Who should I consult regarding how to leave (divide up) the assets to my wife plus a

[Disappointed]

The situation is that I want to prepare and figure out in advance who should be getting what should I go before my wife. I do not want to leave her with this burden.

Pretty straight forward, 25% is in IRA, 75% is in after tax brokerage account.

I would like to see my wife, my niece, and my nephew, each ends up with one third of the assets.

We currently do not have a trust or a will. The assets are jointly owned, husband and wife, with transfer on death to my niece and nephew 50/50.

Would a CPA be the best choice or an estate attorney?

[skipro33]

I would recommend an estate planning attorney. Mine did an excellent job, setting up things I didn't even know could be set up.

For example; lets say Nephew is under age, or still in school. A lump sum could get him in trouble with drugs perhaps or maybe dropping out of school to blow it all. It can be tied as an annual payment, based on his grades and police record. Or say he's of age and decides to quit his job and blow it. You could tie it into his wages, maybe dollar for dollar. Then, after a period of time, if he's performed as stipulated in your will, receive the rest as lump sum at a future date.

There a million or more scenarios that could play out. You can make any and all conditions you choose with your money when it comes to inheritance. A well seasoned Estate attorney will know how to interview you to find out what your wishes really are and how to word the documents to make it air-tight. In today's legal world, a comma or period could change the whole meaning under the law.

[RobbieB]

I think you are good to go as it is.

If you die first your wife is fine (joint) and when she dies, the niece and nephew split the dough.

[RE2Boys]

Quote:

Originally Posted by RobbieB I think you are good to go as it is. If you die first your wife is fine (joint) and when she dies, the niece and nephew split the dough.

Unless his widow decides to change the beneficiary designation, or remarries, or gamble it away.

[Just_Steve]

So the assets are "Jointly owned" which means she owns 50% of the assets. But if you go first you want to reduce her 50% to 33%, how very nice of you. How does she feel about taking such a haircut for her old age?

[pb4uski]

Quote:

Originally Posted by Just_Steve .....How does she feel about taking such a haircut for her old age?

Disappointed.

[Just_Steve]

Quote:

Originally Posted by pb4uski Disappointed.

To say the least.

Edit to say: I got your joke, took a min.

[RobbieB]

If you don't trust your wife you should get a divorce.

[Disappointed]

Just_Steve, good point, but there is plenty, we both are 63, the 33% is more than she will ever need.
I am trying to figure out that we should start withdrawing from my IRA and minimize/manage the taxes. Both my niece and my nephew make pretty good money and if they have to take mandatory distribution they will get killed with taxes.
I really want my wife to get the after tax part of the assets so there will be no taxes. We currently live off the after tax money, may not be the best strategy anymore.

[2017ish]

Quote:

Originally Posted by Disappointed Just_Steve, good point, but there is plenty, we both are 63, the 33% is more than she will ever need. I am trying to figure out that we should start withdrawing from my IRA and minimize/manage the taxes. Both my niece and my nephew make pretty good money and if they have to take mandatory distribution they will get killed with taxes. I really want my wife to get the after tax part of the assets so there will be no taxes. We currently live off the after tax money, may not be the best strategy anymore.

Have you investigated roth conversions?

[Sunset]

Quote:

Originally Posted by Just_Steve So the assets are "Jointly owned" which means she owns 50% of the assets. But if you go first you want to reduce her 50% to 33%, how very nice of you. How does she feel about taking such a haircut for her old age?

Exactly my thoughts, how terrible for the wife.

OP - since the assets are jointly owned, they are also your Wife's, so why are you trying to steal from her via your death ?

To answer your question, on the account you simply do a TOD, ( Transfer on Death) and you state that 16.6 % goes to niece, and 16.6% goes to nephew and the remainder 66.8% goes to your Wife.

Possibly your wife will have to agree and this split is only "fair" if you contributed at least 50% of the joint money.

[Just_Steve]

Quote:

Originally Posted by Sunset Exactly my thoughts, how terrible for the wife. OP - since the assets are jointly owned, they are also your Wife's, so why are you trying to steal from her via your death ? To answer your question, on the account you simply do a TOD, ( Transfer on Death) and you state that 16.6 % goes to niece, and 16.6% goes to nephew and the remainder 66.8% goes to your Wife. Possibly your wife will have to agree and this split is only "fair" if you contributed at least 50% of the joint money.

Right, then when she goes she can leave it to the niece and nephew or maby the pool boy if she so desires.

[Sunset]

Quote:

Originally Posted by RobbieB I think you are good to go as it is. If you die first your wife is fine (joint) and when she dies, the niece and nephew split the dough.

Yes this is true, and has the benefit of leaving it all to the spouse first (because what if the spouse has a serious illness and needs intensive medical care for many years).

