Dad has dementia, and is starting to be too much for Mom to be able to care for alone. Mom is 15 yrs younger than dad. We met with an estate/elder attorney in their state (NY), and one of the main things she brought up to protect mom's assets for medicaid to help with dad's home care (and eventually nursing home care) is an irrevocable trust for the assets above the spousal limit (~125,000 in NY). It's my understanding that this type of trust can be used to pay my mom dividends on the growth of assets inside of it, but my mom can not take any principle from it while dad needs medicaid (or in the future if mom needs it).
My sister and I do not care how much is left in there for our inheritance, we want mom to be able to live without being a burden on us, and dad to get care without being a burden on mom. So instead of a typical VTSAX/vtiax/Vbtlx mix for my mom's money, my thoughts are to guide mom to invest the money that will go into this trust into high dividend stock index and bonds- so mom gets a monthly or quarterly dividend and my sister and I will just inherit whatever's left over when mom dies. They are in a very low tax bracket so the tax on dividends even if short term wont be terrible for mom. She's also the type who always just put money in CDs or bank accounts as opposed to the market. If the trust pays all the dividends to mom, then the trust itself doesn't pay any taxes, correct? Just mom?
What do you guys think about going 20% VBTLX (total bond index, current yield 1.23 %) 20% VNYTX (NY long term tax exempt fund, current yield 1.72%) 20%VTIAX, and 40% a US fund that tracks dividend stocks index like VDIGX (Dividend growth fund), VDADX (Dividend appreciation index fund), or VHYAX (High Dividend Yield Index fund)?
Or am I overthinking this too much and can just go with a value tilt 20% VVIAX and 20% VTSAX to round out the 40 % US stocks? The more I'm typing the more I think I'm overthinking this.
tl;dr- setting up irrevocable income trust for mom's assets. Goal to provide mom dividends since she can't the touch principle. How would you invest in it?
My sister and I do not care how much is left in there for our inheritance, we want mom to be able to live without being a burden on us, and dad to get care without being a burden on mom. So instead of a typical VTSAX/vtiax/Vbtlx mix for my mom's money, my thoughts are to guide mom to invest the money that will go into this trust into high dividend stock index and bonds- so mom gets a monthly or quarterly dividend and my sister and I will just inherit whatever's left over when mom dies. They are in a very low tax bracket so the tax on dividends even if short term wont be terrible for mom. She's also the type who always just put money in CDs or bank accounts as opposed to the market. If the trust pays all the dividends to mom, then the trust itself doesn't pay any taxes, correct? Just mom?
What do you guys think about going 20% VBTLX (total bond index, current yield 1.23 %) 20% VNYTX (NY long term tax exempt fund, current yield 1.72%) 20%VTIAX, and 40% a US fund that tracks dividend stocks index like VDIGX (Dividend growth fund), VDADX (Dividend appreciation index fund), or VHYAX (High Dividend Yield Index fund)?
Or am I overthinking this too much and can just go with a value tilt 20% VVIAX and 20% VTSAX to round out the 40 % US stocks? The more I'm typing the more I think I'm overthinking this.
tl;dr- setting up irrevocable income trust for mom's assets. Goal to provide mom dividends since she can't the touch principle. How would you invest in it?
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