Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Trusts, legal planning, who takes the kids
Old 08-14-2016, 03:26 PM   #1
Moderator Emeritus
laurence's Avatar
 
Join Date: Feb 2005
Location: San Diego
Posts: 5,234
Trusts, legal planning, who takes the kids

So DW and I have been scolded for not setting up our legal documentation yet if the worst were to happen to us. We have a good reference now and I'm sure she'll answer most of our questions but does anyone have advice or experience they'd like to share? Our oldest has special needs (Down Syndrome) and is almost 12, the other two are 9 and 5. We know who we'd name to take the kids (and backups). Anything we should keep in mind that we may not be thinking about? Any particular questions you were glad you asked the lawyer? Thanks, and sorry if this has been beaten to death, tried the search function and didn't get any obvious hits.
__________________

__________________
laurence is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 08-14-2016, 05:08 PM   #2
Thinks s/he gets paid by the post
Dash man's Avatar
 
Join Date: Mar 2013
Location: Limerick
Posts: 1,672
Ask about setting up a special needs trust. This should shield your child from any reduction of government aid from having too much of their own assets.


Enjoying life!
__________________

__________________
Dash man is offline   Reply With Quote
Old 08-14-2016, 05:14 PM   #3
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,492
Quote:
Originally Posted by laurence View Post
We know who we'd name to take the kids (and backups).
Have you discussed with them and secured their agreement?
__________________
MichaelB is offline   Reply With Quote
Old 08-14-2016, 05:15 PM   #4
Full time employment: Posting here.
CaliKid's Avatar
 
Join Date: Apr 2016
Location: Cali
Posts: 552
Ask about continuing trusts for the two younger kids. Do not distribute outright at 25 or 1/2 at 25 and 1/2 at 30. Hold in trust for life, pay life insurance to the trust too, and make the kids their own trustee at an older page. This gives them protection from themselves (at the younger ages) and possibly protection from creditors (including divorcing spouse) at an older age. In fact, see if your attorney offers this option. Of course a special needs trust for your eldest. Name lots of back ups for everything. In California I would think you would spend around $3,000 for the full package. If they are substantially higher or lower than this I would get a second opinion. A good resource, in California, is the State Bar of California list of attorneys who are Certified Specialist in estate planning. You can search in your county on the state bar website. Good luck.
__________________
______________________
Hoping to get out around September 1, 2022... I hope, I hope, I hope. Until then off to work I go....
CaliKid is offline   Reply With Quote
Old 08-14-2016, 05:17 PM   #5
Thinks s/he gets paid by the post
 
Join Date: Jun 2014
Posts: 1,466
We made sure we had enough life insurance $ so that if something happened whoever was taking care of the kids would not be financially burdened.
__________________
Teacher Terry is offline   Reply With Quote
Old 08-14-2016, 09:53 PM   #6
Thinks s/he gets paid by the post
growing_older's Avatar
 
Join Date: Jun 2007
Posts: 2,608
Quote:
Have you discussed with them and secured their agreement?
In some families, this can be problematic. You don't want to cause friction by naming one relative, and implicitly not-naming others, when in all likelihood you will not die while the kids are still minors and all the planning is just for an unlikely case. Of course you still want that case covered, but it may or may not be worth the upsets that can result from making it known who you choose.

For a special needs guardian, this may be more difficult and you may need to make sure that your chosen individuals are willing to serve.
__________________
growing_older is offline   Reply With Quote
Old 08-15-2016, 10:48 AM   #7
Thinks s/he gets paid by the post
ivinsfan's Avatar
 
Join Date: Feb 2007
Posts: 2,201
Why would you not talk to the people you want to take care of your children? And why would everyone need to know what's going on?

