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Old 07-16-2017, 09:30 AM   #61
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I grew up around a lot of kids who were trust fund babies and/or in line for big inheritances.
Some ended up just fine, some ended up disasters (or dead) as a result.
The money only seemed to magnify their strengths or weaknesses.
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Old 07-16-2017, 09:35 AM   #62
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Originally Posted by marko View Post
I grew up around a lot of kids who were trust fund babies and/or in line for big inheritances.
Some ended up just fine, some ended up disasters (or dead) as a result.
The money only seemed to magnify their strengths or weaknesses.
I grew up poor in the inner city and knew absolutely no one with any appreciable wealth or lined up for big inheritances.

Some ended up just fine, some ended up disasters (or dead) as a result.
The lack of money only seemed to magnify their strengths or weaknesses.
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Old 07-16-2017, 09:37 AM   #63
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I grew up poor in the inner city and knew absolutely no one with any appreciable wealth or lined up for big inheritances.

Some ended up just fine, some ended up disasters (or dead) as a result.
The lack of money only seemed to magnify their strengths or weaknesses.
Exactly!
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Old 07-16-2017, 09:43 AM   #64
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In the late 70s, I saw a childhood friend go through a roughly $100K inheritance he received shortly after turning 18.

This was a very substantial inheritance at the time, basically spent on alcohol and drugs.
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Old 07-16-2017, 09:52 AM   #65
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My step-father's QTIP trust gives my mother the power to disinherit any of my step-brothers for any reason. Compared to this, the 'no contest' clause seems 'automatic'. If, as executor of my mother's estate, I try to use the 'no contest' clause to disinherit one of my step-brothers, it's not clear why I would need to get the court system involved. Of course, the disinherited step-brother would probably sue me over the application of this clause, so the whole mess would land in the court system anyway. In any case, I would get the advice of a lawyer before proceeding. As you point out, the main value of the clause may be as a psychological deterrent.
That sounds like an unusual clause for a QTIP trust.

If you try to enforce a no contest clause without a Judge's signature on a court order I suspect you will be sued. Just a hunch.
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Old 07-16-2017, 10:44 AM   #66
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How about what this Michigan lumber baron did, he split it among heirs, 21 years after the last grandchild died.


Millionaire's heirs get inheritance after 92 yrs - CBS News

Must have been invested pretty badly or the lawyers and trustees must have loved it.

He died in 1919. He was once among the eight wealthiest Americans. And there were some incredibly wealthy Americans at that point, including the most wealthy of all time in Rockefeller.

Annualized S&P 500 return is 10.3% and DJIA is 10%. To get an estate of 110 million one would only have had to put 4,000 dollars into the equivalent investments...
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Old 07-16-2017, 10:53 AM   #67
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Must have been invested pretty badly or the lawyers and trustees must have loved it.

He died in 1919. He was once among the eight wealthiest Americans. And there were some incredibly wealthy Americans at that point, including the most wealthy of all time in Rockefeller.

Annualized S&P 500 return is 10.3% and DJIA is 10%. To get an estate of 110 million one would only have had to put 4,000 dollars into the equivalent investments...
Maybe he hired my former investment adviser.
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Old 07-16-2017, 11:18 AM   #68
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In the late 70s, I saw a childhood friend go through a roughly $100K inheritance he received shortly after turning 18.

This was a very substantial inheritance at the time, basically spent on alcohol and drugs.
Hey, you must know my Cousin - same story - but maybe it's just a common occurrence
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Old 07-16-2017, 12:18 PM   #69
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My step-father's QTIP trust gives my mother the power to disinherit any of my step-brothers for any reason. Compared to this, the 'no contest' clause seems 'automatic'. If, as executor of my mother's estate, I try to use the 'no contest' clause to disinherit one of my step-brothers, it's not clear why I would need to get the court system involved. Of course, the disinherited step-brother would probably sue me over the application of this clause, so the whole mess would land in the court system anyway. In any case, I would get the advice of a lawyer before proceeding. As you point out, the main value of the clause may be as a psychological deterrent.
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That sounds like an unusual clause for a QTIP trust.

If you try to enforce a no contest clause without a Judge's signature on a court order I suspect you will be sued. Just a hunch.
Perhaps mom has a limited power of appointment over the remainders, giving her the ability to decide within the limited class. Of course, this is much different than a "no contest clause." Agree that making a decision of cutting someone out through a no-contest clause should be blessed by the court - because you're going there anyway. Also, just to point out since we're talking about getting sued, as a fiduciary, you are "never" excused for a breach of your duties, and can generally still get in trouble for actions deemed as "gross negligence", "wanton disregard", and the like - regardless of the trust language.
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Old 07-16-2017, 01:16 PM   #70
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Must have been invested pretty badly or the lawyers and trustees must have loved it.

He died in 1919. He was once among the eight wealthiest Americans. And there were some incredibly wealthy Americans at that point, including the most wealthy of all time in Rockefeller.

Annualized S&P 500 return is 10.3% and DJIA is 10%. To get an estate of 110 million one would only have had to put 4,000 dollars into the equivalent investments...
You're right, that's a horrible return on his estimated $40-90M. He did give annuities to most of his kids and some of his staff, but they ranged from $1K-30K for a favored son. Probably not more than $100K a year, while they lived.

