How to handle money left to heirs...

[OldShooter]

Doesn't this get back to allowing interpretation and possibly more difficult/costly to defend in court vs set payout schedule? The beneficiary can sue the trust and defense is paid for out of the trust

In most trusts, at least the ones my wife's staff was involved with, the trustee is given a fair amount of discretion. This is important because circumstances change and needs for money can change too. If you Google "trust HEMS standard" you will get a lot of stuff to read.

She and the bank got sued several times (four IIRC) during her career, but IIRC it was mostly cases where the beneficiaries were trying to break the trust by claiming that the grantor was not competent to sign, undue influence by someone, etc. Or sometimes a beneficiary wanted money from the trust that violated the rules set down by the grantor. The bank won 100% of the cases and, as you point out, the trust paid the legal bills.

 

[rodi]

We have minor age children (high schoolers). We set it so that 1/3 of their inheritance is issued at age 25, another 3rd at age 30, and the balance at age 35... Prior to 25 the funds are used for college, and room/board. A trusted family member is in charge of both raising them (guardian) and doling out the money.

We may change it later... but neither of us wanted them getting a lump sum at a very young age... At ages 14 and 16.... we have time to redo the trust if nothing happens to us and they grow into responsible adults.... but for now, we've got a trust set up for our current situation.

 

[OldShooter]

... We may change it later. ...

Yup. That's the nature of estate plans. Things change, so every few years you have to write another check to the attorney.

Another small thing: Our attorney is quite a bit younger than we are, so odds are that she will still be around to help explain and manage the estate when the time comes.

 

[Car-Guy]

Another small thing: Our attorney is quite a bit younger than we are, so odds are that she will still be around to help explain and manage the estate when the time comes.

Actually that can be a pretty big thing. Many in our family used the same estate planning attorney back in the 80's and 90's. He was still practicing when the DW's mom and dad passed away and the probate process was super easy. However, when my mom and dad passed on, the attorney had retired (actually he had passed away too) It was much more of a time consuming and PIA to deal with the probate process with different lawyers that didn't know us and who didn't write up the original wills. Not sure how to avoid that since even lawyers die and or retire at some point. But having gone thru the process with both the original lawyer and a new lawyer, it is no contest. (No pun intended)

 

[aja8888]

How do people keep these things a secret? Were you living in a trailer park? Were your parents wringing their hands when the electric bill came? Poor people feed their kids first, then grab the pan and a slice of white bread and wipe the pan clean and eat the bread. When college came and you filled out the financial aid forms did they forge their assets?

Then to add insult to injury you bought a Porsche and thought your parents were poor? I see you didnt think of their well being very much, I hope they enjoy their money and leave you zero.
That might be their next secret surprise.

It's all about one's perceived definition of "poor".

 

[Blue Collar Guy]

We have minor age children (high schoolers). We set it so that 1/3 of their inheritance is issued at age 25, another 3rd at age 30, and the balance at age 35... Prior to 25 the funds are used for college, and room/board. A trusted family member is in charge of both raising them (guardian) and doling out the money.

We may change it later... but neither of us wanted them getting a lump sum at a very young age... At ages 14 and 16.... we have time to redo the trust if nothing happens to us and they grow into responsible adults.... but for now, we've got a trust set up for our current situation.

In a case like this, how does the guardian invest the money until the distributions happen?

 

[rodi]

In a case like this, how does the guardian invest the money until the distributions happen?

Good question. I've got a lazy portfolio - and written notes (intended for DH) on how to rebalance every year... But this relative uses Schwab's managed portfolio service... and so it would likely be dumped into that. The relative also handled elderly relatives' investments - and that's how it was done....

I'll be dead... so it will be up to the relative/guardian/trustee to manage it for the beneficiaries. Oh... and there are two back up guardian/trustee folks lined up also.

 

[RenoJay]

How do people keep these things a secret? Were you living in a trailer park? Were your parents wringing their hands when the electric bill came? Poor people feed their kids first, then grab the pan and a slice of white bread and wipe the pan clean and eat the bread. When college came and you filled out the financial aid forms did they forge their assets?

Then to add insult to injury you bought a Porsche and thought your parents were poor? I see you didnt think of their well being very much, I hope they enjoy their money and leave you zero.
That might be their next secret surprise.

I thought we were much more working-class than we were because my parents lived way below their means. But thanks for such a d-bag comment.

 

[Blue Collar Guy]

I thought we were much more working-class than we were because my parents lived way below their means. But thanks for such a d-bag comment.

Your very welcome, anytime.

 

[rodi]

I thought we were much more working-class than we were because my parents lived way below their means. But thanks for such a d-bag comment.

This was my upbringing also. I was convinced we were poor because money was carefully budgeted and there were few splurges. Hand me downs were the rule and fashionable clothes were self purchased with babysitting income. Later I learned my parents didn't like debt and we're aggressive savers.

 

[kcowan]

My Dad was the first in his family of 5 siblings to own a house, a cottage and a car. It was not until I talked him into applying for a means-tested scholarship at university that I realized we qualified!

 

[pj.mask]

I can definitely say we live less fancy than a friend who earns about 35% of what we do. Appearances can be deceiving. Although I guess we have a nanny and they have family/stay at home mom so that's about 18% of their salary - since we live on half it about makes sense.

 

[Souschef]

How do people keep these things a secret? Were you living in a trailer park?

Actually, we live in a very nice +55 mobile home park. Nobody knows what we have, but since we have 2 new cars in the driveway, they might have an inkling.
The thing they do not know is we paid cash for both cars. My DW's car is the first one she has owned in her life without payments
We still believe in LBYM