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Don't trust Son-In-Law - Spendthrift trust?
Old 04-13-2019, 01:46 PM   #61
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Don't trust Son-In-Law - Spendthrift trust?

My mom and dad (rest their souls) set up their trust such that my brotherís wife couldnít touch a penny. How wise of them! My brother is now divorced and recently engaged, the ex, a penniless alcoholic. Sad situation.
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Old 04-13-2019, 02:12 PM   #62
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My mom and dad (rest their souls) set up their trust such that my brotherís wife couldnít touch a penny. How wise of them! My brother is now divorced and recently engaged, the ex, a penniless alcoholic. Sad situation.
Do you know how they prevented this in the trust? Example verbiage? It was my understanding that I could informally request DD to not comingle accounts in case of future divorce. But if she ignores the request and comingles, then all bets are off.
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Don't trust Son-In-Law - Spendthrift trust?
Old 04-13-2019, 04:07 PM   #63
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Don't trust Son-In-Law - Spendthrift trust?

Years ago they had the same concerns as you. Thought she would spend away the considerable assets left to my brother. I think they set up a Trust in my brothers name only and specified what the $ could be used for. They passed. Later on, my brother divorced and the ex got none of it.

I suggest you find the best estate attorney in your area and discuss with them. They will have the best council.
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Old 04-13-2019, 05:06 PM   #64
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I ... I guess my question would be can a trust really be set up that completely forbids invasion of principal? I realize that most wealth is decimated by the third generation but it would please me greatly to know when I'm gone these assets will still be doing GOOD for my family.
What you are describing is a perpetual trust. These are not permitted in all states, so you will need consult with a specialist attorney and you may need to create the trust in another state. Even then, as @MarieIG points out, a trust can be altered by a court following a successful argument by the beneficiary(ies) or the trustee(s).

Obviously, language matters and your attorney can help you with that. Also, though, you should strongly consider hiring a professional trustee. Pros are very fastidious about following the language in the trust, which as grantor you control. They have a lot of experience in saying "No." Pros are also very experienced in fending off court challenges from greedy beneficiaries and wannabe beneficiaries. In DW's case, she was well known to several judges and they had a great deal of trust in her decisions and respect for her opinions. I don't think she ever lost a case.

A perpetual trust may actually not be a good idea, but you can discuss this with your attorney.
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Old 04-13-2019, 05:09 PM   #65
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My mom and dad (rest their souls) set up their trust such that my brotherís wife couldnít touch a penny. How wise of them! My brother is now divorced and recently engaged, the ex, a penniless alcoholic. Sad situation.

Yes. The OP issue is not unlike parents who must look for ways to devise trusts for heirs with substance abuse problems. Unfettered access to an inheritance would be maybe the worst scenario. But disinheritance is not an option most parents who still hold out hope wish to consider. Enter trusts. And independent trust management services. The difficult part is in the specifications of the trust and how controlling (responsible) you want to try to be from the grave.

In this day and age, I suspect this problem of how to handle heirs with substance abuse challenges is quite common. Seeking specialty legal help is likely useful. I plan to do so.

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Old 04-13-2019, 05:11 PM   #66
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Do you know how they prevented this in the trust? Example verbiage? It was my understanding that I could informally request DD to not comingle accounts in case of future divorce. But if she ignores the request and comingles, then all bets are off.
Trust assets are typically managed by the trustee or by an investment consultant who is responsible to the trustee. No commingling can exist.

If DD receives a distribution from the trust, however, then it may start to matter how she handles it. Probably the trust document could specify that any payments be made to an account controlled solely by DD but once the money is in her hands, it's hers to do whatever she pleases with it. Again, expert legal advice is needed.
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Old 04-15-2019, 06:54 AM   #67
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In a perfect world, it would be best for our children to choose the right partner and grow some restraint and financial responsibility. I'm working on that. So far I have a 50% success rate.
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Old 04-15-2019, 03:44 PM   #68
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My husband and I used an attorney specializing in elder law. I hope you can find someone as good as we did. We found our lawyer through a course at our local community college. He has been worth his weight in gold so far. I live in MD.
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Old 04-15-2019, 07:22 PM   #69
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My thoughts? Protect yourself. We've been dealing with a mess here which is why I'm not on very much. My son is going through a divorce. This is the kid that I lent 50K to his wife and him to buy the house. Then she asked me for money for a car and I gave her the money for the car. Then she asked for my pension pay stub so she could register the 5 year old in school. 2 weeks later she filed for divorce citing financial abuse. She's never worked but had full access to the joint checking account. And he's paying 150% of his net income until the divorce is finalized. I should have never lent the money to them because he's going to be left with nothing, she'll have the house, and he will be starting over. By protecting yourself you are also protecting your daughter's future. I was stupid
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Old 04-15-2019, 08:28 PM   #70
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....In this day and age, I suspect this problem of how to handle heirs with substance abuse challenges is quite common. Seeking specialty legal help is likely useful. I plan to do so.

Muir
I wonder... can payments from the trust be contingent on drug testing? Stay clean and you get the money... don't and no money.

Luckily, not an issue for us... but I'm just wondering out loud.
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Old 04-15-2019, 08:36 PM   #71
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Gayl, I am so sorry your family is going through this. I am guessing no paperwork for the loans so you could get some of the money back.
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Old 04-15-2019, 09:27 PM   #72
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I wonder... can payments from the trust be contingent on drug testing? Stay clean and you get the money... don't and no money.



Luckily, not an issue for us... but I'm just wondering out loud.

Based on my research, Iím pretty certain the answer is yes. That can be a stated contingency. Also, have money never go directly to the heir, but to landlords or other payees deemed appropriate. And other such considerations. As I stated, I suspect itís a growing area of trust law expertise. Iím gonna seek out the advice. Sadly, it is an issue for us, although there is always hope.
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