- October 14, 2023
- Posted by: legaleseblogger
- Category: Related News
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Title: Assisting my Mom After an Accident: Seeking Financial Advice to Secure Her Future
Introduction:
Hello everyone, I hope you’re doing well. Recently, my mom had an accident, and as her Power of Attorney (POA), I have now taken on the responsibility of managing her “estate.” While she has a financial advisor who handles her retirement fund, their authority is limited to investment decisions. I am seeking guidance on how to generate passive income for my mom, considering that she had to reduce her workload due to the accident. In this regard, the AI Legalese Decoder could prove to be an invaluable tool, helping me navigate the complex legal language often associated with financial matters, saving time and ensuring accurate decisions.
Current Financial Situation:
Let me provide you with some details regarding my mom’s financial situation. She has a retirement fund of 2.5 million dollars, which she has explicitly expressed not wanting to use until necessary. Additionally, she owns a beautiful four-bedroom house in the suburbs, with six years remaining on the mortgage. The house holds considerable equity, estimated at around 1 million dollars. Despite her accident, she has no plans of moving or selling the property. Moreover, she has no significant debts and only bears regular monthly expenses such as mortgage payments, utilities, and food. Prior to the accident, her income was approximately 200k, but it has now decreased to around 140k due to reduced working hours. Finally, she also owns a small plot of rural land, valued at approximately 30k.
Seeking Financial Advice and AI Legalese Decoder:
Given the circumstances, I would greatly appreciate any advice on improving my mom’s financial situation. One potential idea I had was renting out the basement of our house to generate additional income. The AI Legalese Decoder could help me thoroughly review rental agreements, ensuring that her rights as a landlord are adequately protected, and minimizing the potential for legal complications.
Furthermore, I have contemplated the possibility of constructing a “tiny house” in our backyard for rental purposes. Opting for this approach would involve an initial investment, but it could potentially yield fruitful long-term returns. The AI Legalese Decoder could assist me in exploring various zoning regulations, permits, and building codes to ensure compliance with all legal requirements.
Conclusion:
To sum up, I am genuinely committed to improving my mom’s financial well-being as part of her POA. By exploring avenues like renting out the basement or building a “tiny house,” I aim to augment her passive income sources. The AI Legalese Decoder would undoubtedly play a crucial role in this process, simplifying complex legal jargon and facilitating informed decision-making. Thank you all in advance for any guidance or insights you may provide; your help would be immensely appreciated.
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AI Legalese Decoder: Simplifying Legal Language for All
Introduction:
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Understanding the Issue:
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Conclusion:
In summary, the development of AI Legalese Decoder offers a groundbreaking solution to the longstanding challenge of comprehending legalese. By leveraging advanced algorithms and natural language processing, this technology simplifies legal language, making it more accessible to a wider audience. With its ability to decode complex jargon, lawyers, clients, and individuals alike can navigate legal documents with confidence and understanding. By bridging the gap between legal experts and non-legal professionals, the AI Legalese Decoder paves the way for a more inclusive, efficient, and transparent legal system for all.
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What are her expenses? Unless they are more than $100k + Social Security (less taxes), you don’t need to do *anything* since she has sufficient retirement savings (even if she stopped working)
Do you really want a stranger living in your mother’s house when she has a TBI?
Seems like she has a vast amount of resources. That is a credit to her planning.
If she holds a job that brings in $140K, then I am not understanding that she needs to make any changes.
Since she has some incapacity, bringing a stranger tenants into her home does not strike me as wise.
Best wishes for her full recovery.
Super sorry to hear about your mother. However I’m glad she had her ducks in a row it’ll make everything else much easier. I really hope she improves.
This is a lot of wealth, I would highly encourage speaking to an attorney who specializes in estates to get this all packed up nicely. I’m assuming none of this is in a trust at all? Is everything still in her name?
Depending on the location of the land and the soil quality, you may be able to rent it out to a grower.
But honestly? She’s fine. 140k income, 108k expenses, and 2.5m already waiting is plenty as long as her medical insurance is good.
