Incentive Trusts - your thoughts?

[rayinpenn]

I like the idea of a living trust for him... Only the trusts earnings go to him. When the time comes you'll have to learn to hang up on him... Sorry you'll have guilt but better to deal with a little guilt then let his negativity affect you as it clearly has.

You can't live his life for him and you aren't his mom. I am often amazed at the number of enablers and leeches there are in this world... Rarely do they change.

Incentive trust - sounds like a very bad idea.


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[haha]

This would be a guarantee of lawsuits and strife forever. Let your mother leave him his share if she won't just cut him off. He can't harass you if you are clear that you want nothing to do with him. There are all kinds of laws against this kind of thing. He also can't harass you much if he is in jail.

So what if he has no money once he blows through his inheritance? At least you cannot be blamed. Recently I have started attending a 55+ coffee hour. Astonishing numbers of these fully acceptable looking and talking people are on some kind of dole, and I am not including the ER's favorite dole, ACA. Section 8 vouchers, gas bill discounts, on and on. In many ways if you cannot be well off, you might as well just have fun and let the Great Society step in to care for you. No more stressing about SWRs!

Your brother is a lost cause. Many of us have family difficulties, just wall it off like the lung sometimes walls off tubercular infections and enjoy life without him. In America, he will never starve.

Ha

[racy]

Sounds to me like 'odd one' has a mental illness, specifically a Delusional Disorder called Persecutory Type.

[Htown Harry]

I too see potential problems in the implementation of the good behavior trust. It could result in three perceived grievances: the old business deal, the siblings' setting up mom to write an unequal distribution and actions the siblings take to trigger a distribution penalty.

ERD, you mentioned OO has a daughter. It's a longshot, but I'm wondering if there there any options available for her involvement in managing her father's finances and behavior after after the grandmother passes.

[ERD50]

I'll reply to the earlier responses in more detail later, but let me get back to these recent ones and try to clear up a few things:

Quote:

Originally Posted by Shanky Wouldn't it be easier and less painful in the long run to pay him the specific amount he feels he is owed? ...

Seems reasonable - however, you don't know the OO. Reason has nothing to do with it, he definitely will just jump from one imagined 'injustice' to another. He has already shown that. When one avenue finally hits a dead end, there is a redirect to an equally ludicrous claim. Paying him off would just embolden him, and provide positive feedback. He'd blow it, and be looking for more in no time.

Quote:

Originally Posted by jon-nyc If you intend to arrange the trust such that it pays or not based solely on the word of the other siblings, you'd be better off making the siblings the trustees. After all, either way he'd know that it was ultimately your call whether he gets paid, the bank isn't really offering deniability, just expense and complication. Also it would be a lot cleaner to just withhold payment rather than paying a charity, especially one not spelled out in the trust.

I don't see it this way - the idea is for Mom to add the incentive clause to the trust, with an arbitrator to make the call on what constitutes 'harassment'. It would not be solely on our word, we'd need to provide proof. The easiest thing for him to do is just stay out of our hair. That's all we want.

Quote:

Originally Posted by LARS As others have alluded to, I suspect you create more ill-will by having mother handle OO's inheritance different from other siblings. ....

That trust has been in place a very long time, I know he is aware of it and the reasons (he can't handle a debit card or checking account, not because he is stupid, he just ... I don't know, he can't handle money). I don't think he has any big issue with the trust itself (as it is now), if he is getting $ every quarter, I think he'll be OK with that.

I get your point, but I don;t think there is any need to get every son's inheritance in a trust, he's different, and he knows it. He's the only one w/o his own home, money in the bank, etc.

Quote:

... And there is the rub. Are you (and other siblings) prepared to turn your back on OO if he burns through all his money irresponsibly? ...

Sad to say, yes. He has driven us to this. He's had every benefit my Mom and Dad could give him over the years, and he threw it away, or just sucked it up w/o lifting a finger to help. Example: my Dad helped get a business set up for him, he appeared to be successful for a few years, and was able to buy a fairly nice house on 5 acres. A few years in, I think he just realized he didn't want to work this hard for 20-30 years, so he 'dropped out'. The bank was in the process of repossessing the house, my folks bought the house, and ended up letting him live there, no rent, nothing for many years (and then he moved in with my Mom, making things worse). The kicker was, years later, he's still not working, living in that house rent free, and my Mom paid someone to come and paint the house! Why couldn't he at least maintain his free house? And he trashed it inside.

