moneymom
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Post by moneymom on Feb 7, 2015 13:03:49 GMT -5
Okay guys. This will be my last question re: our trust. We are in the final step!!
Y'all know all my issues with the grown stepchildren. Then we have young DD.
Here's what we decided:
All retirement accounts are NOT in the trust. DH has his, I have mine. This is the most significant asset we each have, by far. DH will make his beneficiary me, then when I die, it is split 3 ways between the kids. My retirement accounts will only go to DD. All our other tangible items will be split 3 ways. Pretty much everything in trust split 3 ways. However, here's the tough call. Our house. The step kids have never lived in this house. I paid the down payment 100% out of my money (inheritance). The downpayment was 30%. But I'm SAHM now and DH's income is paying most of the mortgage. DH is not giving me any input on how to handle the house. He tends to lean to give it towards DD only because he's not having a decent relationship with his older kids. I initially had the great idea of letting DD live in it for however long she wants (forever if she wants, after we die). Then once sold, the proceeds split 3 ways. However I can see the step kids fighting DD to sell the house and huge family feud. I am leaning towards DD just getting our home. But in a way it just doesn't feel right. I also considering just giving the step kids an extra $100k or so each to cover the fact that DD would get the house. Any thoughts?
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zibazinski
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Post by zibazinski on Feb 7, 2015 13:09:54 GMT -5
Leave DD the house for now. You can always change it later if you choose to. The way things are split seem very reasonable btw.
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justme
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Post by justme on Feb 7, 2015 13:10:50 GMT -5
It's not clear in your post, but I still think your trust should have two different set ups - before DD is 18 and after. i.e. Things only getting split between the kids after both of you die and if you both die before DD turns 18 she would get a higher proportion of the estate.
There is a way to give someone a living interest or something like that in a house. It lets them live in it until they die (or decide to move I think) and then it is split up after then. Beneficiaries cannot force sale before the person dies/moves.
What did you decide to do with life insurance.
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Deleted
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Post by Deleted on Feb 7, 2015 13:36:42 GMT -5
How old is DD and who would be likely to take care of her if you both were gone? When DS was small, my brother and his wife were the potential guardians. They lived several states away but DS had a good relationship with them because he saw them over the summers. They undoubtedly would have taken him into their house.
So, the provisions you make for the house would depend partly upon where DD's guardians would want to live. You can always specify that the house will be sold when she's 18 or when she's 22 if she's in college.
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zibazinski
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Post by zibazinski on Feb 7, 2015 13:42:58 GMT -5
Your down payment should be excluded from being divided up 3 ways.
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moneymom
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Post by moneymom on Feb 7, 2015 14:12:22 GMT -5
It's not clear in your post, but I still think your trust should have two different set ups - before DD is 18 and after. i.e. Things only getting split between the kids after both of you die and if you both die before DD turns 18 she would get a higher proportion of the estate. There is a way to give someone a living interest or something like that in a house. It lets them live in it until they die (or decide to move I think) and then it is split up after then. Beneficiaries cannot force sale before the person dies/moves. What did you decide to do with life insurance. DH's life insurance 3 ways. My life insurance (very small) to DD. We have to decide about the before 18, after 18. Everything above is on the assumption one of us lives until she is 18. Of course that may not be the case and we need to make those decisions still. Will likely take lawyers suggestions. yes, we can let her live there and when out, the three split the house $$. However I watch too many lifetime movies and I'm not comfortable with that. I'd rather give them the cash up front, or no house $$ at all.
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tcu2003
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Post by tcu2003 on Feb 7, 2015 14:40:45 GMT -5
I wouldn't spilt the house money, or give any extra to the other two kids to make up for it. You contributed all of the down payment, and you're managing the home now. It doesn't matter that your DH is the some earner at this moment - it's both of yours, and your DD's, home, and you're contributing to the household in other ways that are important to you guys. I will also say that fair is not always equal, and equal is not always fair. In this situation, fair to me is leaving the house solely to you if your DH dies first, and then to your DD after you die.
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ripvanwinkle
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All that is necessary for evil to succeed is that good men do nothing - Edmund Burke 1729 -1797
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Post by ripvanwinkle on Feb 7, 2015 19:25:13 GMT -5
What happens if you pass first?
