Inheritances

[skweet]

I have inherited from two grandfathers, although the inheritance of one was directed to my parent that passed the inheritance on. My parents will be listing their grandchildren as primary beneficiaries of the estate, as they are above any estate tax limit (other than 2010) so far, and likely in the future. This way their estate tax will be taxed once before reaching my children, instead of at their death, and then mine. I expect to have an estate large enough to be taxed significantly, also, and I plan to teach my children financial management skills to the point they don't squander anything. That way I can bequeath to my grandchildren (should I live long enough to know them).

[debtheaven]

Thyme, Crone, thank you for your kind words. I am very grateful that three grandparents out of four met all of our four children.

My sister is 13 years older than me, so she was in her early 50s when we lost our parents. There is NEVER a right time to lose a parent, the later the better. And hopefully with little or no suffering.

All these years later, when something "important" happens, I still find myself thinking "hey I need to call Dad to tell him!" My sister and my DH have the same reaction. 10 years later it doesn't happen often anymore, but it still does happen sometimes.

[Deleted]

I've not inherited anything money wise. It doesn't look like there will be any money in future inheritance. I have an uncle, a grandma and my mom left (all maternal side. As of Nov I can say my siblings, cousins and I are the oldest generation on my dads side).

I did "inherit" other things since with the various deaths I grew as a person.

As far as when I die, right now it goes to my younger siblings. This could change in the future if I have kids/ get married and various other life changes.

[2kids10horses]

Well, my Dad passed away 2 years ago at 97, and my Mom is 97 now... They inherited money back in 1962, and have conservatively invested it over the years. When Dad died, my sister and I received the proceeds of a couple of life insurance policies.

15 or so years ago, they did extensive estate planning, setting up trusts and so on. What will happen is the corpus of the estate will go into a generation skipping trusts where my children and my sisters children will be the ultimate beneficiaries, but my sister and I can get the income from the trust until we die. (If we want/need it.) One of these trusts contains commercial real estate, which provides the income my mother lives on.

Anyway, I have set up education trusts for my children for their college, and if they earn scholarships for college, they can use the money for other purposes like buying a house, investments, or some other worthwhile purpose.

We own rental houses, that I fully expect my kids to inherit. We've been landlords ever since the kids were young, so they know the business.

[happytraveler]

My wife and I have never received an inheritance---we are in our late 40's and our parents are still alive (which we are both happy about!) Our grandparents are deceased, but any money they might have passed on must have gone to their kids (our parents, aunts, uncles, etc.). Neither of us had the proverbial unknown rich aunt or uncle who died and bequeathed their estate to us.

Financial magazines (Money, Kiplingers, etc.) always address the importance of talking to your parents about money and their estate while they are alive--I guess it is a way to ensure expectations are set, and for people (the beneficiaries of their parents' estates) to plan accordingly, but I have never been comfortable talking to my parents about money. First, it makes me uncomfortable just thinking about their mortality, the fact that someday they won't be here. Second, I just feel like asking them about how large their estate is, how much I should expect to get, etc. is crass and in bad taste. I don't mean to imply that anyone who does this (or has done this) is rude or crass---its just how I feel about talking to my parents about money. Frankly, I wish we had more open and comfortable communications in that regard.

[2kids10horses]

happytraveler...

i know what you are talking about with the parents about money. My Dad wanted me to know so could take over the family finances in case something happened to him. In college I was a Business major, and went on to get an MBA in Finance. My mother doesn't want me to know anything so she can retain "control" over everything!

The control thing has really worn on my sister. She is not financially independent. She has a part time job, but it doesn't support her lifestyle, so she has depended upon gifts from my parents for years. So, my mother constantly threatens to "cut her off" if she doesn't do exactly what she wants.

Fortunately, I'm financially indepenant (landlord) so her threats don't have the same terrorizing effect on me! (Thank goodness!)

Anyway, since my Dad passed away a couple of years ago, the estate attorney/CPA/estate planner calls me every so often to discuss the ramification of the latest change/no change of the tax laws. Just to keep me abreast of the situation. It's usually a "here's the situation, and this is what we are doing about it" kind of call.

These trusts are pretty complicated, and there's no way my 97 year old mother can keep it straight in her head. She's pretty deaf, so she "hears what she wants to hear". (If she starts to hear stuff she DOESN'T want to hear, she'll start fiddling with her hearing aids, and claiming that she can't hear!)

