What are your plans for your children's inheritance?

[Closet_Gamer]

A 20 year old and a 16 year old here.

Our plan has always been a phased distribution from college costs until they were 40 with a $2M (inflation adjusted) cap on each kid, and most of the money being delivered at age 40. By the time you're 40, you are a fully formed adult and are whoever you are. Hopefully between trying to raise them right and not giving them loads of dough along the way, they are responsible and able to handle it. Time will tell.

After that it goes to family members and charity.

We often discuss trying to set up a multi-generational educational trust if we wind up with enough $$$. Something that let's us reach across the generations and help out. At some point in our family tree, some descendent is going to get stuck with crap parent and a crap situation. If we knew we had laid a foundation for basic education even if you have crap parents, that would mean a lot to us.

Hopefully I have a long time to refine this plan!!!

 

[MikeD]

Even 4-way split.

That's what my Dad did. He had three children. My sister got two shares. His little button...

 

[mickeyd]

Our kids (adults now) will split the baby 50/50 when we are out of the picture. They both have a copy of the wills and instructions regarding our CCRC access. We plan on living a long time so there may not be much left in the mickeyd piggybank when this show ends.

 

[Vacation4us]

That's what my Dad did. He had three children. My sister got two shares. His little button...

And this is why no matter what my son does he and his sister will get an equal share 50/50. I love them both, even if one loves me more than the other or chooses to act that way.

I have felt the pain, and seen the pain of family choices. Even when an estate is minuscule favoritism leaves a lasting bite.

 

[Brian]

Has anyone thought about how to pass on inheritance to your kids while protecting it from a possible future divorce?

We need to update our will/trust. When we set up the documents, our two kids were under 10 and we felt they needed some safeguards. We set up a trust which distributed the money out over time with significant life event bonuses (going to college, buy a house, getting married, etc.).

Our kids are now early 20s. One has graduated from college and has a good job. The other is about halfway through college. They each have a good work ethic, so I’m thinking of giving each of them half with a lot fewer restrictions.

Neither is currently married or dating seriously, but one would assume each will marry someday. Base purely on statistics, it is assumed one or both will unfortunately be divorced someday. I assume it may be more politically correct if they had a trust which protected the inheritance vs. them needing to ask for a prenup.

 

[MuirWannabe]

Has anyone dealt with a will, in the case of having an heir who is an addict (alcoholism)?

We have 3 adult children 30, 30, and 24. Our 24yo DS is an alcoholic. The 30yo’s are responsible nurses, both married with children.

Our desire all along has been an equal split between the 3. But the way things are today, giving a chunk of money to the alcoholic son seems about as wise as throwing kerosene on a fire.

We still have hope that one day things will change and he will turn his life around. So, as I re-work our wills, I’m thinking of the 30yo’s each getting their 1/3 upon our death. But the sons 1/3 going into some kind of trust with some independent trustee to manage. If son ever turns the corner (I’m not sure how this can be defined in a trust), then he gets his 1/3 at that time. If son, by some age (not sure how long to wait), has not straightened out, then his 1/3 goes evenly to the other two children.

It’s complicated and I feel like I’m gonna need legal advice from someone who specializes in wills for parents of addicted children. But if someone here has any experience I’m interested to learn what you’ve done.

Muir

 

[MichaelB]

Has anyone dealt with a will, in the case of having an heir who is an addict (alcoholism)?

We have 3 adult children 30, 30, and 24. Our 24yo DS is an alcoholic. The 30yo’s are responsible nurses, both married with children.

Our desire all along has been an equal split between the 3. But the way things are today, giving a chunk of money to the alcoholic son seems about as wise as throwing kerosene on a fire.

We still have hope that one day things will change and he will turn his life around. So, as I re-work our wills, I’m thinking of the 30yo’s each getting their 1/3 upon our death. But the sons 1/3 going into some kind of trust with some independent trustee to manage. If son ever turns the corner (I’m not sure how this can be defined in a trust), then he gets his 1/3 at that time. If son, by some age (not sure how long to wait), has not straightened out, then his 1/3 goes evenly to the other two children.

