Inheritance Income Question

**Gailete** · 02-13-2018, 04:51 PM

Well to start with, the easiest thing is to start saving that money for 5-6 months so that you have a decent down payment. Do I assume correctly that it is just you? You are retired as opposed to be on disablity? You are getting a nice inheritance although I don't understand all the numbers. Was the $6000 for all the property sales combined so with your SS it makes $7850, or is it $6000 + 1850 + x = Z with x being the amount from the sale of the 9 properties and the family home or was it included with that $6000 total?

If this inheritance is only going to come in for 36 months, you need to be looking for a small affordable place that is less that what you are paying now. Once that inheritance is gone, it is gone. You have no savings, which is not a good place to find yourself. If you are still driving, is your car going to need to be replaced? What about clothing needs, and if you own your own house, appliances break down.

Personally I would try to find senior housing in one of those two states that you are looking at where you can live decently, have enough to live on and pay for things that you can't afford on SS. After the last three years without essentially a cost of living raise (my SS went up a whole $2 this year), you know that your SS isn't going to go up over the years as you need it to. I would want to tuck pretty much all that money away to give you an edge as the years pass. I would not want to be buying a house at this point as I no longer am able to do yard work, house work, etc. If you can still do that, how long do you think you will be able to? Both places that you are proposing going to, get plenty of snow. How do you feel about shoveling?

You don't seem to be under the gun to make the decision right now, so really take your time to figure this out. Also will you need to be paying taxes on any of this money?

**Willienme1950** · 02-14-2018, 05:41 AM

Inheritance Income Question

I'm sorry for any confusion in my post.

I am a single retired ( not disabled) 67-year-old living solely on Social Security. My Social Security check is $1850.00 per month. I do not own a car. I drive my mother's car as she no longer can drive. It is an older car so when the time comes I will sell this car. I am an only child.

My mother has a Living Trust set up.

My mother has Annuities and from those Annuities I will get a monthly check in the amount of $6,000.00 for 36 months.

My mother also owns 9 Homes that she rents out. These are all owned outright, she owes nothing on them. These homes have been paid off for many years. When she passes these homes are to be sold. After all expenses I will get the net proceeds from these homes. Living in a very rural area I was told that these homes only have an average value of about $50,000.00 each. Also, until these homes are sold I will get the net rent money from them after any expenses.

Then there is my mothers home that will be sold. I'm told it has an approximate value of about $75,000.00. That home is to be sold and I will also get any net proceeds after expenses from that.

My mother also has several insurance policies of $50,000.00 of which I'm the beneficiary.

I hope this has cleared up any confusion. I really need some advice on what I need to do.

**Gailete** · 02-14-2018, 07:52 AM

Okay you said that your mom can no longer drive so she is still alive? So you will be getting this inheritance you don't have it now? I think it is smart to plan for what you will do, since at your age, your mom is most likely in her late 80's. Does she currently live with you or nearby? Or does she live where you hope to move to? Is any of the property that needs to be sold located where you want to move to? Answering these can at least get you understanding the path you are on.

When your mom passes and the estate is settled, you are going to have a very nice chunk of cash. You most likely will be over qualified for a senior housing apartment where the cost is based on income. However, you should be able to buy a nice condo where all/most of the yard work/building maintenance is done for you. You may be peppy and lively currently, but that doesn't mean you might not be slowing down soon. Or if mom lives another 5 years, you will be in your 70's and may not be up to the yard work and maintenance required from owning your own home. That would be my personal preference. As you will be inheriting a goodly amount of money, you should be able to pay cash for a place if you want to buy. If at all possible I would skip a mortgage.

If I am doing the math correctly you are in line for around a $7-800,000, perhaps a bit less, depending on how much those houses sell for, or of course, you can keep renting them if you like. But at your age, I wouldn't be worried about getting a mortgage. Between everything, you should have enough to pay cash for whatever you want to buy and whereever you want to buy.

