A different take on inheritance splits for adult children

[Knee Deep in Water Chloe]

In today's Dear Prudie: 


Dear Prudence,
My husband’s sister is a mess. She’s 40 and can’t hold a job for more than a few months. She lives beyond her means, and my in-laws encourage this behavior by subsidizing her entire life. The in-laws have a substantial amount of money, and I’ve never thought it was my business how they spent it. However, as they are nearing the end of their lives, they’ve told us that they have been keeping track of how much money they have given her over the years and will be deducting it from her share of the will! I think this is a terrible idea, one that will cause all sorts of hurt feelings. We don’t need the extra cash, and would be happy if everything is divided 50/50 (or they can give it all to charity, I don’t care)! How do we deal with the inevitable fallout from this? We’ve told the in-laws to make the inheritance equal, but they have decided they want to prove a point.

—Confused

Dear Prudie's repsonse:

SPOILER: Click to show

Dear Confused,It is generous of you and your husband to want to waive a substantial extra share of your in-laws’ estate. But I agree that if they think the best time to give life lessons to their daughter is after they’re gone, the lesson is guaranteed to backfire. Their will as described will leave horrible feelings of resentment on the part of your sister-in-law. Unfortunately, she won’t express these by stomping away, but by constantly harassing you and your husband. She has been taken care of all her life, and if her parents leave her without the means to continue this, she’s going to turn to you two for bailing out. I wonder if your sister-in-law has ever had a psychological evaluation to find out the source of her troubles. It could be she has a treatable condition that never got diagnosed, then the “treatment” became writing her checks. In any case, you are not the person who should talk to your in-laws about their estate planning. Your husband is. He should tell them that for the sake of his relationship with his sister, and her well-being, he’s urging them to redo their plans. A trust needs to be set up for his sister with administrators to watch over it and make sure she doesn’t run through it. That way she will have to start living within her means, which might motivate her to deal with her issues so that she is able to hold down a job. If she is sufficiently provided for, you and your husband won’t constantly have to turn away her begging bowl.—Prudie

[Shooby]

It's their will so they can do whatever they want. In general, I think it is just best to do a 50/50 split as your last act on earth. If they are concerned, they should just gift some money now to the brother or gift it to some separate account to the brother or their kids. Then, as the final act, do the 50/50 split. But, yes, if it isn't it is most likely to create family disharmony. But, if Sis is a user, she is going to find a way to create that disharmony any way by bickering over things in the house or whatever, so that won't really matter either way.

[ArchietheDragon]

Hard to tell from this, but it is possible that the parents have discussed this with their daughter and she is well aware that she is spending down her inheritance. 

[busymom]

Wouldn't be the first time that kids fought over a will. Or, the possessions in Mom & Dad's house, for that matter.

I agree that if this woman is THAT bad with money, a trust fund should be set up so she gets any inheritance in pieces, rather than the lump sum.  And, that husband should seriously consider changing his telephone number, so his sister won't be calling constantly asking for money. 

[emma1420]

Jul 30, 2015 12:28:13 GMT -5 Knee Deep in Water Chloe said:

In today's Dear Prudie: 


Dear Prudence,
My husband’s sister is a mess. She’s 40 and can’t hold a job for more than a few months. She lives beyond her means, and my in-laws encourage this behavior by subsidizing her entire life. The in-laws have a substantial amount of money, and I’ve never thought it was my business how they spent it. However, as they are nearing the end of their lives, they’ve told us that they have been keeping track of how much money they have given her over the years and will be deducting it from her share of the will! I think this is a terrible idea, one that will cause all sorts of hurt feelings. We don’t need the extra cash, and would be happy if everything is divided 50/50 (or they can give it all to charity, I don’t care)! How do we deal with the inevitable fallout from this? We’ve told the in-laws to make the inheritance equal, but they have decided they want to prove a point.

