Leaving an Inheritance

Moemg · 06-29-2008, 09:28 AM

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 .

lazygood4nothinbum · 06-29-2008, 11:13 AM

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.

73ss454 · 06-29-2008, 01:30 PM

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.

nwsteve · 06-29-2008, 01:49 PM

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.
nwsteve

Moemg · 06-29-2008, 02:28 PM

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 .

**Martha** · 06-29-2008, 02:43 PM

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.

Nords · 06-29-2008, 04:27 PM

Quote:

Originally Posted by Moemg

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:
http://www.early-retirement.org/foru...9&postcount=67 (#67)
Slightly unscrupulous investment pros

and more here:
Trust Fund Baby sites?

Rich_in_Tampa · 06-29-2008, 04:49 PM

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.

stargazer08 · 06-29-2008, 05:28 PM

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.

FIREdreamer · 06-29-2008, 05:28 PM

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...

Moemg · 06-29-2008, 05:35 PM

Quote:

Originally Posted by Rich_in_Tampa

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 .

Rich_in_Tampa · 06-29-2008, 06:10 PM

Quote:

Originally Posted by Moemg

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.

Notmuchlonger · 06-29-2008, 06:15 PM

Kid is over 30. You are dead. Im thinking why would I care... I mean once you die its ok to let go

growing_older · 06-29-2008, 06:25 PM

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.

Moemg · 06-29-2008, 06:32 PM

Quote:

Originally Posted by growing_older

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 !

Nords · 06-29-2008, 06:43 PM

Quote:

Originally Posted by growing_older

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.

socca · 06-29-2008, 06:55 PM

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...

simple girl · 06-29-2008, 06:59 PM

Quote:

Originally Posted by FIREdreamer

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.

TromboneAl · 06-29-2008, 07:25 PM

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.

Moemg · 06-29-2008, 07:36 PM

Quote:

Originally Posted by TromboneAl

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 !

06-29-2008, 09:28 AM	#1
Moemg Thinks s/he gets paid by the post Join Date: Jan 2007 Location: Sarasota,fl. Posts: 3,092	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 .

06-29-2008, 11:13 AM	#2
lazygood4nothinbum Thinks s/he gets paid by the post Join Date: Feb 2006 Posts: 3,786	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. __________________ "off with their heads"~~dr. joseph-ignace guillotin "life should begin with age and its privileges and accumulations, and end with youth and its capacity to splendidly enjoy such advantages."~~mark twain - letter to edward kimmitt 1901

06-29-2008, 04:49 PM	#8
Rich_in_Tampa Moderator Emeritus Join Date: Feb 2006 Location: Tampa Posts: 5,878	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. __________________ Rich Tampa, FL (10% retired) As if you didn't know..If the above message happens to contain medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any medical purpose whatsoever. Consult your own doctor for all medical advice.

06-29-2008, 05:28 PM	#9
stargazer08 Recycles dryer sheets Join Date: Mar 2006 Posts: 90	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. __________________ There is a fine line between a hobby and mental illness.

06-29-2008, 05:28 PM	#10
FIREdreamer Thinks s/he gets paid by the post Join Date: May 2007 Posts: 1,350	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... __________________ "Fortune favors the brave" - Virgil

06-29-2008, 01:30 PM	#3
73ss454 Thinks s/he gets paid by the post Join Date: Oct 2004 Posts: 1,758	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.

06-29-2008, 01:49 PM	#4
nwsteve Recycles dryer sheets Join Date: Jun 2004 Location: Pullman Posts: 280	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. nwsteve

06-29-2008, 02:28 PM	#5
Moemg Thinks s/he gets paid by the post Join Date: Jan 2007 Location: Sarasota,fl. Posts: 3,092	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 .

06-29-2008, 02:43 PM	#6
Martha Administrator Join Date: Feb 2004 Location: minnesota Posts: 9,859	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. __________________ . Do not rely on the information provided--my posts are not to be taken as legal advice. Needless to say you must consult with your legal representative. I am not responsible for errors. If I offended you with cya I apologize. If I did not, I tried.

06-29-2008, 06:15 PM	#13
Notmuchlonger Thinks s/he gets paid by the post Join Date: Dec 2007 Posts: 2,991	Kid is over 30. You are dead. Im thinking why would I care... I mean once you die its ok to let go __________________ Call the troops out in a hurry. This is what we've waited for. This is it boys, this is war.

06-29-2008, 06:25 PM	#14
growing_older Recycles dryer sheets Join Date: Jun 2007 Posts: 402	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.

06-29-2008, 06:55 PM	#17
socca Recycles dryer sheets Join Date: Nov 2005 Location: Sarasota, FL Posts: 349	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...

06-29-2008, 07:25 PM	#19
TromboneAl Thinks s/he gets paid by the post Join Date: Jun 2006 Posts: 4,165	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. __________________ - Al -- Always serious, never joking. No, wait. Never serious... Always... I forget.