Need advice to give my mom about planning a will

[Sum Dum Gai]

Your mom sucks - that is a horrible chore to throw on you. I would push back, push back - wayyy back.

Whoa now, that's still my mom you're talking about. Let's keep it a little civil huh?

[Deleted]

The other risk with leaving all of the money to you is that if something happens to you, that is now your money and would pass to your heirs - Loop and the kids. Messy.

A trust seems like a better option.

[tskeeter]

So how do you determine "need".

You leave it up to me, because I'm the responsible one and I'll be fair.

And because they "need" more, the black sheep in your family will be unhappy with you because, in their mind, you have not done what your Mother wanted. For you to provide for the needy members of the family.

In your place, I'd try to talk Mom out of leaving everything to your judgment. Using your good judgment will almost certainly earn you the disdain and wrath of your family.

[debtheaven]

You leave it up to me, because I'm the responsible one and I'll be fair.

That's definitely true. You would agree, Loop would agree, your mom would agree, your two older siblings would agree. Hey, even YM would agree LOL.

But would the two younger siblings agree, the ones who are CONSTANTLY having "issues"? I doubt it.

THAT'S the issue here, Dark. We like you, we just want to protect you from the inevitable fallout this solution would cause.

[midjd]

The others are right. At the very, very least, she should talk to the other siblings and tell them her intentions. And then she should see an attorney to help her draw up a will. Even the most close-knit, loving families can be torn apart by a situation like this - I've seen it too many times.

[zibazinski]

Believe me, this will not end well and you will cave to avoid losing it all to lawyers. He started to actually point out that the siblings had "borrowed" thousands of dollars and never paid it back but it was pointless. Trainwrecks are trainwrecks and his dad wasn't even cold in the ground before the hands were out.

[Sum Dum Gai]

Jun 17, 2011 18:36:51 GMT -5 Lady Gaga Gaga Snerd said:

Jun 17, 2011 18:09:31 GMT -5 Sum Dum Gai said:

So how do you determine "need".

You leave it up to me, because I'm the responsible one and I'll be fair.

Wow. Do you realize how condescending that is going to sound to your sibs?

That was a somewhat sarcastic remark about the position my mom is putting me in. That is basically her thinking on this though. She never came out and said it in exactly those words, but it's what she's intending.

[Sum Dum Gai]

But, what are the concerns anyway? And, why the need to tell people how to spend money from the grave? Money comes and goes. It always will. Trying to control other adults will never fly.

She specifically mentioned that if she were to leave my youngest brother a lump sum he would blow it on something stupid then regret it later. She was worried my older sister would basically do the same thing. In my sister's case, she has two kids and my mom would rather see the money help the kids go to college or something, where my sister might use it take them to Disneyland or some other thing that she feels they're missing out on because my sister is broke.

I'll see if I can talk her into leaving the money equally to the grand kids. There should be a way to put that in a will without having to name each grandchild specifically right? That way she wouldn't have to get the thing re-written every time a new one comes along. It seems the simplest way to meet the majority of what she wanted the money used for, and it shouldn't breed too much resentment amongst the siblings.

[debtheaven]

There should be a way to put that in a will without having to name each grandchild specifically right?

Yes. But one way or another, she's going to need to write a will.

Also, this solution begs the question: if she leaves it to minor grandkids, who will disburse that money? If it's all her kids, it sounds like that money will be long gone before the grandkids reach adulthood with two of your siblings.

Again, your mom needs to bite the bullet and spend the time and money on making a will.

Or (I've been hesitant to suggest this) maybe you and / or the other responsible sibs need to gift this to her so it's done.

It's not just for the money, it's for your future peace of mind.

[Sum Dum Gai]

BTW, how many sibs and how old are they?

Sister 30, two kids and done.
Me 29, two kids and done.
Brother 27, two kids, and has talked about being done but hasn't decided for sure AFAIK.
Brother 23, one in the oven.
Brother 22, has a child he never sees that lives in Germany with the baby momma's momma. Although the baby's grandfather who still lives in the states has full custody according to the courts, and he has a child support order against my brother. It's one of his many ongoing legal issues.

