Best way to set up investment accounts?

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Best way to set up investment accounts?

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Mom has decent amount of money, but just has it in passbook savings type accounts which make less than 1% interest. Wants to invest some of it in higher-risk, higher-return stuff such as mutual funds and ETFs. But, of course, wants to protect it so it won't be lost if she eventually has to go into a nursing home.

She wants to set up the accounts with me named on them next to her name, so that we both effectively own the accounts. Would this be subject to the lookback by Medicaid? If it comes down to that, how would they differentiate between money she might have put in, and money I might have put in?

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I am not any kind of financial expert.....just a daughter in the middle of handling all this for my parents. BUT...I agree you should see an eldercare attorney or financial expert before doing anything. The other thing you need to consider, is the type of investments chosen, because you may not want investments tied up in longer term investments just to earn higher interests when you do not know how fast you may need to access money at some point. We are approaching $70,000 in expenses for my Dad, just since January, 2013 due to placement and the long timeframes to get qualified for VA and Medicaid benefits. We started that process the week he was placed in a facility and, to date, we still do not have approval from either program. So, if placement happens, there is a LOT of money to be used up fast. We pay $4600/mo for Dad in a memory care unit, and this is just rent. There are doctor bills, supplies, meds and so forth on top of that figure....so on a good month, it's costing us $5000 just for him! Money goes REAL fast at that rate!

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Yes, a fee-only financial planner. Also look at Fidelity and Vanguard, which are both lower-cost companies. She probably wants index funds. They are low expense funds.

Ask the person advising you or trying to sell you something how they are being compensated. Beware of someone who is paid more when you buy or sell stocks.

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I had my savings in mutual funds for about 20 years They were conservative "widow and orphan" type funds. At one point I was making 14 percent interest. Then 9/11 came, and my funds plummeted. I ended up with practically nothing. And I did use financial planners! So I recommend her money be put in very safe CDs or very conservative stocks or funds. Big interest can eventually mean big losses.

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I agree with lilikalani and joannes, you have to be careful of the market if your mom doesn't have a huge stockpile of money. I know from experience that you can blow up to $10,000 a month on home health care of maybe $5-7,000 per month in a facility. You don't want all your assets tied up in long term things, even CDs. You also don't want it all in the market because as people have pointed out, one good recession can cut your investments in half.

You don't say how old she is. That also influences how much you'd put in the market vs safe deposits. If she's got a decade or more to go, that money has to grow. You need help from a good financial advisor. Unfortunately, the free "planners" at banks may not have your best interests at heart; they are graded on the amount of financial products they push. If she has a decent amount of savings, consider a paid financial planner.

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Hi sirpsychosexy, I'm no expert but I think you should visit a financial advisor and have him/her help you since your mom is not ill. As far as Medicaid goes, I'm pretty sure it will be subject to the lookback process. The accounts that my mother had put in both of our names had to be surrendered once I became her guardian. If you contribute money, you will need receipts to prove that you did. That was my experience.

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You want to keep all accounts separate. You can set up a Scottrade account and help monitor it but all monies should be kept separate. This is what I do for my mother. Please speak w/your local bank financial advisor person. They will consult w/you for free initially, but it will give you some advice to start with/build upon for your needs and your mother's. 1% or less interest is not good as the stock market will make you about 5% now. On one of my mom's bank accounts she made interest for the YEAR that wouldn't even pay for a postage stamp. Terrible!! Best of luck.

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Sirp…you've gotten some great and realistic answers from others. Joanne's especially as really truly if there is 1 fall or bad health situation, you can easily go through 6 figures in a year for care. So much for that nest-egg.

There is no such thing as "high-risk, high-return" that can ever be 100% protected. Risk means risk and could be everything and then some both in gain & in loss.If your mom even thinks this is possible... then imho you & your mom are not the type to be able to be doing day trading or other self directed accounts. You need a FA that is a stockbroker at an old-school wire house. A lot of FA are more about insurance and annuities which is quite different approach.

Whatever you do mom's $ needs to be separate. Medicaid seems to take the approach when $$ is commingled that all belongs to the Medicaid applicant and all will have to be cashed in & spent-down before Medicaid will pay a penny.

Just how much liquid $ are we talking about…..mid6, 100, 50K?
What does she have for life insurance and who owns it? other assets? Has she done a fully prepaid funeral & burial? How is her health and family history? All these are things to take into consideration before you do anything imho.

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Hi there, my father passed away last year, and left everything to my mom. I'm an only child. Mom lives with me (will be 81 in January) and wants to avoid probate after her passing. We put everything in my name to avoid probate, but it is still her money. Treasury Direct is a great way to buy I-Bonds. They are a safe investment, but you can only buy 10,000 per calender year. So we did that in Dec. and January of last year. There is also a CD that has me as the POD, which avoids probate. I'm a joint holder on some vacant property. This makes it easy if the money doesn't run out. This is still mom's money, and I save ALL receipts for her care, Dr's visits, respite care, etc. You have to always assume Medicaid will be involved one day, and they are ALL KNOWING. Don't "comingle" your monies. That 5 year lookback will look at bank statements, purchases of investments, and transfers of property. We sold mom's house last year, and even though that money is in my name...that amount is for her care ONLY. Things of public record will definitely be in the "lookback" along with anything that has to have a social security number for purchase (Ex. anything that gains interest). Good Luck with everything...it can be hard to make a plan that works.

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Best way to set up investment accounts?

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