Inheritance
Hi Terry
I presently am receiving money from my parents that is deposited in a joint checking account under my mothers name as owner. She pays the taxes on it. It’s there for me to use if needed now because I thought I’d be divorcing my husband. It’s back up cash and it’s part of what will be my inheritance. Presently I’ve no plan to divorce and an thinking I should put some of it…what’s allowed, into my Roth IRA. It’s over $165,000. I don’t have other income to deposit in my Roth this year other than what is sitting in that account.
My only retirement savings are in a Roth. I’m self employed and do not have a 401k. Just Roth and SS and this joint account with my mother.
1. I’m still not clear on the best way to save this money without incurring unnecessary taxing
2. Do I save some of it in Roth or just let it be in the money market acct?
I’m 59 and my parents are 81 and 85.
Thank you
Terry Says
You can put up to $7500 in your Roth IRA for 2023. The question is how are you investing it inside the Roth?
Also, does your mother have an estate plan? That’s the first thing she should do — and create a Revocable Living Trust with you as her successor trustee. Watch this video:
https://www.terrysavage.com/wp-content/uploads/2022/10/Terry-Talks-Wills-Trusts-Estate-Planning.mp4
Just in case you DO get divorced, money in this joint account could be considered marital property — at least half of it. So that’s not really protecting it in case of divorce. If she sets up a RLT and you are successor, this gives you access if you need it –and keeps it out of your marital assets as an inheritance.
Oh, and don’t leave that much money sitting in low yielding deposits. How about having her buy some T-bills with the money.
https://www.terrysavage.com/t-bills-beat-cds/