A simple Thank you for agreeing to do this and let's keep it between us and not discuss it with others should be more then sufficient.
__________________
ivinsfan is offline   Reply With Quote
Old 08-15-2016, 11:29 AM   #8
Thinks s/he gets paid by the post
DrRoy's Avatar
 
Join Date: Dec 2015
Location: Michigan
Posts: 1,727
Have you provided for medical power of attorney in case one or both of you are not able to communicate or make decisions? Also, what instructions do you have?
__________________
"The mountains are calling, and I must go." John Muir
DrRoy is offline   Reply With Quote
Old 08-15-2016, 11:44 PM   #9
Moderator Emeritus
laurence's Avatar
 
Join Date: Feb 2005
Location: San Diego
Posts: 5,234
Quote:
Originally Posted by ivinsfan View Post
Why would you not talk to the people you want to take care of your children? And why would everyone need to know what's going on?

A simple Thank you for agreeing to do this and let's keep it between us and not discuss it with others should be more then sufficient.
This is exactly how we handled it. It's actually close friends and we agreed to take care of their kids (we are 2nd behind his twin brother). No family, either too elderly or too untrustworthy!

Medical power of attorney is on the to do list as well.....
__________________
laurence is offline   Reply With Quote
Old 08-16-2016, 06:33 AM   #10
Moderator
Sarah in SC's Avatar
 
Join Date: Sep 2005
Location: Charleston, SC
Posts: 13,457
So glad you are taking care of this!
Definitely set up plans for a special needs trust for your oldest, preferably with an outside trustee (my boss is trustee of one set up for his young cousin).
Our wills set up two trusts, one for sister's kids and one for brother's. My sister's husband is trustee for both. The remaining estate after other bequests and life insurance are evenly divided between two trusts, which are to be used for HEMS (health, education, maintenance, and support) until youngest is 25, then the balance will be distributed to those beneficiaries.
And of course the usual: health care POA and living will. We also have a codicil for our roommate to remain in our home to care for animals, for a period of 10 years, with the estate paying for maintenance and utilities and veterinary care. He is also responsible, in exchange for a yearly stipend, to maintain the property and prepare it for sale at the end of that period.
Again, so glad you are working on this now. And don't forget that you will need to revisit the process when any major changes take place in your life. Wills are not one and done over a lifetime.
__________________
“One day your life will flash before your eyes. Make sure it's worth watching.”
Gerard Arthur Way

Sarah in SC is offline   Reply With Quote
Old 08-16-2016, 09:33 AM   #11
Thinks s/he gets paid by the post
mpeirce's Avatar
 
Join Date: Feb 2012
Location: Columbus area
Posts: 1,597
Everyone always say to set up a special needs trust. That's not always the best course of action. Make sure you lawyer discusses both the pros and cons of the situation with you.

We also have a special needs child and have not set one one for him. They can be expensive and also can be complicated given certain family situations.

Rather, we are leaving our estate to his two siblings. They are trustworthy and know they are to set aside a portion of their inheritance to assist their brother as need.
__________________
mpeirce is offline   Reply With Quote
Old 08-16-2016, 10:20 AM   #12
Thinks s/he gets paid by the post
 
Join Date: Dec 2014
Location: Florence, AL/Helen, GA
Posts: 2,093
Quote:
Originally Posted by mpeirce View Post
Everyone always say to set up a special needs trust. That's not always the best course of action. Make sure you lawyer discusses both the pros and cons of the situation with you.

We also have a special needs child and have not set one one for him. They can be expensive and also can be complicated given certain family situations.

Rather, we are leaving our estate to his two siblings. They are trustworthy and know they are to set aside a portion of their inheritance to assist their brother as need.
The chances are that you'll need to redo your estate planning a number of times as your children get older. And attorneys that specialize in trusts and such specialized law are somewhat rare. Getting good advice on special needs children is difficult to obtain, too.

I had a cousin with Downs Syndrome and a mother that was unable to care for him. Blake spent much of his life in the state's care until they went out of the mental health business. Then Blake was placed into the care of Volunteers of America, a wonderful non-profit organization. Blake lived his last 30 years in a tri-plex with two other gentlemen, and he went to a day-care center during the day. He was very happy, and was very well cared for until we lost him at age 62.

