with it."

Translated, she figgered I (with the Fool's help) could do better than a CD.

So she's thinking of sending me a cashier's check, and I wasa thinking of dropping it into my Freetrade => Ameritrade account and buying her some mutual funds or something.

I ran my thoughts by the good folk on the HG Philosophy board, and got some good feedback, but the consensus was "Better post that on the Tax Strategies Board"... so here I am.

Maybe I should open an online account for Mom with her tax ID. That would seem the simplest thing...

TIA,

-1A
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Couple of issues going on here -

Be careful handling it because of possible gift issues.

Does she intend for it to stay in her name or does she want it in yours or your son's ?

How old's your son ?

rad
P.S. Same recommendation for your mom as a few posts back for someone else. Ignore the investing piece of it but read Sudden Money by Susan Bradley before she does anything with the money.
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The one thing you DON'T want to do is put the money in an account under your SSN. Doing that will constitute a gift from your mother to you (presumably in excess of $12K) and she will have to file a gift tax return. Instead, you can open an account under her name where she can give you the privilege of managing the investments.

Under current tax law, she can give $12K/year gift tax-free to as many people as she wants. Additionally, she can pay the qualified education expenses of your son without having to report that as a gift.

Ira
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If she wants to pay for your son's college, one option is to put in a 529 keeping her as the owner. I think this has the best outcome for financial aid impacts. Try the Paying for College fool board or savingforcollege.com for info on 529's.
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Maybe I should open an online account for Mom with her tax ID. That would seem the simplest thing...

it is.

one thing you can do is have your mom fill out a transfer on death (TOD) instruction for a new brokerage account funded with the assets, naming your son (or yourself) as beneficiary. that's not a bad way to go... although it won't prevent your mom from changing her mind later & using the money for something else, so there's that to think about.

donating to a 529 plan isn't a bad idea, either, except i haven't yet seen one with a terrific-looking slate of investments to choose from. if you're a good investor, the loss of control, plus the management fees, is kind of a tough pill to swallow.

trp
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If she wants to pay for your son's college, one option is to put in a 529 keeping her as the owner. I think this has the best outcome for financial aid impacts. Try the Paying for College fool board or savingforcollege.com for info on 529's.

I'm not a big fan of 529 plans as their investment choices aren't very good and the fees are high. Additionally, you now have to report some 529 plans on financial aid applications. It probably won't take too many more years before all 529 plans are reported.

Ira
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"Take it and pay for your son's college. Invest it. Do something with it, I don't know what to do with it."

WARNING!!!
You have entered the land of Marti's Unsolicited Advice. Proceed at your own risk.

Yikes! I thought the June Cleaver "Oh, I have no head for figures--you handle everything" model had gone out of style.

More than 30 years ago I sat in a living room in Chicago trying to collect taxes from a widowed New Orleans belle who confessed, "I was raised to be a lady. I can't do anything to support myself, and since my husband died and left me penniless I have to rely on my son."

I can envision the day you'd have to face 2Apocolypse. Your father dies, and you have to manage all your mother's affairs, perhaps at a time of your life that it's not the best use of your time. Worse, she could be broke as well as bereft.

As has already been noted, there are tax reasons she shouldn't be giving her money away. This is also a great time for your parents to be looking at their financial futures and seeing what tinkering is necessary.

I see nothing wrong with her turning to you for advice, but IMO it's imperative that you involve her in the process. I think you also need to treat it as their money, not yours. For example, you mentioned Hidden Gems. I'm a great HG fan and own some, but extensive investment in them could be highly inappropriate for them because of the risk factor.

From a tax perspective you definitely want to keep everything in her name and under her SSN. Otherwise you'll be drowning in nominee paperwork. I would then suggest a thorough evaluation of their financial future, which would then guide investment choices. There's nothing wrong with a 6 month CD or even an MMA while you sort things out.

Phil
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since my husband died and left me penniless

FYI -- in most states it is illegal to disinherit a spouse, and a spouse left out of the will can file to get her 50% (or whatever).
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since my husband died and left me penniless

in most states it is illegal to disinherit a spouse, and a spouse left out of the will can file to get her 50%


Unless they've changed the rules since my last math class, more years ago than I'd care to admit, 50% of nothing is still nothing.