—Confused

Dear Prudie's repsonse:

SPOILER: Click to show

Dear Confused,It is generous of you and your husband to want to waive a substantial extra share of your in-laws’ estate. But I agree that if they think the best time to give life lessons to their daughter is after they’re gone, the lesson is guaranteed to backfire. Their will as described will leave horrible feelings of resentment on the part of your sister-in-law. Unfortunately, she won’t express these by stomping away, but by constantly harassing you and your husband. She has been taken care of all her life, and if her parents leave her without the means to continue this, she’s going to turn to you two for bailing out. I wonder if your sister-in-law has ever had a psychological evaluation to find out the source of her troubles. It could be she has a treatable condition that never got diagnosed, then the “treatment” became writing her checks. In any case, you are not the person who should talk to your in-laws about their estate planning. Your husband is. He should tell them that for the sake of his relationship with his sister, and her well-being, he’s urging them to redo their plans. A trust needs to be set up for his sister with administrators to watch over it and make sure she doesn’t run through it. That way she will have to start living within her means, which might motivate her to deal with her issues so that she is able to hold down a job. If she is sufficiently provided for, you and your husband won’t constantly have to turn away her begging bowl.—Prudie

It's their money so however they want to divide it up should be fine.  My dad is super into fairness, and he keeps track of the money he has given to both my brother and I over the years.  I know his will is set up so that I will receive a significant amount of extra money (as he provided my brother the deposit for his house, which was a substantial amount of money).  I've told my dad that he doesn't need to set-up his will in the way he has.  I don't care that he gave my brother the money, as I know if I had similar circumstances, he would have helped me as well.   But, my dad is set on dividing up his assets this way.  

And I disagree with Prudie's reply.   While it's possible that the SIL has a psychological condition, it's more likely that she doesn't.  Many people don't ever learn to manage their money while they are getting hand outs from others.  And in this case, I suspect that the SIL will just blow through whatever gets left to her anyway.

[Lizard Queen]

Jul 30, 2015 12:49:31 GMT -5 ArchietheDragon said:

Hard to tell from this, but it is possible that the parents have discussed this with their daughter and she is well aware that she is spending down her inheritance. 

  

[Deleted]

If the sister feels that entitled that she will fight with the brother over the inheritance it is going to happen no matter what you do. Might as well take the money and the grief. Better than not taking the money and getting the grief anyway.

[The Captain]

Stuff like this sucks, big time!

I'm a firm believer in it's the parent's money - they can do whatever they want with it.

However, I've seen what happens (both ways) when the parents support one child more than another, then either does or doesn't try to even it out in the will.

Probably the worst I saw was the above situation where the bulk was left to the one who didn't "need" help all their lives.  Then after the parent died the "poor" sibling came to the other for their "fair share" in a major guilt trip.

No good solutions any way around.

[souldoubt]

I think it's their money to do with as they please and if the lady writing in has such an issue with it her and her husband can support or give money to sister in law once the parents are gone and see that it accomplishes nothing.  Someone I know will receive 1/3 of a trust when the father passes, the youngest sister will receive 1/3 and the remaining 1/3 will be split between the older sister and the older sisters 2 children.  Older sister is 40 years old and constantly cuts off her nose to spite her face and has done so at the expense of her children one of which she didn't support or raise.  People like that aren't ever going to grow up or change and I'd be pretty PO'd if someone told me what I should do with the money I was leaving behind assuming I didn't ask for their advice.  

[movingforward]

Well, my dad has set up his will this way.  My brother has gotten a total of 25K through the years so the will is set-up so l receive an additional 25K from the taxable account.  The IRAs are 50/50.  I expressed the fact that I really don't want this because I don't want there to be any friction but my dad is insisting upon it.  He says it is the only way to make things equal.  I let it go... it is his money and he can do what he pleases.  My brother and I are not very close and live 1300 miles apart so if he  gets pissed about it then he gets pissed about it.  It is really not my fault that I have remained self sufficient and asked for nothing over the years.  Dad is only 68 and could live another 25 yrs.  There may be nothing left by that time anyway.

[Knee Deep in Water Chloe]

I have two thoughts: 

1) Why be so upset about a gift? The wife should just accept whatever is given to her and force a discussion about it.
2) Does the entire will have to be everyone's business? If the son and his wife insist on having the conversation with the parents, what if they just asked the parents to keep everyone's inheritance allocation private?

[zibazinski]

I'd do this before I died. I very much intend to even things up between DD and DS. He's going to get a huge chunk of cash to make up for her getting PA school. After I die, if there's anything left, it's not going to my kids anyway.

[happyhoix]

Jul 30, 2015 14:11:03 GMT -5 Knee Deep in Water Chloe said:

I have two thoughts: 

1) Why be so upset about a gift? The wife should just accept whatever is given to her and force a discussion about it.
2) Does the entire will have to be everyone's business? If the son and his wife insist on having the conversation with the parents, what if they just asked the parents to keep everyone's inheritance allocation private?