Blake received social security disability and a VA benefit that more than paid for his care at Volunteers of America. In fact, he had too much money in his account, and V/A had to buy big screen tv's and really nice furniture to keep his liquid assets down to meet standards.

In order for Volunteers of America to care for Blake, he could never be left his just inheritance. His mother died 2 years ago at age 99--a year after we lost Blake--so we never had to cross that bridge.

So some circumstances require that special needs people be formally excluded from estates. We're fortunate that we the family had the financial resources to care for him--but were never needed. And Blake was never a burden on his brother, cousins or anyone while he lived a very long and full life.
__________________
Bamaman is offline   Reply With Quote
Old 08-16-2016, 10:26 AM   #13
Full time employment: Posting here.
CaliKid's Avatar
 
Join Date: Apr 2016
Location: Cali
Posts: 552
Quote:
Originally Posted by mpeirce View Post
Everyone always say to set up a special needs trust. That's not always the best course of action. Make sure you lawyer discusses both the pros and cons of the situation with you.

We also have a special needs child and have not set one one for him. They can be expensive and also can be complicated given certain family situations.

Rather, we are leaving our estate to his two siblings. They are trustworthy and know they are to set aside a portion of their inheritance to assist their brother as need.
I would say this is good and not as good advice. The good is to not always jump to a special needs trust for a special needs child. Each situation is unique and they are right to not just jump for special needs.

The not as good is relying on siblings to do the right thing. Unfortunately I have seen way too many times where this doesn't work out. People die unexpectedly and out of order, people develop drug/gambling/etc... addictions, people can be married to horribly overbearing people who get them to do the wrong thing with the money, and the list goes on.

The key is talk to an experienced estate planning attorney who knows the pros and cons of special needs trusts.
__________________
______________________
Hoping to get out around September 1, 2022... I hope, I hope, I hope. Until then off to work I go....
CaliKid is offline   Reply With Quote
Old 08-16-2016, 11:21 AM   #14
Thinks s/he gets paid by the post
mpeirce's Avatar
 
Join Date: Feb 2012
Location: Columbus area
Posts: 1,597
Quote:
Originally Posted by CaliKid View Post
...Each situation is unique...

The not as good is relying on siblings to do the right thing. Unfortunately I have seen way too many times where this doesn't work out.
As I said, consider the pros and cons. Each family needs to look at it's own circumstances to make a decision.

If a special needs person has adult siblings who are living good lives and care about their disabled sibling - and are willing to step up - I don't see any reason to not rely on them.
__________________
mpeirce is offline   Reply With Quote
Old 08-16-2016, 11:39 AM   #15
Thinks s/he gets paid by the post
Dash man's Avatar
 
Join Date: Mar 2013
Location: Limerick
Posts: 1,672
Quote:
Originally Posted by mpeirce View Post
As I said, consider the pros and cons. Each family needs to look at it's own circumstances to make a decision.



If a special needs person has adult siblings who are living good lives and care about their disabled sibling - and are willing to step up - I don't see any reason to not rely on them.

Until something happens in their lives where they can't/won't help any longer.


Enjoying life!
__________________
Dash man is offline   Reply With Quote
Old 08-16-2016, 12:15 PM   #16
Full time employment: Posting here.
SumDay's Avatar
 
Join Date: Aug 2012
Posts: 799
We had "4 Cylinder" clauses in our trust when the kids were younger. They had to get approval from the trustee to buy a vehicle, and it could be no bigger than 4 cylinders. I think we had that end at age 30. No Maserati for you!
__________________
SumDay is offline   Reply With Quote
Old 08-16-2016, 01:11 PM   #17
Thinks s/he gets paid by the post
 
Join Date: Mar 2010
Posts: 1,649
Quote:
Originally Posted by Teacher Terry View Post
We made sure we had enough life insurance $ so that if something happened whoever was taking care of the kids would not be financially burdened.
+1

