Need financial advice...inlaws came into some $$$

[windycitymom]

It would be nice if they had an "executor" (maybe you?) who oversaw their financial matters with the help of a financial planner. This way, when people start asking for money - and they will - they can comfortably say "we have to go through our executor to decide if this is a wise financial choice." Put the blame on someone else for not saying "yes" right away.

I don't recommend handing the reins over to a financial planner blindly without accountability and transparency. The cons can talk circles around people so an ethical, honest family person needs to help them in addition to a FP.

Once people start seeing new furniture, etc. they will know that money is coming from somewhere and start asking questions. I don't feel they owe anybody an explanation about where the money came from. Someone might think they have money at home and maybe try and rob them. I hope they learn to never tell the amount of money they have...they can say "just a little something" and downplay it.

I would set up a trust and designate beneficiaries. People start getting weird once they realize large amounts of money are involved.

Good luck!!

 

[Ladybugsy]

[/B]

Agreed. I would also not let the 44 year old know it since he seems to want to eat everything. Maybe it's time that he move out.
Your MIL should be able to buy ANYTHING they want and not have to worry about someone else eating it. I would also go as far as to make sure they get some POA for you and your DH in case some one tries to take them to court and get conservatorship and or guardianship over them. People are willing to do anything when it comes to money that don't belong to them.

They should be careful not to disclose to him that they have that money as well too. He could take them to court and demand that they "pay" him for taking care of him for all these years and that he is entitle to a certain lifestyle . Please make sure that the financial counselor has their best interest at heart. Some local CU give free advice and you get all those services for free just for being a member. Good luck and though I know that they are glad to have some money at this time. The reasons for them are sad. May God bless and keep them.

I have tried so hard to get him out of their house. He is in and out of jail, and makes their life very difficult. They won't throw him out because he has no where else to go. It won't be long till he's in jail again. I hate to say that, but he's been there most of his adult like and he's institutionalized. I am afraid for them. Especially if he finds this out.

 

[Ladybugsy]

LOL...Now I don't know what to give them for Christmas...I always give them money...ha!

 

[TLuvsD]

Be very careful about who knows about this money. If your MIL wants new flooring, ask the landlord if you can give if to her as a gift. BIL should get the same story (he's scary). Your inlaws deserve to enjoy these funds, not be badgered to death about them. For now, get a plan in place (enough funds set aside for car, captial improvments, a little fun now and then, and long term expenses---medical/nursing, etc).
There is no reason for the whole world to know their private business....if you think they will be taken advantage of, teach them to tell people they will have to consult with you before spending, you are helping them stretch the budget. It does put you in a bad spot, but if that's what it takes....
For Christmas, how about a nice, new shiny lock for that refrig/shed?

 

[Cheshire Figment]

A minor warning. Find out, from the paperwork, if this money might be subject to Income Taxes. If it is, make sure that their tax return is properly prepared and filed.

 

[jgates]

My recommendation is to use an independent advisor such as LPL Financial - they can sell from a number of companies, vs. going with NYL or a 'fixed' company that can only sell through their company. And have another 1 or 2 review all of the policies. I hate to say we have one local single company one that likes to sell only what is the best commission.

The executor or Power of Attorney should be set up for a couple their age regardless of whether they have money or not. Also Medical POA. (My hospital is pushing Medical POA regardless of age).

If they do want to just do some CD's for now - short term such as 6 months etc., have them put POD beneficiaries on the CD so the money goes to who they want it to go to. They may never have had a will if they didn't have money before.

 

[Leajess99]

A minor warning. Find out, from the paperwork, if this money might be subject to Income Taxes. If it is, make sure that their tax return is properly prepared and filed.

I can answer this one, No the money is not subjected to income taxes. That money is tax free as it is most likely Disability compensation from the VA. I have lots of experience with this.


OP - I am so glad that you inlaws are now taken care of. My father died of heart failure as a result of Agent Orange exposure (even though back then they denied it all they could) and I know many people who have suffered the ill effects. I am so glad the VA has paid up and your family will no longer struggle.

I would seriously talk to them about appointing you conservator so that you can make sure no one is taking advantage of them.

 

[clarabelle]

If the financial advisor is percentage based -then he or she will try to sell them products -because he gets a percentage

So they need to be on their guard

Think about fee-based advice -you pay by the hour -not by what products (funds etc) that you buy.

I would also encourage you to help them "hide" some of this money.
It sounds like many people will have their hands out

 

[ChickieToo]

Just wanted to add that if they have a troubled son living with them, and other parasitic relatives nearby, perhaps they should have their bank and financial statements sent to your address so people don't see all this new mail coming to them from financial institutions. Nosy, bold people may open the mail outright, or sweet talk your in-laws into telling them all about their windfall.

I would speak with an attorney as opposed to a CFP up front--preferably one that is an eldercare expert. Just some basics, but there are a couple of different types of trusts that have different benefits. A trust will be more difficult for dishonest relatives to get money out of, and an elder care attorney can help you with this and help you make a decision that is right for your inlaws. Trusts are complicated and I don't pretend to know what is best for your needs, so please speak to someone who can set this up. They may even tell you you don't need a trust and have other advice.

Good luck with this!

 

[Ladybugsy]

My head is spinning with all of this information.

The advisor I have made an appointment with was recommended by the Dave Ramsey site...If I don't like what he says, or if I feel pressured, I'll be sure to let Dave know. I know they send out a survey of your experience with the "ELP", so hopefully he will be wonderful. If not, there are other advisors out there.

Yes, this is tax free disability from the VA. YAY!

And I'm pretty sure they will appoint my dh as POA. He is the oldest son. Not sure if they will include me in the mix, but that's fine. my BIL and SIL's may not appreciate me being included. (Not that I really care...lol.)