It’s complicated and I feel like I’m gonna need legal advice from someone who specializes in wills for parents of addicted children. But if someone here has any experience I’m interested to learn what you’ve done.

Muir

IANAL but you have a number of options. Three are spendthrift trust, special needs trust, and addiction trust. In each there is a trustee who administer funds and has final say in disbursement, as long as it adheres to the trust language. The special needs trust ensures the recipient does not lose eligibility for public assistance programs, such as Medicaid, food stamps, etc. The addiction trust pays out based on incentives and behaviour. The spendthrift trust paces the distributions. Which you choose depends on what you want to accomplish and what trustee you have available. You do have good options, though.

 

[clifp]

Single, no kids.

I have a niece who is an angel and a nephew who is a screwup. I have two older sisters, one is unlikely to outlive me and the other who might. Rather than a percentage, I elected to go with fix sums, A million each to nieces and sisters, and $100K to nephew, grandnephews and grandnieces, and a number of friends. The remainder goes to charity.

If I die tomorrow the bulk will go to family and friends, but over time as my estate grows and beneficiaries die more will go to charities.

 

[ivinsfan]

Has anyone dealt with a will, in the case of having an heir who is an addict (alcoholism)?

We have 3 adult children 30, 30, and 24. Our 24yo DS is an alcoholic. The 30yo’s are responsible nurses, both married with children.

Our desire all along has been an equal split between the 3. But the way things are today, giving a chunk of money to the alcoholic son seems about as wise as throwing kerosene on a fire.

We still have hope that one day things will change and he will turn his life around. So, as I re-work our wills, I’m thinking of the 30yo’s each getting their 1/3 upon our death. But the sons 1/3 going into some kind of trust with some independent trustee to manage. If son ever turns the corner (I’m not sure how this can be defined in a trust), then he gets his 1/3 at that time. If son, by some age (not sure how long to wait), has not straightened out, then his 1/3 goes evenly to the other two children.

It’s complicated and I feel like I’m gonna need legal advice from someone who specializes in wills for parents of addicted children. But if someone here has any experience I’m interested to learn what you’ve done.

Muir

This is confusing because you say your DS is an addict. The trust part understood. The not wanting to give in a lump sum because he might drink himself to death understood. After you are gone why would you want to alienate him from his family, his DSisters by giving them the money earmarked for him? It seems rough to put his sisters in that position. It feels like one more poke from the grave saying he disappointed you. In fact if he continues to drink he will be the one in need of financial help to keep him safe and off the street if it comes to that point. Don't make a sister a trustee either, if it comes to that find someone independent hire them and see he gets enough annually to put a roof over his head.

He's young yet and things might change for the better I hope they do for your DS's sake and to make these decisions easier for you.

Everything I've heard from families in this position is to bring in expert help both legal and counseling to give you some peace of mind about caretaking for the addicted child after you are gone.

Good luck.

 

[MuirWannabe]

IANAL but you have a number of options. Three are spendthrift trust, special needs trust, and addiction trust. In each there is a trustee who administer funds and has final say in disbursement, as long as it adheres to the trust language. The special needs trust ensures the recipient does not lose eligibility for public assistance programs, such as Medicaid, food stamps, etc. The addiction trust pays out based on incentives and behaviour. The spendthrift trust paces the distributions. Which you choose depends on what you want to accomplish and what trustee you have available. You do have good options, though.

Thanks Michael. Good information for my legal pursuits.

 

[MuirWannabe]

This is confusing because you say your DS is an addict. The trust part understood. The not wanting to give in a lump sum because he might drink himself to death understood. After you are gone why would you want to alienate him from his family, his DSisters by giving them the money earmarked for him? It seems rough to put his sisters in that position. It feels like one more poke from the grave saying he disappointed you. In fact if he continues to drink he will be the one in need of financial help to keep him safe and off the street if it comes to that point. Don't make a sister a trustee either, if it comes to that find someone independent hire them and see he gets enough annually to put a roof over his head.



