How should one title account for helping out a parent

[Ronnieboy]

My mother who is only 69 is talking about consolidating her retirement accounts. She wants some help and would like for the helping person to have access to the account if she is unable to herself (her mother, my grandmother, had Alzheimer's but recently passed at 94) and she is afraid that if she gets or has the disease that it would be much easier if one of her kids have access to the funds.

What would be the best way to have access to the account without invoking any tax penalties or whatever.

This would most likely be a Roth or regular IRA. I'm guessing it can't be joint or it would affect the other persons contribution limits? Something with survivor rights? Best to not have anything at all and just access through online sites?

What do you suggest and why?

[youbet]

To help my son keep track of his various IRA accts, I have POA for each acct. With Schwab, this means his accounts come up right along with mine when I open the acct web site.

For his 401k, I simply have his password.

For your mom's IRA's, I'd go the POA route and the institution where the IRA's are located can give you the forms (or download from their web site) and mom's sig, your sig and a notary and you're all set.

[growing_older]

I second the Power of Atty idea. It's a lot easier than changing titles on accounts.

[Bestwifeever]

Vanguard has paperwork you can fill out to allow someone to be an agent on an account (it's preferable to just informally sharing access to the account, which is a no-no in their online security procedures). They have two different levels--one limits a couple of things, the other lets the agent do anything, including making the agent the beneficiary.

I imagine other firms have the same kind of arrangements your mother could make.

[Aeowyn]

You can't be joint on an IRA. A power of attorney works great.

By the way, make sure she has a benneficiary set up on the IRAs.

Also, you do NOT want to be joint on any non sheltered investments. If you are joint, when she passes, you will have her basis for the investmemts. If you inherit the investmemts, you're basis is the value as of DOD.

For non sheltered invstments, POA will work fine too. I also recommend TOD/POA be set up on all acconts so the assets can transfer outside of probate. If she has a large estate (several mil), should seek estate planning assistnace).

If you are going to be POA, make sure she keeps a list up to date of where all her assets are and that you know where it is.

In addition to a financial POA, she'll also want a medical POA in the event she is unable to make decisions on her own (will also give you assess to medical records and to talk to her doctors).

[MichaelB]

+1 on the Vanguard option.

Another possibility is to open a joint checking account with your mother as the primary account holder but with you having signatory power, then setting up the IRAs to be able to transfer into that account via online transaction which you can execute. That way, if your mother is disabled in some fashion but needs access to her funds you do that.

[sheehs1]

Quote:

Originally Posted by Bestwifeever Vanguard has paperwork you can fill out to allow someone to be an agent on an account (it's preferable to just informally sharing access to the account, which is a no-no in their online security procedures). They have two different levels--one limits a couple of things, the other lets the agent do anything, including making the agent the beneficiary. I imagine other firms have the same kind of arrangements your mother could make.

I'd do both the POA and the "agent on account" too..to cover all your bases. . As Bestwifeever says it is "agent" or in some cases called a "Trading Authorization".
I just set a Roth IRA up for my daughter and filled out a Trading Authorization form which she signed. I can make deposits and withdrawals on her behalf. Double check this because I think if I closed the account I might still need her signature.

[chinaco]

What I am stating below is my opinion... but you should seek the help of a competent attorney to make any decisions on these matters!

Start by visiting an attorney and getting the Estate and Power of Attorney documents in order.

As far as her accounts go and having direct access to them... wait till it is actually needed. Do not front run it and take control.... even for the purposes of helping her out. However, helping her or making conservative suggestions might be helpful or advice if you know she is making a gross mistake (risky move).

You should have POA for Finance and Health decision.... They should give you the authorization to act on her behalf. Talk to an attorney!

One thing you need to be concerned about is some heir coming back on you and filing suit for negligence or misappropriation of funds... or even making an investment mistakes! Careful! Talk to an Attorney!!!

When money is involved anyone that has a stake in the estate could (often will) imagine all manner of wrong.

Any and all of your actions should be done in a manner to prove what happened in a court of law! Because that is where you could wind up (if things turn out bad).

It is admirable to help someone... but she needs to be protected and you need to be protected...

[Ronnieboy]

Thanks for all the replies, I will talk to her and she what she wants to do.
The 'estate' is definitely under $1 mill, probably closer to $500k with a paid off house being $200k of that.
There is only me, 1 bro and 1 sister.
She has supposedly set me up as POA for her, but I haven't signed any paperwork.
I was thinking of setting her up with Vanguard Wessley or Wellington fund and go from there.
She is good financially with alimony, SS, and small non cola pension till RMD in a year and a half.

[meierlde]

Quote:

Originally Posted by Aeowyn For non sheltered invstments, POA will work fine too. I also recommend TOD/POA be set up on all acconts so the assets can transfer outside of probate. If she has a large estate (several mil), should seek estate planning assistnace).

The amount of hassle in probate depends on the state, in Tx its not much of a hassle you just file an inventory and that is that if the lawyer who drew up the will did the job right. This is because of independent executor status.

[Aeowyn]

Quote:

Originally Posted by meierlde The amount of hassle in probate depends on the state, in Tx its not much of a hassle you just file an inventory and that is that if the lawyer who drew up the will did the job right. This is because of independent executor status.

Probate isn't that bad... it just takes a while. It takes time to liquidate assets (like a house), wait for all the bills/refunds to come in, close accounts, file taxes (final individual and final estate taxes, inheritance tax for state if applicable). If an account has a TOD/POA set up, the assets pass directly to the people listed. If the account is an individual account with no POA/TOD, the assets are tied up in an estate account until the "final affairs" are taken care of.

[WhoDaresWins]

I have TOD indicated on all my non-qualified accounts and a beneficiary designation on my qualified accounts. My son (my only child) is also my POA. He and I are not joint on any accounts, but I have been considering putting him on my bank checking account for ease of paying bills in an emergency. I have tried in vain to talk to him about my affairs just to keep him apprised of where things are, but he goes into full blown avoidance mode at any mention of my finances. Maybe as we both get older, he will be more receptive.