Unless those annuities have already been turned over to you now, you only have to work on your long range plans so that you have some direction once your mother dies. It is going to take some time to settle her estate because of the real estate involved. Until the estate is settled, assuming she owned the properties in Idaho, you probably will not want to leave until things are basically settled, which may be a year or two. At that point, you can move to wherever you want to, buy a house or not, buy a car when needed, etc. You just need to make a plan of what you would like to do. In the meantime if you are set on buying, you need to research property costs in the area where you want to live, the cost of living in those areas, the eather, etc. You will pretty much be able to do what you want. Having a plan set aside, will help you know which direction to head when the time has arrived.

I would allow no more than a third of the inheritance for moving, newer used car, and a new place to live whether buying a house, condo or renting an apartment. The rest I would invest for steady growing income that would give you extra income as needed each month, and a nest egg in case of a need for a large amount of cash.

**msomnipotent** · 02-14-2018, 08:19 AM

I would try to hold on to the rentals and use that as income instead of the inheritance payments. Is the sale mandated in the will and can she change it?

**bjl584** · 02-14-2018, 08:26 AM

You're about to receive a substantial cash windfall that I don't think you are prepared for. I would forget about moving or buying a home for the time being. The first thing that I would do if I were in your shoes would be to learn as much financial education as possible. You are on SS and have 0 savings. Having over $600,000 dumped in your lap is going to be a shock to the system. You're going to end up chewing through every dime of it if you don't have a solid education on money management and financial responsibility.

**Willienme1950** · 02-14-2018, 08:39 AM

Inheritance Income Questions

My mother is 92 years old and is failing fast. She has a slew of medical issues as well as mental issues. She still lives on her own across the street from me, and so far I am able to care for her. I am now currently living in one of her rentals and I pay only $300.00 per month in rent.

It is stated in the will that her rental homes ARE TO BE SOLD upon her death.

I would prefer to purchase a single-family home as I have pets and I still do "love" yard work. I think that when the time comes that I can no longer do this yard work, I can then hire it out. I have no health problems and I am considered to be a very active 67-year-old.

I do realize that I will probably need to remain here until the estate is completed. I'm not sure if I need to remain here while the rentals are being sold. Not sure on that one. I AM NOT the executor of my mother's estate. Someone else is, so overseeing the sales of the rentals will be their responsibility.

I was thinking of keeping my budget to more than $450,000.00 for a home, and I wanted to be able to pay cash for this home.

Here is my problem: Again, I will get this $6,000.00 per month from my mother's annuities. I have called several mortgages brokers in different states and have been told that there is "some kind of government" rule where when it comes to Inheritance Income I must "be able to prove to the lenders that I can guarantee an income of this $6,000.00 for a MINIMUM of 36 months. Well, therein lies the problem. So, let me give you an example::: Let's say the first month I receive this $6,000 I go out and I find a home, I make an offer on that home, the offer is accepted. Well, ok, then I'm told by the lenders that it will take 60 days before closing. So, then when the time comes for closing I show up...........but then I'm told......."Oh, No, now you don't qualify for a home because you NOW can't prove 36 months of inheritance income.......you can only prove 34 months of inheritance income........so you can't purchase a home. This IS MY DILEMMA with the whole purchasing a home thing. See, this causes me another problem. Where I want to move to there are not that many "rentals" to choose from if that is what I need to do. I don't want to rent, period!! I wanted to buy something. Dang. How do I get around this????

**Willienme1950** · 02-14-2018, 08:45 AM

Inheritance Income Question

Just so you all know I moved here "for the specific" reason to take care of my mother. I was born and raised in this very rural town, but I left when I was 19 and have never returned to live here. I do not like it here. I am not a rural person. Most of my adult life I've lived in California, New York, Pennsylvania, Florida, and North Carolina. I'm a city person at heart. I am wanting to leave here as soon as I can when the time comes.

The biggest reason why I'm asking you all these questions is I do realize that I will have a huge sum of money to work with and trust me I don't want to make any mistakes with this, and yes I need to educate myself. I'm scared to death!

I DO NOT if I can help want to find myself in a situation where I wind up moving multiple times before I finally settle where I want to be. So......I don't want to make a mistake in that area either.