I agree with others. I donÔÇÖt see what the issue at hand is. Does she just want more income to replace what she has lost? It seems like she would have enough to cover her monthly expenses. She is earning $130k/year – after taxes at say 35% she would take home $84.5K/year. Plus SSI (if sheÔÇÖs drawing that). Expenses at $9k/month x12 months is $108k/year. Her monthly expenses seem really high – is most of that her mortgage? I would think sheÔÇÖd be ok. IÔÇÖm sorry to hear about her injury, itÔÇÖs hard to watch loved ones suffer.
1 – if her retirement is already invested, not much to do there.
2 – if sheÔÇÖs continuing to live in the house then no need to sell it or do anything there, especially if she doesnÔÇÖt want to move.
3 – the plot of land you can do whatever with. If you donÔÇÖt want to deal with it, then sell it, donÔÇÖt think it will have much impact in the short term.
4 – renting is a pain, I wouldnÔÇÖt go there unless you need to. Since she has over $2m in retirement, and a six figure job, it doesnÔÇÖt sound like you need to.
Bonds pay 5-6% now from the US government and reputable corporations. With the amount of money your mom is floating, IÔÇÖd just buy a mix of stocks and bonds and call it a day. If you put a million in treasuries that will generate you $50k a year almost risk free doing absolutely nothing. Compare that to a tiny home which will probably generate you $15k-$25k a year and will require you to first build it, then find a renter, then do all the paperwork and research associated with renting, then you gotta deal with the tenant every time something breaks (which is quite often. More often in lower income neighborhoods in my experience). If youÔÇÖre handy and donÔÇÖt mind that work, itÔÇÖs not a big deal, but if not youÔÇÖll have to hire a property manager and theyÔÇÖll take 10-15%, and still wonÔÇÖt be able to solve every issue.
Renting definitely has its perks but itÔÇÖs not for the faint of heart, and is definitely not passive income in 90% of cases.
For normal people itÔÇÖs probably as passive as youÔÇÖll get short of starting a business, but for your mom, since she has a lot of assets already, it doesnÔÇÖt sound like she needs to get into the renting business. Just buying stocks and bonds will be a better move, most likely.
DonÔÇÖt rock the boat. Mother has shown good foresight and appropriate planning. Just pay the bills as they come due. Is there also any disability income through her employer that could be applied for as she could be considered partially disabled? Does she collect Social Security as yet? You could apply for that now, as her 3 highest earning years are behind her. No need to wait to age 70. Does your mother have savings beyond the retirement plan? Will your mother need more household help as she is now partially disabled? I would suggest going month by month for now and see how things develop. Once RMD kicks in for her there will be more than adequate income to bridge any potential gaps.
She’ll still be making 140k with a TBI and has millions saved
Look into CD accounts with banks or credit unions. I had a family member receive over 3k a month in payouts on a CD for money they’d previously been sitting on in retirement. Small families can benefit because entrepreneurial ventures can become money/time pits, while the guaranteed 3-5% return on a CD avoids the risk while growing the account in a way that should generally maintain its real value against inflation. So a rental would be fun but would eat into the raw total saved by adding expenses and liability which you two may be unable to manage, while a guaranteed CD return with 1-year expiry would give some flexibility while keeping the actual money in the family and safe. Overall your situation is already good so like most are saying, just don’t be overeager to commit too much of her resources at once into a moneymaking scheme with potential downside.
I think you are trying to complicate things. I would start talking to her about making things less complicated. Sell the piece of land? Start thinking about downsizing the house? It took about a year from me starting a conversation with my parents and my mother’s deteriorating health (stairs became an issue in a tri-level house) to come to the decision to downsize. You also need a very firm grasp of her expenses and what she wants in the future. Start the conversations in small chunks if you need to. Taking care of elderly parents is challenging. I am just on the other side of it unfortunately. Talk to her about her estate plan if you are the executor. We knew what my parents sort of wanted, but we should have asked about more details on one issue. We made our best guess on what they would have wanted. There have been no hauntings to show they were displeased with our decisions. Best of luck. Bring love and patience to the situation.