Personal Investments • Elderly Parent's Transition: From Property Wealth to Liquid Assets

I'm assisting my late-70s, widowed parent in selling their $1.6M home and moving into their rental condo. This move will liquidate about two-thirds of their $2.5M net worth. I'd welcome your advice on where to put the cash

Current financial snapshot:

• Home $1.6M, Condo $400K
• Cash, CDs, Ibonds: $180K
• Annuity: $300K
• Equities: $20K (VTSAX)
• Annual income: $80K (pension, social security, annuity RMD, condo rent)
• Annual expenses: $80K

Key considerations:

• They're set on selling the place. The sale will net around $1.4M after realtors and taxes.
• Income will decrease by $20K/year after moving, but expenses are also expected to drop by a similar amount due to reduced property taxes and home maintenance.
• Their priority is wealth preservation and growth for heirs.
• They expect to receive an inheritance of ~$2M in the next few years.
• There's a family history of longevity and late-onset dementia. They have a $300K long-term care insurance policy in place.

Initial thoughts:

• I'm planning to engage a fee-only, no-AUM financial advisor from this list viewtopic.php?t=360823. This will get us sound expert advice that is free from conflicts of interest.
• I could see a 3-fund portfolio with a 50-50 split between equities and bonds being a good fit.
• Considering Washington State's estate tax exemption of $2.2M, I could see proactive gifting down to that level.

Your insights would be greatly appreciated!

Statistics: Posted by CommitmentDevice — Wed Jan 17, 2024 5:29 pm — Replies 0 — Views 143

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