Anyway, the CPA/Attorney/Estate Planner calls me so I'll know what's going on. That infuriates my mother. She sees it that now I'm in control of her money instead of her.

For example: The CPA/Estate Planner/Attorney called me to say that mother wanted to give $50,000 to some Arts foundation. He convinced her that was too much, and that $5,000 would be more appropriate for her tax situation. I told him that I agreed, $5,000 is a very generous gift to the foundation, and my sister would probably be needing the $50,000 sometime in the future.

Now, of course, my mother thinks that I'm controlling her money!

(It used to be that she wanted to give tons of money to the Church. But at Dad's funeral, the Associate Pastor instead of the principal Pastor conducted the ceremony. So, now she's mad at the Church, and has "written them off".)

[happytraveler]

Jan 1, 2011 14:59:52 GMT -5 2kids10horses said:

Anyway, the CPA/Attorney/Estate Planner calls me so I'll know what's going on. That infuriates my mother. She sees it that now I'm in control of her money instead of her.

For example: The CPA/Estate Planner/Attorney called me to say that mother wanted to give $50,000 to some Arts foundation. He convinced her that was too much, and that $5,000 would be more appropriate for her tax situation. I told him that I agreed, $5,000 is a very generous gift to the foundation, and my sister would probably be needing the $50,000 sometime in the future.

Now, of course, my mother thinks that I'm controlling her money!

I don't mean to offend you, but based on what you said above, it does sound like you are controlling her money--you (and her financial planner) are deciding how much to donate to various causes. Given her age, and the complexities of the finances, that may be a very sensible thing. But what you describe may be why my parents don't share much info with me about money--I think it may reflect that they are giving up control.

[Deleted]

Dec 28, 2010 18:42:02 GMT -5 @debtheaven said:

For those of you who say you'd prefer to have your parents than an inheritance, as if it were a badge of honor ... DH and I would have greatly preferred that too. However, nobody ever asked us which we'd prefer, our parents, or the inheritances.

So having inherited, like it or not, we tried our best to "do right" by our parents and honor them by using their money wisely.

I just wanted to point that out. Not a day goes by that we do not think of our parents and all they have given us, and the inheritances are pretty low on the list.

Debtheaven people say that to point out that they themselves are not disappointed to not have inherritted. It is not a reflection on anyone else.

[Deleted]

I haven't inheritted money though my parents have been very generous with me and we joke about advancing my inheritance. Whether I actually inherit anything will depend on whether my Mom or Dad dies first. I don't know who I will leave things too. I have no kids and I am an only child so it kinda leaves things wide open. LOL I just realised that I answered N/A to all your questions.

[Deleted]

My parents are 80 but with good genes and God willing, they'll be around awhile. They have just under a$1 million in assets and a paid-for house. I have 4 siblings, so not counting on anything- if there's nothing left when they die, they planned well.

My Ex inherited about $300K from his late mother in 1983. We put $100K down on a house. He spent a lot on toys (new car, new sound system) and the rest ended up being used during years when he was unemployed. I calculate that the money would have appreciated to a couple of million if he'd kept it in the stock it was in.

In 1997 we divorced. We split the equity in the house 60 him/40 me. I got $100K; so did he after his credit card bills were paid from his share. He never worked again and ran through it all. I put mine down on a house with a $250K mortgage and sold the house 5 years later at at $200K profit. It was a nice boost to my retirement accounts, which had suffered in the last 5 years of the marriage when my then-husband was unemployed.

I like to think that my ex in-laws would appreciate my stewardship of the money they worked to accumulate. Anything left when I'm gone will go partly to my church but mostly to DS. He wants a SAH wife and a lot of kids (doesn't have either yet) and will put it to good use.

[TheOtherMe]

None of my grandparents had anything when they passed away.

One uncle who did have money left most of it to one brother and the rest to specific nieces and nephews who he had decided needed help. I was not among the chosen, nor was my father.

I did inherit about $10K from my mother's brother who had no children. He divided it evenly between his living nieces and nephews. I spent it for traveling. In hindsight, probably a poor decision.

If I live a long life, I might have some equity in my house. Otherwise, I have an extensive Beatles collection that should bring in enough cash to pay off my last bills.

I doubt my parents will have anything left as the way it now works in this country, the nursing home will end up with all of it.