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Formerly SK
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Post by Formerly SK on Feb 7, 2015 19:59:15 GMT -5
It's not clear in your post, but I still think your trust should have two different set ups - before DD is 18 and after. i.e. Things only getting split between the kids after both of you die and if you both die before DD turns 18 she would get a higher proportion of the estate. There is a way to give someone a living interest or something like that in a house. It lets them live in it until they die (or decide to move I think) and then it is split up after then. Beneficiaries cannot force sale before the person dies/moves. What did you decide to do with life insurance. DH's life insurance 3 ways. My life insurance (very small) to DD. We have to decide about the before 18, after 18. Everything above is on the assumption one of us lives until she is 18. Of course that may not be the case and we need to make those decisions still. Will likely take lawyers suggestions. yes, we can let her live there and when out, the three split the house $$. However I watch too many lifetime movies and I'm not comfortable with that. I'd rather give them the cash up front, or no house $$ at all. So if your DH dies you only get 1/3 of his life insurance?
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Deleted
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Post by Deleted on Feb 7, 2015 20:19:55 GMT -5
I know that a trust is different than a will, but can one change a trust like one can change a will?
I'm sorry if this is a stupid question. I only ask because DH and I married nearly 10 years ago, and wrote our wills just before we got married, with our prenup. I have 3 kids from a former marriage, we have 1 together, DH raised "my" 3 from a very young age (7, 5, 1).
When we married in 2005, "my" oldest was just 18. We just rewrote our wills in December because 9.5 years later, "my" 3 are now 28, 26 and 22, and "ours" is 16. We also changed DS3's guardian.
All this to say, do you really have to make decisions now for when your DD is over 18? Can't you just set things up till then, and then revisit things later? You may want to change things when she is older, either due to her age, aor due to a change in the situation with your stepkids. It's hard enough making decisions for now, do you really have to make them for 13 years from now?
Perhaps change is not be possible with a trust, that's why I'm asking.
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Bonny
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Post by Bonny on Feb 7, 2015 20:32:11 GMT -5
I know that a trust is different than a will, but can one change a trust like one can change a will? I'm sorry if this is a stupid question. I only ask because DH and I married nearly 10 years ago, and wrote our wills just before we got married, with our prenup. I have 3 kids from a former marriage, we have 1 together, DH raised "my" 3 from a very young age (7, 5, 1). When we married in 2005, "my" oldest was just 18. We just rewrote our wills in December because 9.5 years later, "my" 3 are now 28, 26 and 22, and "ours" is 16. We also changed DS3's guardian. All this to say, do you really have to make decisions now for when your DD is over 18? Can you just set things up till then, and then revisit things later? You may choose to change things when she is older, either due to her age, aor due to a change in the situation with your stepkids. Perhaps this is not be possible with a trust, that's why I'm asking. Yes you can change a Trust. Depending on what you want to do you either amend it or if there is a list (say of assets aka your Exhibit A) you can simply substitute a new exhibit A.
When we helped MIL changed her will (really her will and Trust) the "amendment" was really a re-stating of the Trust since we eliminated the dog Trust and eliminated some beneficiaries.
BTW and sorry to go O-T but sounds like MIL wants to change her Trust again and re-insert the Dog Trust again. Yes and make Pond Guy the Trustee of the Dog Trust. I TOLD you guys it was a bad idea not to speak up about it.
She'll wind up spending another $2,500, get in a fight and fire him and it will be changed again.
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Bonny
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Post by Bonny on Feb 7, 2015 20:42:12 GMT -5
It's not clear in your post, but I still think your trust should have two different set ups - before DD is 18 and after. i.e. Things only getting split between the kids after both of you die and if you both die before DD turns 18 she would get a higher proportion of the estate. There is a way to give someone a living interest or something like that in a house. It lets them live in it until they die (or decide to move I think) and then it is split up after then. Beneficiaries cannot force sale before the person dies/moves. What did you decide to do with life insurance. DH's life insurance 3 ways. My life insurance (very small) to DD. We have to decide about the before 18, after 18. Everything above is on the assumption one of us lives until she is 18. Of course that may not be the case and we need to make those decisions still. Will likely take lawyers suggestions. yes, we can let her live there and when out, the three split the house $$. However I watch too many lifetime movies and I'm not comfortable with that. I'd rather give them the cash up front, or no house $$ at all. I suspect your lawyer will advise to set up a separate Trust for your under aged DD. Typically these run for a period of time, say until she's 30 with a spendthrift clause. Typically the Trust would get funded by the life insurance policies and she would have income from the 401ks. With the spendthrift clause she can have X when she turns 18, another chunk at age 21 or 25 and the balance (if it's more than a certain amount, say $100k) at age 30.