[midjd]

Yes. In my grandpa's will, 1/2 his estate is to be divided between my mom and uncle, and the other 1/2 is to be divided equally "among all grandchildren". It shouldn't cost your mom more than a few hundred bucks to have a similar will written up.

[Sum Dum Gai]

Also, this solution begs the question: if she leaves it to minor grandkids, who will disburse that money? If it's all her kids, it sounds like that money will be long gone before the grandkids reach adulthood with two of your siblings.

I'm thinking if she left it to the grand kids but had it held in trust until they're 18, I'd be willing to act as the custodian for the trusts. In that case there's a clear indication of where the money is supposed to go, and it shouldn't cause any hard feelings between my siblings and I. I don't think, anyway.

[debtheaven]

I think Midwestern's post sounds like a great solution for your mom. The sibs all get something. If they blow it, like Snerdley says, that's life.

And there's still help for the grandkids. Maybe the problem could be solved by doing something like this, and making you executor / custodian rather than heir.

Your mom should also stipulate the age at which the grandkids would have access to that money. And by naming you executor / custodian, it would ensure that your sibs don't blow their kids' money (I think).

That shouldn't cost much to draw up. Frankly you might even want to pay for it yourself, I think it would be worth the peace of mind.

ETA: Personally I'd suggest 19 or 21, not 18. But again, I'm not a lawyer. But I think there would be every interest (in general, not just in your family) to make sure the kids go to school (college, trade school, whatever). Even if they don't and establish a successful business, they are unlikely to do that before the age of 21.

[midjd]

Honestly, if it's at all possible, I'd have her appoint an executor that is not a beneficiary of the will, pay him or her a certain percentage of the estate, and have him or her hold the money in trust for any minor grandchildren. That way no one can accuse anyone else of undue influence, etc. If she wants you to handle it, and you're willing to, that's fine - but be prepared for the very real possibility that it will cause some friction and hard feelings.

[Sum Dum Gai]

Maybe the problem could be solved by doing something like this, and making your executor rather than heir. She should also stipulate the age at which the grandkids would have access to that money. And by naming you executor, it would ensure that your sibs don't blow their kids' money (I think).

So I would tell her to go talk to an estate lawyer and tell her that she wanted a will written that left her estate split evenly between her surviving grand children with the money held in trust by me for any grand children under the age of 18? Basically? When filling out the beneficiary information on her life insurance and retirement, she would name her estate, right? Is that all stuff the lawyer can tell her?

My mom isn't real savvy when it comes to finances. She calls me every year to tell her what to do with her retirement accounts.

[debtheaven]

Basically, yes, that would be the gist of it. But again, I'm not a lawyer and I don't even live in the US anymore.

When filling out the beneficiary information on her life insurance and retirement, she would name her estate, right?

I'm not sure how this works. Here you have to name a specific person, you can't name an estate.

[midjd]

Your "estate" is your assets minus debts at the time of death. You name an executor, who is basically the document-gatherer and $ distributor. Life insurance generally passes on free and clear of the estate - it becomes the beneficiary's property at the time of death, rather than remaining the deceased's property to be divvied up among the survivors. Same with joint bank accounts and properties held in joint - they pass on outside of probate. If your mom named you her LI beneficiary but died without a will, you'd get the life insurance and 1/5 of what was left after the house was sold, assets liquidated, etc. (the actual percentage might differ a bit - I'm not sure of the intestate succession rules in CA).

(Other lawyers who practice in this area, please correct me if I'm inaccurate... it's been a while since I studied T&E).

[midjd]

Another thing you might want to think about is what happens to a sibling's share if, Gd forbid, the sibling predeceases your mother. Should the sib's share go straight to his/her kids, or back into the pot?