So yes, my two other siblings have said they don't care if he blows it, his problem. At this point, I only care because he will come to us for help. He's had his help. But the inheritance really should keep him out of poverty, maybe just barely, but that's his problem. Maybe if he didn't attack us for decades, I could have a bit more sympathy, but that's gone. One of his most recent actions, while my Mom was recovering from open heart surgery sealed the deal. He pulled something so unsettling and self-centered, and upsetting my Mom in the process (though the way he told it, the other brothers were the 'problem'), I thought it was beneath even anything he could think of. He will do anything to try to feel he is above everyone else. He's always telling us we are not 'Good Christians', so we can't possibly understand him. Hiding behind religion is one of my hot-hot buttons.

Quote:

Originally Posted by rayinpenn I like the idea of a living trust for him... Only the trusts earnings go to him. When the time comes you'll have to learn to hang up on him... Sorry you'll have guilt but better to deal with a little guilt then let his negativity affect you as it clearly has. You can't live his life for him and you aren't his mom. ... Incentive trust - sounds like a very bad idea.

I guess I don't understand why you say it's a bad idea?

We have no guilt whatsoever about only the earnings from the trust going to him. He doesn't deserve a penny anyhow, the earnings are gravy.

I know we can't live his life for him - we aren't trying to - the only thing we are trying to control is for him to take that money and just leave us alone. No confrontations. He can do what he wants with the payments.

The posts saying leave this to a restraining order - I think that is a long, complex, and mostly ineffective process. My brother did look into it at one point when his business was being harassed. It gets messy, and time consuming. Plus, he will just shift from one of us to another. How many RO will we need to get?

My hope is (and maybe it can't really be done), is that an "Incentive Clause" that says just
no communication, no harassment of any kind (determined by the trustee-bank, or arbitrator deciding for the trustee-bank, after seeing evidence), or he loses that year's payment. We would hope the threat alone would be enough to just shut him up and move on to some other scam unrelated to us.

The bar could be low - he has no reason to contact us at all, we want nothing to do with him. So just stay away.

Quote:

... I am often amazed at the number of enablers and leeches there are in this world... Rarely do they change. ...

You can say that again! Every single person in my parent's life (us sons, other family, friends, ministers, counselors...) has told them that they need to stop coddling the OO, and let him learn to be responsible for himself. But the 'mothering' instinct is strong, and I guess they just couldn't do "tough love". "Enabler" is exactly right, I was even in some counseling sessions with my Mom to try to work through this, and the counselor was referring to personality dependency issues. I wasn't really getting what he was talking about, but I think he was alluding to 'battered wife syndrome', where my Mom is similar to the battered wife, with the OO being the abuser (not physical). And just like the battered wife is always thinking/hoping the abuser will change, I think my Mom hopes beyond hope that he will change. Not while you keep enabling him, he won't!

I honestly thought, some 25 years ago, that the OO had a terminal disease, and Mom & Dad were babying him because he only had a year to live or something. That would have at least been a reasonable explanation. But all these years later, I don't think he's spent a day in the hospital.

Thanks again to all. I realize my responses might be coming across like those who are looking for confirmation rather than advice, but I am listening! Some excellent responses, please keep them coming! ( a few more came in as I typed, I'll need to get back to those later)

-ERD50

[MooreBonds]

Quote:

Originally Posted by ERD50 I guess the X years certain would help with that. After all, I doubt that his daughter is expecting any inheritance from her Dad long term (she can see he's a dead-beat), so maybe an X years certain annuity could work. I just wouldn't want to see her left out, though we could throw her some support from whatever we get - we really don't need it. The other thing that I think some posters are missing - and I'll take the blame for that with such a long entry post - is it isn't an issue of him contesting the will or my Mom's trust (they have no-contest clauses), or his trust (he's the sole beneficiary, nothing really to contest, other than the fact that the bank determines the quarterly payments, but I think even he understands the reason for that - to keep him from blowing it). It's a longer term issue.

