Need Annuity advice-brother is foolish with money

[Gumby]

Huh?

To clarify: If some stranger guy were taking advantage of your mother, talking her out of money and such, would you tolerate that? If some stranger guy received a large inheritance, spent it all and now wants to live with you and have you pay his bills, would you tolerate that? I think the answer would be NO in both cases. So why should you tolerate it because, by accident of birth, the guy happens to be your brother?

 

[Chuckanut]

It sounds to me that you are dealing with people called "Crazy Makers". That is they will drive you crazy by inflicting their problems and issues on you and then making you responsible for the results, especially if the results are bad.

Crazy Makers are people who create storm centers in their own lives and the lives of others. The book "The Artists Way " describes them very well, and that chapter is worth reading even if one has no interest in being an artist.

Crazymakers expect special treatment: They suffer a wide panoply of mysterious ailments that require care and attention whenever you have a deadline looming – or anything else that draws your attention from the crazymaker’s demands. The crazymaker cooks her own special meal in a house full of hungry children – and does nothing to feed the kids.

Crazymakers discount your reality: No matter how important your deadline or how critical your work trajectory at the moment, crazymakers will violate your needs. Crazymakers are the people who call you at midnight or 6:00am saying, “I know you asked me not to call you at this time, but…”

Crazymakers triangulate those they deal with: Because crazymakers thrive on energy (your energy), they set people against one another in order to maintain their own power position dead center.
Crazymakers are expert blamers: Nothing that goes wrong is ever their fault, and to hear them tell it, the fault is usually yours.

Crazymakers hate schedules – except their own: If you claim a certain block of time as your own, your crazymaker will find a way to fight you for that time, to mysteriously need things (meaning you) just when you need to be alone and focused on the task in hand.

https://marionann.wordpress.com/2015/05/18/the-artists-way-crazymaker/

 

[OldShooter]

I have a relative, getting a trust from dear dad, which is currently providing for him.
The relative has told me, as soon as dear dad dies, he is getting a lawyer to break the trust because "That money is mine".

Quite funny, actually.

Your relative is almost certain to lose, and as a special treat he will find that not only does he have to pay his own lawyer, the trust has paid for the trustee's lawyer.

DW has been thought a number of this type of action as a trust officer. They always fail, but she always feels bad at the amount of money wasted from the trust.

The courts know that trusts are created for a reason, generally the reason is to prevent the beneficiary from getting hold of the money. The courts will honor the wishes of the grantor unless exceptional circumstances arise, like provable incompetence. Any good attorney, though, will make sure that there is no question of competence -- even to the point of getting a contemporaneous medical opinion when the documents are signed.

DW and I were laughing a few weeks ago when she heard that a young acquaintance was planning the same sort of manuever at the urging of her Eddie Jones guy, who obviously wanted to get his mitts on the money. Too bad, really, because Eddie won't be paying a dime towards the legal bills on what is almost certainly an unsuccessful effort.

 

[TriumphTR3fan]

He never married, no savings, no pension. If he gets any money it is spent immediately on travel, etc. He has been enabled and the behavior is entrenched.

Our mom allows him to write checks on her account for health care, car insurance, etc.

There has been some great advice in this post but it has missed the most important part of the OP’s first comments. If broher #2 has the ability to access her accounts there is a major risk of financial abuse. While the mother may be in good health today, this can change subtly over a period of time. You migjt not notice anything until major damage has been done. Your mother needs the services of a good elder law attorney. It is a rapidly expanding area of the legal profession. An elder law attorney can save you a lot of grief. I saw this happen numerous times in my career.

 

[OldShooter]

... An elder law attorney can save you a lot of grief. I saw this happen numerous times in my career.

Yes. My wife, former SVP with megabank Trust, former Deputy Chair of our state's board on aging, and former delegate to the President's Conference on Aging, estimates that 80% of the elderly have been financially abused. Sometimes by caregivers but, often, by family.

 

[jim584672]

Why is he your problem? You are not responsible for his actions. If he goes broke just put him on ignore and be done with him.

 

[hesperus]

I have two brothers, age 66 and 68. The youngest can not manage money. He is currently temporarily living with our oldest brother and is self employed - his income is sporadic.

