Adult children inheritance

[skipro33]

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Originally Posted by Joylush I have two adult children, twins no less. The daughter is extremely responsible with money. The thought of leaving money to my son makes me queasy. How do you handle potential inheritances in a case like this?

I would have zero qualm leaving MY hard earned money to one sibling over the other. Or to neither if I thought neither deserved. Just because one or the other is responsible doesn't necessarily mean they deserve the money either. There are many reasons a child doesn't deserve an inheritance and financial responsibility is but one.
It's my responsibility to be sure any potential heir knows well before hand what my personal standards are for choosing who will inherit my estate. It's up to them to decide if they do or don't. This makes any differences in inheritances between them their own responsibility.

[gayl]

At 27 DS was renting a room with no clear prospects. At 39 he owns 1/2 acre in pricey SF Bay Area & could fire by 45

At 27 DD owned a home in Stockton. At 37 she barely owns one in Clayton. Not on track to FIRE

IMHO: Boys mature more slowly but like the idea of your bank being the trustee if he doesn't wake up @ 30

[harley]

My recommendation, and what I have advised DD, is to tell them that they will likely inherit a good sum of money - some day. But that I intend to live so long that by the time they get it they will be so old they won't really be able to enjoy it. Getting a big inheritance when you are in your 60s isn't going to change your life. So make your own money, save it, invest it, and enjoy your life just as if the money doesn't exist. What you eventually get from me will likely just be held in trust for the next generation.

[ivinsfan]

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Originally Posted by skipro33 I would have zero qualm leaving MY hard earned money to one sibling over the other. Or to neither if I thought neither deserved. Just because one or the other is responsible doesn't necessarily mean they deserve the money either. There are many reasons a child doesn't deserve an inheritance and financial responsibility is but one. It's my responsibility to be sure any potential heir knows well before hand what my personal standards are for choosing who will inherit my estate. It's up to them to decide if they do or don't. This makes any differences in inheritances between them their own responsibility.

Actually the difference is how well they play along to your personal standards and arbitrary rule making. It's your money so there is no doubt you can do as you wish. Our standard is we did our best raising our 2 daughters to be decent human beings and they don't have to jump thru our hoops to prove they are worthy of our "Hard-earned".. leftover money.

[Joylush]

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Originally Posted by ivinsfan Actually the difference is how well they play along to your personal standards and arbitrary rule making. It's your money so there is no doubt you can do as you wish. Our standard is we did our best raising our 2 daughters to be decent human beings and they don't have to jump thru our hoops to prove they are worthy of our "Hard-earned".. leftover money.

I hear what your're saying but I'm more in tune with Skipro33's sentiment. Some people are quite decent human beings but financially irresponsible. It's less about wanting to control them than it is about wanting to protect them from themselves or others who may take advantage of them. My adult sister being a prime example. My son, only time will tell. Giving vast sums of money to the irresponsible but good human being is enabling further bad decision making, and not a responsible use of the money.

[scrabbler1]

Back in 2008, my dad's financial advisor mentioned to my dad (mom is deceased) that he makes sure he had an updated will along with other estate documents such as a health care proxy and a trust to put the house into.


My dad and I went to a local estate lawyer and we put the documents together. My brother lives out of state with his wife and young son (age 4 at the time) but was kept in the loop and had to sign off on all the documents.


The will had some boilerplate language about a beneficiary's inheritance being challenged if he were unemployed or otherwise a deadbeat. While I was still working at the time, my ER plans were moving ahead in full, as I expected to retire by the end of the year. I asked to have that language struck from the will to protect me from any possible challenge, even though I knew I wouldn't be a deadbeat or anything close. Nobody objected, thankfully.


My brother and I are both doing well (he is wealthier than me) and have never been a burden on my dad (or my parents, when she was still alive). Sometimes, when my dad incurs some unforeseen expenses such as some costly dental work, he kids my brother and me by saying, "There goes some more of your inheritance!" We enjoy the good laugh.

[Souschef]

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Originally Posted by harley Getting a big inheritance when you are in your 60s isn't going to change your life.

I agree, my late mother said she would rather give some of it now to l the receive the gratitude instead of after she was gone.
I take part of my RMD and divide it up among our 4 children, who are in their late 40's and early 50's.

[ivinsfan]

Quote:

Originally Posted by Joylush I hear what your're saying but I'm more in tune with Skipro33's sentiment. Some people are quite decent human beings but financially irresponsible. It's less about wanting to control them than it is about wanting to protect them from themselves or others who may take advantage of them. My adult sister being a prime example. My son, only time will tell. Giving vast sums of money to the irresponsible but good human being is enabling further bad decision making, and not a responsible use of the money.

Just as you can't control what they spend your money on from the grave you also can't protect them from themselves from the grave..it is about control IMO..

[Bestwifeever]

We can’t see the future, so our two kids will just be splitting everything equally. There are so many ways our good intentions could be disregarded down the road. We’ll let them make their own mistakes. If there were true special needs or criminal activities, yes, nail down that money, but to not treat our two equally because one might behave fiscally or otherwise more to our liking? No. But we all get to decide what we want to do.

[bingybear]

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Originally Posted by ivinsfan Just as you can't control what they spend your money on from the grave you also can't protect them from themselves from the grave..it is about control IMO..

Actually you can. You can write a spend thrift trust that doesn't hand the $ to the beneficiary, but pays the rent and utilities directly. The hard part is writing all the rules and contingencies. It is hard to control from the grave especially if you don't know what will get the desired response from the beneficiary. If you don't know how to motivate the beneficiary now, you likely don't know how to do it with a trust.

