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Leaving an Inheritance
Old 06-29-2008, 09:28 AM   #1
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Leaving an Inheritance

If something would happen to me in the next few years my daughter would inherit a considerable amount . Since she is still young (31) and my only child I worry about that . I've seen too many people inherit at a young age and just blow thru the money . Besides talking to her about it any suggestions to how I can help her realize to proceed with caution if this happens .
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Old 06-29-2008, 11:13 AM   #2
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you could set up a trust to distribute funds in stages. that way she could have some early to invest or enjoy (or waste) as she saw fit but the bulk would remain safe until such time that you predetermine she'd be mature enough to handle the money responsibly.
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Old 06-29-2008, 01:30 PM   #3
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DW and I have 2 Kids/adults and we are in the middle of setting up a trust. One of the things we are struggling with is whether to leave any money that's left in one lump sum or set up pay outs. With DD we have no problem leaving a lump sum but with DS he'll spend the money before we're cold.

He's 35 and we are thinking of 4% a year till he's 50 and then a lump sum at that point. We will talk with him about it when we see him in 2 weeks and go from there.
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Old 06-29-2008, 01:49 PM   #4
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We also have an only. DD is now 26 and our wills provide for her to receive her shares in thirds--first at our joint demise, a second third when she hits 30 and the balance when 35. She is a very responsible person and fiscally conservative or we would probably, chosen a different distribution. The nature of the child are probably as important to your decision as the timing. We also have provisos for any required funds for edcuation and any associated expenses including shelter and food.
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Old 06-29-2008, 02:28 PM   #5
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Thanks for the good ideas . She is very responsible but I'm afraid that large an amount would be overwhelming . I think the shares idea is great . A share when I die and the rest at 50 . Hopefully I'll be around a long time so I can revise it as she ages .
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Old 06-29-2008, 02:43 PM   #6
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What can be the most difficult is determining a suitable trustee to invest the money in the interim. I you are looking that far out you are probably looking at a bank trust department. The fees can be high.
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Old 06-29-2008, 04:27 PM   #7
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Besides talking to her about it any suggestions to how I can help her realize to proceed with caution if this happens .
Give her a copy of Thayer Cheatham Willis' "Navigating the Dark Side of Wealth"...

Here's a post from this thread:
Slightly unscrupulous investment pros (#67)
Slightly unscrupulous investment pros

and more here:
Trust Fund Baby sites?
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Old 06-29-2008, 04:49 PM   #8
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31 is not that young. What is it about her judgment or vulnerability that concerns you? That may help us suggest different solutions.

For example, some managers of professional athletes take part of their millions of dollars and purchase SPIAs for them. A lousy investment to be sure, but it prevents their wealthy, headstrong, and impulsive clients from going from a networth of $10mm to bankruptcy like so many have done.

If I were heir to a lot of money, it might not make me warm and fuzzy to have to ask some trustee whether I could buy a new car. OTOH, if I were developmentally or otherwise impaired, I might welcome the steady guidance that a good trustee could offer.
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Old 06-29-2008, 05:28 PM   #9
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Our trust is set up in increments for our two daughters. I believe the final payout is at age 35 which is 13 years from now for the youngest. They will get lump sums from 35 and on...if there is anything left in the estate. It is also set up so that any money inherited doesn't become community property should they marry.
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Old 06-29-2008, 05:28 PM   #10
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This thread reminds me that we really should start some kind of estate planning soon. We don't have kids and we have no idea who should get our money. We don't even have wills. Right now, if we both die, the great state of AL would be a few millions richer I suppose...
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Old 06-29-2008, 05:35 PM   #11
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31 is not that young. What is it about her judgment or vulnerability that concerns you? That may help us suggest different solutions.

She is very sensible but I have seen first hand several young adults get inheritances and go thru them pretty quickly and I really want her to enjoy some when I die but still have money for later in life .
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Old 06-29-2008, 06:10 PM   #12
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She is very sensible but I have seen first hand several young adults get inheritances and go thru them pretty quickly and I really want her to enjoy some when I die but still have money for later in life .
I could see where staging the payout over a period of time would make sense. That way a trustee has some control, but eventually it turns over to her.
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Old 06-29-2008, 06:15 PM   #13
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Kid is over 30. You are dead. Im thinking why would I care... I mean once you die its ok to let go
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Old 06-29-2008, 06:25 PM   #14
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My siblings and I are all adults now. Our parents don't talk much about inheritance, but whatever may or may not come will include a letter from my father that describes his wishes that any inheritance be invested wisely and not consumed faster than 4% per year. He did something similar with college funds and asked that any leftovers be held for future education or education of future generations. The smallish bit of funds left over from my education could have been easily spent on whatever, but instead it now makes a nice start on my kids' college 20+ years later.

