<p>@Himom, What interest rate do you use for the loan you gave to your S? I gave my kid a small loan and have to charge interest. Not sue what IRS requires.</p>
<p>The minimum the IRS allows is 0.4% or 40 basis points–$.40 per hundred dollars borrowed. You can, of course, charge more.</p>
<p>^Thank you. Nice that it’s a lot lower than in the market.</p>
<p>Yes, it’s a way to informally “income shift,” if your loved one can use the funds to make money and then give you back the principal. We gave S a short term (one year) loan in May, that he plans to repay in December of January. It seems like a win-win. We like getting him used to handling more money and seeing what he does with it so hopefully he won’t blow through it when he inherits a nice sum from us down the road. When D is ready, we will similarly loan her money at a nice low interest rate.</p>
<p>So far, our kids have been VERY responsible with money, which pleases us and reassures us.</p>
<p>We decided not to worry about our money going to our widow(er)'s second spouses kids, or whatever could happen. Once the kids are out of college, they don’t expect anything from us. If I die and DH remarries, then dies, and leaves everything to his new trophy wife, who leaves it all to her bratty kids, they’ll blame DH, not me.</p>
<p>We already split our assets. No problem whatever happens.</p>
<p>I thought the title of this thread said,“Bruce Willis, what have you planned?”</p>
<p>What a disappointment. </p>
<p>Having attended two funerals in two weeks, I am interested in catching up with what’s been posted. The experience of the past two weeks have taught me 1) be very clear in you will, but in broad strokes (my uncle’s will will no doubt lead to litigation), and 2) make sure the funeral home where the service is held is talking to the funeral home where the burial is being held. We drive hours OOS, and when we arrive no a hole hasn’t been dug, the tent hasn’t been set up, there were no chairs for the elderly people, who were close to sunstroke.</p>
<p>Who is Willis Bruce and what the heck does he have to do with my buriel?</p>
<p>Our financial advisor recommended we shift up our distributions by 5 years to older ages. His reasoning had to do with reducing the likelihood that money would end up in the hands of a bad spouse from a marriage at perhaps too young an age. </p>
<p>A lot of great responses … a few other things to think about</p>
<p>Set-up legal documents with your back-up with all your financial institutions while you are able and motivated. A lot of banks and financial institutions have their own specific form … and getting access after death without the forms can be cumbersome. My Dad basically has lost his motivation about this stuff (he is in his mid-80s) and since he’ll be dead when it come into play for his estate he considers the extra work my problem (I’m the executor) … and the reality given the loose ends this is going to be a lot more work for me than it needs to be. A couple hours on his part would save me a ton of time in the future but it just isn’t happening now.</p>
<p>Similarly make a complete listing of all your assets with contact info … so the executor has all the info they need from the get go. In addition, if there small inconsequential accounts take care of them now (merge, liquidate, etc) assuming no big tax consequence so things are simple for the executor. Both my Dad and wife have a zillion little accounts which will be a pain … while I’m down to just a handful.</p>
<p>Finally, a comment on the timing of distribution of trusts. I think this depends a lot on the kids and the amount. If I was leaving $100,000 I’d leave it all in the 25-30 range. If I was a Walton leaving really big bucks I’d spread it out … I would NOT want a kid to be willing to be a bum unitl 30 because they knew they were getting millions them … I’m looking for the sweet spot … first ensuring the kids have a career and become self-sufficient … and second, that any money coming from Mom3ToGo and I can meaningfully help their life (house purchase and college expenses come to mind). If we’re lucky and live long lives beyond estate planning this will likely involve substantial gifts before we die … so the money has leverage in their lives … and they don’t receive a pretty good sized pile of money after all their major life choices have been made (for example, whatever I receive from my parents will likely arrive in my 60s).</p>
<p>We have a life insurance trust that pays out over time. But, the primary vehicle in our estate plan is a trust that never ends. We and our progeny are beneficiaries and it specifies the kinds of things the trustee should distribute for including health, education, housing. It has bought the condo that ShawD is living in while she is in college and in which she could easily live even as a part of a couple with one child – she’s near a number of great teaching hospitals. Great town with great school system. She has roommates who pay rent, as do we. As an investment, it has done very well. We’ve taken care of education thus far in 529 plans. But, it should be there to help kids with downpayments and things like that when they are ready and responsible. </p>
<p>Both my kids are really responsible. They don’t spend much at all. My D will be a nurse practitioner at age 23. My son is in an MBA/MS Data Science program after starting up a software company (the trust has invested a little into his startup) and will probably start his next one in his final year of his program. So, we have little need to worry about their responsibility. </p>
<p>But, as in @HImom’s situation, my brother is not terribly responsible with money. He has never married and while employed, he still amasses significant credit card debt, which my mother periodically pays off. I have suggested to her that she set up a trust with his 1/4 of the estate in it so that he has money to help him in retirement. She agrees but can’t bring herself to do it.</p>
<p>Oh, and thanks for this thread. It reminded me to review what we have to make sure it is up to date.</p>
<p>One thing I recall from when my father died. There is a lot of work collecting all of the information – N life insurance policies purchased over time, Y mutual fund accounts, Z retirement accounts. As executor, I consolidated all of his accounts, which took a fair bit of time.</p>
<p>My father was a professor and I was one but started several businesses and so my situation is much more complex. I have a financial advisor, an accountant (who handles both business and personal) and a lawyer (who handles business and gives the personal to others in his firm but we introduced him to his wife who is one of my wife’s best friends). Between them, sorting things out will be much simpler.</p>
