The scenarios that you suggest could work out well if you make sure and die immediately when the assumptions are still valid. Otherwise you’re going to need to update your will every time something changes for one of the children. Marriage, divorce, moving, and the one child who makes a high salary may retire with no pension, while the lower salary child retires with a government pension, putting them in a higher tax bracket. And the value of property may fluctuate in an entirely different direction than an investment account. Maybe this could work out well if there was also some sort of slush account, where it was dictated that after the assets are divided as specified, this account can be utilized to even things out.
My mom is 83 and has mild dementia. She has saved a surprising amount of money. I can’t imagine asking her to change things around so I get the house (I have a much higher tax rate than my sister), while giving my sister her IRA, though at this point, these two assets may be roughly equal in value. She’s uncomfortable talking about this and confused, I wouldn’t want to put her through this discussion repetitively when things change. And the house could burn down, the stock market could crash, she could sell the house and move into memory care. So many people lose their minds as they get older and become suspicious and paranoid.
My 96 year old MIL has told her six children what property assets they get upon her death. The house, the Lake house, timber property, all completely different values. I think a big reason why she’s still living at home and not at assisted living is because she’ll have to sell some of those assets promised to the kids, and then she’ll have to figure out how to arrange things at age 96 or leave nothing to some kids. Sometimes it’s worth it to take a tax hit.
I found your post re taking into account the tax implications for the beneficiary in deciding how to allocate assets in registered accounts vs. those in taxable accounts to be interesting.
I’ve seen siblings bicker when they inherited investment houses of similar values because of perceived better location, better condition etc. The best thing to do is for the beneficiaries to sell everything after the step up and divide up the cash equally.
When or if my husband and I receive any inheritance, I’ll ask him if he wants to keep them separate. I’m pretty sure we won’t divorce at this point but odds are that I will outlive him.
That way, any money he inherits, can be passed along to our children and grandchildren. Of which we’ve talked and if and when we inherit, we will fund college for any grandchildren out of that. Although I think the most we will have is 2.
And then I will ask my husband if we can take that safari we’ve always wanted to go on!
Although his mother likes me better. I mean, I’m the one she calls when she needs something
This is a good point in this sense - my sister has two kids with her first husband and her husband has a child from his first marriage.
If you comingle the inheritance, now her husband is getting half of what my dad is leaving to her which is to be passed on to her two kids. And now his child, not a relative of my dad (or nephews) inherits.
So each situation is different.
This is an interesting topic with interesting perspectives (like factoring in taxes to who you give what to) - and it’s possible that while it’s eye opening for sure, that maybe short of the common equal split, it’s really a one size doesn’t fit all.
My one sister lived with my dad too. It was her home. The rest of us already had homes. My dad wanted to deed the house to this one sister, and the other three of us readily agreed. It was her home, plus she had lived with and helped care for dad for a number of years. No buyout!
Nevada - no clue - but they both have single and joint accounts - my sister for sure a living trust and I’m guessing that’s what the trust pays - our individual living trusts.
Not really sure how all this works…don’t really want to know!!! But yep, you have to know!!!
I didn’t flag your post, I’ve never flagged a post, and I’ve seen some doozies. If I have comments, disagreement or questions about a post, I address them. I am often wrong, learn things and get further information. would never try to silence someone and I see zero reason for you to alter any of your posts or stop posting about this.
Please continue. I don’t know what was flagged I’m amazed that that happened.
We’re getting ready to update our trust and we’re going to check into language that would include after tax transfer of money. That way kids could move wherever but would still get the same after tax money?
One can also disclaim an inheritance, the inheritance then passing directly to their heirs. It’s not common, but it’s something that certainly has its benefits in particular situations.
I’ll bet someone was trying to bookmark, and they accidentally flagged. There have been multiple times that I’ve seen random stuff flagged for no apparent reason.