I understand that the two issues are somewhat 'unrelated'...but if you and your siblings' attempts to set the record straight on OO selling the business and it flourishing AFTER he sold it, so far have not sunk in - your mother passing on will not instantly solve any of that. And imagine if his ENTIRE YEAR'S worth of payments have been diverted to some unnamed charity - now THAT would be a certain 'unjustice' in his eyes that is undeniable (I'm not saying it's not justified, just that it's in black and white numbers that is known and not subject to personal views). Imagine how much he would hound you all and wail and gnash his teeth over an entire year's worth of living expenses taken away from him. He would be knocking on your door every day to complain!

ESPECIALLY because, after that, what has he got to lose for the rest of the year? He might as well give you all hell 10x over EVERY DAY for screwing him out of an entire year's worth of support.

I just don't see the bank wanting to get involved in a highly subjective LEGAL matter. Bank trust departments aren't in the business of legal matters, they are in the business of overseeing trust assets and distributions to people according to your mother's wishes. I'm willing to bet that if you presented your original proposed arrangement to a bank trust dept of them deciding when to send out a check, they would say " Give us the name of your family lawyer, and the family lawyer (outside neutral 3rd party) can be listed in the estate as the deciding judge on when the inheritance checks are given to OO". THAT is probably the only way a bank trust dept would agree to it, since it's all in the lawyer's hands to decide if the OO violated the terms of the trust.

And, as you can see instantly, THAT arrangement would involve legal fees at $250/hr every year. Probably $15,000/year in fees+, especially if OO files any sort of lawsuit, given all of the constant phone calling and bickering and other issues OO would undoubtedly engage in. Because there's no way you could keep OO from CONSTANTLY calling the lawyer. And I'm sure the lawyer would be happy to talk all day and night with OO while he is on the clock.

As another poster asked, just how much is OO thinking he is "owed"? On the order of $100k? Or is it $1MM or $2MM? If it's on the order of $100k or even $250k, can you just let mom leave him that much more to shut him up once and for all? Maybe even have mom written in her estate that the estate trustee will only give OO a check for $250k from her estate if he signs a memorandum that he will cease and desist all harassment of you and your siblings about past business in order to get the extra $250k. If he doesn't cease after the payment, then he will be hit with restraining orders and all contact will be forever cutoff.

What kind of harassment has he unleashed on you? Just phone calls every few weeks? Showing up at your house during the weekend to complain? Seeing you around town? How frequent is it and how in-depth?

Or how about this: What if you and siblings agree to cut checks to OO every year, starting after mother's passing, for $X from each sibling, with the clear understanding in writing that if OO says NOTHING about the business for the next 12 months, then he will continue to get $X each year from all siblings, and it repeats (if he then says nothing for months 13-24, he gets another stipend, and same for months 25-36, etc.)

If he harasses any of you (and you must, in writing, define what constitutes "harassment"), then he will not get his annual stipend next year from that sibling.

[ERD50]

OK, I'll try to do a quick reply on these points for now:

Quote:

Originally Posted by Htown Harry ... ERD, you mentioned OO has a daughter. It's a longshot, but I'm wondering if there there any options available for her involvement in managing her father's finances and behavior after after the grandmother passes.

This is something to think about. Off hand, I'm not sure we want to burden her with this, but maybe something is workable. As I mentioned, she seems fairly level headed at this point. We've been estranged from her to a point, due to the conflicts with her father, but we are on good terms with her. I have thought that it might be nice to have a little family meeting with her (w/o her dad, the OO), just to get everything out there, and to let her know we are there for her. I think she has a pretty good grasp of the situation, I don't think there would be any big surprises for her (she may not know the full depth of his actions) but I think a talk would help.

Something to think about, an angle I hadn't really considered. Thanks.

Quote:

Originally Posted by racy Sounds to me like 'odd one' has a mental illness, specifically a Delusional Disorder called Persecutory Type.

