When my late parents set up their trust, each was a co-trustee. Later they added me and DH as successor trustees, and then after my mom passed away and my dad struggled, I was made co-trustee, and then became trustee after he died. My brother, for a variety of reasons, was not at all involved in the management of the trust or their estate.
@doschicos I don’t care about what estate planners consider “normal” and certainly not about deferring “tax consequences.” I care about doing what is right by my kid, right now.
My parents had no concern about sufficient funds for long-term care. Plenty of cash for that.
My kid has proved very responsible and hard working. I have no doubts about his character and maturity. The money will not be dumped in his lap, but he’ll have it available if he wants to start a business, go to grad school, assist in the purchase of a home, etc. I prefer that he have it early enough to make good use of it. I’ll take care of grandkids too, if I ever have any. I think that it’s really weird to care more about (real or hypothetical) grandkids than your own children. The money can get “pissed away” by the grandkids too. But, to each his own.
" he’ll have it available if he wants to start a business, go to grad school, assist in the purchase of a home"
Lots of folks do that type of assistance anyway. To me, that is different than passing along huge chunks of one’s estate pre-death which is what you seemed to me to be advocating for in your earlier post.
Let’s call it prudent then instead of “normal” for one’s assets to revert to one’s spouse after death.
Sounds like you consider your dad a poor planner and miserly. That’s different than having a prudent estate plan, imo.
Anyway, I’d still love to hear from folks on how they handled fiduciaries/executors with young adult children in their early/mid 20s.
No, not pre-death. I was referring to my will and trust, so allocations after I die. I can provide any support he needs while I am alive, and judge his development and use of those funds in an ongoing manner. Wills and trusts are different, because one has to assume so much.
My dad was not miserly, but really really didn’t like paying taxes.
" My kid gets all that he needs while he is young - not just HEMS but big chunks of cash every five years. Everything by the time he is 40. "
So, just curious as to how you split it between your kids and your spouse, @whatisyourquest, or is a spouse not relevant here? If you died tomorrow?
We do have things set up so that the kids will each get a chunk of money if one of us dies but the vast majority passes along to the surviving spouse.
And, you parents - mom or dad - could have easily have sent $$ your way yearly or for things like down payments without triggering any taxes during their lifetime.
One kid. Spouse is well taken care of too, with a separate set of funds. I have no doubts that she will be comfortable and prosper, if my death precedes hers. I want her to remember me well too, obviously. State law regarding marriage also protects her assets.
“We do have things set up so that the kids will each get a chunk of money if one of us dies…” That seems very fair. As I mentioned, my dad chose instead to roll everything over to my mom. He had no reason to think that we would be profligate. We are all quite responsible. It was driven by tax avoidance and a belief that we would all outlive our mom, which turned out to be the case, but was nevertheless a reckless gamble, imo, at our ages.
“And, you parents - mom or dad - could have easily have sent $$ your way yearly or for things like down payments without triggering any taxes during their lifetime.”
I believe that gifting, without tax consequences, is limited to $14k.
My son is #1 executor, #2 is my lawyer. Similarly, son is #1 to make medical,decisions, and my doctor is #2.
I strongly suspect my son will let these 2 women take charge. They are both my friends, and he knows both quite well. While im close to relatives, why burden someone with hiring people to clean out my house and hire a realtor, etc? My house and bank account are in my Trust. No,probate issues (been thru that).
Currently the gift tax annual exclusion amount is $15k up from $14k - per spouse per year per giftee, plus it only counts towards the lifetime cap if applicable based on the size of the estate (pretty large these days). No taxes paid currently.
So, IMO that gives a lot of wiggle room for many things. Say my spouse and I want to help one of our kids and their future spouse down the road with a down payment on a house. We can each gift them $15k, so $60k total. Plan ahead and do it 2 years in a row and that’s $120k. If you aren’t worrying about the estate tax threshold that is currently $22 million, no problems/limitations at all.
While I agree that it’s perfectly reasonable to leave funds to one’s spouse if they have a spouse, how each family decides to gift, allocate or invest their money in their kids or kids’ ventures is a personal one, hopefully decided with some purpose or reason and with forethought. We should respect each poster’s choices, not question them.
My sil just sent her updated will to my DH, who is executor of her estate. She never married, and has no kids. She purposely left nothing to DH and BIL because BIL is so terrible with money management and spends it recklessly. We are fine with this. She left it to her nephews a god-child and some other people. Her money, her choice.