Phil
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(Phil:)More than 30 years ago I sat in a living room in Chicago trying to collect taxes from a widowed New Orleans belle who confessed, "I was raised to be a lady. I can't do anything to support myself, and since my husband died and left me penniless I have to rely on my son."
==========================================
She sounds like a couple of characters out of Tennessee Williams.
Did she have an odd collection of crystal animals sitting around?

Bill


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Thanks all! The HG Philosophy board was right!


My mom's pretty unique... doesn't drive if she doesn't have to. My dad loves her lots and potentiates it by waiting on her... who's gonna change after 50 years of marriage?

They're fine for their "retirement years", which began two decades ago. This real estate is one of five parcels my uncle talked them into 18 years ago, and my sister (anesthesiologist, BIL is a neurosurgeon) has helped them with their other investments along the way.

So I end up by my mom's comparison being the poor pediatrician, so she's helping me with college costs.

With all this sage advice, now her help will go as she intends (and not to the Tax man's coffers)

-1A
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She sounds like a couple of characters out of Tennessee Williams.

I must admit I was half listening for a poingnant "Stella!" from the wings.

Phil
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They're fine for their "retirement years", which began two decades ago. This real estate is one of five parcels my uncle talked them into 18 years ago, and my sister (anesthesiologist, BIL is a neurosurgeon) has helped them with their other investments along the way.

I hate to be the one who always has a skunk in tow at the garden party, but....

This is good news, but make sure they have considered long-term care issues. I hope the saddest day of my life was the day that I had to tell my father that he would run out of money in about 9 months. My parents went through well over $200,000 in the last 2 years of their lives. I'm just thankful that they had it, and we were able to keep them at home.

I've had occasion to opine on end-of-life issues on another board recently: http://boards.fool.com/Message.asp?mid=25611952

Modern medical science can keep the heart beating long after the body has exceeded its shelf life. Prepare for it.

I realize that I sound harsh about doctors, and I don't mean to be. I recognize that they are given little preparation for their 100% failure rate. They are trained to cure, and, as Wise Cousin Barbara pointed out after my last trip to the ER with my father, when you show up they assume that you want them to do something.

I thank God daily for people who work in hospice. They were truly a blessing for me.

Phil
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I, too, had the grand experience to taking care of my mother the last 3 years of her life, after the death of my father 8 years previously. Mother had about $300,000.00; however, her care exhausted all but $80,000 of that money. I do thank the Lord that she and Daddy had been frugal so I had to money to take care of her in the way I would like to be taken care of (full time caregiver, as I traveled for 1 year while she was with me, and allowing me to continue working fulltime.)

Donna
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since my husband died and left me penniless

in most states it is illegal to disinherit a spouse, and a spouse left out of the will can file to get her 50%

Unless they've changed the rules since my last math class, more years ago than I'd care to admit, 50% of nothing is still nothing.


No one said her husband was broke; just that he left her pennyless...
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Modern medical science can keep the heart beating long after the body has exceeded its shelf life. Prepare for it.

I realize that I sound harsh about doctors, and I don't mean to be. I recognize that they are given little preparation for their 100% failure rate. They are trained to cure, and, as Wise Cousin Barbara pointed out after my last trip to the ER with my father, when you show up they assume that you want them to do something.

I thank God daily for people who work in hospice. They were truly a blessing for me.


Greetings, TMFPMarti, though this may be a bit off topic for the board, I am compelled to add my comments to your excellent post. I am an internist who primarily takes care of a geriatric panel (the young and healthy don't need ongoing medical care for chronic issues they don't have!).

EVERY DAY I encounter issues of when to decide not to push forth for what amounts ultimately to futile care. EVERY DAY I need to help a patient and their family decide which interventions are likely to lead to beneficial results - and which ones are little more than time, expense and discomfort without real hope of meaningful recovery.

I work in all areas of the hospital, from the ICU to the wards to Hospice, so I am informed of what types of care are delivered in each of these settings. I have to say that, when finally appropriate, Hospice is a true godsend (and I don't happen to be particulary religious). When there is truly nothing more to do that current medical interventions purport to offer, then the most humane and loving thing to do is - NOTHING - apart, of course, for honest-to-goodness comfort care that alleviates pain and distress and preserves dignity and lucidity as much as possible until the end. I have families truly astonished over how much better their loved ones do in Hospice rather than in the hospital for yet another round of aggressive medical and pharmacologic interventions with daily blood draws, hooked up to monitors, restricted mobility, no peace at night, disorented and uncomfortable - when the outcome, in the long run, is not improved for any kind of secure duration. It's as though we have become so enamored of the idea of even incremental improvements, just because modern medicine CAN, that we lose sight of what do those so-called improvements mean in any realistic context?

