Author Topic: Invest MIL money in our TFSA  (Read 1822 times)

Le Barbu

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Invest MIL money in our TFSA
« on: March 26, 2016, 06:14:03 AM »
My MIL just filled her taxes and realised that investing taxable money in GICs is not a good idea. All of her tax shelters are full, no debt, above average pension income etc. There is no chance to convince her to invest in a tax efficient way.

Me and DW have some TFSA room available and a small mortgage (les than 50k$ now). We could make an agreement wich brings her a better rate than GICs and use it way better than she does now. Our TFSA room would also be "protected" if one of die (exactly what they should have done before my FIL passed away 2 years ago).

All of our investments meets our plan now so I would deal this money in a different way (safer?) since its not really our money. My first idea was to prepay our mortgage and buy VSB or VBA into TFSA. Other idea?

Heckler

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Re: Invest MIL money in our TFSA
« Reply #1 on: March 26, 2016, 08:14:19 AM »
Shes giving you money, or you're proposing to use your TFSA room to shelter her money?  That sounds like a bad idea for a myriad of reasons, for starters it's likely on the edge of tax law.

If you are close to mortgage free, why would you not be planning to max both your own TFSAs?  $5500 ex-mortgage money fills pretty quickly.



Please come back to what they should have done before he passed - did they only have one TFSA account, plus a taxable?  Need to know what to help my parents avoid. Thanks.

pbkmaine

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Re: Invest MIL money in our TFSA
« Reply #2 on: March 26, 2016, 08:34:28 AM »
I worry about any informal financial arrangement between family members. I have seen too many blow up.

Le Barbu

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Re: Invest MIL money in our TFSA
« Reply #3 on: March 26, 2016, 09:12:45 AM »
Shes giving you money, or you're proposing to use your TFSA room to shelter her money?  That sounds like a bad idea for a myriad of reasons, for starters it's likely on the edge of tax law.

She's not giving us the money, just find a better use for money she dont need. And of course, it's on the edge of tax law!

If you are close to mortgage free, why would you not be planning to max both your own TFSAs?  $5500 ex-mortgage money fills pretty quickly.



Please come back to what they should have done before he passed - did they only have one TFSA account, plus a taxable?  Need to know what to help my parents avoid. Thanks.

The mistake they made was to have no money in their TFSA. If one of the spouse die, the money in the account rolls the the other but the unused room is lost forever. Her TFSA was filled with the life insurances money.
« Last Edit: March 26, 2016, 09:14:50 AM by Le Barbu »

Le Barbu

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Re: Invest MIL money in our TFSA
« Reply #4 on: March 26, 2016, 09:15:46 AM »
I worry about any informal financial arrangement between family members. I have seen too many blow up.

Shit happens

Kaspian

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Re: Invest MIL money in our TFSA
« Reply #5 on: March 31, 2016, 08:55:14 AM »
We could make an agreement wich brings her a better rate than GICs and use it way better than she does now

I think I could use money from my dad, my brothers, and my sister "way better than they do now", but it sounds too much like low-level theft to me.  :/

I would leave other peoples' money alone if I was you.  Using your MIL's money to prepay your mortage is badness.

Retire-Canada

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Re: Invest MIL money in our TFSA
« Reply #6 on: March 31, 2016, 09:06:06 AM »
If you take her money write up a contract and sign it. Specify how much she is giving you and how much you are giving her back on what specific dates. Get everyone to sign it.

I'm not a lawyer so this is not legal advice. This is just a way to prevent a bunch of anger and unhappiness when What your MIL, your wife and you understand was going to happen inevitably end up being different. At least you'll have a document to reference and resolve the misunderstanding.

If it was me I'd do what the other folks have suggested and stay away from her money unless it's a gift. I know I can manage my money better than my SO or parents, but I don't get involved beyond providing advice if asked.