reimbursements from parents?

[Anonymous]

Vanguard is fast. Sell orders close 4 pm that day. If one fund has checks, can transfer in. Do really at most 2 work days.
You panicked and goofed. Well meaning but now a pita.

[Anonymous]

Family loan template is online. Family loan interest rates are available at irs.com. You have to charge interest if going this loan route.

[Anonymous]

Anonymous wrote:I recently got my 88 y.o mom and 92 y.o. dad (still married) to move into senior housing. My dad has $800K in a Vanguard account and $50K in checking. I now have POA. My brother and I paid the upfront fees (200K) to get them in. What is the best way for us to be reimbursed from my parents' money?

We are not trying to spend down their assets so they are covered by Medicare. Ongoing costs ($10K per month) will be paid from his money. But both my bro and I make approximately $100K a year, so to recoup this initial outlay would be a lifesaver for us.

Thanks so much to anyone who can advise!

You and your brother each make 100k a year and both had an easily accessible 100k to contribute to the move in fee? Either you guys are incredible savers or the math ain’t mathing.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I recently got my 88 y.o mom and 92 y.o. dad (still married) to move into senior housing. My dad has $800K in a Vanguard account and $50K in checking. I now have POA. My brother and I paid the upfront fees (200K) to get them in. What is the best way for us to be reimbursed from my parents' money?

We are not trying to spend down their assets so they are covered by Medicare. Ongoing costs ($10K per month) will be paid from his money. But both my bro and I make approximately $100K a year, so to recoup this initial outlay would be a lifesaver for us.

Thanks so much to anyone who can advise!

You and your brother each make 100k a year and both had an easily accessible 100k to contribute to the move in fee? Either you guys are incredible savers or the math ain’t mathing.

OP is in 50s or 60s. It’s savings.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I recently got my 88 y.o mom and 92 y.o. dad (still married) to move into senior housing. My dad has $800K in a Vanguard account and $50K in checking. I now have POA. My brother and I paid the upfront fees (200K) to get them in. What is the best way for us to be reimbursed for my parents' money?

We are not trying to spend down their assets so they are covered by Medicare. Ongoing costs ($10K per month) will be paid from his money. But both my bro and I make approximately $100K a year, so to recoup this initial outlay would be a lifesaver for us.

Thanks so much to anyone who can advise!

You and your brother each make 100k a year and both had an easily accessible 100k to contribute to the move in fee? Either you guys are incredible savers or the math ain’t mathing.

Also, did you have a buy-off from your spouses? Mine has been doing things like this without any discussion, and I'm looking for ways to separate finances because I'm worried about what will come next. Rading the kids’ college accounts? Our retirement accounts? Already dipped into our emergency fund.

[Anonymous]

Anonymous wrote:Take the POA to your parent’s bank and get yourself added to their checking account. The bank will give you checks that you can use.

I actually did this with Bank of America with my dad's POA. I found it really scary (security-wise) that they just on the spot added me to the account with just that piece of paper.

[Anonymous]

Anonymous wrote:

Good to document this is a reimbursement and not a gift (though even if a gift it’s just a matter of filing an additional form with his taxes - it doesn’t sound like his estate will be large enough to trigger estate taxes down the road).

Could you elaborate on the bolded part? Does this mean a parent can give more than the "allowed" gift amount as long as they file a form with their taxes?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Good to document this is a reimbursement and not a gift (though even if a gift it’s just a matter of filing an additional form with his taxes - it doesn’t sound like his estate will be large enough to trigger estate taxes down the road).

Could you elaborate on the bolded part? Does this mean a parent can give more than the "allowed" gift amount as long as they file a form with their taxes?

And they have to pay the gift tax—which in this case, where the parents might not have enough money for their care, would be deeply stupid.

[Anonymous]

there's no gift tax unless they give over 13.6 million away.
there's no need to report a gift. it was a loan. and you don't even have to report that. it's just potentially good to document it if anyone is ever audited.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Good to document this is a reimbursement and not a gift (though even if a gift it’s just a matter of filing an additional form with his taxes - it doesn’t sound like his estate will be large enough to trigger estate taxes down the road).

Could you elaborate on the bolded part? Does this mean a parent can give more than the "allowed" gift amount as long as they file a form with their taxes?

Gifts over ~$15K/yearr/giver/recipient should be reported to the IRS, so that taxes can be correctly charged if and when the lifetime total goes over the lifetime cap of ~$5M.

[Anonymous]

I would contact a lawyer or accountant immediately. If you paid for your parents that might be considered a gift. If you get reimbursed that might be considered a gift. You may have a tax issue here. You can't generally just pay for something like that and get reimbursed.

[Anonymous]

Anonymous wrote:there's no gift tax unless they give over 13.6 million away.
there's no need to report a gift. it was a loan. and you don't even have to report that. it's just potentially good to document it if anyone is ever audited.

+1

You are probably fine, OP, and don’t need to freak out. It’s good to have this documented just in case, but it’s unlikely you’ll be in trouble over this. (The documentation showing that you and your sibling paid the entry fee should already exist and corroborates your story.)

[Anonymous]

I’d be more concerned about the Medicaid look back than gift tax, and would definitely contact an attorney.

[Anonymous]

Did they move into a CCRC? at some places a large percentage of the buy-in gets refunded to the person's estate (which ultimately would pass to you?)

[Anonymous]

Can you have a conversation with the facility? Explain that in a moment of urgency you paid their fee to avoid delay. But now the elders have the liquidity and can the facility refund you and have elders pay?
No gift.