Siblings shared financial responsibilty to widowed mother

[Meadbh]

My dad recently passed away and my three siblings and I are committed to making sure my mom can financially maintain her standard of living during her remaining years.

Her four siblings are in the middle and upper middle class income level so should be able to support her financially if her investments run out or she has major medical expenses or needs LTC.

I interpreted the second paragraph to mean that DM had four siblings. But perhaps I was wrong. Maybe these four siblings are her children? Perhaps the OP could clarify.

 

[Teacher Terry]

If your Mom has no cognitive issues she may very likely decide how to live on the $ she has herself. My Mom was 73 when my Dad died and her income decreased and she still had some but not a ton of savings left. She never consulted any of us but figured it out for herself and if we would have tried to make suggestions she would have been offended. She even prepaid most of her funeral expenses and told us to sell her car to pay for a sit down dinner when she died for all the guests which is what we did plus any outstanding bills she may have had. She never would take $ from anyone. Also at her age she may die before using her $. I would discuss possible issues/solutions with sibs for if/when the time comes but not take any action at this time.

 

[youbet]

I interpreted the second paragraph to mean that DM had four siblings. But perhaps I was wrong. Maybe these four siblings are her children? Perhaps the OP could clarify.

I think OP's mother had 4 children, the 4 siblings.

 

[youbet]

OP's idea to begin asking some family members for regular contributions

IMHO opinion, it's too soon. OP's DM is 78 and her money will last (per OP) until she is 90ish. Lots of things can change in those years. It's hard to motivate people to contribute money so far in advance of a possible need and no matter how the trustee of the funds managed the investments, someone would always be disappointed. It just seems to be opening doors to family disagreements that possibly could be avoided since it's unknown if the funds will actually ever be needed.

If OP really wants to do it, then at least create a goal. For example: "Accumulate funds by the time mom is 90 to take her to 95."

 

[pb4uski]

Looked at immediateannuity and if you bought one for TX... the payments are $766 per month for the rest of her life... that is over the $9K max you say you need...

This would last her WHOLE life... no worry that the market goes down etc... (I would not put much in the market anyhow... maybe 30%)....


That means the kids will not have to kick in anything for a few years until inflation ups her expenses...


I would not be putting money aside for a potential problem that could be years in the future.... yes, if one sibling dies then the burden falls on the remaining... that is life...

BTW, at some point in time she might get medicaid (or some other gvmt payments) when she is broke....

+1 I would do one of two things... either buy an immediate annuity or put it in Wellesley and set up the $8-9k a year as monthly automatic withdrawals .... then wait and see if she needs help later and address that amongst her children if it is necessary.

 

[Running_Man]

This is an overwhelming time to purchase an immediate annuity which provides over $9,000 per year for life. The incremental help that would be needed would therefore be minimal and limited to inflation effects after the $9,000 was not enough. At a minimum to take 60K and have $5,500 per year and the remainder from the other 40 would be the alternative — That would drop the withdrawal rate on the remainder funds to $2,500 per year if she could get by on 8K per year. That would drop the withdrawal rate to 6.25% and allow for a reasonable chance.


To take market chances with those all of those limited funds at 8 % or more of the portfolio would be foolhardy with such a high withdrawal rate. Any market decline would wipe out the portfolio. Merely earning the inflation rate would enable the portfolio to last to age 90.

 

[Travelfreek]

Hi Running Man. I have assisted with asset management for 3 of 4 parents who passed (including in-laws). My advice: do not begin collecting money unless needed. But I don't believe it will be needed in this case. You can offer to help your mom set up a budget. Other than that, as she spends down her assets, she will become eligible for low income senior apt (can sell her mobile home then) and even Medicaid if she needs Nursing home. Also if your father served in a war, look at the aid and attendance benefit from VA for widows worth more than $1000 a month if she has less than xx amount of cash in bank. My
Mom was able to get Medicaid worth the diff in her SS of $1500 a mo and the $6k a mo for skilled nursing. She just had it for 4 mos before she died. There's a lot of options for seniors and it's not wrong to apply once she is eligible. I would just offer budgeting assistance at this time. When our Dad needed 24 hour care at home, the 4 of us kids each took a 12 hour shift per week to help my parents defray the expenses (cost was $75 a day then-19 years ago. Finally after 6 mos we threw in towel (we had full time jobs and young kids). He lasted another 2 years and they burned up their life savings of 90k. We made sure our mom got LTC ins. Lesson learned. Lots of assistance out there however. Your mom and your Dad paid taxes all their life. It's not a handout. Never presume your siblings are on the same page as you. I also think you are jumping the gun here.

