Mutual funds - liquidation - 80 years old

Question

Someone I care for is moving to an Assisted Living Center. They are 80 and on oxygen.

They would like to know how to liquidate their mutual fund assets (made up mostly of bonds and some more agressive stocks) that equate to about 150,000.

They own a house worth 200,000.

Cash is about 120,000.

How would you liquidate the mutual funds (only the agressive ones and leave the rest in bonds alone?) Liquidate them all to a money market account? Waht are the tax implications?

Looking for advice before seeking professional advice (but the only one they know manages their funds and probably only cares about the commission lost).

Thank you

Answer 1

Try not to sell the stocks with the most gain.  Keep them for income.  Same for mutual funds.  

Consult a good tax professional, who can address the tax aspects.

Answer 2

If they sell them there is probably going to be capital gains tax to be paid.  A money market account is a good option.  Why do they want to liquidate at this time?  It does not appear they need the funds to pay expenses at this time.  If they are concerned about the losses in the market selling now is like closing the barn door after the horse is gone.

If they are intent on selling all they have to do is to call the customer service number listed on their statement.  

Answer 3

You really need to look at the income stream that is generated by her Portfolio.  There will be capital gains taxes on the sale.

If you put them all into Money Market account she may actually lose purchasing power over time as the income will be taxed and inflation is starting to raise which means your net returns in a MM fund my be negative after inflation.  Look into Real Return Bonds.