Estate Planning Advice

[PatrickA5]

I'm looking for some suggestions on how to find someone to "guide" my heirs when the time comes that I'm no longer around to handle finances.

A little background:

Both DW and I are 56
I'm semi-retired working part time and she will retire in a few years
DW will inherit everything, with 3 kids as secondaries
We each have a Will, POA, Healthcare Directives, etc
All retirement accounts are at Vanguard. We qualify for Flagship services.

I do all of the financial work for the family. I have a pretty good understanding of investing, taxes, insurance, etc. I actually enjoy finances and reading forums, books, magazines - you name it.

The problem is my DW, while a smart Accountant-type at work, has absolutely no desire to even discuss this stuff. I have to force her to take 5 minutes away from her IPad to look at a listing of our accounts (once a year). And I'm afraid my kids are even less into finances than DW is.

What's the best way to find someone that will guide them through things when I'm gone. Just inheriting IRAs, 401Ks, etc will be complicated enough and I'm afraid they'd make withdrawals mistakes that would end up costing them money. I guess I could write down all of the steps they need to take when the time comes, but it would be good if they had an individual that they could call.

Having said that, this might not even be needed for 20 years and I don't want to start paying someone money now when they might not even be around at the time when it's needed.

What have others done to prepare for when you're gone?

 

[pb4uski]

I'm still working through this as well. Situation similar to yours - I handle it all and DW has little interest. I think DD (she's a CPA) will be helping DW if something happened to me. I have an "investment policy" document explaining our AA, tax efficient allocation, tax efficient withdrawal strategy, rebalancing approach, etc that they can use as a guide to understand why things are set up the way they are so they can continue on if I get run over by a beer truck (after the obligatory mourning period of course).

 

[Walt34]

Fortunately DW is quite capable of handling all that on her own. While I do most of the day-to-day stuff she is firmly in the loop and knows exactly the current state of finances, where everything is, and the like.

 

[RetireAge50]

My wife also has little interest but would be perfectly capable to take over if I were to die or become a vegetable or something.

Even still I/we will be setting things up now so it will be basically be on auto pilot for the remainder of both our lives.

For example, pensions will be joint life, social security is what it is.

Portfolio automatically disbursed using formula Balance/(95-Age). Bulk of it managed by Wellesley and Wellington.




Sent from my iPhone using Early Retirement Forum

 

[Delawaredave5]

For my wife: There's a few friends and family members I use as a "sounding board" on financial matters - people I trust and have same philosophy. I have asked a couple of them if they would be part of an "advisory board" if/when I died. Reviewed this with wife and have a page in my files with names/contacts. Nothing official or legally binding, but I think enough to guide.

For my kids: That's a different story. Kids are in 20's. If both DW and I died in a plane crash, I don't feel comfortable with the above "sounding board".

What I'd like to do is define a lot more specifically (and probably legally) how the money would be managed and "distribution considerations" to kids (x% per year, conditions were distribution might be unequal, etc).

Does anyone have any detailed, specific "principles" they've used that they can share ? I know "get a lawyer" - before that I want to have a detailed list of desires and principles that they can legally execute.

 

[38Chevy454]

I would set up a trust (revocable living trust), with a good knowledgeable person as your trustee. That person could be related or could be a friend or I think your idea to write down some basic instructions is helpful, it is better than none.

If your kids are not wanting to learn or just not interested, the trustee can make sure they have guidance and controls to maximize the inheritance benefits.

 

[Midpack]

I would set up a trust (revocable living trust), with a good knowledgeable person as your trustee. That person could be related or could be a friend or I think your idea to write down some basic instructions is helpful, it is better than none.

If your kids are not wanting to learn or just not interested, the trustee can make sure they have guidance and controls to maximize the inheritance benefits.

+1, that's what I'd suggest too. Same thing my parents have done...

 

[rodi]

For my wife: There's a few friends and family members I use as a "sounding board" on financial matters - people I trust and have same philosophy. I have asked a couple of them if they would be part of an "advisory board" if/when I died. Reviewed this with wife and have a page in my files with names/contacts. Nothing official or legally binding, but I think enough to guide.

For my kids: That's a different story. Kids are in 20's. If both DW and I died in a plane crash, I don't feel comfortable with the above "sounding board".

What I'd like to do is define a lot more specifically (and probably legally) how the money would be managed and "distribution considerations" to kids (x% per year, conditions were distribution might be unequal, etc).

Does anyone have any detailed, specific "principles" they've used that they can share ? I know "get a lawyer" - before that I want to have a detailed list of desires and principles that they can legally execute.

We set up a trust with the kids as beneficiaries. My sister is the executor.
We structured things so that their expenses through college are paid by the trust (via the executor.)
They get a cash bonus upon graduating college.
They get 1/3 of the inheritance on their 25th birthday.
They get the next third on their 30th birthday.
They get the final third on their 35th birthday.

We did this for a few reasons. My husband observed a friend divorce her husband 1 month before inheriting a trust. Her mother, the husband, and all her friends were stunned by this. She promptly blew through all the money. She said she knew he'd want to save it and invest it - and she felt entitled to party. I observed a coworker inherit a big chunk in his mid 20's. He was quite the party guy - and it was gone in less than a year. It's amazing he survived... but he definitely killed brain cells.
Both of these people seemed normal/rational... but a large inheritance at a young age, with no restrictions can cause a normal rational person to go off track. We wanted to avoid that for our kids.

We're hoping we're around when they turn 35... so this is all moot. But if we get hit by the proverbial bus... the trust is structured this way.