[Deleted]

I doubt my parents will have anything left as the way it now works in this country, the nursing home will end up with all of it.

Well... YOU could always take care of them...

My father has promised to be very generous while he's still here with us... He has been so far.

[DVM gone riding]

I have one Grandma left-happens to be the one that had the money. I am not counting on anything but expect a fair token amount. What I imagine she has done is to divide the estate 5 ways with each of four daughters getting a share and the fifth share split again between the three grandkids.
I consider myself to have gotten my inheritance since she paid a large portion of my college education.
I simply hope my parents have enough funds to pay for themselves, though I am prepared to take mom in if/when.

[2kids10horses]

I don't mean to offend you, but based on what you said above, it does sound like you are controlling her money--you (and her financial planner) are deciding how much to donate to various causes.

Read more: notmsnmoney.proboards.com/index.cgi?board=finance&action=post&thread=288&page=2#ixzz19w4fG3ED

Happy,

I'm not offended, the CPA called me after the fact, and told me that he had "talked her down". I really didn't have any input. However, I did have to agree with his actions.

The problem is, she lives in a very nice "retirement complex". There are some VERY wealthy people who live there. Not that my mother isn't well off, but she's not "Uber rich". There are some Uber rich people there. And, I'm sure one of them mentioned that they had just donated some money to the Arts foundation. My mother has a "social climbing" ego, and I'm sure she wanted to keep up with the Jones', so she thought she'd make a large donation, too. (She's never been involved with this Arts Foundation before.) So, in a way, having the CPA having some degree of involvement is like taking the keys away from a drunk. It's for her own good.

[linarex]

I inherited from my grandparents when they passed when I was 10. It paid for all my private schooling through HS, most of my college, and part of my wedding. It also paid (thankfully) for my ridiculous credit card habits in college until I started learning more about my own finances and taking more control over them.

[Deleted]

Happy and 2Kids,

There's actually a practical and self-serving reason a Trustee is in touch with a (future) beneficiary (in a pass-through Trust). Although each state law differs, a Trustee has a fiduciary duty to the beneficiary (including future beneficiaries). So a future beneficiary could sue the Trustee personally if s/he perceives that the Trustee mis-managed or took inappropriate risks which affected the future beneficiaries interest.

We ran into this issue twice. First, when DH's father asked the Trust to be the lender on his house, the Trustee obtained written permission from my husband. The loan amount was about 10% of the value of the Trust.

The second time was after DFIL passed but we co-owned a commercial property with the Trust (on behalf of DH's uncle). The interest rate on the mortgage was something like 10% from an owner carry-back. Although rates had dropped to something between 7%-8% we couldn't get the Trustee to agree to refinance because the new note would become a recourse loan. Meaning of course, that if the property went into foreclosure and if the sale of the property wasn't enough to satisfy the debt, the lender could come after the rest of the Trust's assets (and ours-which actually exceeded the Trust's!). I wasn't too worried since the debt to value was only 50%. We found the situation dealing with the Trust as a co-owner so frustrating we wound up selling the property for less than what was purchased for in 1989, 12 years earlier! Had we been vindicative people we would have sued the Trust for buying the property in the first place since it was an inappropriate investment for a small Trust and was not purchased with proper due diligence; e.g. no inspections et cetera. We figured life was too short and wanted to move on.

[2kids10horses]

bonnap,

You have it right.

I am sitting in the middle... I will be a beneficiary during my lifetime of a generation skipping trust, but upon my passing, the trust will become the property of my children. In theory, I will never own the assets of the trust, but I will be entitled to the income.

[Deleted]

Actually, 2kids, you are the beneficiary and your children are the remainderman. Your parents' Trust will dissolve when you die. Is there a comfort clause for you in their Trust? Medical emergencies? I suspect that a lot of these smaller pass-through Trusts aren't worth a lot when they finally make it to the remainderman. I think DH might have even been a little disappointed after hearing so much about the Trust while he was growing up and found out he couldn't immediately retire at age 42 when he inherited like his dad did. Since I have low standards I was grateful we inherited anything!

[Deleted]

Happy,

I see from your profile you are almost exactly one year younger than I am. So I'm going to assume your parents are close in age to our remaining ones, mid-70s.

