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

Estate Planning, Social Security
Answers
Sort By:
Most Helpful
November 2017

Stewart, Dan

Dallas, TX
75% of people found this answer helpful

Do NOT do an annuity as they are expensive and she is too old to do for the "accumulation" (growth) phase anyway. If you "annuitize" it now for a "lifetime income" then when she passes, there is nothing left. You gave away an asset for an income stream. Annuities are usually great for the insurance agent and not very good for the client in my opinion. There are too many other ways to make money and even replicate annuity strategies without the exhorbinate fees. In this low interest rate environment, annuitization wouldn't be a good deal anyway.

At her age I would probably be looking at renting and investing the difference rather than locking in virtually all of her assets into a single condo. You need to interview a few different money managers. I would look for fee based only managers who do NOT work on commissions. Appropriate strategies would depend upon her goals, her knowlege, what she wants to do with the money when she is gone, etc.. But any strategy you chose should have some type of defensive sell discipline to limit the downside.

With regard to "moving money out of her name," if you are talking about to qualify for medicaid nursing home, there is a 5 year lookback of assets given away as well as an income test in order to qualify. This is complicated and tricky so I hate to try to give you advice in this forum so it is not done incorrectly. If you are talking about conventional estate planning, she is way under the estate exemption and will pay no estate tax. If you are talking about avoiding probate & therefore a living trust/will, it really depends upon the state you live in as to whether probate is a big deal. But a living trust/will really won't hurt anything and simply avoids probate, it does not provide asset protection or tax benefits. She should definitely have durable health powers & wishes in place regardless if she doesn't already have.

Hope this helps and best of luck, Dan Stewart CFA

November 2017
November 2017
November 2017
November 2017