He has been enabled and the behavior is entrenched.

Your post is very revealing. By doing this for him, aren't you continuing the enabling behaviour? That's how enabling works - under the guise of 'helping'.

 

[pb4uski]

....I'm predicting brother will blow through the inheritance in less than five years and want to move in with me and we'll be stuck with his long term care.
DW already said heck no !
I am much younger, plan to ER in a few months, and supporting him isn't in our budget. .....

Oldest brother and I don't get along, he tends to disagree with any advice I give mom, so won't be an easy discussion. Oldest brother is executor and a family law attorney, he wrote her will. He does have a big heart towards #2 brother, they are very close, thus he is a big part of the enabling problem. ....

I would suggest that you have a discreet discussion with oldest brother about your concerns about brother #2 blowing through his inheritance and that you will not support brother #2 in any way, shape or form if that happens.... that you don't think it is reasonable for someone to have to support a 66 yo sibling that inherits $1 million and blows through it. But rather than making any suggestions on how to address the problem, ask oldest brother how he would suggest that the problem be addressed since he is a family law attorney (and executor).... put the monkey on his back..... and see what he has to say.

Even if he has no response and does nothing, at the least you have made your intentions clear so if it comes to pass and you do what you say then it will not be a surprise to anyone. The fact that you and brothers do not get along well will make it easier. To be honest, if brother #2 ends up homeless given the advantages that he had it would not bother me one iota.

 

[Nemo2]

Why is he your problem? You are not responsible for his actions. If he goes broke just put him on ignore and be done with him.

Have to agree...cut him loose.....if a drowning man cooperates, you can pull him to shore, but if he grabs hold of you and fights, he can pull you under and you'll both drown.

 

[Brat]

Mother could create a trust for each of her sons, make the terms of each trust confidential. Treat them the same. One is a spendthrift trust, the two others with language appropriate for each. In that way each heir could tell the other "Ya, my inheritance is in a trust too." If the other brother talks about the terms of his trust shame on him. Perhaps direct the trust to invest in something like Wellington, disburse dividends each year for the next 10 years, if heir dies before exhaustion of the trust disburse per stirpes. Don't give any son the option of changing the trusts. My mother put language in her will that said that if any heir challenged it they lost their share of the inheritance.

DO NOT PERMIT THE LAWYER SON TO BE INVOLVED IN THE WRITING OF THE WILL. MOTHER NEEDS HER OWN ATTORNEY.

 

[Aerides]

After your mom passes and you receive your portion, move.

Change your names if needed, but put both brothers in the rear view mirror. You already don't get along with them. You can assume that your mom will not set up anything, and that even if she does, the others will find a way around it. Cut them both loose before that happens.

 

[Chuckanut]

DO NOT PERMIT THE LAWYER SON TO BE INVOLVED IN THE WRITING OF THE WILL. MOTHER NEEDS HER OWN ATTORNEY.

FWIW to this non lawyer, that would seem to be a huge conflict of interest and good grounds to contest the will.

 

[Calico]

It sounds to me that you are dealing with people called "Crazy Makers". That is they will drive you crazy by inflicting their problems and issues on you and then making you responsible for the results, especially if the results are bad.

Crazy Makers are people who create storm centers in their own lives and the lives of others. The book "The Artists Way " describes them very well, and that chapter is worth reading even if one has no interest in being an artist.

https://marionann.wordpress.com/2015/05/18/the-artists-way-crazymaker/

Huh. I always said Someone should write a book about my family. Looks like Someone finally did.

 

[ERD50]

Originally Posted by Brat View Post

DO NOT PERMIT THE LAWYER SON TO BE INVOLVED IN THE WRITING OF THE WILL. MOTHER NEEDS HER OWN ATTORNEY.

FWIW to this non lawyer, that would seem to be a huge conflict of interest and good grounds to contest the will.

Yes, this is kinda scary. Looks like it has already happened. Considering what OP said:

.. Oldest brother and I don't get along, he tends to disagree with any advice I give mom, so won't be an easy discussion. Oldest brother is executor and a family law attorney, he wrote her will. ...

