Making Wealth Last

[albireo13]

Uh

I highly recommend this book. It may be available in your local library.

Beyond the Grave, Revised and Updated Edition: The Right Way and the Wrong Way of Leaving Money to Your Children (and Others) – Protecting Inheritance from Creditors, IRS, and Risks of Loss
by Jeffery L. Condon

Amazon.com

Looks interesting. It's copyright 2014. Is it still relevant?

 

[Lewis Clark]

Uh

Looks interesting. It's copyright 2014. Is it still relevant?

Yes, it is still relevant. It mainly talks about things to consider in estate planning, and does not focus on specific laws or states. These factors will always be relevant.

Might be worth looking to see if a newer edition is available.

 

[albireo13]

Thx. I just bought the Kindle version for $11. I will read it soon. I have to finish a book on the evolutionary War first!

 

[marko]

------> per stirpes...

Yes. But the way our wills are currently written, if one of the heirs passes, their share is then divided amongst the remainders. $X/9 or $X/8 etc. Something we need to change.

 

[Montecfo]

I'm appreciate all the valuable insights.

I do think our son would take care of the funds. But having said that, it could really be way more money than he would need.

Maybe split some out for next generation, not sure.

I like the idea of a property legacy as Oldshooter was discussing. But since our son is an "only" I think that would be up to him. And we have so far convinced ourselves that we do not want more real estate besides the personal residence which is already deeded to our son post our passing. So that's out for the moment.

I liked the suggestion of Michaelb and others to fund 529's. I'm sure we will do that at the right time if we are blessed with grandkids. In fact I think part of the issue is concern about delaying marriage/kids to get "ducks in a row" financially.

I loved Mr_Pink's idea of gifting now to help kids when they need it most. I feel like our son would refuse this but maybe he could be incrementalized into it via some discussion over time. I just don't want to wait to give him an inheritance when he has grandkids of his own.

I recognize this is a high quality problem. One I had not anticipated.

 

[Mr_Pink]

I'm appreciate all the valuable insights.

I do think our son would take care of the funds. But having said that, it could really be way more money than he would need.

Maybe split some out for next generation, not sure.

I like the idea of a property legacy as Oldshooter was discussing. But since our son is an "only" I think that would be up to him. And we have so far convinced ourselves that we do not want more real estate besides the personal residence which is already deeded to our son post our passing. So that's out for the moment.

I liked the suggestion of Michaelb and others to fund 529's. I'm sure we will do that at the right time if we are blessed with grandkids. In fact I think part of the issue is concern about delaying marriage/kids to get "ducks in a row" financially.

I loved Mr_Pink's idea of gifting now to help kids when they need it most. I feel like our son would refuse this but maybe he could be incrementalized into it via some discussion over time. I just don't want to wait to give him an inheritance when he has grandkids of his own.

I recognize this is a high quality problem. One I had not anticipated.

In our revoc. trust we did leave money to our DGD but in amounts that increase as she ages to 21.

 

[pb4uski]

Wouldn't the tax be on the profit the trust kept ? So If a trust paid out it's earnings it would avoid this tax ?
If so then paying out to 529 plans for too young kids would be a possible way to decrease the tax.

I do wonder how various other trusts deal with this issue of trust taxation ?

I think that is correct, but then it simply forces the trust to pay out at last all income every year in order to avoid tax, but what if in a particulary year there are insufficient items that need funding or the trust has a large gain in a particular year.

 

[beanctr88]

I've toyed with the idea of a family trust that would provide scholarships and grants for home down payments and the like to bloodline descendants (our kids, grandkids, nieces and nephews and their descendants) as a way of using wealth to benefit the bloodline in addition to designated charities, but the 37% lor higher tax on trust income discourages the idea for me.

Am I misremembering? I thought as long as the earnings of the inherited trust were distributed each year, the beneficiaries paid tax at their rates (which may be significantly lower than 37%). Only the earnings retained in the trust would face the trust tax rate of 37% (or whatever they change it to from time to time). So, if the trust distributed the earnings yearly and the principal when needed for the tuition/down payment, the tax bite would be less. Or specify the trust invest only in growth funds putting off little to no dividends until the funds are ready to be used for the allowed purpose.

 

[pb4uski]

See post #57 for your answer. The idea is that the trust is responsive to the needs of the beneficiaries rather than mandated distributions to avoid high tax rates.

 

[TickTock]

I loved Mr_Pink's idea of gifting now to help kids when they need it most. I feel like our son would refuse this but maybe he could be incrementalized into it via some discussion over time. I just don't want to wait to give him an inheritance when he has grandkids of his own.

Warm-hand gifting can be a wonderful thing. Perhaps your son would be more receptive if you explained that this is an inheritance acceleration rather than an inheritance addition?

Dear Aunt and Uncle gave their two children their inheritances early so that they could afford the downpayment on their first houses. They also explained - Don't expect anything later. (I'm sure they will pass on anything left when the second one passes on, but they don't have a large stash and they both have health issues.)

 

[Dash man]

We are planning to update our estate documents soon. This got me thinking. We have 5 adult children … no grandchildren yet. It is possible that, for various reasons, that only one of our children will have children of their own.

I am thinking it best to leave grandchildren out of the beneficiary equation, in the effort for fairness and equity. Thus, estate is split equally among surviving children. I think this is fair.
I am guessing that some may think differently and that grandkids should be considered somehow in the estate split.
I really want to avoid any friction among siblings down the road.

Any advice on that? Thx tv

We have three grandkids and a great niece and great nephew who lost their dad. We’ve set up 529 plans for their college or vocational training and custodial brokerage accounts that they will have access to at 21 years old.
In our trusts, they only get an inheritance if their parents pass away.

 

[Sunset]

Am I misremembering? I thought as long as the earnings of the inherited trust were distributed each year, the beneficiaries paid tax at their rates (which may be significantly lower than 37%). Only the earnings retained in the trust would face the trust tax rate of 37% (or whatever they change it to from time to time). So, if the trust distributed the earnings yearly and the principal when needed for the tuition/down payment, the tax bite would be less. Or specify the trust invest only in growth funds putting off little to no dividends until the funds are ready to be used for the allowed purpose.

I like the idea of having the trust invested in growth funds, or funds like BRK, which produce no dividends at all. The taxation would be extremely low if the fund overall dividend rate was 1%

Example: $10M trust would produce $100k in dividends (possibly here costs of the trust could be deducted ? ) So at worst the taxation would be $37k and the trust would grow say at 7% to 10,663,000.

 

[Badger]

My parents had 3 children and that is how they equally divided the inheritance. I never had children but my brother has 3 and sister has 2. Those grandchildren were the responsibility of my siblings and not part of the inheritance.
We will be doing the same using a simple trust and beneficiaries established where we have investments. Inheritance will go to my wife's 2 children once we are both gone and they can decide how they want to use the money. Between them there are 3 grandchildren and 4 greatgrandchildren. It will be way more than either have had to deal with so I hope they respect how we sacrificed to be responsible in taking care of ourselves without outside help or being a burden on them. In the meantime our NW continues to grow. Once I am gone the money will no longer be an issue for me.