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Question on your estate planning approach
Old 10-27-2007, 01:54 PM   #1
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Question on your estate planning approach

After posting back and forth with Maurice on this topic, I thought I'd start a thread. We don't have kids, we're 40-something, and with insurance proceeds, we'd have a substantial sum to leave behind. So, not planning on going anywhere anytime soon and definately planning to spend it all, but gotta plan for the unexpected.

I'd like to know from you all the following:

1) Do you think it is necessary to leave something to everyone in your immediate family so nobody feels left out (regardless of whether you're close or not)?

2) Would you leave vastly different amounts to different family members(based on depth of relationship), even if you thought it might create some significant petty jealousies and turn people against each other.

3) Would you include close friends in your will or do you follow a keep it in the family philosophy.

4) Does need factor into your decisions about how much to leave whom? Conversely, would you penalize someone for being wealthier than others by leaving them less than than others or cutting them out (because they wouldn't "need" it).
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Old 10-27-2007, 02:03 PM   #2
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It depends.

If you have no kids why not leave assets to those you love mosts, to friends or to charities?

We have no children. My siblings have far greater needs than my DH's siblings. Currently only my sibs are beneficiaries of our wills and trusts.

I know an elderly person who has three children. One is very well to do, the other middling and the third not at all well to do. He talked to his wealthy son about whether he would feel bad about being left out of his will and said he didn't want him to think he did not care. Wealthy son said for goodness sakes, don't leave me anything!

Talking things through can help people buy into your plans if your giving is need based.

But, as I said, it depends on your own situation.
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Old 10-27-2007, 02:15 PM   #3
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1) Do you think it is necessary to leave something to everyone in your immediate family so nobody feels left out (regardless of whether you're close or not)?
No. Genetics is accidental, bequests are discretionary. What did Warren Buffet say? Something about not deserving to inherit money based on the womb you came from.

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2) Would you leave vastly different amounts to different family members(based on depth of relationship), even if you thought it might create some significant petty jealousies and turn people against each other.
While I don't think this will be an issue for me personally, if I had a specific objective in mind (e.g. disabled relative who could benefit from a trust) I would feel free to follow my conscience. After I'm dead I can't be responsible for family squabbles.

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3) Would you include close friends in your will or do you follow a keep it in the family philosophy.
My will does include close friends.

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4) Does need factor into your decisions about how much to leave whom? Conversely, would you penalize someone for being wealthier than others by leaving them less than than others or cutting them out (because they wouldn't "need" it).
Need factors in, but so does potential. How well will they use this money? There is no way I would leave any money to a deadbeat or dissolute relative.
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Old 10-27-2007, 02:15 PM   #4
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Martha, if someone leaves his estate to 2 children equally, can the better off one disclaim his part if he wants to?

I have one son who is quite well off, and one who is just getting started in life. However, I am a little wary of making discriminations based on "need". I don't know how I would have felt about it, if I were the heir in this situation.

Ha
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Old 10-27-2007, 02:19 PM   #5
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Sure, he can disclaim.

In my friend's case, his children were much older and not just starting in life.
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Old 10-27-2007, 02:21 PM   #6
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I have one son who is quite well off, and one who is just getting started in life. However, I am a little wary of making discriminations based on "need". I don't know how I would have felt about it, if I were the heir in this situation.
Not to mention the possibility the of "need" situation of your respective sons being significantly different by the time some jealous woman shoots you your estate is passed on.
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Old 10-27-2007, 03:31 PM   #7
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1) Do you think it is necessary to leave something to everyone in your immediate family so nobody feels left out (regardless of whether you're close or not)?
I have a child and left it ALL to him. If he is not around it gets split up between my family members. No friends.

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2) Would you leave vastly different amounts to different family members(based on depth of relationship), even if you thought it might create some significant petty jealousies and turn people against each other.
I split it evenly if it doesnt all goto the kid. FYI we are talking about > $5MM

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3) Would you include close friends in your will or do you follow a keep it in the family philosophy.
I didn't. Keep it in the family.

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4) Does need factor into your decisions about how much to leave whom? Conversely, would you penalize someone for being wealthier than others by leaving them less than than others or cutting them out (because they wouldn't "need" it).

Nope. No need. Just evenly split. Most likely its going to the kid anyways.
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Old 10-27-2007, 03:44 PM   #8
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Thanks for all the responses. This is such a touchy subject. It forces you to start really thinking about and making judgements about your relationships, which ones are true, which are reciprocal, and which are actually pretty superficial (regardless of blood relation). Also, I can't help bringing my own emotional baggage into it. Since I'm the most economically productive person in both my family and my wife's family, and since we don't have kids to worry about, and since most people will simply leave it all to their own kids, I can see that I won't be getting anything from anybody else's estate. Call me petty, but I kinda resent that.
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Old 10-27-2007, 03:45 PM   #9
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Quote:
Originally Posted by Gekko View Post
After posting back and forth with Maurice on this topic, I thought I'd start a thread. We don't have kids, we're 40-something, and with insurance proceeds, we'd have a substantial sum to leave behind. So, not planning on going anywhere anytime soon and definately planning to spend it all, but gotta plan for the unexpected.