He's young yet and things might change for the better I hope they do for your DS's sake and to make these decisions easier for you.



Everything I've heard from families in this position is to bring in expert help both legal and counseling to give you some peace of mind about caretaking for the addicted child after you are gone.



Good luck.

What exactly is confusing? You started your response seemingly understanding what I’m trying to accomplish. But then...

Why do you think I have any desire to alienate my son from his sisters? And why do you think I want to ‘poke’ at my son from the grave?

Not sure I see the trust paying out money at all to DS as long as he suffers from his addiction. Otherwise it is just enabling.

The trusts intention is to give my son time to turn his life around. But, one of my questions to consider is how long the money should sit in trust waiting before it would go to his sisters? Forever doesn’t seem to make sense to me.

And as I said, an independent trustee is already in my plans as I don’t want to put an unfair burden on one of the sisters.

 

[ivinsfan]

What exactly is confusing? You started your response seemingly understanding what I’m trying to accomplish. But then...

Why do you think I have any desire to alienate my son from his sisters? And why do you think I want to ‘poke’ at my son from the grave?

Not sure I see the trust paying out money at all to DS as long as he suffers from his addiction. Otherwise it is just enabling.

The trusts intention is to give my son time to turn his life around. But, one of my questions to consider is how long the money should sit in trust waiting before it would go to his sisters? Forever doesn’t seem to make sense to me.

And as I said, an independent trustee is already in my plans as I don’t want to put an unfair burden on one of the sisters.

It really a fine line isn't it, I have a close family member that struggles with this exact question. Forever doesn't make sense. Another family member just lost a father way too young to alcohol problems. The father always felt other family members were judging him for not trying hard enough or not being good enough. After countless welfare checks he was found dead by the sheriff, they couldn't even figure out when he actually died. The family could never figure out the right thing to do for him, if there even is a right thing.

The sad sad fact is no matter how much stress the addict cause his family it's nothing compared to the stress he causes himself. No matter your intent most likely cutting out your DS completely could alienate him from his sisters even though they had nothing to do with it..what about skipping a generation and setting that portion up for any potential GK's you might have?

And I'm just commenting from a few up close and personal things I've seen in the last couple years. I feel for every extended family dealing with these issues including your family and mine.

 

[MuirWannabe]

It really a fine line isn't it, I have a close family member that struggles with this exact question. Forever doesn't make sense. Another family member just lost a father way too young to alcohol problems. The father always felt other family members were judging him for not trying hard enough or not being good enough. After countless welfare checks he was found dead by the sheriff, they couldn't even figure out when he actually died. The family could never figure out the right thing to do for him, if there even is a right thing.



The sad sad fact is no matter how much stress the addict cause his family it's nothing compared to the stress he causes himself. No matter your intent most likely cutting out your DS completely could alienate him from his sisters even though they had nothing to do with it..what about skipping a generation and setting that portion up for any potential GK's you might have?



And I'm just commenting from a few up close and personal things I've seen in the last couple years. I feel for every extended family dealing with these issues including your family and mine.

I’m sorry your family has also dealt with addiction issues.

Putting his 1/3 inheritance in a trust is not an option. We simply do not wish to give an active alcoholic such potential for more trouble. So, if that alienates him then I guess so be it. Of course, that’s not our goal or what we want.

I’m viewing this decision from a strictly practical perspective. It’s not retribution oriented. That would frankly be silly. I sense you suspect our motives are about some form of retribution or revenge. It’s the opposite. We are trying to give him time to get better so he hopefully can inherit whatever his 1/3 amount may be. Why? Because although we don’t now trust him, we love him.

If you’ve got details from your family addictions experience about what was done in terms of wills and/or trusts, I’d love to hear.

Muir

 

[Lovely Linda]

No kids but we have 7 nieces and nephews on DW's side in addition to my brother.

We have a hefty sum.

When both DW and I depart, a large portion goes to provide ongoing support to my disabled brother, and the rest is split 7 ways.

Once my brother departs, 50% goes to the rehab hospital that helped him so much and the residue is split 7 ways again.

