Yeah the main reason to have it in a relative’s name that is not parent/self is not to crimp financial aid packages. Is the uncle aware of this?
I don’t think so. I get it previously, if their mom had been in control they’d have $0.00 available. Actually, less because she would have found some way to rack up fees to go negative. Now? That’s why I need to understand his motivation. If it’s the (un-)helpful cousin, we (I) need to cut that off now. If it’s “you’re getting to be 21,” that’s not a good enough reason IMO. If he just doesn’t want to do it, … OK, but then we need to figure out if we can put someone else in charge so it’s not squarely in their name.
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I am fairly sure you’re correct that you cannot have it transferred to you and then use it for the kids.
What I think you could do is, with the children’s permission, take control of the 529, convert it into your Roth IRA, then pay for college in the amount of the 529 out of pocket. I know you wouldn’t take advantage of the kids, but you’d know better how they would react to you saying “Hey I’m just going to slap your money into my retirement but I’ll make it even stevens”. Maybe they’d say go ahead.
Doesn’t that create a taxable event from the 529 since it’s a direct conversion that isn’t expressly for educational purposes? I mean sure, the money after it’s in the Roth would be used for that, but I’m not sure if the 2-step process will work.
Problem is TH is not related to uncle. Not sure if that means Uncle pays tax on gains to get out of 529, then gifts to TH and Mrs TH (to avoid gift tax over exclusion of $18k). Not sure how to keep it in 529 and move to non-relative.
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I understand with recent (2023? 2024?) rule changes, 529-Roth IRA conversions up to $35k lifetime max are tax-free events. I don’t think you could withdraw from your Roth to pay for educational expenses not for you/spouse/legal children.
That said, it appears at a glance that @SteveGrondin is right, you can’t convert the 529 to you without taxes unless the uncle first adopts you, or you him.
The ideal course would be: uncle pays for education expenses
End of complications.
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Some days, Mrs. Hoffman would tell you that she’s open to me being adopted by someone else. Then I’m someone else’s problem, not hers.
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There are tax consequences to using a 529 for non-educational purposes. I’ve never had anyone I was working with try this before, but it doesn’t pass my sniff test. I could be wrong.
In my state absolutely any state resident can open a 529 for absolutely anyone else. I think that’s common. A girlfriend (no relation) in a state with a nice feature on their 529 offered to open one for Mini Me. But state rules do vary.
Not sure about transferring the balance from one custodian to another. If you & Uncle both had 529 accounts with each girl as beneficiary (and I mean you can open them each an account tomorrow and throw $1 into each account) you’d think Uncle could transfer it. People get old and incompetent to manage their own money let alone someone else’s. Not saying that’s Uncle’s deal, but the state should have provisions for such contingencies that you can probably take advantage of.
Or just change the custodian on the account if possible. Call and ask what’s possible… just say Uncle doesn’t want to do it any more… none of their business why.
Rollovers From a 529 Plan to Roth IRA: What to Know.
As of January 1, 2024, owners of 529 plan accounts can make tax and penalty-free rollovers to Roth IRA retirement plan accounts, subject to certain limitations. This has been welcome news to many families who worried about having unused or leftover funds in a 529 plan account.
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Still sounds like you’d need to have the account in your name.
Yes, for sure. So @Ted_Hoffman needs to be adopted by the uncle (or, I think he could adopt the uncle.)
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“Hi, there’s this 60ish-year old guy I don’t know other than he’s an uncle of two 20-year old kids I’m helping co-raise with 2 other sets of parents. I’d like to adopt him for tax purposes, please.”
This seems … it reminds me of a former company’s adoption policy: among other things, once in a 24-month period it would pay for adoption fees and provide 8 weeks off PTO. Several of us realized we could run a scheme where every 2 years we traded off a kid to each other and we all got 8 weeks of PTO.
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Heh, I worked for an employer which provided 4 weeks of paid paternity leave… if your wife had a baby (or if you legally adopted one). It did not pay if your girlfriend / ex / fiancée / one night stand had a baby.
