Advice for incapacitated MIL

[NoMoreE46]

Two years ago, my FIL (59)  passed unexpectedly.  My MIL (64) has not yet recovered from the loss and she has gotten to the point where she cannot take care of herself physically.  We believed it took two years for her depression to really manifest itself.  For instance, she hasn't showered in over three months and lost about 50 pounds in these three months.  She can barely use the toilet (my wife said her mom's bedroom had cups of urine everywhere.)

We know she needs mental and physical help and are addressing this.

With regards to finances, she has no debt-  just monthly bills like utilies, health insurance etc.

She has three IRAs that we would like to consolidate and be

overseen by my wife.  Are there any tax penalties if we touch the IRAs?  My wife has POA of her finances and health.  She is the sole beneficiary of her mom's assets.  

My wife is thinking about quitting her full-time job to take care of her mom and have her mom 'pay' my wife instead to keep her mom from going to a nursing home.  

Thanks in advance for any insight/experiences.

[pizzadude]

I'm very sorry about this situation, and I hope that your MIL can improve and recover.

I would encourage you to talk with an attorney in your state who specalizes in elder care as there are varying state guidelines, possibly federal / medicaid rules, and tax considerations to be in compliance with as a caregiver and your MIL as a potential employer.

Regarding the IRAs, you'll need some financial / legal advice on this as well to ensure there aren't any penalties or issues with consolidating the accounts. 

[Save-n-Invest]

@NoMoreE46  sorry for your MILs declining health. Hopefully, the health care team can help her. I agree with getting legal advice regarding her assets. If it's possible to avoid an LTC that is the best route. They are all bad. Some are worse. 

FWIW a relative was in similar situation with a clinical depression impacting personal hygiene and nutrition. In that case the depression was traced to a maintenance med that had that side effect for a rare few. The treatment was a course of ECTs in an inpatient setting. Improvement was dramatic. That was a few years ago. I don't know if ETCs are still used. The therapy fell out of favor as some freestanding mental hopsitals used ECTs as punishment.  

Please take a complete list of meds to the doctors including OTC meds and supplements. It may take some digging. In the case of the family member I referenced the case was cracked by a psych professor in a nursing school. A neice was studing nursing and asked for help when the doctors wrote it off as a woman's issue. Again, that was quite a few years ago and may not reflect today's care.

I wish your family well.

[mike-fico]

Your spouse may need to take legal action where you will want to get an elder law attorney.  

If your MIL is not able to take care of herself others will need legal ability to act on her behalf and just relying on the MIL to agree every time doesn't make sense if is agreed she can't take care of herself.  

Words like Guardianship and Conservatorship come up in these cases.  There may be other options, but I am familiar with those two.

 

[ChessChik47]

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@NoMoreE46 wrote:

Two years ago, my FIL (59)  passed unexpectedly.  My MIL (64) has not yet recovered from the loss and she has gotten to the point where she cannot take care of herself physically.  We believed it took two years for her depression to really manifest itself.  For instance, she hasn't showered in over three months and lost about 50 pounds in these three months.  She can barely use the toilet (my wife said her mom's bedroom had cups of urine everywhere.)

We know she needs mental and physical help and are addressing this.

With regards to finances, she has no debt-  just monthly bills like utilies, health insurance etc.

She has three IRAs that we would like to consolidate and be

overseen by my wife.  Are there any tax penalties if we touch the IRAs?  My wife has POA of her finances and health.  She is the sole beneficiary of her mom's assets.  

My wife is thinking about quitting her full-time job to take care of her mom and have her mom 'pay' my wife instead to keep her mom from going to a nursing home.  

Thanks in advance for any insight/experiences.

You can consolidate the IRAs without penalty as long as you are not taking a distribution from them.  It's called "rollover IRA".  Any financial institution can assist you with that.  Hoping a speedy recovery to you MIL and peace for your family.

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[Anonymalous]

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@ChessChik47 wrote:

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You can consolidate the IRAs without penalty as long as you are not taking a distribution from them.  It's called "rollover IRA".  Any financial institution can assist you with that.  Hoping a speedy recovery to you MIL and peace for your family.

A rollover IRA is an IRA that was converted from an employee-sponsored plan, usually a 401k or a 403b. These would just be IRAs.

But yes, it's quite possible to consolidate them. Ideally, get a financial advisor who is a fiduciary to help. If retained on an on-going basis, they'll typically charge a fee based on the assets under management, for instance 1% a year. You might be able to hire one for a consultation, but I have no experience with that. But if really necessary, as you mentioned, OP could do it. Just make sure to follow all the IRS rules. Also, be aware of the features of the various accounts, and what might be lost. For instance, if one has a guaranteed return of 4%, it might not be possible to add anything that account, and the feature will be lost if consolidated into another.

And be aware that when you're acting under a power of attorney, the investment bank will need a copy on file (they might need originals, or might reject it), actions are limited to the scope of the document (check to see if it covers her IRAs, for instance), and when acting, remember you are legally obligated to act in her best interest, not yours. This is a really strong legal requirement. As was mentioned before, consulting an elder care attorney experienced with the laws of your state might be a good idea. You can probably find one who will provide a couple hour consult for a couple hundred dollars.

This is not legal or financial advice.