BTW I'm not a big fan of Life Estates. While they sound good in theory in practice they don't work very well. I've been involved with two and in both cases the beneficiaries wound up quitclaiming their interest. DFIL's third wife couldn't afford to service the mortgage or pay the costs like taxes and repairs. Therefore she quitclaimed it to DH who was both the remainderman and the first mortgage holder rather than be foreclosed on. The other was DH's aunt. She was supposed to have a life estate in her father's home. MIL basically guilted her into giving up her interest. I honestly don't know how Aunt could ever forgive my MIL but maybe I don't know the whole story.
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Deleted
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Post by Deleted on Feb 7, 2015 20:45:28 GMT -5
As long as it's her 2.5K, Bonny LOL. More seriously, she is difficult, and you have to choose your battles. But given the info you just posted, I think Moneymom should set things up FOR NOW, accept "good enough", and revisit things later. A LOT can change in 13 years (till her DD turns 18). This thread also reminds me that because of DH's uncle's health issues over Christmas, we never told his cousins that we changed DS3's guardianship from them to his two oldest siblings. I know the cousins would agree it's better for DS3 at this point, but it's not exactly the type of thing you want to state over the phone, or in an email, which is why we'd been planning to tell them while we were there over Christmas.
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moneymom
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Post by moneymom on Feb 7, 2015 21:16:24 GMT -5
DH's life insurance 3 ways. My life insurance (very small) to DD. We have to decide about the before 18, after 18. Everything above is on the assumption one of us lives until she is 18. Of course that may not be the case and we need to make those decisions still. Will likely take lawyers suggestions. yes, we can let her live there and when out, the three split the house $$. However I watch too many lifetime movies and I'm not comfortable with that. I'd rather give them the cash up front, or no house $$ at all. So if your DH dies you only get 1/3 of his life insurance? I apologize, I have been very unclear, as I re-read my posts. If I or DH dies, the life insurance goes to each other first. If the other is also deceased, each child (2 step and 1 young DD) will get a share (everything is even).
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MIgal
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Post by MIgal on Feb 9, 2015 9:38:21 GMT -5
Please include in your will/trust that they must have a financial advisor. Is that even possible?
When my dad passed away, only 1 out of 4 siblings made good financial decisions on what to do with the money. Looking back, I really wish I would have talked to one - or was made to talk to one.
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Ombud
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Post by Ombud on Feb 9, 2015 10:21:26 GMT -5
Thought it was just my family: ♤ 1 gave 1/3 to each kid so they could pay off debts, then bought house next to his for DD, & DS just moved in with him ♡ 1 spent most fixing up a house still under water. Could have bought a new one ♢ 1 spent it fixing up a house she doesn't like and paying off the amount underwater. .. can't sell it ♧ 1 just has it 'evaporating' .... a lot to charity ... more living beyond her means ☆ has me putting it into an account I don't count as mine ... legacy assets
None of us are making great decisions I guess
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emma1420
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Post by emma1420 on Feb 9, 2015 10:32:08 GMT -5
I would leave the house to your DD only. Especially if everything else is equal.
However, I echo what others have said about making sure that you have a trust in place in case something happens to either you or your husband (or both of you) before your DD turns 18. If something happens to your husband will you have enough life insurance to pay off the mortgage to your house? Will you have enough life insurance to give you some time to grieve and look for a job? Do you have enough life insurance that if something were to happen to you that your husband would have enough money to pay for daycare, potentially pay for a house cleaner, etc.
Have you determined who would raise your DD if something happens to both of you? If you have what sorts of monies are being left to assist that person with raising her? What about things like college?
What you have right now sounds like it will be fair once you daughter is an adult. But, until then I would highly encourage a different set-up to make sure that your minor child is taken care.
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zibazinski
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Post by zibazinski on Feb 9, 2015 10:58:22 GMT -5
My trust left 80 percent to DD while she was still in college because DS was out and employed. He knew this and knew I would change it when she got out of school, which I did. What you do for a dependent is different than what you do for someone self supporting.
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