This was the primary reason behind my grandpa's will being designed the way it was. My uncle has 1 kid, and my mom has 3. My uncle is not in great health. If he were to die before my grandpa, under the old will, my cousin would end up with 1/2 my grandpa's estate, and my siblings and I would eventually end up with 1/6 each. My grandpa has given both my mom and uncle a lot of financial help in his lifetime, and was primarily concerned about making things fair for the grandkids. Your mom may have the same feelings.

So now, as it is, if either my mom or uncle dies before my grandpa, the surviving one gets 25% and the 4 grandkids divide the remaining 75% equally. If both my mom and uncle die before my grandpa, the 4 grandkids each get 25%. A little more complex than probably necessary, but it makes sure things are fair regardless of what happens.

[motherto2]

I can't agree enough with going to a lawyer and having their expertise help to set up the correct documentation. My grandmother/grandfather for years talked about how my aunt borrowed money from them and one of their siblings and never paid it back. At one time they were even keeping a notebook with the amounts (that might be a little too much). They told my mom (oldest of 3) about this (as well as my stepdad) and how they would take that amount away from the total that was to be split 3 ways. Well, gpa died, mom and aunt lived way out of state, and only uncle lived in the town. Gma moved into assisted living apartment, and passed a couple of years after gpa. She had several cd's that had her name and one of each of the 3 in case she passed. We know that uncle was able to hone in on some things before either of the sisters got there, but what do you do. When all the dust settled, aunt had about $20k or so less than uncle and mom. We know it was because of the past, but gma/gpa never said one word to her. uncle convinced my mom that the right thing to do was for them to each give aunt money to even everything out. Mom sent aunt a check, which she cashed, never acknowledged and never thanked her for. Pretty sure uncle never paid his share to aunt. Also pretty sure uncle took a cd that he "inadvertently" didn't notice had his name on first and gma's second when he renewed it for her 2 months before her death. Of course, neither aunt or uncle knew how much gma/gpa told my folks. Bottom line, money does wicked things to family. I've gone through that with my father's death just a little over a year ago. I decided that if ex SIL was evil enough to do all the underhanded things she was doing, I just didn't want to be a part of it. I received notices that both houses were being foreclosed on, but have NEVER received anything from the lawyer or court system, other than a form letter that me and my nephew (ex SIL's son) are the only beneficiaries. Well, I have 2 kids and my other brother had 2 kids, and none of the four were mentioned at all (both of my brothers have passed, I'm the only living child). But before I was told by ex SIL's sister (she couldn't even call to let me know he had passed) i knew that anything worth anything was long gone. So I've decided to let it go, and know that one day she'll have to answer for her part in all of it. I guess the rant is over ;D, but what I'm really getting at is that it's your mother's responsibility to let her children know her wishes, not yours.

[mwcpa]

Dark, lots of back and forth here with many poster with many opinions and comments.... but Mom needs to sit down and write down what she wants to accomplish in the event of her untimely passing. Then she needs to take this to a competent attorney that can draft the proper legal documents to reach her stated position.

She may end up with a Will or a trust or a combination of the two or a trust within the Will....

Things to be aware of...
Life insurance will pass to the stated beneficiary, free of any probate (unless her estate is the beneficiary)... this is generally free of income tax (but it is included in her "taxable" estate for estate tax purposes if she is the owner of the policy

Retirement accounts pass to the stated beneficiaries, free of any probate (unless her estate is the beneficiary)... distributions made to beneficiaries are subject to income tax

Other assets, such as cash, securities, her home, etc, will be used to settle her debts first, then be allocated in accordance with her wishes.

In the proposal noted in the first post (and repeated a few times)... if Mom gives you all the assets you need to be aware of the following:
1. Distributions from the retirement account is taxable income.
2. Under the law, written today, you can give only 13,000 per year to any one beneficiary, give more and you will be subject to a gift tax consequence.

from my experience i cannot tell you how many times clients have come in after an untimely passing and no Will or plans were in place.... and the ending results were not the ones desired since the court and state law decided what was to be done....