What I don't want to happen is to have no plan at all as to what I'm going to do, then all of a sudden all of these issues are dumped in my lap and I have no plan.

**bjl584** · 02-14-2018, 08:58 AM

Originally posted by Willienme1950 View Post

I was thinking of keeping my budget to more than $450,000.00 for a home, and I wanted to be able to pay cash for this home.

So that leaves you with $150,000 or so.
Have you thought about taxes, maintenance and upkeep, and everything else that goes with buying a home? Plus the costs of daily living? You are probably looking at $8000 a year in taxes alone on a house that is that expensive. On SS payments alone, you'll be drained to $0 in less than a decade. You need to rethink this plan. Like I said previously, education is key.

Not sure why the will wants the rentals unloaded, but I'd want those more than I'd want a 36 month annuity. If you are prepared to manage rentals, or if you have a solid property management company overseeing them now, then I'd want to keep them. They are paid for. They will cash flow for you for the rest of your life.

**Willienme1950** · 02-14-2018, 09:36 AM

Inheritance Income Question

My mother is very firm about having the Rentals sold. There are no property managers in this area that can be trusted. Right now she pays a handyman to do any work on them, and believe it or not she is the one who does the renting of them. You would have to know my mother. She is tighter than the bark on a tree and she wants total control of everything, even though her mental state is fading. Also, I really don't want the headaches of these homes as they are extremely old homes, not well built......something always going wrong with them.

**snafu** · 02-14-2018, 12:07 PM

Welcome to SA. I admire the fact that you returned to be helpful to mom who you describe as 'fading.'

You have shared so little information, we have no idea of your financial history and choices you made in the past that resulted in no savings and only SS annual gross income $ 22,200. [$ 1850.] at 67 y/o. Like bj, I'm alarmed you have not made a real paper and pencil plan for all the hundreds of decision life demands.

Where you live will influence your costs enormously. I believe you need to read about the best USA places for retirees, that gives you the support and services that meet your needs and expectation. It helps to live where you have people you can rely on to help you transition to a new community. It's expensive and a huge hassle to sell a home so it's usually smart to rent for 6 months to a year, before buying the most expensive of life's purchases in an unfamiliar place.

We'd like you to use your anticipated income to serve you best without un necessary expenses that merely, pointlessly, transfers your money to others. You would be well served to start checking out mortgage interest rates from different types of lenders, Every point translates to huge sums because mortgage amotorization tables are not typical loans. Interest rates are negotiable. Credit Unions offer benefits if you meet their requirements for example.

Have you talked about the situation with the appointed executor? While these Idaho houses are currently rented, are they in good condition to sell? Have you discussed their condition and market value with a reliable, trustworthy, experienced realtor? What time frame would they anticipate? What is average in that community?

Annuities are pretty tricky, have you confirmed the original amount and the sum/commission [has many names] to be paid to distributor? What are the terms of the annuity? Cash less income tax and expenses direct deposit to your bank account?

Who is paying mom's current expenses? Who is completing requirements for mom's 2017 Income tax, [can be submitted immediately] no later than April 15th?

**Willienme1950** · 02-14-2018, 12:43 PM

Inheritance Income Question

My financial history was this: I was in a horribly abusive marriage for years, and I would not leave because of the fear of losing everything, which when I finally did decide my self-worth, and everything else was more important than any money I could have received. So, I finally left, with basically no money, did gather up enough money to take some personal belongings with me. I rented a small U-Haul truck and drove it from North Carolina here so I could be near my failing mother to help her. So, that, in a nutshell, is my financial history. My husband was a raging alcoholic for years and constantly drank up any savings we would accumulate. Why any of this has to do with my financial future is beyond me.

**snafu** · 02-14-2018, 02:05 PM

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**snafu** · 02-14-2018, 02:49 PM

Thanks for the info. Does that mean you have a finalized divorce? Can EX claim against your upcoming inheritance?

**Willienme1950** · 02-14-2018, 03:34 PM

Inheritance Income Question

My divorce has been final for some time now. So, Ex getting any inheritance won't be an issue.

Inheritance Income Question