If I pass away and DH remarries, I would like our money to go to our kids, not a new spouse or step kids. But that is not addressed in our wills. Hopefully there would be a pre-nup. But hopefully it’s a non-issue.
To clarify above, SIL (who is actually a half sister of DH and his/ their brother) left nothing to my DH or brother (my BIL). SIL found some half sibs from her late bio dad’s second marriage. I think some of the names my DH didn’t recognize in the will must be these half sibs. The sad part is that 2 nephews (2 of BIL’s 3 kids) will probably give their share to BIL to mismanage, even though they are grown. One is on the spectrum and having someone else manage the $ is appropriate. It would be better that someone independent of BIL do it, but not sure if SIL stipulated that.
I have an only child. I am planning to make her executor, health proxy, financial when she turns 25. Right now she is third in line after spouse and a 40-year old niece. Since we had her late, she has to grow up fast unfortunately.
We have three children, all adults in their late 20’s and early 30’s. We have not redone our wills or estate plan since our youngest (now 28) needed a guardian, but we have an appointment with an estate attorney next week. We have gifted our children over the years per the annual gift exclusion, as have my in-laws, so they each have assets under their complete control. I expect we will either name all 3 executors or split the responsibilities among them. Unless, for tax purposes, it makes sense to make our estate more complicated, I suspect our respective estates will go to the surviving spouse with the ultimate distribution split evenly among our children. Now, our eldest and his wife are expecting, and we would like to think about this future grandchild and perhaps others, but we’ll wait to hear the current advice before making any decisions in that regard.
I am the single mother of an only child, now 22. When I redid my will last year, I made my lawyer/first cousin, now 46, executor, with his also-lawyer-but-not-practicing sister, now 42, successor. I talked to my daughter, my sole heir, first and she was fine with that. I have one surviving sibling but he’s not reliable in any way.
Our executor was listed as older kid first choice, younger kid second choice, BIL third choice, provided that the executor had to be at least 30 years old. So, in effect, BIL would have been executor if we had died before oldest kid was 30. This was mainly to let the kids get through grad school and get settled and practice managing money before they suddenly got put in charge of an estate.
Then BIL, who used to be competent, made a mess of FIL’s estate, and we spent $500 to change the will to take him off the list and put my sister on. So even though he is not particularly old, he became incompetent before oldest kid turned 30.
In your situation @doschicos , I’d put the attorney in charge until the oldest kid was 30, or whatever age you think they’ll be able to handle it. If you write up the priority order the way we did, the succession will happen automatically, and if all your kids are over 30 they can decide among themselves who takes the helm and who steps aside.
We also wrote up the trusts to give part of the money to them at 25 and the rest at 30, so if we die after they are 30 they will just get the money free of trust, and they can stretch the IRAs over their lifetimes. You can discuss with people forever whether that’s the right way to do it, but that’s the informed decision we made.
Whether or how much they get as gifts while we are still alive and contemplating long term care costs is another discussion entirely.
@MomofJandL Did you make any of your children your medical and/or financial fiduciary prior to your death or did you make the age for that responsibility 30 years old as well as executor?
30 for everything except Health Care POA, where we named oldest kid when we updated the will. If there were no suitable siblings for health care, I would have named the kids at 25, maybe even 21.
We are going to schedule an appointment to update our wills. The “kids” aren’t kids anymore, in a month both will be married, we have a grandchild, and the changes in the estate exemption probably make or trust thing that is set up kinda moot.
When the kids were young, we had other people for POA and medical and trustees for trust.
When they both graduated college, we changed to have oldest D (will be 28 this year) to be medical POA (after each of us for each other) and joint trustees.
We didn’t do the trust so much for taxes, although it would have helped, we did it because of managing money/estate, when they are trustees it is SO much easier than the constant grief of not having the exact POA for a bank or real estate or blah blah blah.
Now I am in the middle of trying to wind up Mom’s trust (it was SUCH a help while she was alive) . It is easier than an estate to process, gives us more time. And where she lived the estate tax does NOT match federal, so you have to be aware of your situation. There are lots of sneak taxes that a good trust can avoid apparently. I am meeting with the tax lady again next week to make sure I do things right within the trust and laws to preserve money for the beneficiaries.