How do you plan to protect your child’s inheritance from a bad marriage?

[Luck_Club]

Quote:

Originally Posted by MichaelB You’ve made your point, so why don’t you give it a rest.

Senator: to marry or not, is a very difficult decision. I truly believe in exclusivity. Ether the bond is legal ie marriage or only between two people. The point is pledging exclusivity to each other allows a man to support the off spring and a woman to count on the off spring being supported.

(I believe the ease of hooking up, (GoVT support) has caused the break down of the family, (especially the poor and minorities). This has led to many of our countries ill's.

My wife and I had a discussion about this just tonight. A close relative's spouse died from cancer, and the surviving spouse was in a relationship before the corpse was buried.

From my perspective my wife deserves a long morning period. Should it be the same length as our marriage in minutes, months, or years is what we need to figure out. At this point in time, I would never commit to another, though casual hook ups and string them along relation ships may be perfectly OK.

As a relative looking in, short morning periods are distasteful and disrespectful.

With no kids and no long term commitment from day one, my opinion would probably be completely different. You know what they say about opinions and the human anatomy don't you?

Just random ramblings...and a point of disagreement among two philosophies which usually coincide.

[nancyfrank232]

All marriages are on “solid footing” until they’re not

If you fail to plan, then plan to fail

[jollystomper]

The assumption in this thread seems to be: if your child's marriage turns bad, it is the other party's "fault".

But... what if it is YOUR child that turns the marriage bad? Would one still want to protect the child's inheritance and not help the other party your child has wronged?

[marko]

Quote:

Originally Posted by bingybear I agree a trust can be a good way to handle it. The more difficult part is what you want the trust to do. You need to define it's function when you set it up because it is difficult to change after you pass. So what does your trust do if your child becomes addicted to drugs? Does it fund the problem? Or does it fund the help they need? The difficulty of controlling from the grave is knowing what is best for the beneficiaries after your gone. .

Quote:

Originally Posted by SecondCor521 I personally wouldn't do a trust. At some point, someone has to make a decision to spend $X on thing Y. With direct giving, it's my kid. With a trust, it's some person who is presumably not my kid.

I think it depends on how well the trust is written and how the trustee is assigned. A trustee could be a close relative who could look out for the beneficiary until a certain point in time; a trustee could also be given lots of leeway in determining how the money is spent and if/when to dissolve the trust. A friend of mine only gets his annual payment if he is gainfully employed! (no sitting on an Italian beach for you, bucko!)

If there's a lot of money involved, it also depends if you want your money to extend to future generations. In my case, my small trust was set up by my great-grandfather who died 40 years before I was born (talk about 'controlling from the grave'), but I was thankful 38 years ago when, going through a divorce that X-DW couldn't touch the principal and her payments stopped the day we left the courtroom.

We have set up our own trust for the support of my disabled brother and give the trustee (DW's brother or a niece) wide scope in determining how the money is spent on his behalf considering that his condition is likely to change over time.

So, one could lay down a set of broad guidelines and then give a good trustee a lot of flexibility to accommodate a changing world.

[neihn]

Quote:

Originally Posted by euro I will let the chips fall as they may. As long as my DW is taken care of, it doesn’t matter to me. My DD just got married and I gifted/sold one of my rental properties to her. If she gets divorced, half of it will go to her husband. C’est la vie!

+1

[athena53]

Quote:

Originally Posted by jollystomper The assumption in this thread seems to be: if your child's marriage turns bad, it is the other party's "fault". But... what if it is YOUR child that turns the marriage bad? Would one still want to protect the child's inheritance and not help the other party your child has wronged?

Thank you. My Ex inherited money from his parents and we put $100K of it down on a house. We had DS, I worked FT, the Ex was unemployed the last 5 years of the marriage and spent what was left of his inheritance in failed business ventures. The house, fortunately, was a very good investment- we split and he got 60% of the equity, I got 40%. My share was $100K, which I immediately put down on a smaller house, same school district. The Separation Agreement had no provision for child support- he wouldn't have paid it anyway. I put DS through a private boarding school when the public school system failed him and paid for half his college (Ex's sister paid the other half).

Six years after the divorce I remarried, we moved to a LCOL area and most of the equity I got out of the house went into investments, which helped my ER. The Ex went through his $$ and ended up on social programs before dying of cirrhosis at age 64. So.. yeah, the Ex-wife walked off with part of the inheritance, but I think my Ex's parents would be very happy with how I used it.

[Aerides]

Perhaps a better question is:

How do you protect your money without throwing a wrench into your kid's marriage?