[Joylush]

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Originally Posted by ivinsfan Just as you can't control what they spend your money on from the grave you also can't protect them from themselves from the grave..it is about control IMO..

You are right. That's what's worrisome when they haven't demonstrated particularly responsible behavior. But I think you can take steps to protect your money from being used irresponsibly or to protect and assist the irresponsibly minded and your grandchildren. I still have faith with time will come maturity.

It's unfortunate but I'd like to give some now but it would cause me too much distress. Perhaps I could give to the daughter early and keep the sons' share for if/when the signs of financial responsibility come along. If they don't his share can be set aside for any future children's education or health care needs.

i want to keep things fair/equal. But I don't want them ever to be a disincentive to work and save or an excuse for bad decision making. I don't want to make a bad investment, children or not.

[ivinsfan]

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Originally Posted by bingybear Actually you can. You can write a spend thrift trust that doesn't hand the $ to the beneficiary, but pays the rent and utilities directly. The hard part is writing all the rules and contingencies. It is hard to control from the grave especially if you don't know what will get the desired response from the beneficiary. If you don't know how to motivate the beneficiary now, you likely don't know how to do it with a trust.

Well now that wouldn't be them spending your money would it, it would be you saying what bills you wanted to pay and not pay. You can never guarantee a "desired response" from anybody, unless you want to use a really big stick...not my style..

[ivinsfan]

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Originally Posted by Joylush You are right. That's what's worrisome when they haven't demonstrated particularly responsible behavior. But I think you can take steps to protect your money from being used irresponsibly or to protect and assist the irresponsibly minded and your grandchildren. I still have faith with time will come maturity. It's unfortunate but I'd like to give some now but it would cause me too much distress. Perhaps I could give to the daughter early and keep the sons' share for if/when the signs of financial responsibility come along. If they don't his share can be set aside for any future children's education or health care needs. i want to keep things fair/equal. But I don't want them ever to be a disincentive to work and save or an excuse for bad decision making. I don't want to make a bad investment, children or not.

Or you could just have a discussion with both children about money and gifting and things you value financially ,ironically your DD does not need cash because she knows how to handle it, it's your DS that could benefit from a do over with some adult guidance....

[Joylush]

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Originally Posted by ivinsfan Or you could just have a discussion with both children about money and gifting and things you value financially ,ironically your DD does not need cash because she knows how to handle it, it's your DS that could benefit from a do over with some adult guidance....

My son and daughter have received exceptionally good guidance and have had awesome role models. They received exceptional financial management guidance, instruction and education. Their father and I made it a priority. They've been managing their own personal checking accounts since they were eight years old. Their own mutual funds since their first jobs, also at eight years old when they ran their first two businesses. That's why it's so disheartening to watch because there is no excuse for the behavior. You can give them all the tools in the world but ultimately it's up to them to use or ignore them.

I'm not one to offer unsolicited advice either because typically people don't care for that. Our mantra has always been you can learn from the stupid mistakes of others or you can be the one making the stupid mistakes that others learn from. My son simply chose to be the latter.

[Yarnstormer]

I expect people thought that about me. Never made much money, under 100k savings at age 50, did not own a home (tho I was a homeowner when I was married) but I can promise you that I protect my inheritance with extreme caution because I know it’s my only shot. It is a great comfort to know it’s there and I enjoy knowing I will never have to borrow money or be unable to pay bills.
I don’t have a history of questionable debts like your son but he is very young. Don’t compare him to his sister, compare him to the population at large.
I remember when my mom passed my accountant said “everyone” she knew that inherited money had spent it all in a few years. I mean to prove her wrong.

[CaliKid]

Set up discretionary trust with sole discretion in trustee. Sister would be ok but maybe a third party might be better. Perhaps another highly trusted family member!?

[harley]

Plus, if he cashed out his Roth and bought Bitcoin, he might easily be worth far more than his sister. Just not in a form you recognize.

[Joylush]

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Originally Posted by harley Plus, if he cashed out his Roth and bought Bitcoin, he might easily be worth far more than his sister. Just not in a form you recognize.

Yep, that sounds like him. I definitely wished him well.

[bclover]

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Originally Posted by MRG +1 Do your kids get along? They won't if sister is the keeper of the money. It that what you really want for them? A lifetime of resentment? At 27 we had a negative next worth and did stupid things. .

+1

Sweet Lord. lol, I was in NYC and single with my 2 best friends in a walk up apartment. Zero savings for retirement (although we did have jobs with pensions and I did have a rainy day savings fund), think sex in the city waaaay before Sarah Jessica Parker. Man did I have a lot of fun and yes I had credit card debt.

and my parents were the king and queen of no credit cards.

Op my sons are 23 and 26. My 23 year old is finishing college, it took him a little longer than 4 years to finish. no he does not have 10K save, my oldest is an Asperger kid so he has difficulties he went to trade school and is doing well also but nope no thousands of dollars saved.

I will admit they don't have any credit cards but one is a saver, the other only saves because I have to pry money out of his hands. They are savings for their first apartment.

Now onto the inheritance. the way I have it set up they get a specific amount at various ages. I'm going to change it though and set it up as a match type of program.
They will get a match to their incomes. so if they make 40K they'll get 40K
Now hopefully I'll live long enough to spend down most of my wealth and it won't be an issue.

[bclover]

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Originally Posted by Joylush I'm not one to offer unsolicited advice either because typically people don't care for that. Our mantra has always been you can learn from the stupid mistakes of others or you can be the one making the stupid mistakes that others learn from. My son simply chose to be the latter.

But one can learn from your own mistakes and experience can be the best teachers.

I'm with the others, don't compare the two and get some one else to administer the trust.