I have this all in order, too. In addition to the legal paperwork, I have a document with contact info for FA and estate attorney, passwords, funeral directives, my obituary , etc. My kids know where it is and have access. I want this to go as smoothly as it can.
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@oldfort I agree with you and your mom. If your sibling isn’t asking anyone for money, it’s his choice to spend how he sees fit. I assume he is an adult and having only his share put in a trust seems very judgmental as well as treating him like a child. And who would the trustee be? Having a sibling control your money is a recipe for trouble.
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Well, obviously I don’t know what he would do and I won’t be here to influence him. But, I do hope that he would be smart enough to protect his assets for our child.
Also, couldn’t stuff also happen even with wills in place. Suppose current wills in place have everything go to the surviving spouse and in the event they die together everything goes to the one child. Then one spouse dies and remarries. That surviving spouse creates a new will and instead of leaving everything to their child, decides to leave everything to wife #2. Isn’t this the plot to many movies and books?
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My brother is not married. He used to ask the other brother for help with money when he was younger. It got kind of ugly and messy, and he hasn’t ask for anything in the 10-15 yrs, even when he was in between job. I think he will be fine after retirement with his veteran’s pay and SS. It is why I kind of feel if he were to blow what my mom gives him, so be it. I think it is better not to have the other brother control his spending, especially with their past history.
I was just kind of thinking out loud.
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Regarding the movie plot, our attorney created the concept of the “crooked second spouse”, so we used that as a shorthand. We realize there are lots of other people who could get close to the surviving spouse, not just a new spouse, but the term is the catch-all. We created an estate plan that protects our kids in the period between the first spouse death and second spouse death. We learned a lot going through the process. My husband and I are both actuaries, so it is risk management.
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@oldfort personally, I’d split evenly. If there are young kids, I get the idea of age fences - like at 25 you get x %, at 30 Y %, at 35 the rest. But that’d be the same for all.
But the fact that you save and your brother doesn’t - that’s his business. And it sounds like he pays his bills. Or at least doesn’t rely on anyone for support.
He’s just more a spender and less a saver. We are all different. And btw - do you truly know his finances ? Maybe he has a cash stash the family is unaware of.
But I don’t see why he wouldn’t be treated like the other kids.
I don’t know the answer but what if you pass. Are you sure the $$ go directly to the beneficiary or could there be probate or something else ?
Something to research anyway.
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if mom is getting close to the $15m estate threshold, she should be getting some solid estate and tax advice, today.
In answer to your Q, if mom decides that a Trust is the best for teh spend-thrift child, don’t put another sib in charge of those disbursements – hire a professional Trustee.
Along those lines, what if child/heir gets divorced after receiving his/her share? Or, child’s spouse gets into financial trouble or falls for an addiction (drugs, gambling)?
Yes, ‘stuff’ happens. Bcos of the unknowns-unknowns, an estate lawyer that I read recommends to setup individual Trusts for your kids/heirs, so your estate is separate and cannot be accessed by a kid’s spouse unless your kid chooses to co-mingle the $$. Not worth it for small amounts but for someone with high seven figures… something to consider.
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Why not have your mom put all her money in a trust with you four as a beneficiaries with annual disbursements for all of you? It seems like none of you need the money right away, it’s consistent with good financial planning anyway (like 4% withdrawal in retirement).
Otherwise, I’d just divide up the estate evenly and everyone gets it straight up, and if your brother blows it, he’s a grown man, and can live with the consequences.
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If your mom decides to put his share in a Trust, she should also put in writing that she is doing this out of love for him and her ability to continue to support him after she passes. If he feels that others in the family, don’t respect him unfortunately, that feeling may not change, but at least she can put her loving thoughts into words if this is the route she chooses to take. The next question would be, given, however old your brother is, will he outlive his money?
I have read enough to know that in MA the accounts with beneficiaries are not considered part of the probate estate. Note that a beneficiary on an account overrides a will (so you all should keep them up to date and check them - including your 401 k and IRA accounts).
My daughter is currently unmarried and has done well and accumulated a sizeable amount of assets. I would strongly suggest a pre-nup should she decide to marry. This way she can keep all her assets and future inheritances (she is also the designated heir for her childless aunt). We sometimes joke that she is the funnel for our family!
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mighty expensive way to distribute the estate. Why pay an independet Trustee to manage and cut an annual check to oldfort?
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Depends on how much family harmony is worth.
My parents took this into account for their estate planning and so did we.
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Yep, and it can get even more complicated with second marriages and step-kids, not to mention estrangements.
I struggle with multiple decisions - (H and I don’t combine assets)
How to split between my kids (their dad will likely leave them close to or nothing) and my step-kid (very wealthy “other” parents), and how to split between my own kids (one is estranged from the family and one is not). I know many people here believe that shouldn’t matter, but as they get older I’m not so sure what I will do.
At death my H and I are leaving some assets directly to kids and some to each other.
I have also been thinking “what would I do” about grandkids. I would likely provide some amount of funds for education for any grands, and I wouldn’t feel the need to keep that “equal” to the others.
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Or close to NYS’s $7.3 million threshold. I think once an estate’s value exceeds 105% of the New York threshold, the entire estate is taxed back to the first dollar.
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No, it’s not that much - close to the threshold. Therefore when you divide it by 4 it’s not something we could get rich on.
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Our wills and most of our assets name spouse as beneficiary, kids as alternate (50/50… though I sometimes joke with them that it’s 51/49 and not saying who is the favored one). The presumption is that IF one of us died and remarried, the survivor would redo the estate planning.
I think though most states have rules that spouses need to get a certain percentage defined in the will (example - for NY 1/3 spouse share, min $50K). If assets have defined beneficiary, I’m not sure if they are included in the calculations.
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One reason I will not remarry!
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That got me curious enought to ask Google a question..
Yes, a small number of U.S. states still allow couples to enter into a common-law marriage. These states are Colorado, Iowa, Kansas, Montana, Oklahoma, Rhode Island, South Carolina (with strict limits), Texas, Utah, and the District of Columbia. New Hampshire also recognizes it exclusively for inheritance purposes after one partner dies