I'm just so thrilled for them, and I SO want them the be taken care of, and to have a little fun. I can't even talk them into having a little fun!

Yesterday, my FIL told me he bought himself a gun. I said, "Did you buy it BRAND NEW?" He said, "Brand new"...I said, "Did you pay CASH for it?" He said, "I paid CASH for it", I said, "DIDN'T THAT FEEL GREAT!" He said, "IT WAS AMAZING!" LOL. And he bought my MIL a diamond ring. She said, "Rory, he paid over FOUR HUNDRED DOLLARS FOR IT!" She was just shocked and amazed...lol. They are so sweet.

 

[lucyem]

I would speak with an attorney as opposed to a CFP up front--preferably one that is an eldercare expert.

I agree with this. I have seen a number of sad things happen with elderly and their greedy relatives, even elderly who do not have cash like this on hand. The money needs to be set up in a way to protect it and them.

 

[Kay1]

If it were my family, I would tell them to take what they thought they'd need for the flooring, etc., and put it in a savings account. Then put put the rest in CDs that can either accumulate interest, or send them the interest monthly. Maybe one 6-month CD and another 12-18-month CD.

That would buy them plenty of time to figure things out and decide what - if anything- to do with the money. Rushing is not a good idea or necessay.

 

[Kay1]

I wanted to add that they can do all this through USAA. USAA offer super-jumbo rates on CDs while not all banks do. They could put most of the money in a CD and have the interest put in their USAA savings account which comes with a debit card. No other family member would need to know,

Interest rates are lousy right now but they could earn a few hundred dollars each month and their money would be safe and sound. Also, interest rates are bound to go up at some point then they'd be making quite a bit more than a few hundred each month.

 

[Mom2Ben02]

I would recommend AGAINST going to a planner who does not charge you. If they are earning commission from what you buy, they may not choose the best product for *you*. They may choose the one that pays them the most...

 

[CBoysMomLovesDisney]

I am the trustee and power of attorney for my Dad. He is disabled from a stroke. My job is to make sure his money is safe and available for him when he needs it. Our attorney set up a trust so that I could do those things without needing my dad to sign any paperwork (which he is unable to do)

I would recommend talking to an attorney first. He/she might suggest a trust - if so, it will be easier to have that info before opening any other accounts (even cd's). I paid about $2500.00 to have all the paperwork drawn up. I then opened cd's with some money. His other money is in housing. When that sells I will keep the money safe and probably buy bonds or other cds. Since my goal is to keep the money safe and not playing the stock market, I really have no need for a financial planner.

I found the attorney to be more benificial than a financial planner. Who is going to suggest you invest money so he/she earn money from your inlaws.

Oh and try not to let the rest of the family know. Even when family gets along and aren't in trouble with the law. Money changes people.

Good Luck - your inlaws are lucky to have you to help them.

 

[Sadie22]

I am the trustee and power of attorney for my Dad. He is disabled from a stroke. My job is to make sure his money is safe and available for him when he needs it. Our attorney set up a trust so that I could do those things without needing my dad to sign any paperwork (which he is unable to do)

I would recommend talking to an attorney first. He/she might suggest a trust - if so, it will be easier to have that info before opening any other accounts (even cd's). I paid about $2500.00 to have all the paperwork drawn up. I then opened cd's with some money. His other money is in housing. When that sells I will keep the money safe and probably buy bonds or other cds. Since my goal is to keep the money safe and not playing the stock market, I really have no need for a financial planner.

I found the attorney to be more benificial than a financial planner. Who is going to suggest you invest money so he/she earn money from your inlaws.

Oh and try not to let the rest of the family know. Even when family gets along and aren't in trouble with the law. Money changes people.

Good Luck - your inlaws are lucky to have you to help them.

I'm sorry that your dad suffered a stroke. He's lucky to have you to take care of things for him. You've given some good advice.

I was fortunate that I already had durable general power of attorney for Mom, and we had gone to the bank and she had completed their power of attorney form herself, before her stroke. So I can write checks on her accounts but the money still belongs to her. This may be important for any government programs that are needed in the future.

I was able to sell her house on her behalf and now pay all her bills. All accounts have payable on death beneficiaries and that accounts for all of her assets so we will not need to probate anything when she passes away.

 

[Eastern]

It is a small enough amount of money that they should be able to manage it themselves, if only to purchase some CDs or a fund from Vanguard.

You could also post your question on http://www.bogleheads.org/ and you will get lots of experienced advice. I would do this before anything else. The last thing I would do is purchase any products from a bank or a financial planner as you will pay so much in fees and nothing is guaranteed.

 

[csharpwv]

I have not read every post here - but by any and all means they need to get the money off of their 'books' as soon as possible. They need to 'give' you the money to put into accounts for them. At their age a major sum of money could be a huge detriment when it comes time - or if they would ever need to live in a nursing home.

It's even best for families that own their family's home to deed it over to their children to avoid having any personal property.

The best possible scenario is to do the following:
1) Pre-pay their final expenses
2) Set up untouchable retirement accounts for themselves or their children.
3) Invest per the advice of a financial planner.

Be sure to shop around for financial planners - don't invest with the first one that you talk to. Shop around for their commission rates etc. You don't want to pay more commission a year than what you make on the investment!

 

[ms mouse]

This is a very complicated subject and broad suggestions may cause more harm than good. You cant just "give away" the money without creating more problems. You really need to talk to someone you trust. Is there anyone you know who might use a financial planner that you would trust their opinion? Good luck to you.

 

[TLuvsD]

I like the idea of consulting and eldercare expert attorney. No reason not to get the paperwork in order asap....and they can advise against multiple handouts...and help put safegaurds in place against the handouts, too. You can consult more than one person, but I wouldn't get too big a group involved, that could get confusing.