Yes, his actions really are on the level of some sort of mental disorder, and the one brother (who is out of state, so a little more isolated from this) keeps bringing that up. Delusional and Persecutory are certainly words I would use to describe him. Of course, I'm no mental health professional, and these things are not black/white, they are on a scale. But I will say, when I was in some family counseling sessions with OO (though he dropped out after 2 or 3) and my Mom, the professional counselor was not going down the mental illness path. The counselor really focused on the enabling, and that OO was just taking the easy way out because he could. I would think these counselors would be trained to look for that.

But it's certainly a possibility. Not sure what to do about it though. My feeling is, he is just too crafty, and is able to control himself when it benefits him (like the few times my Mom has actually worked up the courage to draw a line on something, or threaten to take him out of the will). I'm thinking true mentall illness would mean he couldn't control himself in those situation, the illness would over ride it. But I don't know.

-ERD50

[Dash man]

I think you need to get an attorney involved with this. He might have some insights on how to set things up so your family can be left in peace.

[CaliforniaMan]

Quote:

Originally Posted by Dash man I think you need to get an attorney involved with this. He might have some insights on how to set things up so your family can be left in peace.

I have read through this entire thread to this point but don't have a clue as to what to suggest. However, this must not be an unusual problem for families, and there must be some lawyers that handle this kind of matter on a regular basis. It will cost some money, but from the sound of the magnitude of the problems it will be worth it.

If I were you I would talk with the other siblings and find an attorney experienced with handling this kind of thing.

Sorry for your problems.

[MooreBonds]

Quote:

Originally Posted by ERD50 But it's certainly a possibility. Not sure what to do about it though. My feeling is, he is just too crafty, and is able to control himself when it benefits him (like the few times my Mom has actually worked up the courage to draw a line on something, or threaten to take him out of the will). I'm thinking true mentall illness would mean he couldn't control himself in those situation, the illness would over ride it. But I don't know. -ERD50

Don't confuse "mental disorder" with "non-functioning". While some mental disorders such as schizophrenia can leave someone in a 'less-than-functioning' state (like wandering around, talking to imaginary people, and/or multiple personalities), there are some mental disorders which can be found in functioning people. It just means that the mental disorder compels them to do certain things or act in a certain way (like certain manipulative ways) or it filters how they see scenarios or the world (like OO convinced that your sibling should pay him more for a successful business that he sold). It doesn't always mean the mental disorder renders them unable to lead somewhat productive lives.

Talk with many people with mental disorders, and 90%-95% of the time, they appear no different than any other person. But in those certain situations, their mental disorder compels them to act in certain ways that are not based on facts or the world around them, or in some other distorted way.

[ERD50]

Quote:

Originally Posted by Dash man I think you need to get an attorney involved with this. He might have some insights on how to set things up so your family can be left in peace.

We definitely will need an attorney to draft up this, and for suggestions on how (if) it can be made workable. I'm throwing it out here to get some ideas to prepare for such a meeting, and for alternatives.

Thanks! - ERD50

[akck]

I think the only thing a bank might find acceptable is a no contact clause. It is something relatively easily provable with phone call records, phone video recordings, etc. The only thing the rest of the family needs to do is to follow it too. You'll be cutting all ties with him and likely his daughter. It's not totally foolproof, but it's likely your best option.


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[Closet_Gamer]

OP -

I wouldn't conflate the behavior issue with the trust/inheritance issue. Using your Mom's money to try to control your sibling forever just sounds like a really bad plan. In fact, I would just let the money be discharged to each family member in the same way and drive on with life.

To others posts, you can't control your sibling but you can control yourself. Don't enable your sibling --even trying to set up an annuity is a form of taking responsibility for their issues -- and be prepared to always be the adult. If it comes to 911/restraining orders, so be it. Remember that "get the hell off of my property" is a legitimate reason to dial 911 and will establish a legal trail for enforcement of a restraining order.

I've seen these situations in my extended family. Very sad but also really unsolvable.

Keep it crisp and clean. Minimize future interaction rather than creating a vehicle that encourages it.

My $0.02.

[pb4uski]

One alternative might be for your Mom to build what is effectively a restraining order into the trust so you never have to deal with your wacko sibling. Or move.

I feel blessed that our siblings on both sides all get along for the most part and we don't have to deal with crap like this.