 

[donheff]

Like a couple of others I read this as assuming that the mother's siblings (OPs aunts and uncles) would contribute which to me sounds very questionable. They will be more worried about covering their own situations and will expect OP and company to take care of mom. If she is talking about her three siblings and herself she should start discussing it with them now so they will know what to expect if the situation changes.

 

[Car-Guy]

Looked at immediateannuity and if you bought one for TX... the payments are $766 per month for the rest of her life... that is over the $9K max you say you need...

This would last her WHOLE life... no worry that the market goes down etc... (I would not put much in the market anyhow... maybe 30%)....


That means the kids will not have to kick in anything for a few years until inflation ups her expenses...


I would not be putting money aside for a potential problem that could be years in the future.... yes, if one sibling dies then the burden falls on the remaining... that is life...

BTW, at some point in time she might get medicaid (or some other gvmt payments) when she is broke....

+1

 

[gerntz]

I'm with those that say her getting all of her assets out of her name now - including the trailer - is the way to go so that when the 5 yr Medicaid look back comes there's likely nothing to find (Years ago we did that for MIL. Turned out it wasn't necessary.). Put those assets in one of her children's name plus build up a pot in a child's name. That assumes all the siblings are trustworthy & the pot's remaining assets, if any, can be redistributed back tot he siblings.

 

[tps7742]

Threads like this is one of the many reasons this site is so great! Definitely very informative!

 

[ivinsfan]

OP was it at your DM's request that you took over money management? If she is of sound mind I feel she should be involved in these conversations.

 

[Car-Guy]

Why should taxpayers be responsible for her care when she has money to pay for it

Rant on.

+1 - Just because everybody does it (well it seems a lot of folks do) doesn't mean it's right. Unfortunately many of our "systems" today seem to almost promote such unethical behavior. Justify it in your mind (as smart, sly, crafty, acceptable, sop, etc) anyway you want but it's cheating and sponging off of your fellow taxpayers. Who do people that do things like this, think they are? Elected officials? It's no wonder why so many younger folks today think the way they do.

Rant off.

 

[Sunset]

I'm with those that say her getting all of her assets out of her name now - including the trailer - is the way to go so that when the 5 yr Medicaid look back comes there's likely nothing to find (Years ago we did that for MIL. Turned out it wasn't necessary.). Put those assets in one of her children's name plus build up a pot in a child's name. That assumes all the siblings are trustworthy & the pot's remaining assets, if any, can be redistributed back tot he siblings.

Nope.
Beside the ethical/moral aspect of this being wrong. OP's mother simply does not have enough money to make this worth it, in 5 years she will have spent about 1/3 of the money anyhow.

Also the OP's Mother is independent, and this move would suddenly remove all her independence and subject her to elder abuse very easily.

 

[Moemg]

IMO you are rushing in too soon . Your Mom needs time to transition to her new status . She may not need your help for many years to come and when she does it may be more in the way of physical help than financial . In fact rushing in too soon may halt her learning to become independent . I can say this because my Mother was widowed at 64 with the same type of financial situation but less savings .She lived to 99 and did fine financially with some help from my sisters as she got older .Sure her life changed after my Dad died but that is to be expected . Lot's of widows live on a less amount and do fine . Give her a chance but be prepared to help later . It may never be equal among the siblings so accept that .

 

[fidler4]

Thank you for the replies! I will provide a more detailed response later today hopefully. Yes I meant she has 4 children sorry about the siblings confusion.

 

[Sunset]

IMO you are rushing in too soon . Your Mom needs time to transition to her new status . She may not need your help for many years to come and when she does it may be more in the way of physical help than financial . In fact rushing in too soon may halt her learning to become independent . I can say this because my Mother was widowed at 64 with the same type of financial situation but less savings .She lived to 99 and did fine financially with some help from my sisters as she got older .Sure her life changed after my Dad died but that is to be expected . Lot's of widows live on a less amount and do fine . Give her a chance but be prepared to help later . It may never be equal among the siblings so accept that .