So what was the trust invested in? I found this at Mid-Michigan Remembers
Quote:
All of his money was put into an account at Second National Bank and was not to be distributed until twenty-one years after the last survivors of his two grandchildren died
So the money sat in a bank, probably getting a low but safe return, while most likely getting charged a nice fee for managing it. Early on that would include disbursing those annuities, but later it was just keeping track of the heirs as those living died off, and new candidates were born. Or maybe they just assumed the heirs would contact them, and they just had to validate.
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Old 07-16-2017, 01:17 PM   #71
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I dont believe fair always means equal with regard to inheritances.
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Old 07-17-2017, 07:16 AM   #72
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I dont believe fair always means equal with regard to inheritances.
I agree. But I think it depends on the reason for "non equality". My parents in law decided to give more to DW's brother than her and her sister. Reason was the fact my brother in law is married to someone with Parkinson's which will require expensive care over the years. We are perfectly OK with that, and in fact suggested it in the first place.

Another case relates to very good friends, where his father has decided to give most of his residual wealth to one daughter because she "she hasn't done as well" as her sibs. A little harder to support this decision.

Both cases have generated some resentment though.
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Old 07-17-2017, 07:55 AM   #73
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Another case relates to very good friends, where his father has decided to give most of his residual wealth to one daughter because she "she hasn't done as well" as her sibs. A little harder to support this decision.

Both cases have generated some resentment though.
Why? Do the other siblings think their parents "owe" them their money--or maybe that the money is almost theirs already, the old folks can just use a little while they are still hanging around?

When I hear things like this, I wonder if these "expectant inheritors" also resent money that their folks give to charity, while they are alive or after they die. If they think it is bad that their own sis got money to help make her rent payment or so her kids can attend college, I can only imagine how they feel when total strangers are benefiting from Mom and Dad's money.
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Old 07-17-2017, 10:25 AM   #74
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I agree. But I think it depends on the reason for "non equality". My parents in law decided to give more to DW's brother than her and her sister. Reason was the fact my brother in law is married to someone with Parkinson's which will require expensive care over the years. We are perfectly OK with that, and in fact suggested it in the first place.

Another case relates to very good friends, where his father has decided to give most of his residual wealth to one daughter because she "she hasn't done as well" as her sibs. A little harder to support this decision.

Both cases have generated some resentment though.
This makes me wonder about my own character. When my parents punch out (they are "on the clock" now), it would make perfect sense if they were to leave all their assets to my two sisters. I don't need anything, while both girls are struggling.

But would I secretly, silently harbor any negative feelings? "Mom and Dad always did like them best, while Cindermdlerth had to sleep in the cellar and never got to go to the ball."

I don't know, but I suspect I will find out in a few months.
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Old 07-17-2017, 11:22 AM   #75
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The resentment comes from a greedy (in my view) sister in law.

In the second case the father outlived the mother and changed the will that they had agreed on from an equal distribution to an unequal one. There is some suspicion that the daughter who is getting the money, actively campaigned for it. I don't have a view on that one really. Not that much money (couple million) and my good friend doesn't need it. Just saying it has caused some, but probably not a lot, of resentment.
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Old 07-17-2017, 11:50 AM   #76
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I can't see anything but an equal split. Not so rich that the money (when split 4 ways) will allow them to do nothing unless they go the Mr Money Moustache route and they won't likely get it until they are 50s or later. They are all still in school but we can see even now that there are likely to be differences in affluence among them. Hopefully they have been brought up well enough to help one another if the need arises. Some have alluded to that here. My mother plans an even split of her modest estate even though there are significant differences in the means of her 3 children. None are particularly poor though. I'm sure that she figures we will look out after each other as the need arises.
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Old 07-17-2017, 12:18 PM   #77
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All these problems!
I got lucky as my total inheritance was $600 while my sisters were both a set of fine silver in a pretty wood box. (Same value I was told.)
No arguments or bad feelings involved.
DDs should do a bit better according to Fidelitys planning site. Splitting it down the middle, though I may have to throw a bonus to whoever is willing to take the evil cat.
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Old 07-17-2017, 01:35 PM   #78
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Splitting it down the middle, though I may have to throw a bonus to whoever is willing to take the evil cat.
Funny story about cats. My DS has a wonderful widowed aunt who has a couple of mangy old cats. My DS is her executor and has helped with her will. She wanted to give a $5,000 "bonus" to whoever took the cats. My DS pointed out that this would very likely be a death sentence for the cats, they wouldn't last a week. She thought better of it.
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Old 07-17-2017, 01:52 PM   #79
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Why? Do the other siblings think their parents "owe" them their money--or maybe that the money is almost theirs already, the old folks can just use a little while they are still hanging around?

When I hear things like this, I wonder if these "expectant inheritors" also resent money that their folks give to charity, while they are alive or after they die. If they think it is bad that their own sis got money to help make her rent payment or so her kids can attend college, I can only imagine how they feel when total strangers are benefiting from Mom and Dad's money.
There is a big difference between thinking you are entitled to your parent's money compared to thinking that it is unfair if one child is being rewarded for their life of poor decisions. It has nothing to with being "owed" money...it's about fairness.
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Old 07-17-2017, 02:05 PM   #80
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"Bill and Melinda Gates and Warren Buffett, similarly plan to leave relatively small portions of their massive estates to their children"
5% is a "relatively small portion," but 5% of 50 billion dollars is still $2.5 billion dollars.
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