[Badger]

Quote:

Originally Posted by krotoole OP - I wouldn't conflate the behavior issue with the trust/inheritance issue. Using your Mom's money to try to control your sibling forever just sounds like a really bad plan. In fact, I would just let the money be discharged to each family member in the same way and drive on with life. To others posts, you can't control your sibling but you can control yourself. Don't enable your sibling --even trying to set up an annuity is a form of taking responsibility for their issues -- and be prepared to always be the adult. If it comes to 911/restraining orders, so be it. Remember that "get the hell off of my property" is a legitimate reason to dial 911 and will establish a legal trail for enforcement of a restraining order. I've seen these situations in my extended family. Very sad but also really unsolvable. Keep it crisp and clean. Minimize future interaction rather than creating a vehicle that encourages it. My $0.02.

As I was getting to the end of the posts I was formulating essentially the same as the post above. Anything involving modifying the inheritance to address the behavior of OO approaches enabling him further and risks future confrontations. It may be past time to cut all family ties with him and make it clear (document) that any further contact will result in legal enforcement.

I have a brother who abused his role as POA when Mom was unable to take care of her finances. He started distributing her money to his family and friends against her and Dad's verbal and written instructions. It took a lawyer to force him to return her money. Mom kept telling me he was stealing her money and I didn't believe it at first. Mom died 6 years ago and my sister and I have not been in contact with him since. Sometimes you just have to let go.

Cheers!

[rodi]

Quote:

Originally Posted by ERD50 So the real question is - how do we protect ourselves from his harassment down the line - after the will/trust is settled and closed, for issues outside the will/trust, and our Mom is no longer there to reign him in with threats of cutting him from the will?

You state that the issue is not the will/trust, it's separate from the will/trust... but you are trying to do a will/trust from your mother to solve these other issues.

I don't think anything from your mom's will/trust will solve this issue. The issue with your OO is one that will not go away with an incentive trust.

We have a family member that is somewhat similar: No good with money, takes advantage of his mother, has mental health issues. Now that DH is his mother's legal guardian - he's the one dealing with money requests, and the anger when it's not a "yes". I understand some of the issues dealing with a problem sibling. (In my case, an in law, but still impacting our lives.) I would not think of trying to control his behavior towards his sibling through his mother's will - it's a separate issue.

[W2R]

Quote:

Originally Posted by robertf57 OP, Sorry but you are just creating a new cause for harassment by all these ideas of incentives and arbitration, etc. The inheritance and the old grudge are two separate things. I would recommend keeping them separate. If OO comes harassing the family members over his perceived slight, get a restraining order and have nothing to do with him. It really is the only thing you an do.

+1

I agree with robertf57 and think this might be the best approach.

ERD50, your family situation sounds really tough, and I am sorry that you and your siblings are going through this. Hopefully after your mother passes away, it will be easier to keep some space between you and OO. When she is gone, it is possible that the family dynamics may shift somewhat. In any event, good luck to you in dealing with all of this.

[yakers]

IIRC you live in Northern Illinois, if harrassment gets bad, don't you have a friend who has a cousin in Chicago called Guido that will have a 'talk' with him

[Lucantes]

Quote:

Originally Posted by robertf57 OP, Sorry but you are just creating a new cause for harassment by all these ideas of incentives and arbitration, etc. The inheritance and the old grudge are two separate things. I would recommend keeping them separate. If OO comes harassing the family members over his perceived slight, get a restraining order and have nothing to do with him. It really is the only thing you an do.

+1

[Lucantes]

Quote:

Originally Posted by krotoole OP - I wouldn't conflate the behavior issue with the trust/inheritance issue. Using your Mom's money to try to control your sibling forever just sounds like a really bad plan. In fact, I would just let the money be discharged to each family member in the same way and drive on with life. To others posts, you can't control your sibling but you can control yourself. Don't enable your sibling --even trying to set up an annuity is a form of taking responsibility for their issues -- and be prepared to always be the adult. If it comes to 911/restraining orders, so be it. Remember that "get the hell off of my property" is a legitimate reason to dial 911 and will establish a legal trail for enforcement of a restraining order. I've seen these situations in my extended family. Very sad but also really unsolvable. Keep it crisp and clean. Minimize future interaction rather than creating a vehicle that encourages it. My $0.02.

+1