[happyscooter]

Dark,
I would strongly urge your mom to write her reasons for her decisions in a letter to be opened after her death. Even if she decides to leave you all of the money or leave you in charge of all of the money, you should not have to explain HER rationale. FIL has asked my DH if he wants to be in his will. After being caught off guard, DH said 'no'. He didn't want any money but DH shouldn't have been asked if his brother wasn't going to be asked. I am glad that we at least know where we stand so that we will not spend any time or effort cleaning out a 2000 sq ft house plus garage while out of state BIL sits back and collects the proceeds from the sale of the house.
Please ask your mother to consider putting her requests in writing if she is not comfortable telling anyone her choice before she passes.

[qofcc]

Your mom is only in her early 50's and in good health, so it's unlikely that the things she's worried about will come to pass. Assuming she lives the average of another 30 years, you and your siblings will be in their 50's and the grandchildren in their 30's at least and probably even some great grandchildren. She should definitely consult with a lawyer to make out a will with instructions, but I wouldn't be spending money to set up trusts just yet. Chances are she'll live to be 90 and spend it all before she goes. A lawyer should be able to tell you if it would be possible for her to leave instructions for YOU to set up a trust or education funds or whatever with the life insurance and 401k money with a neutral 3rd party as trustee that would go equally to all grandchildren born within x period of time of her passing for their educations with any remainder as a lump sum on their 30th birthday or whenever. Then any other assets would be divided equally among the siblings when the estate is settled provided they attend a consultation with a financial planner or something. Then she could leave each of you a letter and give some final advice to the wayward ones.

[zibazinski]

Doesn't matter what the mom says or how she says it or her rationale. Point is the train wrecks aren't going to want to hear it. IF there is any estate left, there will be lawyers ready and willing to drain it for legal fees so the executor will settle to avoid that. If she doesn't have the guts to tell them right now they aren't getting any money then afterward when she is gone and can't be yelled at or ignored for saying those things is just wrong. Won't matter really if she does tell them, it isn't what they want to hear, YOU will be the one who turned her against THEM. Yada yada, you get the picture.

[tennis77]

What would happen to a sibling who chose not to or was unable to have children? It seems unfair that they are effectively cut out of the will. I would really resent not receiving anything while another sibling's family gets the entire inheritance merely because they procreated - is there an easy way to plan for this possibility? Also, specifically in your family, what about the child of your youngest brother? That seems that it would have the potential for messiness.

[Deleted]

Dark,

I would really read the comments about money that is passed inside verses outside of the Estate. Estates are tricky things and they don't necessarily work the way you would think. Your mom really needs to talk to a lawyer. Just the tax situation if she has 401K's that she leaves to you, but wants you to distribute as needed would be a mess. The money withdrawn (I am assuming you would roll it into an inherited IRA) would be taxed at your tax rate based on your income, verses the probably lower tax rate of your siblings. Then there is the possibility of a gift tax on top of that, messy, messy, messy....

[Deleted]

Dark,

You really need to get mom in front of an estate lawyer and get the whole estate planning package done and set up a trust. Probate is expensive. Our one trip to the probate court in San Diego (because my mother failed to deed her rental house into her trust-so very minor) cost $2,500. In contrast we paid $2,500 two years ago to do the whole estate planning package e.g.2 wills, Trust, 2 health care directives, the Do Not Resuscitate forms. Your situation isn't that uncommon. Does your mom live in CA or AZ? If she still lives in AZ you can PM me and I will dig up the attorney we used in Phoenix.

It doesn't take that long either. I think I spent 2.5-3 hours with the attorney all together including signing the paperwork. The most amount of time was looking up all the accounts that would be part of our exhibit "A". Listing the future kids is handled by terms like "living issue". I don't have my paperwork with me but I don't think my brother's kids are specifically listed by name.

Avoid the nightmare and get it done professionally.

[bring in the new year]

Dark, you get a lawyer.

Not because you're not the responsible one and not because your mother's wrong. I think she's right.