I'd like to know from you all the following:

1) Do you think it is necessary to leave something to everyone in your immediate family so nobody feels left out (regardless of whether you're close or not)?

2) Would you leave vastly different amounts to different family members(based on depth of relationship), even if you thought it might create some significant petty jealousies and turn people against each other.

3) Would you include close friends in your will or do you follow a keep it in the family philosophy.

4) Does need factor into your decisions about how much to leave whom? Conversely, would you penalize someone for being wealthier than others by leaving them less than than others or cutting them out (because they wouldn't "need" it).
I have the same issues. No kids and my two brothers are so different. Oldest brother is a deadbeat 60 year old motel manager that is in debt and never did anything for his kids. He had 4 kids and 12 grandkids and one kid severely disabled but the state is taking care of him and he wouldn't outlive me. I never see his kids except 2 at Christmas and 3 grandkids some I only see every other year at most so a 9 year old I have seen twice.
I don't feel like leaving anything to any of them maybe a token to the grandkids to help with college or a first home if they are still young.
Other brother is a good man, married 40 years to a good woman he is 58 and retired with a pensions and his wife will retire with pensions in a couple more years. His son is 38 now and not good with money but married with a house and no kids. His sister is 35 married to a driven man they are wealthy it seems but I know his business has good months and bad and they have 3 mortgages on 3 homes. They are tearing down a waterfront home and rebuilding and will live in one of the rentals while they rebuild. They have two children the boy is 11, smart, attractive and a good child but a little spoiled and as driven as his father. The girl is 8 has down syndrome and very very spoiled little princess but works very hard and is driven as much as her father and brother and a good kid. My niece is a stay at home mom working her tail off to keep the kids and house perfect and entertain business contacts with her husband in their home.
I won't be leaving anything much to my older brother and may not leave anything to my younger since he won't need it but leave much to his two kids and two grandkids.
Right now my will leaves everything to my mother but she is 81 and doesn't need anything. My 401K is left to my little brother's son and daughter evenly and my taxable and ROTH are left to my boyfriend. He lives with me and the money would be enough to last him the rest of his life if he didn't blow it and we have been together 21 years so I should leave him something.
I want to buy a different house and then get a new will, I will leave my house in a trust and give my boyfriend use of it until I die then leave the house to my family. The great niece with down syndrome may need financial help so leaving to her or her parents seems reasonable. We shouldn't give her money because she could lose some benefits but I think it is ok for her to get income from a trust. I will see an attorney after I move.
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Old 10-27-2007, 03:47 PM   #10
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Thanks for all the responses. This is such a touchy subject. It forces you to start really thinking about and making judgements about your relationships, which ones are true, which are reciprocal, and which are actually pretty superficial (regardless of blood relation). These issues can be so painful. Also, I can't help bringing my own emotional baggage into it. Since I'm the most economically productive person in both my family and my wife's family, and sinse we don't have kids to worry about, I can see that I'll be getting the short end of the stick so to speak when it comes to everybody else's estates. Call me petty, but I deeply resent that.
I am going to call you petty, because you don't need an inheritance. But by the same token, your relatives are not entitled to yours. Why not find a cause you like and leave it to charity?
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Old 10-27-2007, 03:51 PM   #11
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Originally Posted by Gekko View Post
Thanks for all the responses. This is such a touchy subject. It forces you to start really thinking about and making judgements about your relationships, which ones are true, which are reciprocal, and which are actually pretty superficial (regardless of blood relation). These issues can be so painful. Also, I can't help bringing my own emotional baggage into it. Since I'm the most economically productive person in both my family and my wife's family, and since we don't have kids to worry about, and since most people will simply leave it all to their own kids, I can see that I won't be getting anything from anybody else's estate. Call me petty, but I kinda resent that.
Since the most likely scenario is that one of you will predecease the other, have you given any thought to what percentage of your total assets go to the surviving spouse and what percentage goes to others? For married couples, this is the biggest decision IMHO.

If DW survives you by, say, 30 years, are you comfortable that any residual assets will be distributed as you would have liked had you survived? If not, are you comfortable with an estate plan that passes significant portions of your assets to others (than each other) when one passes first?
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Old 10-27-2007, 03:59 PM   #12
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I am going to call you petty, because you don't need an inheritance. But by the same token, your relatives are not entitled to yours. Why not find a cause you like and leave it to charity?
I knew somebody had to call me petty. That's okay, I know its petty, but that's how I feel. Most people don't "need" the money. However strapped for cash anyone might be, they would still survive if they never got an inheiritance from anyone. In my book, inheiritance is about two things: (1) Helping people whom you would have wanted to help in life; and (2) Showing affection towards those whom you care about the most. I may not need #1, but #2...

