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Large Roth conversion when terminally ill

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  • #16
    Originally posted by fyre4ce View Post

    I appreciate the suggestion. I may personally hire an estate planning attorney in her state to help. It's not so easy being on the other side of the country, but I'm sure we can consult over the phone and pay by credit card. We may run into a wall, because I don't want my mom involved at all, but we can see how far we go.

    I agree there is some murky terrain here. The real problem is that my mom doesn't want to discuss a large Roth conversion, or really any other detailed estate planning, because she would view as an acknowledgment she won't survive the year. (Whether she actually will or not is unclear right now.) Frankly I can understand the desire to not be brought forms to sign while on my death bed. Earlier this year, when we discussed the PoA I mentioned the possibility of large Roth conversions and she was OK with the concept, but again has said she doesn't want to know the details. I have taken her statements as permission. The only other person affected is my brother - we are 50/50 on all her accounts - and I've discussed it with him and he's okay with it.

    If a conversion would move money from, say, an account where I am a 50% beneficiary to one where I am a 100% beneficiary, then yes, that would be ethically prohibited, but that's not the case here. Or, if one of us were very low tax and the other were high-tax, Roth conversions to benefit one heir could also be ethically dubious, but fortunately we're in very similar tax situations.

    One of my mom's sisters (not the executor) is financially literate, and I have discussed this plan with her and she is OK with it. Her opinion is that as long as it doesn't cause my mom any emotional turmoil, and it would save taxes for my brother and me, then it's okay to do.
    yeah i mean please take this all as attempts to be helpful during a difficult time.

    if you mom doesn't want to discuss financial moves right now then isn't she kind of voting with her feet on what should be done?

    again i don't know how any of this would play out but if someone what looking at this (IRS, state court etc) would you be in a convo like this:

    "so this move saved you taxes?" it did
    "was your mother involved in the decision?" no.
    "why not?" ... ... we didn't want to involve her

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    • #17
      "I have traveled to see her twice in the last few months (not easy given our geographic separation) and plan on making more trips soon."
      With privileges come responsibilities. I would view this from a practical standpoint as well. The separation is an issue. The goal should be to make sure all her bases are covered. I would not blindly accept that responsibility. Safeguarding and planning is one thing, but picking up the mail, paying the bills and handing out cash for purchases can be logistically difficult. She might not be there yet but a time may come. You need to think of this full Financial POA similar to adopting a child. Once you step in to an "implied" responsibility, it is difficult to walk it back. The mutual understanding of responsibilities is different than access in EOL situations.

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      • #18
        I am sorry for your troubles and it must be hard losing your mother living at such a distance apart. One thing you and the executor might want to check on is how her other assets, if any, are titled. Are they in a revocable trust so that you can avoid probate? It varies from state to state how much assets are subject to probate so that should be something you should also discuss with the estate attorney.

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