Legal settlement, we don't know where to begin.
August 29, 2013 3:27 PM Subscribe
My mother endured injuries while working for the post office that left her mostly immobile. She was eligible to retire early due to these injuries. She sued her doctors and they agreed on a settlement of 475,000 (Before misc fees and deductions). I believe its for lost wages.
posted by Highest_Of_Fives to work & money (13 answers total) 1 user marked this as a favorite
We are in need of advice on several levels;
1) Settlement Tax advice.
Penalties/Taxes on the lumpsome. Her lawyer told us that the settlement is not taxable but i'm afraid that he is side talking her.
2) Personal tax advice
My mother has no income but Social security and workmans compensation and has not filed taxes in years (Exempt). Now this will change to Social security and Pension.
3) Taxes on gifts:
My mother plans on gifting about 50K to each of her kids. I believe there is a lifetime exclusion for 1M that she has not touched. It's not exactly clear how she will "file" for both the settlement and gifts. They would also need advice on how to best use the money.
I have reached out to a local CPA but have not heard back yet. Is this the right action for this scenario?
2) Personal Finance advice.
My mother has a "Bad" mortgage @ 9.5% APR for 15 years (Despite putting 50% of the homes value down). She has roughly 10 years left. I plan on getting her to pay the balance since it has such a high interest rate, along with any small debts. Where can I find an advisor that will consult with us over a few sessions rather than a long term contract? Part of the issue is convincing her that it’s a good move.
Are there any ONLINE advisors or resources that we can use? My mother is incapable of managing her money and may actually gift it all to me to figure out what to do with it.
Overall any advice would be appreciated. Thank you.