Hello,
I know that the internet isn't the best place for advice, but I cannot find my mom any Fee only financial advisors in her area. What she is dealing with is way above my pay grade and it involves a possible six figure tax hit.
Here is her issue:
She is sixty two and just suffered from several strokes and simply can't work any longer. She is in management and the DR has warned against any/all stress because of her new found heart issue.
Most of her retirement is in company stock. As of the last statement the account value was 1.7 M - outside of tax shelter. See the issue? She has always been very independent and has been very uncomfortable talking about money matters with me until now. Now I find myself trying to figure out the best path for more diversification ( tons more ) and protect her from the sharks in the investment world. It seems that every "planner" I have talked with has tried to sell the idea of "A" share funds with no thought of the tax issue at hand. Making this situation even worse is I'm three States away.
She does have around 200G in her regular 401K. I simply can't believe how much she has invested in the company stock over the years. I guess this time it has worked out well...for now.
Comments
Regards,
Ted
As difficult as it will be for you, start looking into assisted care living and the issues around that with medicare/medicaid.
My mother died of Alzheimer disease - care was $6,000/mo in Ga. That didn't include another 1,500/mo for other things.
The $ goes fast.
Get as much $ into your name as possible now - again look into the transfer issues - I think anything under 5 years is in question.
All the best to the both of you.
Press
First, we wish you well going forward with your Mother and the circumstances.
You have and will receive more great thoughts from the fine folks here. The great value of numerous viewpoints that sometimes are overlooked during stressful times.
Below is a form we put together about 10 years ago, to document specific information that would be needed by others as the result of a serious medical situation or worse event. We have this form in MS Word format so that we make changes as needed. We have since added and deleted a few items, but this is our rough blank draft. We have copies of this saved on paper, and electronically; and the info is also distributed to brothers and sisters.
There will be items in this form of no value for you/your Mother; and of course other items you may need to add. Others here may be able to add suggestions for other items.
Many of the items are fairly common, but easy to overlook when busy thinking about everything. If you copy the below form and paste into a "word" document, you will then be able to manipulate data as needed by you.
Lastly, I personally feel some of the most critical and missing information about other family members is who to contact, acct. numbers and where are physical documents for proof of ownership or other legal circumstance(s). Also, are beneficiary changes and joint accounts (checking/savings) up to date.
You may also discover forms online related to this type of documenting or provided by an estate/tax attorney or CPA.
The document list is not all inclusive, but hopefully a starting point for your thoughts about what needs to be included.
Sincerely,
Catch
........................................................................................................................................
PERSONAL INFO FOR (NAMES)
UPDATED/EFFECTIVE DATE = AUGUST 17, 2003
NOTE !!!!! The below listings would be used in conjunction with any of the following legal forms that should be established for and by you for yourself and family members:
WILL, TRUST (there are many trust styles; i.e., revocable living trust, irrevocable, etc.) GENERAL POWER OF ATTORNEY, DURABLE POWER OF ATTORNEY FOR PROPERTY AND MONIES, LIVING WILL AND/OR DURABLE POWER OF ATTORNEY FOR HEALTH CARE and HIPAA authorization and release form (allowing release of pertinent private medical information to authorized persons)
SOCIAL SECURITY NUMBERS:
*** full legal name, ssn#
DRIVER LICENSE #’S:
*** full legal name
CREDIT CARDS, DEBIT CARDS:
*** issuers, card numbers, their phone #’s, etc.
INSURANCE POLICIES:
-health
-home
-auto
-life
RECIPIENT/BENEFICIARY MONIES FROM OTHERS OR A BUSINESS:
-are you listed in someone’s will/trust/business agreement that should be documented here?
PERSONAL AND REAL PROPERTY: ALL ASSETS
-real estate, cars, and personal property (collections, artwork, boats, jet skis and anything else one considers that others need to be aware).
ALSO indicate as to what property is PAID IN FULL and OWNED
- deeds
LIABILITIES:
-home mortgage
-home equity loans
-auto loans
-all other monies owed to a third party
* provide all pertinent information regarding these liabilities: what, where, who, etc.
PERSONAL RETIREMENT ACCOUNTS:
401K, 403B, 457, IRA’S, COMPANY PENSION PLAN:
*vested company pension plans should be set with a spousal/beneficiary statement
CHILD/CHILDREN ACCTS (EDUCATIONAL, 529, SAVINGS, ETC.):
ANNUITIES:
BROKERAGE/STOCK/MUTUAL FUND ACCT:
Note: contact info…phone numbers, acct numbers, etc.
CHECKING/SAVING ACCOUNTS:
Note: whose names are on the accounts???
SAFE DEPOSIT BOX: location & box number
NOTE…..who has a signed contract for access and who has a key
PASSWORDS: home pc, pc documents, all online accounts
DOCUMENTS LOCATION (physical papers, etc.):
NOTE……indicate where these “original” documents are located
-check book, payment books (house payment, home equity, etc.)
-will, trust, power of attorney, living/medical will, guardianship (child)
-house deed/title
-auto titles
-cemetery plot/ownership documents
-IRS/State, previous tax year filings
-passports
-birth, marriage & related documents
-business/work required license
PHYSICIAN/DENTIST & related:
-preferred medical doctors and facility
-drug allergies
-allergies
-blood type
-immunizations
-brief medical history
EMPLOYER CONTACT INFO:
-human resources
-coworkers
CHILD’S SCHOOL & RELATED CONTACT INFO:
FAMILY/FRIEND CONTACT INFO (email, phone/mailing address):
CPA, ATTORNEY & related:
MEMBERSHIPS, SUBSCRIPTIONS (publications, societies, etc.):
LIST OF USUAL MONTHLY BILLS (phone, utilities, cable tv, etc.)
PETS (local vet contact info):
-deposition of orphaned pet(s)
GENERAL COMMENTS & INSTRUCTIONS related to this info listing:
Expanding on davidmoran's comment - the attorney should also be local. All of this stuff, from wills to state taxes to POA forms vary from state to state, so you need that local expertise from all the professionals you enage.
Regarding the company stock - since it is in a taxable account, it may have come from an ESOP (employee stock option plan), ESPP (employee stock purchase plan), or a 401K distribution. Each of these can be tricky in various ways regarding tax treatment - vesting schedules, discounts, Section 83b elections, holding periods (as I recall, can require as much as two years for long term gains, but I'm rusty), NUA (net unrealized appreciation).
The company may already have provided paperwork (and instructions) documenting the stock, but should be able to reproduce it for you in any case.
Best wishes.
She needs to quickly diversify away from company stock even if it is Apple or Google stock. The paper wealth can whittle down very quickly if that company were to face some problems. This is more important than trying to minimize taxes. A good tax planning advisor can create a plan for incremental sale of company stock combined with charitable donation of shares (not sale proceeds) in small amounts that can reduce the tax hit on shares redeemed for herself, especially if the shares have increased in value steeply from the cost basis.