One of my co-workers did not realize this and did not get to take paternity leave when his long-term live-in girlfriend had a baby. When she got pregnant a second time suddenly he proposed and they got married while she was pregnant / before the second baby came.
Now I’m not saying he married her to get the paternity leave but… I think they’d been together 6 or 7 years at this point. Enough to be common law in some states. The timing certainly lent itself to questions.
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I married my partner when I did to coincide with a work trip + spouse to Hawaii. (They would allow a same-sex family member if you were unmarried, just in case you slept with your opposite-sex relative.) At least two couples got paper-married months before their real wedding - we did the full thing beforehand.
No regerts. Honeymooning in Hawaii was wonderful.
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12 posts were merged into an existing topic: Fun-Poker Games Thread
Progress made with Goddaughter!
Goddaughter’s former mother (FM) is keeping her on the health insurance past 12/31. I gather this is against former father’s (FF) wishes.
Goddaughter has had a couple of 10-minute talks on the phone with FM in the past couple weeks. She mentioned that it was difficult to reconcile “You say that you care about me and want me to be healthy, yet with my disease you are removing me from your health insurance.”
If she doesn’t have medicine, her resting heart rate is ~120 bpm and she can faint from the exertion of walking down the sidewalk. She is on a heavy 60mg dose of Propanolol, in addition to meds for at least a moderate case of ADHD.
FM is in therapy and took this back to the therapist, who was surprised that FM was kicking her daughter off the insurance and also expected to speak to her again in the future. Shortly after, FM texted Goddaughter to say she would be left on the health insurance.
Goddaughter just paid her first month’s “rent” of $250, which includes $160 for “her” auto insurance on “our” co-titled vehicle. She’s getting more comfortable around the house, such as this morning putting a dish in the pretty full dishwasher and kicking it off for us. I’m beginning to teach her how to cook - we’ve done eggs and hamburgers so far. Next time she’s not working over dinnertime, I will teach her to boil pasta.
She has picked up a pre-ordered grocery order once, and recently returned some 450 cans/bottles for deposit and thereafter shopped off a list I made, with my credit card. She decided to add on a few entirely reasonable things that were on a great sale, which I appreciated.
She also came home with a few energy drinks and a couple other things that were not groceries. I made a note to discuss with her later, since I knew she had used my credit card. But she told me before that talk, she wanted those things and purchased them on her own credit card, because they were personal wants. She’s scooping the cat litter weekly, I’ve asked her to take trash out or water plants and she does. We might add a few other regular chores to her, but overall she’s pulling some weight and isn’t much of a burden.
She has some very sincere beliefs about crystals and magic and witches and the moon and horoscopes which I’m not a fan of. However, she hasn’t asked my opinion, and I don’t particularly care as long as it doesn’t negatively impact her life. So far, I’ve seen her spend like $25 on a tarot deck and she wanted to collect some rainwater. She was also raised with FM saying there was a Christianity-derived demon possessing her which caused her endometriosis and other batshit things. She’s exploring the world outside of the crazy bubble and found comfort in a different niche online that believes in magic. I did similar stuff, albeit at more like 13, and I know full adults who believe in hoodoo but it doesn’t make them bad people.
Overall, if our future actual child grows up to become as responsible, kind, and fun, I’ll be a proud parent.
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I also learned that most of her lifetime growing up, dinner was generally things like Spaghetti-Os, boxed mac and cheese, frozen meals, etc. They also placed a lot of importance on eating red meat.
She says a few times FM would get on an “organic health food” kick and try to cook things, then everything would just rot in the fridge and FF would get angry and then it would be back to premade food again.
She’s really enjoying learning to cook, and that we make our food from ingredients.
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Energy drinks and resting hr of 120 may not be the best combo.
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That’s a fair point, but her doctor’s cleared her for 2 caffeinated drinks per day and I think she drinks them in 2 servings. They’re little ones, I think 12 ounces. I think the intent is to take to work and have over an 8-10 hour shift.
I’ve never seen her have more than a cup of coffee or a soda, and she’s turned down soda due to the caffeine. I trust her judgment.
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