OP - What you have is fine, but if you change it as I early suggested, then are you totally fine with your niece and nephew getting a share of the loot if your wife dies first ? Leaving you with only 66.8%

[evilanne]

Although you currently have the bulk of your assets covered through beneficiary/TOD, I'd recommend that you get a will, although I'm not sure that you need anything too complicated. It really depends on the value of the estate and if it is above the threshold for having to pay estate taxes.

The following is what my Aunt & Uncle did (they had no children) and this was prior to the increase in the threshold for estate taxes in ~1989. Aunt wanted to ensure they left something to me and my sister (she didn't want Uncle to blow their nest-egg all on some floozie if she passed first, which she did). They set up a living trust, when one died, half of the assets excluding the house & personal items went into the irrevocable trust. The surviving spouse had half of the assets in their name and they could also draw from the earnings/distributions in the trust for living expenses. Upon the death of 2nd spouse, the trust account was set up as a conduit IRA & brokerage account that flowed directly to us. The IRAs were set up as stretch IRAs that required RMDs based on our ages, beginning year after death. The brokerage assets were at stepped up valued at the date of death. Everything worked very smoothly although I know my Uncle had to have some work done in setting up the irrevocable trust and had to file 2 separate tax returns each year.

I believe what you have will do basically the same thing (beneficiary & TOD flow outside of the estate) unless you want more control or restrictions on how the money flows to the beneficiaries as others mentioned above. You still need to have a will for everything other than the financial accounts.

[chris2008]

We have a similar 'no kids, only nephews and nieces' situation.
We will leave it all to each other so that the remaining partner can leave it to those neph/nices that have been most helpful in old age or to other persons. In case of passing at the same time or without newer will all will go to neph/nieces.

[FIRE'd@51]

Quote:

Originally Posted by Sunset To answer your question, on the account you simply do a TOD, ( Transfer on Death) and you state that 16.6 % goes to niece, and 16.6% goes to nephew and the remainder 66.8% goes to your Wife.

Not always quite that simple. For example, Vanguard does not allow TOD on JTWROS accounts, only on individual accounts.

[athena53]

You really need a will. I'm guessing that the attorney will tell you that you need a Revocable Living Trust, too (which gets him/her more revenue) but that's up to you. When I did mine, the attorney was very good at asking questions about various scenarios: if I died first, would DS and my brother (successor trustees) take good care of DH? Did DS and my brother get along well? A trust would give you the flexibility to specify how the $$ would be paid out to your niece and nephew. You do need to consider the possibility that your wife may need more $$ than you anticipate if she outlives you.

But, at the very least you need a will- the fees and bureaucracy involved if you don't have one can be a pain. The default laws in your state specifying how assets get distributed if there is no will may also not be what you want.

I'm not a lawyer but those are my thoughts.

[bingybear]

JTWROS should trump a TOD and will. At least that is the way I see it. TOD and JTWROS are conflicting requests. I don't expect a will is able to pull assets out of a JTWROS account when only one owner passes. Like TOD, JTWROS will happen before the will takes effect.

It is sounding like you must have significant assets. It may be better avoiding probate for both cost and the public nature of probate. It may be better to juggle some accounts so that TOD can be used.

For us, we keep things somewhat reciprocal. For us this has seemed the most fair. There could be reasons not to do that.

I would start with an estate lawyer as this should solve the problem identified in the OP. A CPA might be some help with tax effects, but a good estate lawyer should understand many of the basic tax issues. I would also be aware of potential tax law changes such as elimination of estate tax which is expected to eliminate the step up in basis. But these are just possibilities that could change estate plans.

[Disappointed]

Thanks all. There is no intention of taking away wife's portion of the assets. While I was the only earner of the family, we are a 50/50 couple. I love my wife dearly, more than my niece and my nephew. I absolutely want to make sure that she is taken care of, I do worry about this, but the 33% should take care of it. More concern than financial is how she is going to cope mentally with the situation should I passed first. We often think about the financial aspect because it is important to a day to day living, I think we need to pay more attention to the mental aspect of the situation as well especially those of us who do not have kids of our own.

[pb4uski]

You can do what you want easily with beneficiary designations. This assumes that you and DW are on the same page on the 1/3 splits and that she will get taxable account money.

Create another brokerage account in your name only....leave 34% in the joint brokerage account and transfer the remaining 41% (in kind if needed to avoid a taxable event) to the new brokerage account in your name only.

Then make beneficiary designations for your new brokerage account and your IRA (totalling 66%) to niece and nephew (50% each).

If you die the next day, your DW gets the joint brokerage account (34%) and niece and nephew split the other two accounts totalling 66% 50/50... gettting 33% each.

No will needed... no probate... clean and easy.

If the accounts grow at different rates because of different investments then you can transfer money between the two brokerage accounts occasionally to "rebalance" and preserve the 34/66 ratio.