I tried posting this message yesterday but somehow lost it. Anyway, the REAL reason to get your parents to do estate planning is not about what you may or may not inherit but to get them to do their Health Directives and Do/ Do Not Resuscitate forms and to agree on who will represent them if they are incapacitated et cetera. Both my mother and DH's mother were finally motivated to get their stuff in order when they had operations requiring anesthesia (I think the hospitals required it before they would do the surgery). That prompted both of them to just do the whole estate planning project (wills, Trust, HD, DNR, et cetera) It was a good thing too because it was only a couple of years later that my mom was diagnosed with stage 4 pancreatic cancer. From diagnosis to death was only 41 days, 5 days after her 70th birthday! I'm glad we didn't waste much of that time dealing with estate planning and I could focus on enjoying the remaining time with her.

DH and I finally got our act together and did our estate planning, literally days before we made our move to Germany. We do have substantial assets but it didn't take that much time and didn't cost that much money. A lot of it is boiler plate stuff (but don't do this at home if you have substantial assets or children, since every State differs on the forms and protocol). 18 months ago it cost us $2,500 in the Phoenix AZ area.

DH was finally motivated after seeing how much work it is to settle an estate. My mother's affairs were in order (well other than having a substantially NEGATIVE estate) except she forgot to deed her little rental house into her Trust. Because it was listed in her Trust we were able to get an expedited trip to the Probate Court and get an order from the Court. But that was still a nearly 6 month delay and cost $2,500 in atty and court costs. Had she not had everything else in order I think it may have more like a 2 year and over 10K process. Both of her properties would have gone into foreclosure and no one would have gotten anything except the Court and the attorney.

It took me almost 2 years to close out the estate; one year of that was basically a part time job. All that I can say is be kind to ones you leave behind and don't leave them a mess!

[happyscooter]

I inherited my dad's share of my Grandmother's money. He was deceased. It was put into a money market account in 2005. My grandparents didn't have an education, so DH and I decided to use it for our children's college if anything happened and we couldn't pay for it. It would have been enough for both kids to finish up school, having to commute. When we were able to pay for school, and the inheritance wasn't needed, it went into CDs to save for retirement. I can't imagine my grandparents working as hard as they did and doing without, then me just squandering the money on something frivolous. Like eating out, or shopping for clothes.

[telephus44]

I haven't received any inheritance yet, but I do expect one from my parents. I don't need it, am not planning on it, but I'm pretty sure I will get one anyways. My dad paid more in taxes on his portfolio last year than he earned from his business. My father has already given both my sister and I positions in his hedge fund. I'm not sure of the exact legal position, but I believe he does have it registered as a closed end fund. It has it's own entity, pays it's own taxes, has a few partners (all friends and family).

DH's parents are another story. They just retired, and most of their current income is pension based. They have some retirement accounts, but given their health issues, I expect they won't leave much behind. I'm also not sure that they would divide it evenly - they have 3 children. DH is the only one to have "given" them a grandchild, but his brother's need more financial help than we do.

[Wisconsin Beth]

Jan 5, 2011 8:24:06 GMT -5 @bonnap said:

I tried posting this message yesterday but somehow lost it. Anyway, the REAL reason to get your parents to do estate planning is not about what you may or may not inherit but to get them to do their Health Directives and Do/ Do Not Resuscitate forms and to agree on who will represent them if they are incapacitated et cetera. Both my mother and DH's mother were finally motivated to get their stuff in order when they had operations requiring anesthesia (I think the hospitals required it before they would do the surgery). That prompted both of them to just do the whole estate planning project (wills, Trust, HD, DNR, et cetera) It was a good thing too because it was only a couple of years later that my mom was diagnosed with stage 4 pancreatic cancer. From diagnosis to death was only 41 days, 5 days after her 70th birthday! I'm glad we didn't waste much of that time dealing with estate planning and I could focus on enjoying the remaining time with her.

My parents got a lot of that done when Dad had his stroke. The hospital provided them with the paperwork for the basics. I don't recall if a lawyer spoke with them or not. My younger sister is a lawyer (and a nurse) and she looked over the paperwork and got named on the Health POA. My older brother got named on the financial POA.

I have to say, if your parents DO have a stroke, it's really helpful to have a lawyer/nurse sister working for a different hospital in the same medical complex. She was easily available when the doctors made rounds and understood all the paperwork Mom got saddled with. Plus, she could translate for all the rest of us. She was a blessing in a very stressful time.