Jym - does your state have estate tax? Ours does. So check with your estate attorney if it still makes sense to keep the trust.
The new estate tax exemption levels expire in 2025 so worthwhile taking that into consideration as things could very well modify again at that point.
Thanks, @BunsenBurner - that’s who er plan to meet with.
I have designated my sister as my health care power of attorney agent. She is not my closest relative geographically but she lives only 90 miles away, so I expect this responsibility would not be unduly burdensome on her if something happens to me. I have designated my brother who lives in state (actually, in city) as my executor. I’m not sure who the financial POA agent is. I need to check that. If I didn’t have willing and able siblings, I would designate my children for the various roles.
Thanks for the reminder that H and I need to schedule an appointment to go over our estate planning. We last updated things when the kids were all minors. Everything is in a trust but beyond that I can’t recall what we have set up for distribution of assets. You have all brought up things I haven’t considered. I think as of now my FIL and one of my siblings are executors of our estate. My in laws are still living, my parents died in their 70’s. My Dad was basically penniless and my Mom had a fairly simple estate. My in laws will be complicated which will complicate our estate. We have been transferring some assets to our children within the allowable law. I consider my children to all be pretty financially responsible.
My divorced sister who has no children is working on her estate planning with an attorney and she is considering asking my oldest to be executor if I’m not able. I presently have medical power of attorney for her as she has a lot less f health issues that down the road might make it difficult to make her own decisions. She has designated me and likely my D over our other siblings because we live in the same city.
We have a good friend who is no longer married who is terminally ill. His friends have tried to get him to put some stipulation for his children as to when they get his money. His issue is one kid who is extremely responsible and another who has no financial sense and spends extravagantly. That child will likely blow through the money in a few years.
@doschicos We need to update our trust and have similar questions. Our current executor is DH’s father, who is still healthy (but you never know for how long). But, that is not ideal since he lives in Canada and is more familiar with their laws.
Our kids are currently 19 and 15. I suppose the older son will be old enough to be an executor sometime in his mid-20s. Not sure what we should do until then. I guess we need a lawyer we’d feel comfortable with as a backup.
A trust is on my list of things to get done before year end. We have wills, POA, and medical directives. My spouse and I are each others people. The kids were babies when we set everything up, they’re now 22, 20 and 18 in a few months. Our 20 year old is going to be a nurse so she will be our medical poa, and we’ll probably make the 22 yr old the executor, but I’m on the fence about that. Thinking the 20 yr old is a little more organized, mmm.
I already posted that while my son is #1, the executor is #2 my lawyer, and my MD is#2 my medical POA. My son can easily pass on his position, but it was necessary for him to be #1 on both.
On the day my mom got sick, she had an appointment with their estate lawyer to shift me to be sole executor. Having my sister and I as joint was a nightmare. I’m very close to my sister, but she lives far away and has no clue about the issues that came up. I pleaded with her to let me fire the awful lawyer, who basically drained mom’s estate.
Second example of poor planning. My former g/f’s husband left everything to her (millions), expecting her to share with their kids. Well, she became an addict and disowned the kids. I’ve heard variations of this story. A dad was left everything, finds a g/f, and their children receive nada, not even the sentimental items.
One thing to consider, that seems obvious, but may need to be said anyway: if any of the people you are considering for any of these positions shows ANY hesitation or desire not to be involved, at any time along the path, RUN to get someone else appointed. Leaving beneficiaries with a trustee that really doesn’t want the job, yet won’t leave voluntarily, is a huge headache and very costly for your beneficiaries.
I worked for an entity for one year about 20 years ago that had a legal benefit which included a nominal fee for having a trust set up. That was just the push dh and I needed so we’ve had one since and have updated it about 3 times. The last time was when youngest D was leaving for college so we were able to update by deleting references to guardians, etc.
We’re a pretty tight knit group with the 3 kids and dh and I are not particularly close to our siblings (love them, would do anything for them but speak with them maybe 3-4 times a year). So, it felt odd to appoint a sibling and it also felt odd to select a friend over an “adult” child (oldest was 24 at the time). Spoke with the kids and the older two agreed they would prefer to take responsibility should dh and I both pass at the same time. Youngest (and we still joke about this today) had eyes as big as saucers and shook her head back and forth indicating she was NOT ready for such responsibility. She thought that she would be comfortable accepting responsibility when she graduated college which was last weekend (I’ll have to remind her!).
So, our 3 are equally responsible for dealing with our trust, medical, financial, etc. Hopefully nothing they’ll have to deal with for years to come. Our attorney plans to retire in about 2 years. I think we’ll meet with him one last time before then just to make sure all our i’s are dotted and our t’s are crossed.
My BFF’s kids don’t have unrestricted access to her money, post her and her h’s passing, until they’re 50! Everyone has to do what works for them.
RE the medical POA. For our first will when we married, I was H’s with my dad (an MD) second, but I had my dad as my #1. H is not good medically, big into heroics, so I passed on him.
