Follow up: If my dad had disbursed a chunk of his estate, as I suggested upthread, then my brother would have had funds for the purchase of his house, and would not have had to approach my sister and be turned down. My sister also used her position to direct assets of the estate to her own kids and shut out her nieces and nephews. This was done by having my mom sign documents put before her, in a very shaky hand, while in her 90s. My brother and I didn’t discover any of this until after my mom passed. I realize that some of this could have been contested in court, but we considered it not worth the time, expense, and aggravation. BIL is a lawyer as well, so there was CYA.
Sounds more like a problem choosing the wrong trustee/executor - if someone was chosen who was fair, equitable, pragmatic, and had integrity, a lot of that could have been avoided.
Are you opposed of per stirpes entirely? If your own death had preceded your mom’s would you have been okay with your kids getting zero cut of the inheritance?
I find it interesting to hear how others would approach things and why, not criticizing others’ choices. 
Of course I would want my kid to get my share of the inheritance in the event that my death preceded my mom’s. I just think that per stirpes and “generation skipping” are weird concepts, because they effectively emphasize the grandchildren over the children. However, if there is some mechanism in place to guarantee that the needs of the children are fully met, then I have no problem, but that’s not always the case as I have anecdotally shown.
Power corrupts and absolute power corrupts absolutely. It’s hard to predict how a relative will behave as a trustee, after your death. I think that it’s better to put these responsibilities into the hands of a corporate trust entity because they are unbiased and more likely to make judicious decisions. That is what I have done in my will and living trust.
This is a good place to put in a plug for a VERY helpful book. “Beyond The Grave: The Right Way and the Wrong Way of Leaving Money to Your Children (And Others)”, by Jeffrey Condon. It covers just about every situation you can think of and many that you haven’t even imagined. It’s one of the most recommended book on Bogleheads and I can see why.
https://www.amazon.com/Beyond-Grave-Revised-Updated-Children-ebook/dp/B00LEYI4S6/ref=sr_1_2?ie=UTF8&qid=1527768983&sr=8-2&keywords=beyond+the+grave+condon
Thanks, @patsmom I just placed it on hold at my library. Sounds like a good book
There are plenty of stories of corporate trustees running up fees and looting trusts. If anybody is going to loot my trust it’s going to be a relative, we plan to keep this in the family. Although the kids are old enough now that they will control their inheritance if we both die.
If I die and DH marries some gold digger and leaves everything to her, that’s on him. I refuse to pay a bunch of attorneys and corporate trustees to put enough barriers in his way to prevent that.
To clarify gifts and taxes. This is how it works at the federal level (states gift and estate tax laws vary). There is an annual gift tax exclusion - meaning money that needs not be reported to the IRS. In 2018, it is $15k per donee per donor. So, for example, if mom and dad want to help their married kid with a decent downpayment on a house, they can give $60k tax reporting-free (2 givers to 2 recipients = 4 exclusions) to their child and the child’s spouse in December and then repeat the gift in January. The couple will have $120k to use as a downplayment on a nice house in January. Or to buy a cheapo Maserati. 
This exclusion is not the same as a lifetime personal estate tax exemption of (currently) $11.18M per person. Let’s say my wealthy uncle wants to gift me a million bucks. Sure, I will take it! It is tax-free money for me, the gift recipient! For the uncle, the first $15k of that million will fall into the exclusion territory. Which leaves $985k, which has to be reported to the IRS on a special form, and the IRS will keep a tab of these gifts. If that was the only gift my uncle made before choking to death on his champagne and caviar, his personal exemption would be $11.18M minus $.985M. You do the math. If he made more gifts, they would similarly count against his lifetime exemption.
Gifts between spouses are not taxed, that is why many well off couples choose to leave their share of the estate in a special trust to benefit the surviving spouse to avoid triggering a large tax bill due after the first death.The trustor can set the terms of the trust so that the spouse is provided for during their lifetime, but whatever is left goes to the kids or another beneficiary.
As to health care fiduciary: before you just name someone your fiduciary consider having a talk with them about your wishes and expectations. Health care directives cannot be written to cover every scenario and may allow a fiduciary some discretion (ie act reasonably). Since acting reasonably is a question of what the facts are, you want your fiduciary to be on same page as you as much as possible.