I think the wife is upset because she knows what a problem this will cause with the loser sister. She'll come whining to her brother that her parents left him most of the money and he has to share it with her, and once she's hit him up for money, wife is afraid brother will be seen as the new cash cow, and I think she's right. I would prefer splitting it 50/50, putting the sister's money into a trust and brother telling sister she can go jump if she thinks he's going to keep bailing her out like their parents did. Brother needs to nip that firmly in the bud.

As for the will being private, once the parents pass I believe the will becomes public, at least to all the beneficiaries. Can't swear to that not being an attorney, just from my experience with my sister's death.

[Deleted]

Jul 30, 2015 14:57:15 GMT -5 happyhoix said:

I think the wife is upset because she knows what a problem this will cause with the loser sister. She'll come whining to her brother that her parents left him most of the money and he has to share it with her, and once she's hit him up for money, wife is afraid brother will be seen as the new cash cow, and I think she's right. <snip>

As for the will being private, once the parents pass I believe the will becomes public, at least to all the beneficiaries. Can't swear to that not being an attorney, just from my experience with my sister's death.

I agree. It may not be the wife's business now but it sure will be when SIL expects her brother to prop her up with his share of the inheritance. I really hope the parents have told SIL this is how the estate will be divided. It will be worse if it comes as a surprise.

And yes, wills are a matter of public record. You may have to visit county offices in person and jump through a few hoops, but you can get them on request. You don't even have to be a family member or a beneficiary.

[souldoubt]

Using that same rationale they can tell her to go pound sand if she complains about getting less of an actual inheritance when the parents pass to make up for what she got when they were alive.  The daughter the parents support, the daughter in law and her husband all need to put their big boy and girl pants on and deal with things like adults by learning to say no or dealing with decisions they don't control.  The world is not a perfect place let's stop trying to wuss it up so feelings aren't hurt when talking about problems people bring on themselves.  Everyone like the daughter the parents support that I've met is always going to come around with their hand out because they're used to others supporting them.  Trust or not sooner or later she would be broke and asking for help.  No amount of money is going to fix that because people like that will always blow through it since it's all they know.  

[happyhoix]

Yes but I think if the sister gets 25% of the estate and the brother 75%, the sister will always hold it over his head that he got so much more than she did. It's true that the parents have every right to leave what they want to each child, but I think they should respect their son's wishes and divide it equally, so brother can flat out say "You got exactly as much as I did."

True the sister probably will still whine about it. I had a sister like this who felt her siblings with jobs had some kind of moral obligation to send her money just because she refused to work. But the brother can be completely guilt free because the money was split 50/50 - hopefully this will empower him to continue to tell her no (just like I did with my sister).

Maybe brother will be lucky and his parents will spend their last dime just as they kick the bucket - nothing to fight over.

[mollyanna58]

Jul 30, 2015 12:49:31 GMT -5 ArchietheDragon said:

Hard to tell from this, but it is possible that the parents have discussed this with their daughter and she is well aware that she is spending down her inheritance. 

My guess is that the sister knows nothing about the parents keeping track of the money she has received, and evening things out in their will.

After all, she just got a little help here and there when she needed it; and brother doesn't need  the money, so she should inherit more than him! 

[ArchietheDragon]

Jul 30, 2015 15:28:33 GMT -5 mollyanna58 said:

Jul 30, 2015 12:49:31 GMT -5 ArchietheDragon said:

Hard to tell from this, but it is possible that the parents have discussed this with their daughter and she is well aware that she is spending down her inheritance. 

My guess is that the sister knows nothing about the parents keeping track of the money she has received, and evening things out in their will.

After all, she just got a little help here and there when she needed it; and brother doesn't need  the money, so she should inherit more than him! 

That is a good guess. 

[Ombud]

I'm not a great example but I've seen the mess left behind when mom left it to us 5 kids & nothing to GKs. Plus 1 sis was subsidized & will be out of inheritance soon

So here's my plan:
DS got 50k for a house, 12K for Roths, 5k wedding

DD got 6k car, 7 yrs support

Inheritance:
DD & DS - 50 / 50 house, brokerage, IRA, Roth (just changed)

GKs - equal parts of legacy account

[mollyanna58]

Jul 30, 2015 15:34:45 GMT -5 Ombud said:

I'm not a great example but I've seen the mess left behind when mom left it to us 5 kids & nothing to GKs. Plus 1 sis was subsidized & will be out of inheritance soon

So here's my plan:
DS got 50k for a house, 12K for Roths, 5k wedding

DD got 6k car, 7 yrs support

Inheritance:
DD & DS - 50 / 50 house, brokerage, IRA, Roth (just changed)

GKs - equal parts of legacy account

Just get everything set up legally; new will, whatever. 