Your sister is completely right about the expectation on the part of the hospital MD's that should a patient appear in front of them, they are mandated to do SOMETHING. I have learned that sometimes the SOMETHING ought to be a call to the Hospice evaluator for transfer to Hospice services (whether inpatient or ultimately outpatient) for truly comfort care and to stop the insanity of test after test after test. Sometimes the most meaningful thing I can do is not to order up a firestorm of probing investigations but instead to SIT WITH the patient and the family to explain what actual benefit DERIVES to a patient when he or she can truly no longer provide self-nutrition or self-hydration and take the fear out of the thought that someone "starves to death" or "dies of thirst." Sometimes educating and clearing up misconceptions is really all it takes to confer peace and relief that the inevitable progress towards the end of life can be made with support that is fully directed towards what honestly helps. I love rounding in Hospice, which may sound somewhat strange to say to the uninitiated, but it is without doubt one of the places in the hospital system where there is a god-given sense of actual hope, and the Hospice staff are in my eyes, truly angels - and, remember, I am not religious! Just aware that when there is literally nothing else to do for someone that has acute medical benefit, then the alternative of Hospice is a blessing beyond measure. How ironic that sometimes the creation of the deepest sense of hope for everyone - patients, families and physicians - comes at the end of life when we can finally STOP doing what doesn't help and KEEP doing what clearly does.

xraymd
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Your sister

OCD: Your cousin

xraymd
self-policing!
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<take the fear out of the thought that someone "starves to death" or "dies of thirst." >

I apologize for the off-topic digression, but...

Would you please explain this? How does it work?

Thank you,
Wendy
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take the fear out of the thought that someone "starves to death" or "dies of thirst."

I apologize for the off-topic digression, but...

Would you please explain this? How does it work?


I can't explain the biological side of it, but I can offer my observations of my father, whose death certificate lists the primary cause of death as dehydration and starvation.

The day he made his decision and requested (in home) hospice care the hospice people arranged a hospital bed and sublingual pain and anxiety meds (morphine and Zanex IIRC). We used little of the meds in the week it took him to die. He was alert and talkative for a few days, then gradually drifted into sleep most of the time. I don't recall his saying anything in the last 48 hours, and he eventually just stopped breathing.

Phil
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Greetings, Wendy and Phil, this is how I regularly witness the end of life once someone has become unable to eat or drink - either they are largely somnolent and sleeping for great stretches of time or to take in nutrition and fluids actually makes them feel worse (nausea in a kidney failure patient because the kidneys can no longer filter the toxins that the body creates as byproducts of processing nutrients).

In a patient who is awake and able to eat and drink, by all means is this continued and NOT withheld! When nutrition and fluids are withheld is when a patient has ALREADY become unable to take them in independently (someone who has become dependent on tube feeds, for instance, who has been rendered unable to swallow due to stroke, esophageal stricture or bowel obstruction likely from cancer, unremitting nausea from numerous processes) and who is clearly made less comfortable by being given such nutrition. Why near the end it becomes adverse to continue trying to feed and hydrate is that when the organs begin to shut down, the body struggles to metabolize the intake with much lower reserves and this puts a strain on the processes that are already diminished. The patients refusal of food and water is instinctive.

In Hospice, nutrition and hydration are offered but not foisted. The patient guides the staff by ceasing to seek food over time. Mouth swabs and ice chips are always available to moisten but the sensation of raging hunger or thirst appears to just dissipate. Unlike in health! So one of the major misconceptions about standing guard when someone is dying is that somehow they must be hungry or thirsty and must be fed and hydrated at all costs. I have seen patients whose families insisted on this literally yank out their IV or their feeding tube with some of their last remaining strength. So I have learned to respect that, when the time comes, the patient will choose not to continue with nutrition or hydration because they simply feel better without it. Sometimes that choice is made alertly and sometimes it is when the patient has begun to sleep for longer and longer stretches (dehydration particularly confers somnolence as the kidneys invariably shut down) and this ends up being among the more calm and tranquil ways to pass.

xraymd
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<this ends up being among the more calm and tranquil ways to pass.>

Thank you for sharing this.
Wendy

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