<p>I have two financial issues that I would like to bounce off as many people as I can. But they’re unrelated, so I am going to make two new threads.</p>
<p>We are finally getting around to setting up a will or trust and will definitely seek professional help as warranted. I need to run things past people who have had real-life experiences or know someone in a similar situation.</p>
<p>We have two sons, 18 and 16, with the older a Frosh in college. Given the people in both our families, my wife and I have concluded that our oldest should be the youngest’s guardian should anything happen to the both of us. The oldest is a really responsible kid and they both adore each other, so I know that youngest would be well looked after.</p>
<p>The sad thing, he is probably also the best person in the family to entrust with the estate although we think that would be too much of a burden. There is no one in our family under the age of 75 who is really competent enough with money to make good choices.</p>
<p>We think we need to go outside the family to handle the money side of things for a few years. Any ideas?</p>
<p>We have just about the same situation, and have designated a trusted friend who is sophisticated about financial matters to be the executor of our estate. In the event that he can’t do it, our accountant (who is also a personal friend) will act in that capacity.</p>
<p>You can also appoint a bank to be the executor, trustee, and everything else except guardian. You can set it up so the trustee is completely in charge, or you can set it up so your older son is pretty much in charge but needs permission to spend the money from the trustee. That way you’re assured he won’t cash it all in and take the two of them on a cruise around the world as a graduation present.</p>
<p>You MUST speak to a Trust and Estates attorney to help figure this out. That person will present you with all your options, and help you consider things you haven’t thought of yet.</p>
<p>Dadguy, we have also faced the issue of relatives not being “right” as Executors and Trustees for quite some while. So we have asked a close friend to serve as Executor in the past, and she has been willing. In this case, she is also godparent to our son.</p>
<p>Our attorney suggested this year, when we updated things, that our son is now in a position to be considered. He is a college sophomore and has shown himself to be sensible with money and mature (for a 19-year old ). He is just a bit older than your son (turned 20 just after we made these decisions). We made him the Trustee. For some reason I no longer remember, we didn’t make him the Executor.</p>
<p>What we did was talk to him about it and provide him with a list of people and resources we think he could consult as need be, when the day arrives. Some people he knows (personal friends), some he knows of, some he doesn’t. But people who could be sounding boards or advisors on financial matters should the occasion arise. Some have no professional interest in such matters, but are just wise folks who would care to help him. Some are attorneys/attorney friends, other than our current estate attorney because - who knows? - he may not be around. We put the list with contact information in a letter filed with the other estate documents.</p>
<p>Just as VeryHappy says, there can be the concern that a young person might “blow” the money. This is why many estates are set up so that children don’t have access to principal until age 25 or 30 or whatever, or receive it in installments at milestone ages such as 21/25/30/40. </p>
<p>We had reason to believe we no longer need worry about that. Hence, our decision to eliminate those age restrictions and to name our son as Trustee should both of us die. We also have given each other broad Powers of Attorney, in effect immediately. Handy because one of us is often travelling apart from the other. So, along with naming him for the future role of Trustee, we have also each given him POA, again in effect immediately. It is obviously to be used if we were both incapacitated, but he could actually act with this POA at any time, spending our funds right out from under us, borrowing foolishly or whatever. I’m of the belief that showing trust in a worthy young adult in this way only serves to enhance their sense of responsibility and ability to rise to the occasion.</p>
<p>Your son may yet be a tad young for these responsibilities. Or not. Just wanted you to know that it is done. And that it was recommended to us by a very experienced Estate Attorney who has seen it done before.</p>
<p>OK, I am an estates attorney, at least that’s part of what I do.</p>
<p>You are not getting bad advice here at all, except that I would hesitate to appoint a bank as the only executor/trustee. That can get both very expensive and very, very rigid. I generally give the trustees the power to appoint (and to remove, which is crucial) any institutional trustee they want. Also, a bank is not going to make a lot of sense unless you have close to $1 million in liquid assets.</p>
<p>Remember, also, that the executor can get help. The executor almost always has counsel. If there’s a lawyer you trust who helps you with the will, it is natural for the executor to hire him as counsel for administering the will. The executor and his counsel can divvy up tasks as they see fit, but serving as executor, for your son, would mean that he had the ultimate say-so on decisions, and also that he would be entitled to a percentage commission from the estate for acting as executor. It doesn’t mean that he would have to figure out what to do on his own (or at least it shouldn’t mean that).</p>
<p>My tendency would be to agree with JHS, and name the older son as executor, but make sure that there were written instructions to him suggesting appropriate people to go to for advice. Agree that the bank fees can get expensive.</p>
<p>It depends on the kid, but my biggest worry over the years was always that if I named my older one as trustee for the younger one, that he is so conservative and such a tightwad that he’d preserve the estate while she starved. (Not quite, but somehow I didn’t see him coming up with all the money for dance classes and costumes). Fortunately, she’s now 18 so I don’t have to worry about trusts any more. </p>
<p>But I’d rather see an 18 year old who tends to be cautious with money <em>in charge</em> than delegate to someone’s whose primary motivation might be collecting commissions and management fees. </p>
<p>My feelings would be different with a kid who tended to be a big spender, of course. You know your own kids best.</p>
). He is just a bit older than your son (turned 20 just after we made these decisions). We made him the Trustee. For some reason I no longer remember, we didn’t make him the Executor.</p>