You get a lawyer because probate is a bitch when no one contests it and a bitch and a half when they do. Because every state has their own laws about inheritance and in some states, the state takes over if there's no will. (Life insurance and 401k can be inherited separately at least where I live) There will be funeral bills, hospital bills, there may be a mortgage on the house, etc. If the estate isn't running through one instrument like a will, it gets messy.

In DC, you can't disinherit a spouse. Will becomes invalid. I think in some states that may be true for children as well - there needs to be a clause stating that "I am disinheriting these children for the following reasons" or you leave them some nominal amount like $20 to get around the law. Once will is invalid, the state divides the estate and I think there's a trustee in most states and the trustee has to be paid.

Last but not least, you get a lawyer because (god forbid) what if something happens to both of you at the same time? Now who's responsible? If you die first, I don't think it goes to your wife. If she dies first, it might - is your mom good with that? If (also god forbid) you and the wife are going through marital problems when your mom dies, the court is not going to see that inheritance as a trust for your siblings. I think they're going to consider it a marital asset and it's going to be divvied up accordingly.

I think getting a lawyer for a brief consultation or even getting one of those DIY books about drawing up wills and then seeing a lawyer will pay off in the long run.

If your mom works for a big company, she may have legal advice as one of her benefits. Most of the big companies I worked for did.

[bring in the new year]

Tennis77,

I don't think most people leave out their kids and go straight to the grandkids except when there's a question of parents blowing the money or the fear that the parent won't survive the grandparent. If you didn't have kids, I don't see why you would be disinherited.

I disagree with everyone who thinks the estate should be split up even though that's not what mom wants. Mom wants to leave it to the cat, that's up to her. In a lot of these cases, you don't want to give addicts and alcoholics big inheritances. It doesn't sound like that's true for Dark's siblings but I've known it not to end well.

As for controlling from the grave, give me a break. You're telling me that after spending a lifetime being careful about your money, you'd be perfectly fine with your child blowing it in six months? Knowing that when he/she/they hit fifty they'll need it and they'll lose the house?

All a good will or a good trust should do is do what you would do yourself if you were there. It's not a lottery and it's not a reward for who sucked up best. It's a way to take what you have and spread it out the way you would like it spread out. If kids are adults and mainly responsible, then you trust their judgement. But if you're sitting up nights worrying that your grandchildren are going to have to come live with you if their mom doesn't get it together soon, then no, I don't think you hand over the money.

Mom may change her mind in a year. The siblings could grow up and come to their senses in a year (all of them still seem pretty young to me). That's why these things are not written in stone. But for right now, for today, if she wants to leave it to the responsible child so that when the others do grow up the money's there for them, I say go for it. (By using lawyer and trust - not willy nilly left to you)

As for their relationship, most people know who the most responsible one in the family is. They may not like it and they may whine about it, but they've got a pretty good idea of why things are left the way they were left. (same is true for people whose parents play favorites). The problem comes when they have grown accustomed to thinking of the money as already theirs. That's why Mom should have a quick conversation with everyone. If they know it's not coming to them free & clear, that might change their attitudes as well.





Anybody wants to contest it? Put in the clause that gives their share to the Salvation Army.

[Sum Dum Gai]

What would happen to a sibling who chose not to or was unable to have children? It seems unfair that they are effectively cut out of the will.

There's that fair word again. How exactly is it fair to feel entitled to your parents money? She could leave it all to the SPCA for all I care, it's her money.

Also, specifically in your family, what about the child of your youngest brother? That seems that it would have the potential for messiness.

Yeah, I realized that while I was typing that post. I always forget about that niece.

[midjd]

Dark, if you and your mom do end up deciding to leave everything to you and having you distribute/administer a trust, you'll need a will as well.

Someone earlier hit on this - if your mom dies, and then the next week you die, Loop can choose to give your mom's entire estate to the Roller Derby You'll want to have instructions in your will for what is to be done with any remaining funds of your mom's estate.