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Old 10-13-2013, 12:36 AM   #61
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Trusts do hold up much better in court.

With a will, all parties that are excluded, but would normally inherit based on the states default rules, must be notified by the executor/trustee, that they are excluded. And they usually receive a copy of the will as part of this notification. Laws may vary based on your state of residence. When my great aunt died, my grandmother received a copy of the will from the law firm handling the estate for just this reason. She had to sign some things stating that she would not contest. Wills beg you to contest them. Will go through probate, trusts do not. So the mechanism for challenging wills is set up and ready to go.

With a trust, notifications like that do not occur. The left out party should know nothing about it unless it holds something like property that they already know about and they start asking questions. If it's just money and liquid assets that are not public knowledge, I doubt any legal issues would even come up, because no one would know to raise them. One major reason trusts are used is to keep things private.


The exclusion part is why some put in a minor bequest... which means they are not excluded....


I wonder how many wills are contested and how often the person wins.... id doubt many are and I would be willing to bet that a vast majority of the ones that are contested are upheld....


Also, as an comment on other posts.... doesn't an asset that passes by a TOD get excluded from the estate.... even reporting it to the court
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Old 10-13-2013, 04:51 AM   #62
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Well, she did ask, and she thanks people in the thread, so hopefully she found some value in the responses.
I have found value in what has been said. I am more aware of my options. I appreciate the input and feel better informed.
Most people keep quiet about such family issues. I guess there's a sense of failure or shame on the parents part. However, I learned in my previous occupation that situations like ours are, sadly, far too common. I've talked with other parents who have a difficult child and their heartache. I've just never approached the very personal and unique issue of estate planning concerning how things will be dispersed. This forum offered the more anonymous venue ;-).
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Old 10-13-2013, 05:37 AM   #63
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Family situation such as you describe are indeed very common. My older sister managed 457 accounts and has some stories to tell, some funny, many of them tragic in the outcome.

People get downright weird about money sometimes.
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Old 10-13-2013, 10:10 AM   #64
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People get downright weird about money sometimes.
FIFY People get downright weird about money some most times.

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Old 10-13-2013, 10:56 AM   #65
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The exclusion part is why some put in a minor bequest... which means they are not excluded....


I wonder how many wills are contested and how often the person wins.... id doubt many are and I would be willing to bet that a vast majority of the ones that are contested are upheld....


Also, as an comment on other posts.... doesn't an asset that passes by a TOD get excluded from the estate.... even reporting it to the court
If you include someone in the will in a minor way, you are making them aware of the will and the conditions of the will. If they get $5K and another sibling gets $500K. They might have a reason to be upset and a reason to consider contesting. Sometimes people try to leave the party enough in the hopes that said party will consider letting it go to get the money faster. It really depends on the type of person we are talking about. A NORP (normal ordinary reasonable person) will respect the conditions of the will in most cases. The person that contests is probably not a NORP. You have to decide what kind of person you are dealing with to determine the appropriate actions to take with your estate.

Very few wills are actually contested. Less than 1% the last time I spoke with an estate attorney. You have to have a party that feels wronged, thinks something was improper with the will or is very desperate to attempt to contest. Fighting a will is not cost free for either side. Most often, all the person contesting accomplishes, is delaying the probate process, reducing the size of the estate and creating a rift in the family.

Google will bring up many sites that discuss this in more detail. e.g. Contested wills on the rise | London and Watford based solicitors | Matthew Arnold & Baldwin

Contesting a Will, Inheritance - Will Cost - AARP Bulletin

Contesting wills

TOD does operate outside of probate. But just like a trust it can be subject to a legal challenge. And it doesn't have the same privacy protections as a trust. If I move a house from myself to my son via a trust upon my death, there is no transfer of ownership. The trust actually owns the house, both before and after my death. With TOD, there will be a public record indicating the transfer occurred. This public record is freely available on the county website to any who choose to look. With a trust is just harder to get the details. There is probably nothing you can do that is iron-clad. All you are doing is increasing your odds. Even gifting the money a few years before your death is subject to legal challenge.
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Old 10-13-2013, 11:06 AM   #66
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doesn't an asset that passes by a TOD get excluded from the estate.... even reporting it to the court
TOD assets are treated just like beneficiary designated assets and will be excluded. The reporting of assets is done by the executor and TOD/POD/beneficiary assets wouldn't be reported. A separate party can contest the TOD designation, bring it to the court's attention and try to make a claim to the assets. When there's money to be had, pretty much anything can be stated and challenged in court. It's up to the accused to disprove the claims.
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Old 10-13-2013, 11:32 AM   #67
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Well, she did ask, and she thanks people in the thread, so hopefully she found some value in the responses.
You are certainly correct about these things. Nevertheless, it amazes me. There has to be a back story somewhere, perhaps it was given, perhaps I missed it as I didn't closely read the thread. I try to imagine how quickly I could come up with a plan were I in this situation, and knowing what a parent in this situation might typically know, and I realize that I would have trouble trying to decide how to proceed. I would consult several experts, who themselves would very likely feel hard pressed to give suggestions.