Some of the N&Ns are highly responsible, some will suffer from "lottery winner's syndrome" but that'll be their problem.

Marko,

You mentioned a disabled brother so I was wondering if you have a "special needs trust" set up for him so after you are no longer here to help him, a trustee would distribute money to him? I ask because we have set up such a trust to hold our adult child's inheritance.

I'm concerned about how having an older cousin (since there are no siblings) as trustee will affect their relationship. For example, what if the two don't agree on the amount or timing of the distributions and there are hard feeling. Yet I don't want an institution to be trustee because they have no relationship with the adult child plus they charge 1-2% of total assets.

 

[joeea]

That's what my Dad did. He had three children. My sister got two shares. His little button...

How did you and your other sibling feel about that?
Based on "His little button", I'm guessing you weren't very happy.

 

[joeea]

Has anyone thought about how to pass on inheritance to your kids while protecting it from a possible future divorce?

I assume it may be more politically correct if they had a trust which protected the inheritance vs. them needing to ask for a prenup.

A good estate attorney can set up such a trust for you.

 

[joeea]

It’s complicated and I feel like I’m gonna need legal advice from someone who specializes in wills for parents of addicted children. But if someone here has any experience I’m interested to learn what you’ve done.

You do need legal advice from a good estate attorney.

One friend in a similar circumstance set up a trust for all 4 of her children, even though only one has addiction issues. Treating each equally feels right to her.

 

[ivinsfan]

I’m sorry your family has also dealt with addiction issues.

Putting his 1/3 inheritance in a trust is not an option. We simply do not wish to give an active alcoholic such potential for more trouble. So, if that alienates him then I guess so be it. Of course, that’s not our goal or what we want.

I’m viewing this decision from a strictly practical perspective. It’s not retribution oriented. That would frankly be silly. I sense you suspect our motives are about some form of retribution or revenge. It’s the opposite. We are trying to give him time to get better so he hopefully can inherit whatever his 1/3 amount may be. Why? Because although we don’t now trust him, we love him.

If you’ve got details from your family addictions experience about what was done in terms of wills and/or trusts, I’d love to hear.

Muir

It's not a fun group to belong to, is it? And I don't suspect or even remotely think it's about retribution on your part, I worry your DS might think those were your motives.

As far as wills and trusts it never got that far, as he passed a week before the last living parent. I would guess he got his share of the estate before he died, the addicted person did try to seek help occasionally and the parents involved did provide money to get help for the addiction and for more then one fresh start. They always hoped that one of the fresh starts would actually stick.

Would you structure the trust to allow for medical treatment or a basic place to live? Maybe some of these answers will become clear to you in the future.

This all happened less then six months ago and his children are still reeling from the aftereffects if his death. Having an barely functional addicted father is life altering ..if your DS has children at sometime you could set his one-third over to them.

 

[MuirWannabe]

It's not a fun group to belong to, is it? And I don't suspect or even remotely think it's about retribution on your part, I worry your DS might think those were your motives.

As far as wills and trusts it never got that far, as he passed a week before the last living parent. I would guess he got his share of the estate before he died, the addicted person did try to seek help occasionally and the parents involved did provide money to get help for the addiction and for more then one fresh start. They always hoped that one of the fresh starts would actually stick.

Would you structure the trust to allow for medical treatment or a basic place to live? Maybe some of these answers will become clear to you in the future.

This all happened less then six months ago and his children are still reeling from the aftereffects if his death. Having an barely functional addicted father is life altering ..if your DS has children at sometime you could set his one-third over to them.

Yes, I think we would want the trust to allow for medical treatment. But I’m not sure about the living expenses and think probably not, as that gets into the line of enabling. Those are good and tough questions I’m hoping an experienced attorney can help us think through.

DS has no children. And I could always be wrong, but don’t see any from him anytime soon. Unfortunately he is a loner who among other problems has severe anxiety disorder. No girlfriend in past, present, or near term future. But I guess you never know what life brings. So that’s a consideration for the future.

No, it’s not a fun group in which to belong. But we’re hardly alone, and are trusting in God for his future. Thanks.