Assuming they seem happily married or engaged, then the new spouse finds out that their darling new in-laws have felt the need to jump through such hoops? If I'm that spouse...ouch - guess those in-laws that just became my family, whom I adore and embrace....don't trust me at all?

If you're going to do this sort of thing, don't tell the kid or the spouse, just be quiet about it, let them find out after you're gone.

[nancyfrank232]

Coincidentally this article seems relevant:

My stepdaughter blew through an inheritance and was mysteriously fired from her job — what should we do with our $1.6M estate?

https://www.marketwatch.com/story/my...ate-2019-10-31

[marko]

Family is family but family money is family money. Some new coming into the family can often confuse the two.

A pre-nup often has the same effect.

Quote:

Originally Posted by Aerides Perhaps a better question is: How do you protect your money without throwing a wrench into your kid's marriage? Assuming they seem happily married or engaged, then the new spouse finds out that their darling new in-laws have felt the need to jump through such hoops? If I'm that spouse...ouch - guess those in-laws that just became my family, whom I adore and embrace....don't trust me at all? If you're going to do this sort of thing, don't tell the kid or the spouse, just be quiet about it, let them find out after you're gone.

[nancyfrank232]

Quote:

Originally Posted by Aerides Perhaps a better question is: How do you protect your money without throwing a wrench into your kid's marriage? Assuming they seem happily married or engaged, then the new spouse finds out that their darling new in-laws have felt the need to jump through such hoops? If I'm that spouse...ouch - guess those in-laws that just became my family, whom I adore and embrace....don't trust me at all? If you're going to do this sort of thing, don't tell the kid or the spouse, just be quiet about it, let them find out after you're gone.

This is why money topics need to be discussed between parent and child (and between partners), continually and as soon as appropriate, and not be left for a couple decades when the child is “happy married”

[street]

I been following this thread and the subject has been something I have pondered a lot. With only one son (34) and he isn't married is what I think about also. He has a 6 figure income and has home, land, savings, 401K, pension and has many paid off earthly belongings.
He will get all we own when we die including a ranch. My worry is what will happen to all of the rest, when he passes on if not married or no kids. I know there are options for him and us prior to death but we haven't talked about it.

[nancyfrank232]

Quote:

Originally Posted by street My worry is what will happen to all of the rest, when he passes on if not married or no kids. I know there are options for him and us prior to death but we haven't talked about it.

Uncle Sam gets it all. Back to the source

[brett]

I have no intention to control my assets from the grave.

Once I fall off the perch the game is over. We spend our time on the present. Who knows what others will do in the future. Any financial decisions we make are based on the here and the now.

If one of our children becomes a financial moron or has his or her common sense blinded by love I cannot do anything to help from the grave. They will be on their own, just as we were.

[kaneohe]

Quote:

Originally Posted by street I been following this thread and the subject has been something I have pondered a lot. With only one son (34) and he isn't married is what I think about also. He has a 6 figure income and has home, land, savings, 401K, pension and has many paid off earthly belongings. He will get all we own when we die including a ranch. My worry is what will happen to all of the rest, when he passes on if not married or no kids. I know there are options for him and us prior to death but we haven't talked about it.

It goes according to his will/trust. If none, the state laws take over
https://estate.findlaw.com/planning-...tate-plan.html

Generally they go to the closer relatives in the bloodline.

[FANOFJESUS]

Quote:

Originally Posted by brett Here is what my grandfather's brother did when his daughter married and he did not think it would last. He had a chat with his lawyer. He had a very successful business. Hard working, very canny Scotsman. His daughter's fiance was in med school. -he bought a house for them to live in. The title was in his name, not his daughter's or her husband's, or joint. -he provided them with a company automobile. Nothing in either of their names. Less than two years after med school the marriage was over. SIL kept no assets, no alimony from his wife. NADA. Not good, but it could have been much worse had he not been on the ball and sought some legal advice.

Sounds good. One could do this several years to see how things are going along.

[OldShooter]

Quote:

Originally Posted by nancyfrank232 Coincidentally this article seems relevant: My stepdaughter blew through an inheritance and was mysteriously fired from her job — what should we do with our $1.6M estate? https://www.marketwatch.com/story/my...ate-2019-10-31

This article re-raises a point that I tried to make earlier in the thread: Using testamentary trusts is not just about marriages and divorces. Several here have commented on how wise, trustworthy, beautiful, etc. their children are. This can all be true, but their assets are still in peril due to circumstances completely beyond their control like a judgment due to an auto accident.

Quote:

Originally Posted by street ... My worry is what will happen to all of the rest, when he passes on if not married or no kids. I know there are options for him and us prior to death but we haven't talked about it.