+1
You reminded me, my Mom was widowed at 65, my parents had very little savings, she did get about $100K life insurance, it was years ago, so more equal to $200K now.

She lived for over 20 years, took Church trips, traveled the world a few times with a University club, and eventually died of a sudden heart attack.
She left us a total of $140K inheritance.

So she managed very well on her meager gov't pension without any support needed.

 

[Brat]

Actually I disagree with many of you. If the OP's siblings are inclined establish an account as a partnership for the benefit of their mother invested 50/50 and fund it with a modest contribution ($100) monthly... along the lines of an investment club. Write up an agreement that at the time your mother's passing the balance in the account will be distributed in proportion of the sibling's family contribution. If for any reason a contributor want's their money back they only can get back what they contributed or the value of their remaining share, whatever is the lower.

The minus is that the investment club will need to file a tax return each year.

Mom will not own the account so it shouldn't impact any benefits.

 

[Teacher Terry]

Brat: you are solving a problem that does not exist and may never exist.

 

[ivinsfan]

Brat: you are solving a problem that does not exist and may never exist.

+1

 

[pb4uski]

Rant on.

+1 - Just because everybody does it (well it seems a lot of folks do) doesn't mean it's right. Unfortunately many of our "systems" today seem to almost promote such unethical behavior. Justify it in your mind (as smart, sly, crafty, acceptable, sop, etc) anyway you want but it's cheating and sponging off of your fellow taxpayers. Who do people that do things like this, think they are? Elected officials? It's no wonder why so many younger folks today think the way they do.

Rant off.

+2 While I have no problems with a taxpayer structuring their financial affairs to minimize the taxes they pay, or even those who structure their financial affairs to keep their income low to get Obamacare subsidies, for some reason that I can't explain I think it is unseemly for families to structure their financial affairs to pass assets to children in a way that keeps them out of the hands of Medicare for nursing home care.

I guess the difference is the amounts involved can be much more significant and that the subject's heirs are the beneficiaries of this chicanery, not the subjects... rather than have a 5 year rule they should also have some amount... something like any gifts in excess of $50,000 in total to heirs over 10 years are subject to clawback.... that should stop the games people play. What people give away to get Medicare to pay nursing home bills could be used to buy LTC insurance that would likely cover all or a large portion of their nursing home bills. Heirs should get what is left over after the subject's have provided for themselves to the extent that they have the resources to do so.

 

[Just_Steve]

+2 While I have no problems with a taxpayer structuring their financial affairs to minimize the taxes they pay, or even those who structure their financial affairs to keep their income low to get Obamacare subsidies, for some reason that I can't explain I think it is unseemly for families to structure their financial affairs to pass assets to children in a way that keeps them out of the hands of Medicare for nursing home care.

I guess the difference is the amounts involved can be much more significant and that the subject's heirs are the beneficiaries of this chicanery, not the subjects... rather than have a 5 year rule they should also have some amount... something like any gifts in excess of $50,000 in total to heirs over 10 years are subject to clawback.... that should stop the games people play. What people give away to get Medicare to pay nursing home bills could be used to buy LTC insurance that would likely cover all or a large portion of their nursing home bills. Heirs should get what is left over after the subject's have provided for themselves to the extent that they have the resources to do so.

I think the above are all unseemly and unethical.

 

[MichaelB]

+2 While I have no problems with a taxpayer structuring their financial affairs to minimize the taxes they pay, or even those who structure their financial affairs to keep their income low to get Obamacare subsidies, for some reason that I can't explain I think it is unseemly for families to structure their financial affairs to pass assets to children in a way that keeps them out of the hands of Medicare for nursing home care.

Just to remind everyone, the thread topic and discussion is about the OP and siblings assisting their DM. There have been no serious suggestions to move assets to heirs and then ask for public support.

 

[pb4uski]

Just to remind everyone, the thread topic and discussion is about the OP and siblings assisting their DM. There have been no serious suggestions to move assets to heirs and then ask for public support.

My bad... I read that into some of the posts.

 

[MichaelB]

My bad... I read that into some of the posts.

Didn't mean to single you out - yes, there were others, and I'm not sure why this keeps coming up. The OP thread topic - siblings helping the DM - is still under discussion, and it would be helpful for every one to contribute to that.