Just talk with someone who was asked to be a Godparent. My friend asked them if they had insurance that would follow the kids. She was told no. She turned them down.
__________________
sheehs1 is offline   Reply With Quote
Old 08-16-2016, 03:59 PM   #18
Moderator Emeritus
laurence's Avatar
 
Join Date: Feb 2005
Location: San Diego
Posts: 5,234
Quote:
Originally Posted by sheehs1 View Post
+1

Just talk with someone who was asked to be a Godparent. My friend asked them if they had insurance that would follow the kids. She was told no. She turned them down.
Yeah we're trying to figure out the right split on assets to help the new guardians vs. inheritance for the kids once they are adults.

It's a strange sort of....relief of anxiety as the typical kids pass each birthday. Yes I'll miss them being tiny, but the fact that my 9 year old is very mature and half way to adulthood now in some ways lowers the stress level.

DW and I used to have much more life insurance, but we've receded a bit - I should buy some more as my work provided is 3xSalary and going part time will drastically reduce that benefit.
__________________
laurence is offline   Reply With Quote
Old 08-16-2016, 09:09 PM   #19
Moderator
Sarah in SC's Avatar
 
Join Date: Sep 2005
Location: Charleston, SC
Posts: 13,457
Just to be clear, the godparent role is that of a mentorship, in a spiritual or moral way, and not legal guardianship. The terms should not be interchangeable. I imagine sheehs's friend did the right thing by turning down a role that muddled the two!

Laurence, I think the best idea is to leave your estates as a pool of money to be used for specific needs while the kids are minors, and whatever is left would be given to them as adults (but at least wait until they are 25 or older). Something to consider is to have the legal guardian and the trustee for the funds be different people. Another consideration is the relative wealth of the folks you are granting guardianship. What you don't want is a situation where your kids are "wealthy" and their own kids have more modest means at their disposal. Like yours go to private school or fancy soccer camp but the guardian can't afford the same for their own children. If you choose someone without kids of their own, it is a bit less complex.
__________________
“One day your life will flash before your eyes. Make sure it's worth watching.”
Gerard Arthur Way

Sarah in SC is offline   Reply With Quote
Old 08-16-2016, 09:41 PM   #20
Moderator Emeritus
laurence's Avatar
 
Join Date: Feb 2005
Location: San Diego
Posts: 5,234
Quote:
Originally Posted by Sarah in SC View Post
Just to be clear, the godparent role is that of a mentorship, in a spiritual or moral way, and not legal guardianship. The terms should not be interchangeable. I imagine sheehs's friend did the right thing by turning down a role that muddled the two!

Laurence, I think the best idea is to leave your estates as a pool of money to be used for specific needs while the kids are minors, and whatever is left would be given to them as adults (but at least wait until they are 25 or older). Something to consider is to have the legal guardian and the trustee for the funds be different people. Another consideration is the relative wealth of the folks you are granting guardianship. What you don't want is a situation where your kids are "wealthy" and their own kids have more modest means at their disposal. Like yours go to private school or fancy soccer camp but the guardian can't afford the same for their own children. If you choose someone without kids of their own, it is a bit less complex.
Good points, our closest friends have very similar parenting styles and philosophies, that was essential to us. Childless couples were never a consideration, talk about a crash course in having no life and possibly resenting the kids! The primary choices are actually better off than us, part of my large hiatus to this board is my personal circle was a bunch of grad degree LBYM types so I got my fix on the weekends anyway. I came back because we've moved on from the "save everything you can invest wisely and try not to think about how long you have" phase and I have to learn new things!
__________________

__________________
laurence is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Kids when young vs. kids when old(er) jjquantz FIRE and Money 43 07-29-2014 11:14 AM
Wills, Trusts and Estate Planning nun FIRE and Money 37 07-22-2013 06:48 PM
Kids and ER Planning Omalley FIRE and Money 18 03-14-2012 02:10 PM

 

 
All times are GMT -6. The time now is 11:30 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.