Well, maybe it would be a good idea to talk about it. Hopefully your estate plan contemplates that he may predecease you. That is more or less the same problem. Have you designated charities as beneficiaries then? Maybe you and he ought to talk about what charities you believe in.

-----------------------------------------------------
Switching gears, I submit the the "controlling from the grave" meme is distorting the dialog here. Certainly it is possible to draft a trust that does exactly that, but there are many situations where a better meme might be "protecting from the grave."

The simplest case might be a special needs trust for a person who cannot live on their own. A direct bequest might result in his/her not qualifying for government aid that they might otherwise get, where a properly written trust can provide money that is supplemental. Depending on the person's mental ability, a direct bequest might also result in a court-appointed conservator being given control of the money.

In our case, "protecting from the grave" means that our son will not receive a seven figure bequest that he has no idea how to manage. He would not be a spendthrift; we don't worry about that, but he is a very open and trusting soul who would be very susceptible to salespeople that he should not trust.

In the case of our grandchildren, "protecting from the grave" means encouraging them via financial carrots to go for as much education as they can while, at the same time, protecting them from the sort of natural spendthrift urges that come from being young.

[nancyfrank232]

^ +1

Most people are selfish. They use the phrase “controlling from the grave” in order to recuse themselves from doing any more work than necessary

Especially when they rationalize to themselves that Death will take them off the hook from any responsibility

[JustCurious]

Quote:

Originally Posted by brett If one of our children becomes a financial moron or has his or her common sense blinded by love I cannot do anything to help from the grave. They will be on their own, just as we were.

Exactly. Absent special circumstances, at some point you have to accept that your children are or will become old enough to make their own decisions just as you did. I can understand trying to set up a trust to protect children from the immaturity of youth, but I think trying to control from the grave once the beneficiary of your funds reaches the age of 35 or 40 is just too much.

For all of you that are in favor of controlling your beneficiaries from the grave beyond the age of 35, were you the beneficiaries of such an arrangement? How would you feel if you were the beneficiary of a trust that restricted you from controlling your inheritance beyond the age of 40?

[cathy63]

Quote:

Originally Posted by Aerides Perhaps a better question is: How do you protect your money without throwing a wrench into your kid's marriage? Assuming they seem happily married or engaged, then the new spouse finds out that their darling new in-laws have felt the need to jump through such hoops? If I'm that spouse...ouch - guess those in-laws that just became my family, whom I adore and embrace....don't trust me at all? If you're going to do this sort of thing, don't tell the kid or the spouse, just be quiet about it, let them find out after you're gone.

Well, I guess I am a spouse who is sort of in this situation. About 15 yrs ago, FIL asked me to read the documents for the trust they were setting up because he said I was named in them and he wanted everyone who was mentioned to know it. So I read the docs and learned that my role would be to act as trustee for my daughter's estate in the event that my husband pre-deceased his parents and then they also died before our daughter reached age 25. I guess my main reaction was to be mildly amused that he thought I needed to know this. I really hadn't ever thought about inheriting money from them (the family talk is all about sentimental heirlooms, not money), so reading the trust docs made me realize in quick succession: that they had a fairly significant amount of money; that DH was in line for a good-sized inheritance; and that if he pre-deceases me and them, I will get nothing, but our daughter will be close to FI at a young age. Once I digested all that, it seemed like the right thing for them to do and it didn't change how I feel about them. I know they've always loved me and I've been blessed to have them in my life for over 30 years.

At this point it's pretty much moot anyway. FIL passed three years ago, but MIL is still going strong; DH and I are still married and happily retired and we don't need an inheritance to stay financially secure; and DD is over 25. If/when DH receives a large inheritance, it's unlikely to make much difference to our day-to-day standard of living. The only time we've really considered it was when we decided to self-insure instead of buying long term care insurance.

DD is not married, but we've talked to her about the fact that she's our only heir and she knows where to find our estate plan if we die at the same time. We have no provisions in our trust or wills to prevent her future spouse from getting half of what we leave her, but I imagine we'll at least make sure she knows that inheritances and income from same are separate property in our state so she can make an informed decision about whether to comingle money or not.

[gwraigty]

Quote:

Originally Posted by JustCurious Exactly. Absent special circumstances, at some point you have to accept that your children are or will become old enough to make their own decisions just as you did. I can understand trying to set up a trust to protect children from the immaturity of youth, but I think trying to control from the grave once the beneficiary of your funds reaches the age of 35 or 40 is just too much. For all of you that are in favor of controlling your beneficiaries from the grave beyond the age of 35, were you the beneficiaries of such an arrangement? How would you feel if you were the beneficiary of a trust that restricted you from controlling your inheritance beyond the age of 40?

+1