With that relationship, who knows? The lawyer brother could pull out a (legitimate) Will that no one else has seen before. Could be anything, leaving OP out entirely?

This is a clear conflict of interest, I wonder if the Bar Association would have anything to say about it? Regardless, it doesn't look good, and even the appearance of the opportunity for conflict should be avoided in touchy situations like this.

-ERD50

 

[Ready]

To clarify: If some stranger guy were taking advantage of your mother, talking her out of money and such, would you tolerate that? If some stranger guy received a large inheritance, spent it all and now wants to live with you and have you pay his bills, would you tolerate that? I think the answer would be NO in both cases. So why should you tolerate it because, by accident of birth, the guy happens to be your brother?

I agree with your sentiments Gumby. And I've been telling my sister that for years now. At some point when she runs out of money and becomes homeless unless I help her, I guess I'll find out if I really feel this way.

 

[harley]

I agree with your sentiments Gumby. And I've been telling my sister that for years now. At some point when she runs out of money and becomes homeless unless I help her, I guess I'll find out if I really feel this way.

Once again, it's not a binary option, frugal or homeless. I know plenty of people who don't seem to have two nickels to rub together, but they manage to have a place to live and food to eat. Yes, they might have problems paying for some things that I would consider needs (meds, health care, etc.), but they aren't homeless. Homelessness usually comes with some other condition besides profligacy, like significant mental illness or a major cocaine addiction, something like that. Bankruptcy, foolish spending, and the like can land you in a crappy living situation, but doesn't usually put you out on the street.

 

[ivinsfan]

Once again, it's not a binary option, frugal or homeless. I know plenty of people who don't seem to have two nickels to rub together, but they manage to have a place to live and food to eat. Yes, they might have problems paying for some things that I would consider needs (meds, health care, etc.), but they aren't homeless. Homelessness usually comes with some other condition besides profligacy, like significant mental illness or a major cocaine addiction, something like that. Bankruptcy, foolish spending, and the like can land you in a crappy living situation, but doesn't usually put you out on the street.

Agree completely and I think the OP is jumping to a lot of conclusions..MY naïve pretty 17 year old niece and her friend, wanted to go down to the waterfront in their local town and hand out goody bags,sandwiches and candy to the street people. I gently suggested to her that lots of street people have either drug problems or mental health problems and that her time might be better and more safely spent working with and volunteering with a legit homeless shelter. She sneeringly told me that was BS, and that some of these people were homeless because they had missed just one or two house payments. She said that was all it took to turn into a street person. I told her oh honey, that's not even close to reality......

 

[braumeister]

Once again, it's not a binary option, frugal or homeless. I know plenty of people who don't seem to have two nickels to rub together, but they manage to have a place to live and food to eat.

A very valid point.
My relative lives in a manner I would never consider reasonable because he has steadfastly refused all advice for decades. But he is actually happy with his lifestyle because he lives it entirely on his own terms without interference. To each his own.

 

[rayinpenn]

Convince mom to set up the trust...
If your brother gets po’d who cares he either gets over it or he won’t.

 

[dd564]

I have siblings and I give some free advice. They seem to think I know what I am talking about but they all do what they want anyway.

He's not going to listen to whatever you suggest, so if you decide you care enough, I guess the one out of the box solution you could do is fork over the money for an annuity in his name to cover minimal living expenses and gift it to him.

 

[pb4uski]

and then he would sell the annuity cash flows to some on-tv-at-night outfit and blow the proceeds and you would have accomplished nothing other than flushing money down the toilet.

 

[ScottS]

I have siblings and I give some free advice. They seem to think I know what I am talking about but they all do what they want anyway.

He's not going to listen to whatever you suggest, so if you decide you care enough, I guess the one out of the box solution you could do is fork over the money for an annuity in his name to cover minimal living expenses and gift it to him.

That has been suggested. The main concern that others have brought up is that if the annuity is in his name he could simply sell it for cash - think "J. G. Wentworth".

The primary problem is that the OP (youngest brother) wants to guarantee some financial safety in the older brother's life, but the older brother's lifestyle of past spending makes this unlikely. He is concerned that any attempt will be resented by the older brother, and that the oldest brother who has enabled the middle brother in the past will continue to do so.