<p>Just a few tidbits from an estate lawyer. Obviously I could go on all day about this, but I’ll restrain myself. Lots of good advice and ideas already posted.</p>
<ol>
<li><p>if you have done your planning but haven’t had it reviewed in a while, have it looked over by an estate planning attorney. A lot has changed in the law and what may have been a great idea a few years ago (A/B trust to save estate tax) may be dooming your beneficiaries to paying a lot of unnecessary capital gains tax, after you are gone, now. If your estate is under the exclusion amount ($5.34M for a single, $10.68M for a married couple), there are better ways to set things up. And even if it’s over those amounts, there may be advantages to a change.</p></li>
<li><p>More people are shifting from the “kids get the money at ages/stages” to “lifetime trusts” with the kid becoming trustee (or co-trustee) at a certain age. This can protect the inherited assets from the recipient’s creditors, including people who sue them, and future ex-spouses’ claims, while allowing them de facto control as long as they’re not a target.</p></li>
<li><p>If you have substantial assets in retirement accounts (IRAs, 401(k)s, etc.), consider a special trust for those too. Once you die, if you name the kids as beneficiaries, those assets become available to their creditors too. It is possible to protect them while still getting the benefit of the “stretch” payout and tax deferral. Any advisor who tells you this isn’t possible, is not very skilled or knowledgeable in the field.</p></li>
<li><p>Some states (Hawaii is one) have a special form you can fill out to designate someone to make funeral decisions and decisions about the disposition of your remains. You can leave the decisions up to them, or attach your wishes, and they have to follow them (if they are legal AND there’s enough money in your estate to pay for what you want). This way, if you’ve signed the form, the funeral home only has to follow the directions of the specified agent, and can ignore other disputing relatives.</p></li>
</ol>
<p>I’m happy to answer any other questions people might have about these things, but most of all, I URGE you to sit down with a knowledgeable specialist in this area, if you haven’t in a while (or ever), and get your ducks in a row. We deal with the fallout from poor planning, or no planning, every day, and it isn’t fun (even when we’re getting paid to clean up the mess; a lot LESS fun for those who are PAYING to clean it up!)</p>
<p>This thread reminds me to go on nice expensive vacation, make sure my money runs out before I die so I don’t have to worry about who gets to inherit my inheritance. I need to enjoy my hard work.</p>
<p>After my mom died, I was the executrix and my H and I learned a lot. He had his single disabled sister, who lives with his widowed mom, move the title all of his mother’s assets to her. So if my MIL must be moved to a home, my SIL will be able to still keep and live in their current house that they own and have no mortgage, and not have to pay everything to the nursing home. However, as we learned in my mom’s situation, my SIL must have title to the house and be living in the house for a certain number of years (each state is different I believe) for her to be considered the owner. So only time will tell if it works out. </p>
<p>She genuinely has been living in the house for many years, so it is legit. My Sis was also living at my mom’s house for many years, but we never had the title transferred to her. Thank goodness as it turns out. But that is a whole 'nother story. </p>
<p>My SIL also made a will that leaves all that is left to our children. There are no other grandchildren. This would never have been done if we had not gone through my executrix experience.</p>
<p>Sweetbeet, is there a book or website you’d recommend reading before contacting a lawyer to draw up the will? As background? I’m thinking a “Wills for Dummies”-type thing. 
I’m hoping this will be simple as both our kids are legally adults and responsible, and all we have is the house, savings and a 401k.</p>
<p>So I just asked my H about where he wanted to be buried or if he wanted to be cremated. He said- " I do not want to talk about it now. " Okay, so maybe it is not the right time. But whenever is???</p>
<p>The other thing I have become concerned about is what of our retirement can actually be inherited? I mean we, H and I, have a great deal of retirement funds that we will, most likely, not use up before we die. Will kids inherent it? So I need to figure this all out.</p>
<p>Many retirement assets (other than life pensions) can be inherited. The beneficiaries are able to take the funds over a period of time, as set forth in statutes. My SisIL had significant retirement assets and died before she could spend them. She left them to her brothers who have shared them equally, as she desired. The estate attorney shortly before she died and was able to help make the transfer as easily as possible. We think we saved a LOT of money by working with her proactively.</p>
<p>Most retirement accounts are passed by naming a beneficiary or beneficiaries. You should check with the plan administrator to see if you have named anyone. Most will default to the spouse, but some default to your estate, which is NOT usually a good idea. Even if a spouse takes, then what if you both die? You should have “contingent” or secondary beneficiaries named.</p>
<p>@Youdontsay - one sign of a good attorney in this field is that they can explain things well, and answer your questions satisfactorily. You should feel free to talk to a few to see who you feel most comfortable working with. Look for someone who LISTENS, not just talks about what they know; someone who will consider YOUR goals, not try to shoe-horn you into the plan they prefer; etc. There are lots of resources on the web, but there are a lot of things that are state-specific, so the kind of “broad-brush” stuff that tries to apply to all is not very helpful.</p>
<p>The most important thing you can do before meeting with an attorney is to know what you have, and what your goals are. Not only who gets stuff, but who should be in charge of the transition, whether you are concerned about creditors, future divorces, future remarriage of the surviving spouse, long-term care costs, providing for pets, etc. The attorney can tell you HOW to accomplish your goals, but can’t tell you what those goals ARE or “should be”.</p>