I'm planning to do something similar. For now, my kids are minors and while I'm not planning on them inheriting from me anytime soon, if they do my main concerns are using the money to raise them properly. It goes into a trust with a very trusted relative with broad latitude to do the right thing. If they make it past 30 before inheriting, they get the money outright with a suitable 4% letter attached. Not enforceable from the great beyond, but hopefully simple enough guidance that they will treat it responsibly. I suppose if they do anything to alarm me in the next few years I might add more strings, but for now this seems sufficient. I know the college request was enough for me in my early 20's, so I'm hopeful it will work for them.
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Old 06-29-2008, 06:32 PM   #15
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My siblings and I are all adults now. Our parents don't talk much about inheritance, but whatever may or may not come will include a letter from my father that describes his wishes that any inheritance be invested wisely and not consumed faster than 4% per year. He did something similar with college funds and asked that any leftovers be held for future education or education of future generations. The smallish bit of funds left over from my education could have been easily spent on whatever, but instead it now makes a nice start on my kids' college 20+ years later.

I'm planning to do something similar. For now, my kids are minors and while I'm not planning on them inheriting from me anytime soon, if they do my main concerns are using the money to raise them properly. It goes into a trust with a very trusted relative with broad latitude to do the right thing. If they make it past 30 before inheriting, they get the money outright with a suitable 4% letter attached. Not enforceable from the great beyond, but hopefully simple enough guidance that they will treat it responsibly. I suppose if they do anything to alarm me in the next few years I might add more strings, but for now this seems sufficient. I know the college request was enough for me in my early 20's, so I'm hopeful it will work for them.

Great idea Thanks !
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Old 06-29-2008, 06:43 PM   #16
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I'm planning to do something similar. For now, my kids are minors and while I'm not planning on them inheriting from me anytime soon, if they do my main concerns are using the money to raise them properly. It goes into a trust with a very trusted relative with broad latitude to do the right thing. If they make it past 30 before inheriting, they get the money outright with a suitable 4% letter attached. Not enforceable from the great beyond, but hopefully simple enough guidance that they will treat it responsibly. I suppose if they do anything to alarm me in the next few years I might add more strings, but for now this seems sufficient. I know the college request was enough for me in my early 20's, so I'm hopeful it will work for them.
Interesting plan. I like the 4% letter idea.

Our kid turns 18 in just over two years, and at that point we were going to make her executrix of (whatever's left of) our estate. We hope that our money-management teachings are adequate to the task whether it's $200K or $2M, and we hadn't planned on establishing any trustee burdens.
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Old 06-29-2008, 06:55 PM   #17
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I highly recommend this Nolo book on creating living wills/trusts:

Make Your Own Living Trust

The webpage says "good in all states except Louisiana." I don't know what's wrong with those Louisiana folks... :confused:
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Old 06-29-2008, 06:59 PM   #18
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This thread reminds me that we really should start some kind of estate planning soon. We don't have kids and we have no idea who should get our money. We don't even have wills. Right now, if we both die, the great state of AL would be a few millions richer I suppose...
Do you have siblings/nieces/nephews? This is who we wrote as heirs. In addition, I know it sounds silly, but we set up a small trust to pay for the care of any cats/pets we might leave behind (we don't have any children either). We chose a good friend to manage that trust. We figure if we leave money for the care of the pets, someone will be more likely to adopt them, and there will never be any question about getting proper veterinary care.

Now one thing we still have to do is have the will be re-written to be effective for our current state.
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Old 06-29-2008, 07:25 PM   #19
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I'd recommend just leaving all the money, no strings. Do you want her memory of you to include "Sheesh, I'm 31 and she still doesn't trust me!" ?

That could mess her up more than blowing through a couple of million dollars, and be a lot less fun.
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Old 06-29-2008, 07:36 PM   #20
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I'd recommend just leaving all the money, no strings. Do you want her memory of you to include "Sheesh, I'm 31 and she still doesn't trust me!" ?

That could mess her up more than blowing through a couple of million dollars, and be a lot less fun.

Thanks Al , Hopefully she'll be a lot older when this happens or I'll think sheesh I LBYM so she could drive a Lexus !
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