We redid everything (for a third time) when D2 turned 18. I have D1 (age 22 then) as my #1, S1 as #2. H has gotten no better and I just can’t have him making medical/health decisions. I am his #1, then D1, then S1.
Our estate is set up to distribute money at age 25, 28, and 31 unless all are 25 when H and I pass and then it gets divided 3 ways. S2 has autism and I carry a large insurance policy that will fund a special needs trust for him. S1 and D1 are co-trustees. He will live with either of them.
My parents began distributing their estate when I turned 30, giving my sister, brother and me the annual max per parent. I think it started at about $12k from each parent. We have been giving our kids annual gifts.
My sister is a lawyer and able to assist them. Right now the kids range in age from 19-31. Hopefully we are organized enough that distribution will be straight-forward.
We should get going on this too. @collage1 , I get you on the sibling issue (and every family will be different on all of these issues and , as you say, what works for them) . I have only one sibling, 4 years older. Never married. If she had a spouse or children, I would assume they would take major responsibility. As it stands, either me or my children (who are very close to her), will probably end up with some responsibility for her. My H , though, has siblings, both married with children. They are connected, no bad blood, but only see each other infrequently, due to distance. I can’t imagine we would ever be involved down the line with their care or their estates, when they have adult children who seem to be first in line to assume that responsibility. And , if they don’t want to do that, my understanding is there are people who will take on that responsibility for good money?
I went to a seminar and learned that the limit on gifts that everyone sticks to is a myth. You only have to report gifts over $15k- not pay taxes on them. Reporting is only to record and eventually determine going over a lifetime limit of, I believe, $7 million. Not that many of us are in danger of going over that.
I am divorced and already sold my house. I live simply now, after selling or donating most of what I owned. Kids are late 20’s and enjoy visiting in my studio apartment.
My main concern is their financial futures. When my mother dies, I will inherit some funds and I am most concerned that my health or residential care will take all of that money. I want my kids to have it:and two have special health needs.
I am going to a lawyer soon to figure out whether I can transfer inheritance somehow so I have fewer assets to drain, and so my kids can plan.
" So, it felt odd to appoint a sibling and it also felt odd to select a friend over an “adult” child (oldest was 24 at the time)."
Similar feelings here.
As far as payouts to the kids in the case of both of us dying, ours is 1/3 each when the youngest turns 25, then half the remainder at 30, with the balance at 35 per the suggestion of the attorney.
“Reporting is only to record and eventually determine going over a lifetime limit of, I believe, $7 million.”
Currently $11.18 million per person so basically $22.4 million per couple until 2025. If not extended in 2025 it will revert back to $5.6 million per person adjusted for inflation from 2018.
Again, there is no annual limit on gifts. There is a hefty lifetime limit of, I think, around 7 million. If more than $15k is gifted it is reported but not taxed- it is just used to add up the accumulated gifts in case they reach the lifetime limit.
No, @compmom. The estate thresholds I’ve listed in post #94 are valid not $7 million. You are correct on the annual gift tax exemption being $15K and that it is reported not taxed in the current year and only applies if the estate surpasses the current $11.18 million per person.
“Everybody knows the fight is fixed
The poor stay poor and the rich get rich
That’s how it goes
Everybody knows”
Leonard Cohen
Massive multimillion dollar estates are probably a situation where lawyers, accountants, financial people, have been involved for quite some time! And have looked at every angle.
@whatisyourquest I am not sure I am understanding the issue with your Dad. Did you mean he should not have left everything to Mom? Or is it step Mom? Did you want him to divide the assets between all ya’ll kids and Mom at his death?
Our kids are late 20s & early 30s, the oldest ones pursued advances degrees, the youngest one married young, had kids young, is already on their second house. We appointed the youngest as the financial person and the medical kid as the POA. The older ones are too busy and too far away, it is just logical to have the youngest be in charge of all that stuff as she will know what is going on and have time to handle it. I am not sure if the older kids know all this or not.
@somemom Given that there was plenty of money in the estate to ensure that my mom would maintain her standard of living and also for 24/7 in-home care (she was in her 80s when my dad died), and given that his children were already in their early 50s, I think that it would have been more considerate of him to disburse a sizable chunk of the estate at the time of his death rather than roll it over, in its entirety, to my mom.
IMO, there was a not insignificant probability that my mom would outlive me or my siblings; if that had occurred, the deceased child would obviously never see his/her share of the estate, but (per stirpes) it would pass to the grandchild/ grandchildren of the deceased child. Some people may see that as reasonable and fair. I don’t.
The reason that my dad didn’t do this, I’m told, is that it would trigger taxes at the time of his death. He wished to defer the payment of taxes until his wife died. That was very important to him.
Regarding gifting, my mom was in no condition while in her late 80s and early 90s to make rational decisions. My sister had POA to make disbursements for the kind of things @doschicos described. That didn’t work out well. For example, my sister turned down my brother when he asked that the estate extend him a loan for purchase of a new house. My sister refused, even though there was plenty of money in the estate for it. Sibling rivalries should be an important consideration in your estate planning.