What should my mother do with the income she received from selling her home?

My 90-year-old widowed mother recently sold her house and moved in with my sister. My sister suddenly passed away and I am in charge of finding a new place for my mother to live, as well as helping her manage her estate. She has $200,000 in the bank from the house sale, plus she receives Social Security and a small veteran's pension. She is looking to rent or buy a condo. Assisted living is a cost-prohibitive option and she's not ready for a nursing home. What is the best mix for investing the $200,000 from selling her home? Is it better to buy or rent at her age? What about an annuity? Should she move the money out of her name?

Estate Planning, Social Security
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November 2017

Dawson, Rebecca

Los Angeles, CA

You could set up a living trust for your Mother which would allow for transfer of assets upon death to inheritors free of probate. Probate is the legal process that inventories and distributes a person's property after death, and can be time consuming and expensive.

Or you could leave the money in her name and keep bank accounts out of probate by setting up payable-on-death accounts, which give the recipient immediate access to the money.

I would think at this age and depending on your local real estate market that renting may be a better option since that would allow for more flexibility. And also would be more cost effective for maintenance purposes.

Investing the $200,000 in some income producing investments in order to receive monthly income for your Mother. Of course, I would recommend all investment grade type securities and diversifying within different sectors.

November 2017
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November 2017