Knotty situation all around.

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Old 10-13-2013, 11:55 AM   #68
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Ha,

Have to agree 100%, pros at family issues wouldn't be so quick with solutions, myself included.

I applaud the OP for having the courage to seek answers to a difficult situation.

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Old 10-13-2013, 12:31 PM   #69
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TOD assets are treated just like beneficiary designated assets and will be excluded. The reporting of assets is done by the executor and TOD/POD/beneficiary assets wouldn't be reported. A separate party can contest the TOD designation, bring it to the court's attention and try to make a claim to the assets. When there's money to be had, pretty much anything can be stated and challenged in court. It's up to the accused to disprove the claims.
The executor would have to know about the TOD assets to determine if state or federal taxes are due. In fact in the worst case the executor could claw them back if needed to pay the taxes. However they do not show up on inventories filed with the court.
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Old 10-13-2013, 01:01 PM   #70
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The executor would have to know about the TOD assets to determine if state or federal taxes are due.
I'm referring to the probate process and you wouldn't bring this into the inventory for probate assets. The majority of estates don't even need to worry about taxes due.

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In fact in the worst case the executor could claw them back if needed to pay the taxes. However they do not show up on inventories filed with the court.
Executors can't claw any money back, they can bring it to the court's attention and the judge would need to rule on it. Getting a judgement and collecting the money are completely separate issues.

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However they do not show up on inventories filed with the court.
Isn't this the same thing I wrote?
TOD/POD/beneficiary assets wouldn't be reported.
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Old 10-13-2013, 03:08 PM   #71
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Family situation such as you describe are indeed very common. My older sister managed 457 accounts and has some stories to tell, some funny, many of them tragic in the outcome. People get downright weird about money sometimes.
I'd love to hear some of those stories. I thought the one I shared about the two brothers who tried to get what little funds their mentally incompetent mom had and said the state could take care of her. Ahhhhh family love and concern.
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Old 10-13-2013, 04:45 PM   #72
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To the OP, I'm sorry that your own child has treated you like this. All I can say is that as I have learned more about human behavior and psychology over the years from personal experiences, I understand that virtually every family has issues. Have no qualms with treating them just as they have treated you, and set up your estate accordingly. However, double check and make sure everything is as lock tight as possible, because money can make people to strange things. And even larger sums can make them do even stranger things.

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My quandary- the thought of one dime of my parents money going to and being spent by someone who holds us all in disdain riles me up. Am I being vindictive or prudent to have set up my will to give half the estate to our close child and the other half divided among the grandchildren (who we don't even know?).
One thing to keep in mind (which I didn't see other posts mention) is that if you do leave money to the grandchildren of the estranged child, that could create a host of issues. Would the money go outright to the grandchildren in one lump sum if they are minors? If so, the estranged son/DIL would undoubtedly wring their hands around it and do who-knows-what with it, and could use the excuse that it was for the benefit of the grandchildren.

If you create a trust to hold the grandchildrens' funds until a certain age, then the estranged child could challenge/contest it on a number of grounds. If you allow the trust to disperse money "for the benefit of the grandchildren", then estranged child would likely use a number of excuses to get money withdrawn from the trust...."for the grandchildren's benefit".

Perhaps one way is a way my grandparents used - if you are going to purchase savings bonds for yourself anyway, put grandchildren's names on them as either co-owners or beneficiaries. Then, you can instruct the 'good child' to not mention the existence of hte savings bonds until the grandchildren are of legal age (perhaps a little older and more mature, say 25?). That way, estranged child has no way of getting their hands on the savings bonds that would legally be in the name of the grandchildren at that point.

I know you said you were living off of the dividends of your portfolio, so this may be a somewhat limited way of dividing up your estate.

Money can be a very frustrating thing - my own father tried to screw my siblings and I out of our share of my grandmother's estate with a stash of cash in a safe deposit box (my grandfather was old-school, and lost money in a bank in 1929 when he was a young 11 year old paperboy). My father thought no one knew what was in the box, but luckily, my grandmother entrusted me with all of her investments and holdings several years before her death, and I took an inventory of the box with her a while back.

After grandmother's death, my dad went over her assets to disperse. Someone asked about the existence of a safe deposit box at a certain bank (the one w/ the cash, but no one else knew what was in it). Dad said "it just had a few papers" and quickly changed the subject. The safe deposit box was asked about again later on by another sibling, and after dad again said "it had nothing in it", I said "BS, it had about $50k!", to which he quickly said "no, it only had about $10k".

All of my siblings have an unhealthy, fearful relationship with my dad, so no one bothered to bring him to task about insisting it had "just a few papers" to suddenly admitting it had $10k (it actually held $40k in cash, as my memory was just a little fuzzy). I can only assume that my dad hoped no one would ask about the safe deposit box, and he would simply take the cash as his own and put it in his own safe deposit box.
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Old 10-13-2013, 09:35 PM   #73
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Forgiveness can be very powerful, both for the grantor and the recipient. This can even be more powerful from "beyond the grave." Your actions will say a lot about you.