FYI, most of my estate is going to charity.
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Old 10-27-2007, 04:04 PM   #13
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Since the most likely scenario is that one of you will predecease the other, have you given any thought to what percentage of your total assets go to the surviving spouse and what percentage goes to others? For married couples, this is the biggest decision IMHO.

If DW survives you by, say, 30 years, are you comfortable that any residual assets will be distributed as you would have liked had you survived? If not, are you comfortable with an estate plan that passes significant portions of your assets to others (than each other) when one passes first?
In our present plan, we each leave each other everything. There are some trusts that make sure some assets go to benefit certain family members. But, in general, wife and I trust that if one of us goes before the other, the survivor should have 99% flexibility to act as they see fit. And to be honest, I just don't think we could anticipate (and negotiate) all the various issues to do it any differently.
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Old 10-27-2007, 04:06 PM   #14
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It depends.


We have no children. My siblings have far greater needs than my DH's siblings. Currently only my sibs are beneficiaries of our wills and trusts.
Not each other?
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Old 10-27-2007, 04:10 PM   #15
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Sure, he can disclaim.
How does a disclaimer affect the money? I understand that the disclaiming beneficiary doesn't get it, but then who does? Is the next step governed by the will or does the disclaimed inheritance go to the beneficiary's kids/siblings?

If the beneficiary is thinking about disclaiming the inheritance, would they be able to parse the will to figure out what would happen?

I wouldn't want an inheritance. But if my disclaimer meant that the inheritance would go to a shelter for homeless dogs (or some other destination that I wouldn't support) then I'd rather take the inheritance and either start gifting or donating.

So apparently I wouldn't want the money, but I'd still want some measure of control over it...
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Old 10-27-2007, 04:13 PM   #16
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FYI, most of my estate is going to charity.
Have you looked into a Charitable Remainder Trust?

You get to take a charitable tax deduction while you're alive, withdraw income from the trust while you're alive, and leave the remainder to charity when you're dead.
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Old 10-27-2007, 04:28 PM   #17
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In our present plan, we each leave each other everything. There are some trusts that make sure some assets go to benefit certain family members. But, in general, wife and I trust that if one of us goes before the other, the survivor should have 99% flexibility to act as they see fit. And to be honest, I just don't think we could anticipate (and negotiate) all the various issues to do it any differently.
Somehow having "trusts that make sure some assets go to benefit certain family members" and "wife and I trust that if one of us goes before the other, the survivor should have 99% flexibility to act as they see fit" don't go together.........

DW and myself, to the extent the survivor will still be financially well positioned, are leaving some assets directly to others. I have a few things I want to accomplish with a percentage of our assets at the time of my death, DW feels the same way. There's a good chance one of us will significantly outlive the other and a lot can change if the time frame involves decades.
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Old 10-27-2007, 04:41 PM   #18
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Somehow having "trusts that make sure some assets go to benefit certain family members" and "wife and I trust that if one of us goes before the other, the survivor should have 99% flexibility to act as they see fit" don't go together.........

DW and myself, to the extent the survivor will still be financially well positioned, are leaving some assets directly to others. I have a few things I want to accomplish with a percentage of our assets at the time of my death, DW feels the same way. There's a good chance one of us will significantly outlive the other and a lot can change if the time frame involves decades.
Basically, the survivor will have substantial control of the trusts. The trusts really exist for two reasons: (1) taxes; and (2) In case neither of us survives. If she survives, I trust my wife to do the right thing, and she trusts me to do likewise.
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Old 10-27-2007, 04:47 PM   #19
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1) Do you think it is necessary to leave something to everyone in your immediate family so nobody feels left out (regardless of whether you're close or not)?
Nope! Currently, my Mom is my primary beneficiary @100% and my 2 siblings are secondary, each @ 50%. However, sometime this winter (when I have nothing else to do) I'm changing the secondary beneficiary to a non-profit organization for the developmentally handicapped. The siblings, who haven't bothered to call or visit in years, are getting cut out. (btw, I've called and tried to keep in touch, but they don't seem to want that.....sooooo.....) The sad thing is that they both could really use the money, but I know that the charity will have deeper appreciation for it.

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2) Would you leave vastly different amounts to different family members(based on depth of relationship), even if you thought it might create some significant petty jealousies and turn people against each other.
I would have no problem with leaving different amounts to different members. How they dealt with the inheritance and/or each other would be their problem. But as noted above, my estate will go to either Mom or a charity (once I change the beneficiary designations).

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4) Does need factor into your decisions about how much to leave whom? Conversely, would you penalize someone for being wealthier than others by leaving them less than than others or cutting them out (because they wouldn't "need" it).
Not really. Up to this point Mom would receive 100%, or if she past away, the siblings would each get 50%, even though one sibling may need it more than the other. But once I get around to changing the paper work, Mom will still be 100% primary beneficiary, and the charity will will be 100% secondary.
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Old 10-27-2007, 05:01 PM   #20
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One reason I am taking my mom out of my will is that if she outlived me she would leave half to a brother I don't want to leave anything to.
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