Yes. Unless the stepped up basis is eliminated with new estate tax laws.
When I first received my driverâs license in the state of AL in 1983, for women you had first name middle name, maiden name, and married name - 4 spots. They went down to 3, and at renewal when you look at the little box before they submit, I didnât realize they went first name, maiden name, last name. I had to submit documents to get back to first name, middle name, married last name. I know some women will go to maiden name for their middle name, but not me.
My SS card is correct. Same marriage for 42 years and continuing. If DH dies and I remarry, only if new H has benefits for me would I potentially need to change my name of SS/Medicare card (which I doubt benefit would be higher than my own benefit which is higher than half of DHâs and DH had max pay in for quite a while) - which potentially could be if someone waited until 70 and was a max pay in for a while. Changing oneâs legal name is a pain and is worth doing for a long time marriage (which people do hope to enter into with marriage). Since I only had DDs, staying with the married last name is convenient and I like that it is same as DH.
I guess if DH dies I need to look at potentially selling the house that tax year if it suits me and it fits with planning, to also take max benefit on tax exemption on house sale/married filing together. I will mention to DH in the event that my passing happens before him.
Also a good suggestion about a timely appraisal when necessary.
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Well, yes, but I didnât think you were inquiring about potential tax law changes but instead were asking about the current status.
Editing to addâŠ
I am not a tax person so have no idea where any of these proposed changes will fall out. Quoting from an article that may have been linked here earlier, I am not sure if the proposed change applies to jointly owned assets or only to inherited assets.
"Remove Capital Gains âStep upâ for Assets Transferred at Death
Who may be affected?
- Taxpayers with significantly appreciated assets
- Beneficiaries inheriting assets with unrealized gains over $1 million
Tax proposal
Currently, your basis is the value of assets on the date when the person from whom you inherited died. So, when you sell the asset, youâll only pay capital gains tax on any appreciation that happens after the date of death.
The tax proposal would remove this âstep upâ of income tax basis for gains over $1 million on inherited assets (or totaling over $2 million if inheriting from a married couple). This could require you to pay additional tax when you sell assets you inherit. Alternatively, the gains could be deemed realized when you inherit the assets, creating an immediate tax liability on any gift or inheritance."
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In community property states, like CA, when one spouse dies, the surviving spouse gets a full step-up in basis, not just on half.
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This is another example of there is SO MUCH that I donât know that I canât begin to understand it all and wonât let it keep me from doing what we think is best/want to do. I am an overthinker by nature. I figure as long as I know enough to ask the question when the time comes.
No, not in community property states (under existing law). But that step-up in basis for such things is being targeted for elimination in the current Admin proposal.
Speaking of asking the question when the time comes âŠ
I recently discovered a small IRA ($5k) in my credit union and moved it over to Vanguard, where my 401k is. I donât have a Roth. Dh retired this year so, assuming this is the lowest earning year we will have (he hopes to pick up a part-time job soon enough), this is the year I should convert to a Roth, right? And because this is an IRA rollover, I can add $7k to it, right? I am older than 50.
Also, can someone explain HSAs to me? Are these only available to retirees? Why havenât I heard of these before? If dh decides to go back to work full time, what happens to those funds? Clearly, Iâve done no research on this, and dh has done minimal.
Depending on your combined income, this year could be one to consider. Did your DH receive any âextraâ upon leaving? Vacation payout? Figure out what tax bracket you will be in to figure out if it makes sense.
As far as adding $7k to it (it being the ROTH IRA?), that depends in part on your earned income for the year. This would be a contribution - check with Vanguard about if a ROTH can have both conversion funds and contributions.
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Yes, low income years are a good opportunity to convert a tIRA to Roth. Many Bogleheads delay claiming SS so they can convert more years.
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@Youdon_tsay Yes, this may be a good year to convert the IRA to a Roth. You have to have earned income over $7k if you want to max the Roth contribution. This also assumes your combined income is below the limit for Roth eligibility.
Ooooh. I have no income, only dhâs. So Iâm not eligible?
yes, your Husband can make a Spousal contribution up to $7k to fund your account (if both over 50) and you are not over the limits.
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Excellent! Thanks so much.
So, been gone for about a month from CC more or less dealing with getting 3 of my kiddos off to 3 different colleges (what an experience) and having to deal with moving one in alone when my MIL fell and my husband had to stay behind to deal with that.