As to simply turning over estate matters to others (eg bank trust dept, attorneys), it depends, in part, on size, complexity of estate, one’s time, one’s background, one’s ability to advance monies, but consider:
W’s mother (W is oldest of 3 sisters) owned a home located in another state in Trust. Youngest sister lived with mother and was allowed to stay in house when mother died. The Trust gave youngest sister most of the proceeds from house upon its sale as W and other sister are in better places financially, whereas youngest sister had little. I think W’s mother thought that upon her death, youngest sister would just sell and move on. She didn’t and stayed several years, then died. It would have made things easier if Trust stated that should any sister die before house is sold and monies are distributed, the deceased sister’s share would be split equally among surviving sisters. The Trust had no such language. As a result, W not only had to bring the Trust to its conclusion, but as deceased sister had no will and due to size of deceased sister’s share from sale of house, a full blown probate was required (it took over a year). An attorney was retained but W felt that she could handle much of what was needed (eg hire realtor, sell house, hire contractors (eg painting, flooring, landscaper, etc), obtain insurance, deal with CPA, open and control bank accts, keep accurate financial records, regularly inform other sister of progress, etc, etc, etc). Although W was not a loose cannon and attorney was kept up to date, with attorney’s fees at over $400/hour and paralegal at over $100/hour excluding costs, if an attorney or bank trust dept is given free rein, you’d be amazed at how fast the attorney/bank trust could reach heir status as to amount taken from estate. Not suggesting anyone should go without legal advice, but giving full rein and just sitting back waiting for check could be quite costly to heirs.
I work at a law firm and I’ve seen attorney’s write up their time (inflate their bills) so they can absorb more of the trust money. No way would I ever ever allow any attorney to be executor of my trust unless he was a family member I trust. Some random guy? No WAY!!
I named my sister as my health care power of attorney agent because I have learned over the years that she has what it takes to make informed, compassionate medical decisions for or in tandem with other family members. I did not name my (now ex-)husband, even while we were still married, because he doesn’t have what it takes.
I don’t have as negative a view of lawyers as @SeeksKnowledge and would not hesitate to name the one who drew up our trust as the trustee if my other options (child, brother, etc.) could not serve.
Ditto. I know a wonderful estate planning attorney I would not hesitate to hire to serve as a trustee for me. She runs her own little firm so her time is not padded with overhead like payments to multiple staff.
There are good, honest attorneys, and… there are the type @SeeksKnowledge describes. There are attorneys who I thought were fine, upstanding citizens… until I read about them in the paper for raiding their escrow accounts.
You can also specify in your will/trust that whoever you name as executor/executrix/trustee, that you ask that they not take personal payment or funds for anything other than direct expenses related to the following the terms of the will/closing the estate.
BunsenBurner and Dischicos, thanks for clarifying. I had the $7 million wrong (I couldn’t remember a figure other than that it was wrong) but tried to articulate what you articulated so much better
@jym626 : If you do not trust the person you name as executor/executrix/trustee, then putting such a clause in the will/trust is not going to help. That person is under a fiduciary obligation as a matter of law not to use funds for any unauthorized purpose. Do your due diligence and pick a person you trust.
That said,please bear in mind that the executor/executrix/trustee is generally entitled to a fee, and a “professional trustee” will insist on one, but that should be part of your contract with them.
When I handled my aunt’s estate some years back, her attorney advised me that 1% of the estate was traditional, and I ended up including that in the accounting, since she had left money to many different people, some of whom (for example, my previously deceased uncle’s grandchildren from his first marriage) were hard to track down, and I saved the estate many dollars by not hiring an investigator to do that job.
In contrast, I’m just now wrapping up my mother’s estate, and I wouldn’t think of taking a fee, since it’s just my brother and me splitting things even Stephen – even though dealing with insurance companies and banks and mutual funds and the like has made it feel like a second job at times.
@AboutTheSame -
Was just sharing that a person writing their will/trust can be clear with their wishes and add that as an additional request (not to take funds other than direct costs of managing the estate expenses)… It goes without say that the person being named as executor/executrix/trustee should hopefully be a trustworthy person, though as @whatisyourquest mentioned, people can do things you wouldn’t have expected of them once they have the power to do so.
I handled both my late mom’s and late dad’s affairs/estate/trust (dad wasn’t emotionally able to handle it after mom died) and the ONLY thing I let the estate pay for was one thing after dad died- it was my airfare (once) to get to their home when I needed to go there to handle things. Handling their affairs, took hours and hours and HOURS of time, and a ton of paperwork, and selling the car, and the house, and all that went with that… It was exhausting. I never took a penny for it. In fact, the accountant screwed up something with the last taxes he prepared to close the estate, and we had our personal accountant fix it. Paid for that out of my own pocket. But I’ll bet my brother wouldn’t believe that I didn’t take any $ for all that. Not that it matters.
Understood @jym626
Seems like an obvious comment but you would be amazed at how many people don’t do this critical step when establishing a living trust…transfer ownership of the house to the trust. The trust will only effect trust assets. Remember title equals ownership. If title is not in trust name, it does not own asset.
^^^And if there is a property located in another state… put that property into a trust - unless you want to deal with probate in more than one state!
And your bank account