Think about it.
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Old 10-13-2013, 11:17 PM   #74
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You are certainly correct about these things. Nevertheless, it amazes me. There has to be a back story somewhere, perhaps it was given, perhaps I missed it as I didn't closely read the thread. I try to imagine how quickly I could come up with a plan were I in this situation, and knowing what a parent in this situation might typically know, and I realize that I would have trouble trying to decide how to proceed. I would consult several experts, who themselves would very likely feel hard pressed to give suggestions.

Knotty situation all around.

Ha

Ha,

I think that people are giving opinions to the OP based on what they went through or have seen... as for any advice given, it is the reader who has to put any weight to those suggestions... I do not see this being that much different than a lot of the other posts who ask for advice on investing, paying off a mortgage, moving money from a 401 to an IRA etc. etc.... some are more fact based than others, but all have to be viewed as they are... some rambling of an unknown person on the internet....
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Old 10-14-2013, 04:52 AM   #75
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Money can be a very frustrating thing - my own father tried to screw my siblings and I out of our share of my grandmother's estate with a stash of cash in a safe deposit box (my grandfather was old-school, and lost money in a bank in 1929 when he was a young 11 year old paperboy). My father thought no one knew what was in the box, but luckily, my grandmother entrusted me with all of her investments and holdings several years before her death, and I took an inventory of the box with her a while back. After grandmother's death, my dad went over her assets to disperse. Someone asked about the existence of a safe deposit box at a certain bank (the one w/ the cash, but no one else knew what was in it). Dad said "it just had a few papers" and quickly changed the subject. The safe deposit box was asked about again later on by another sibling, and after dad again said "it had nothing in it", I said "BS, it had about $50k!", to which he quickly said "no, it only had about $10k". All of my siblings have an unhealthy, fearful relationship with my dad, so no one bothered to bring him to task about insisting it had "just a few papers" to suddenly admitting it had $10k (it actually held $40k in cash, as my memory was just a little fuzzy). I can only assume that my dad hoped no one would ask about the safe deposit box, and he would simply take the cash as his own and put it in his own safe deposit box.
Sounds like old dad was quite the character :-}. Glad your grandmother trusted you and went over her holdings with you!
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Old 10-14-2013, 04:57 AM   #76
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Ha, I think that people are giving opinions to the OP based on what they went through or have seen... as for any advice given, it is the reader who has to put any weight to those suggestions... I do not see this being that much different than a lot of the other posts who ask for advice on investing, paying off a mortgage, moving money from a 401 to an IRA etc. etc.... some are more fact based than others, but all have to be viewed as they are... some rambling of an unknown person on the internet....
Exactly. Just picture us all sitting around a table drinking coffee, sharing our personal knowledge and experiences.
And rest assured, I will definitely consult a professional.
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Old 10-14-2013, 05:00 AM   #77
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Forgiveness can be very powerful, both for the grantor and the recipient. This can even be more powerful from "beyond the grave." Your actions will say a lot about you. Think about it.
Can I include a letter telling them what I "really" think? Just kidding, but yes, I have weighed taking the higher road and it isn't out of the list of choices.
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Old 10-14-2013, 08:29 AM   #78
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[QUOTE=RitaR551;1366918]Can I include a letter telling them what I "really" think? Just kidding, QUOTE]

Yes you can. Years ago I was struggling with some family issues and went to a councilor. She decided I needed to writer a letter to Mom and Dad asking their forgiveness. Well all I could see was their stuff, what they did. I stayed up all night, wrote 15 pages of what they did and how it messed me up. It was a horrible bunch of junk, hate, resentments and nonsense.

As I was telling the councilor I had done this and mailed it, she looked at me in horror "you mailed it". Yep I did, it was addressed "Mom & Dad", no address, no return. I found that writing all that crap out, and mailing it, let me go past their stuff and allowed me to see my part.

Best wishes,

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Old 10-14-2013, 08:36 AM   #79
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Family situation such as you describe are indeed very common.

People get downright weird about money sometimes.
+1

Dysfunctional families are everywhere, and people are downright weird even without money. That dysfunction continues is not a testament to the effectiveness of family therapy.
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Old 10-14-2013, 08:53 AM   #80
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I am not very religious but the prodigal son is a thought-provoking parallel to your situation, Rita. The good child stays and is part of your life, the bad one takes what you gave her growing up and leaves.

I would probably skip the bad child as an heir (leave her a thousand or something) and leave a trust for those grandchildren. I know people who, like you, had grandchildren only from one child, and did that (in this case it was because the grandchildren's parents were financially well-off; you could justify it that way too). You might have done that for both your kids, had the good child had a family, so it is not necessarily a slight.
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