So, that brings me to this. My MIL has been fighting my husband for ages on needing extra care. Sheâs 91 and living in independent living. Very stubborn, spends money on pure junk, just to buy junk. Heâs tried to limit the amount of credit cards she uses, but she has every reason under the sun why she needs them all. I think sheâs finally down to 4 different ones. She receives pension and social security, has some cash in a money market and a traditional IRA which shouldâve been rolled to a Roth years ago but her advisors at the time never advised her of such and then she missed the deadline to be able to do so. Needless to say she isnât using those advisors any longer. The current one has done well with her, however, she has limited assets. She needs about $20k/year over her pension and SS to live if things stayed the same. With that maybe she has 5 years left of $. However, based on some of her stubborness and need for more care, itâs likely she will run out of money much sooner. That brings me to my question if anyone has had to deal with this for their parents.
Moving her to assisted living at her place they would nickel and dime and charge for every extra expense under the sun. The pendant (that she needs to wear, but until now has refused - my husband is no longer giving her a choice), medicine distribution (same issue, she needs oversight with this and they charge), etc. Also, once she runs out of $, they will kick her out. Based on the extra costs and care she needs, she would be lucky to make it to 2 years.
Then we found another place she can go to that her money would probably also last another 2 years, but once she runs out, they wonât kick her out and she can stay forever. Iâm not sure if they referred to this as a medicare funded facility, or medicaid, but itâs nicer that where she would go if she stayed where she is and was kicked out then. This place she needs a certain income/asset combination to qualify, which she currently has. We calculated that if she stayed in independent living with a part-time caregiver and some of the extra things she needs, she would not qualify in 10 months from now.
So, apparently once people are completely out of money and housed by medicare, then the places take all their pensions/social security and they get a $90 allowance. Has anyone heard of this? I guess thatâs better than $0 if they have no money, but I canât imagine people can buy their monthly necessities on that.
Have any of you had to deal with this with your loved ones? My MIL has never cared about how much $ she has spent before, to her own detriment and now itâs coming back to bite her. Itâs a sad sight to see. My husband convincing her to move to this other place was tough, but aside from the fact that she has no friends where she lives, when he painted what the picture would be when she runs out of money at a SNF that she would end up, that may be what tipped the scales.
Bottom line really is growing old sucks, but growing old with no money, no good investing and plans, sucks more! 
This is why this thread is important as well as making sure we all plan well for our retirements and onward.
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My BIL is looking at that kind of facility for my FIL (age 87). He can get in with current income/assets, and they will keep him once he goes over to Medicaid. Heâs doing pretty well in an apartment and an aide who comes twice a day (bless that agency - theyâll send someone for two hours instead of a minimum of four). Heâs getting to the financial point where decisions have to be made â not for immediate medical needs, but to be financially eligible. He has a pension and SS. Has gone through the IRA. No other investments.
Most people in nursing homes are on Medicaid.
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Exactly. If she waits too long then she will be in a crap place. Sheâs been in a rehab type of facility right now since her fall and hospital stay mainly for getting some PT and OT services even though she didnât break anything, but itâs been a godsend for my husband. It bought time to really take a look and see whatâs out there for her, as well as realize she needs a lot of extra care, even if itâs not to the point of assisted living yet. Fortunately he was able to sell her on it, but Iâm sure mainly based on her monetary position.
The worst part is we went a couple times to clean her apartment. First step in there the place just wreaked. This weekend we emptied the fridge and she had 2 or 3 of the same items (ie cottage cheese) all partially open, some as old as 3 years. She had other food like that in her cabinets , similar deal. Multiple things partially opened, some years old. A lot of expired things never opened. She has clearly wasted a lot of money on groceries she has never needed.
Cleaning other stuff out of the apartment like the amount of papers, and lists, lists, lists everywhere that are meaningless. One personâs phone number I found on probably 100 different pieces of paper, yet itâs also in her address book. The dust, the film from her cooking in the kitchen, on and on. The new place thank god wonât have a kitchen, so that will eliminate the need for her to take a ton of stuff. I sure hope she doesnât try to take a toaster oven, especially because she has a toaster she uses! Ugh this is the worst part of when our parents get old.
Anyway, I told my kids I will never do this to them. So, every weekend I am going to keep purging stuff so it will make things easier on them when they do have to clean out our house (which they donât want me to sell now to downsize from anyway!)
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My mom was in a beautiful facility and took Medicaid. As it turned out she would have had over 20 years of funds but we didnât know that at the time and my dad made it sound like they were going to run out of money any day.
Iâd strongly suggest picking a facility where your mil wouldnât have to move.
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