Hope this is the proper forum, apologies if not.
Background: Dad died three years ago with Alzheimers. Mom survives, will be 92, in reasonably good health but some dementia. They had a very nice 2 bedroom Independent Living apartment in a very nice facility with AL and MC options. She’s about to downsize and move into Assisted Living.
Dad had long ago set up a revocable trust, and also had several workplace savings/IRAs. Mom was the beneficiary of the retirement accounts (save one which paid a death benefit to the trust).
So basically mom's assets are in three buckets: pre-tax, post-tax, and the taxable trust account. She would like to make sure we 'kids' enjoy our inheritance, but we 'kids' are now mid- to late-sixties. I think their plan was always that the trust was for my parents expenses, and the retirement funds "the inheritance."
I think I want to keep the trust for funding mom, and started distributing the rest. Starting with $100,000 total to my brother and me. I realize it's in excess of the exclusion ($36,000) and also that it would be taxable to Mom. Is that reasonable or should I (I'm executor, trustee and have POA for Mom) be willing to use the trust to avoid the tax bite and let the IRAs grow? Seems like using the pre-tax now would be moving the tax burden to Mom and not the heirs, am I correct?
And I realize I don't have to decide the entire future right now; this is something to reevaluate every year.
Assets
Taxable trust: $1,250,000
After-tax (Roth): 1,357,000
pre-tax: $396,000
Income:
SS + annuity: $7,000/mo.
RMDs last year: $43,000
Expenses (est.):
Rent + caregiving: ca. $12,000/month (may change; approximate)
Medicare +insurance + medical: $1,000/month
Background: Dad died three years ago with Alzheimers. Mom survives, will be 92, in reasonably good health but some dementia. They had a very nice 2 bedroom Independent Living apartment in a very nice facility with AL and MC options. She’s about to downsize and move into Assisted Living.
Dad had long ago set up a revocable trust, and also had several workplace savings/IRAs. Mom was the beneficiary of the retirement accounts (save one which paid a death benefit to the trust).
So basically mom's assets are in three buckets: pre-tax, post-tax, and the taxable trust account. She would like to make sure we 'kids' enjoy our inheritance, but we 'kids' are now mid- to late-sixties. I think their plan was always that the trust was for my parents expenses, and the retirement funds "the inheritance."
I think I want to keep the trust for funding mom, and started distributing the rest. Starting with $100,000 total to my brother and me. I realize it's in excess of the exclusion ($36,000) and also that it would be taxable to Mom. Is that reasonable or should I (I'm executor, trustee and have POA for Mom) be willing to use the trust to avoid the tax bite and let the IRAs grow? Seems like using the pre-tax now would be moving the tax burden to Mom and not the heirs, am I correct?
And I realize I don't have to decide the entire future right now; this is something to reevaluate every year.
Assets
Taxable trust: $1,250,000
After-tax (Roth): 1,357,000
pre-tax: $396,000
Income:
SS + annuity: $7,000/mo.
RMDs last year: $43,000
Expenses (est.):
Rent + caregiving: ca. $12,000/month (may change; approximate)
Medicare +insurance + medical: $1,000/month
Statistics: Posted by austin_hiker — Tue Feb 13, 2024 1:24 pm — Replies 0 — Views 36