It's the classic "how do you help someone who doesn't want to help themselves?" Almost anything one would suggest that is practical and reasonable will probably be resented, as this doesn't fit in with the way the other person lives and what he/she considers important in their life. Yet the same individual will, when the support for their lifestyle and choices is exhausted, come to you for support because "you are family."

If you say no, the other will feel resentful towards you. If you say yes, you will feel resentful towards yourself and the other because you know that this person is where they are because of the hard choices they didn't want to make.

An "enabled" individual is almost like someone with a addiction - that person is not likely to change until in a situation where change is the only alternative. The youngest brother realizes this and doesn't want to be in the position of being an enabler, as he has already seen the results.

Family stuff can ge tough!

 

[OldShooter]

... The main concern that others have brought up is that if the annuity is in his name he could simply sell it for cash. ...

I disagree with "others." I think the main concern should be the inflexibility of an annuity. With a trust and a HEMS directive, the trustee can react to circumstances like a terminal illness, a need to buy a car, need for home care due to injury or illness, any one of hundreds of other things that could change in brother's life. The trust can also control what happens to the trust assets upon brother's death.

Just as an example, our trust documents for our sons include HEMS language but also say: "It is not our intention that our son will be able to stop working prior to his normal retirement age."

OP's mother could direct something like: "The trustee is directed to give high priority to preservation of capital to ensure that the trust will not be exhausted prior to my son's death." Just riffing here, IANAL, but compared to trusts an annuity is a really dumb and inflexible robot, unsuited to the unpredictability of life.

IMO anyway.

 

[ScottS]

Agreed.
I was simply addressing the previous poster's comment about an annuity.

I believe anything that the mother should strive to do in this case if her desire is to truly HELP the brother with an inheritance is to set up the way he recieves it to be in such a way that it will support him in a reasonable manner for as long as the funds may last.
It will likely not be what he may want, and he may never come to appreciate that it was done out of a mother's love for her child.
The mother is concerned because she cares.
The oldest brother has enabled because he cares.
And the OP is trying to figure out the best way to help in this situation because he cares.

 

[ivinsfan]

The different perspectives are insightful , reading your replies helps. I appreciate each of you.

Mom and I talked last night, she accepts she enabled his behaviors & resulting mess. She wants to fix it and trusts me with financial advice.

Thank you ERD50, I did not know a fixed annuity could be sold for a lump sum. I predict that would be the outcome ( curses on JG Wentworth!).
As CaptTom said, brother #2 already has the money mentally spent, he will use all his energy and talent to get the full annuity sum immediately. That was so obvious but I hadn't yet considered that outcome.

I'm following up on MarieIG's and OldShooter's advice, a HEMS trust may be the solution. I will start researching and discussing with the attorney we use.

My relationship with brothers is already strained, we are civil to each other at family events once or twice a year. That is the only time we speak.
I don't hate my brothers, but they are narcissistic and rude, not people I want to associate with, so I minimize contact with them.

However Brother #2 will most likely be a homeless street person if Brother #1 dies first. That outcome would definitely haunt my conscience, which will prevent me from completely abandoning him.
My good wife has already made it clear we scrimped, did without living very modestly, saved & invested for 35 years building a retirement nest egg while Brother #2 goofed off and travelled. She will not agree to support him one cent- I understand and will support her.

Thus my desire to resolve while mom mentally can, even if that hurts Brother #2's pride.

Thanks!

Well in another thread you talk about how on the ball your Mom is, she tracks her finances and she speaks to her FA monthly. I have to think if she wanted another way to deal with your brother she would find it on her own. Are you sure she's just not telling you what she thinks you want to hear? This really isn't any of your business at this point and no good can come of it. Trust your Mom to do things the way she wants to, even if it doesn't agree with your ideas. You seem to have contempt toward both your brothers, since your DW doesn't want you to fund spendthrift brother I suggest you start finding a way to not give a rip. I think you are on the path to borrowing trouble and most of us have enough without borrowing other peoples issues. If I was your sib and I was told you wanted my share of the money put in trust because you don't want to support me when I'm a homeless bum, I'd tell you to get off your high horse and take a hike.