[Ombud]

Jul 30, 2015 15:37:21 GMT -5 mollyanna58 said:

Jul 30, 2015 15:34:45 GMT -5 Ombud said:

I'm not a great example but I've seen the mess left behind when mom left it to us 5 kids & nothing to GKs. Plus 1 sis was subsidized & will be out of inheritance soon

So here's my plan:
DS got 50k for a house, 12K for Roths, 5k wedding

DD got 6k car, 7 yrs support

Inheritance:
DD & DS - 50 / 50 house, brokerage, IRA, Roth (just changed)

GKs - equal parts of legacy account

Just get everything set up legally; new will, whatever. 

House is in a trust by itself. All accounts have POD / TOD in place. Easier than a will in California as only death cert needed on accounts.

[Robert not Bobby]

I have two kids, when I go and I hope that is not for decades to come, it will be 50/50 even if one is a billionaire and the other is living in the streets. Those are my thoughts.

[ArchietheDragon]

The only estate I have had intimate knowledge of was my mom's mom.  The estate was not divided equitably between my mom and her brother because my mom was co-owner of a lot of cash accounts and sole beneficiary of some insurance accounts.  Also my mom's brother (her only sibling had already died).  So the remaining estate was slit equality between my mom and my three cousins.   So, it was not equitably, but was it fair? I can't answer that. 

[Ryan]

This is how my in-laws are doing it (from what I gather).  They don't have any freeloading kids, but I think they want to make sure it's pretty even so they keep track.  I'm sure they are kind of evening it out as they go along.

[tskeeter]

Prudie is probably right about the sister.

I think one has to consider that nothing stops the brother from gifting part of his inheritance to his sister, so both kids recieve the same amount from the parents estate.  That should polish the brother's shining armor a bit and excuse him from any future obligation to his sister.  She probably won't see it that way, though.

In my Dad's family, the youngest sibling always got help from his Mom and Dad.  Mom and Dad made him sign documentation for the loans.  Obviously they were pretty sure he'd never pay them back.  When Grandpa died and Grandma sold the farm, the other siblings convinced Grandma to let them "invest" the proceeds from the sale of the farm to provide her with enough income to cover her modest living expenses (and to shelter the small nest egg from the youngest brother).  By the time Grandma passed away, the "investments" were exhausted and the older siblings were subsidizing Grandma's expenses.  The youngest son never contributed to his mother's expenses.

Grandma died 35 years ago.  Today, the youngest son will tell anyone who will listen how his older brother, the exectutor of Grandma's estate (which amounted to some old clothes and a few pieces of valueless personal property), screwed him out of his inheritance.  He doesn't give a thought to the tens of thousands of dollars he borrowed from his parents and never repaid.  He doesn't give a thought to the fact that the executor uncle was the family member who looked after Grandma, got her to doctor's appointments and church, and invited Grandma over for dinner during the last 15 years of her life (as far as I know, Grandma and/or Grandpa were never invited to their youngest child's home, much less invited for a meal).  He doesn't give a thought to the fact that he brought his family of five to Grandma and Grandpa's every Sunday for a free lunch and dinner for 20 years.

Parasites will always be parasites.  And they will never get enough from others.    

[Bonny]

Jul 30, 2015 15:17:10 GMT -5 happyhoix said:

Yes but I think if the sister gets 25% of the estate and the brother 75%, the sister will always hold it over his head that he got so much more than she did. It's true that the parents have every right to leave what they want to each child, but I think they should respect their son's wishes and divide it equally, so brother can flat out say "You got exactly as much as I did."

True the sister probably will still whine about it. I had a sister like this who felt her siblings with jobs had some kind of moral obligation to send her money just because she refused to work. But the brother can be completely guilt free because the money was split 50/50 - hopefully this will empower him to continue to tell her no (just like I did with my sister).

Maybe brother will be lucky and his parents will spend their last dime just as they kick the bucket - nothing to fight over.

I know I probably dodged this bullet with my brother when my mom died. But I fully expect he will bring up how I "got" Mom's condo (and made money on it) at some point in the future. I also suspect that he thinks his kids will inherit DH's and my money since we don't have kids and DH is an only child.

He's in for a rude surprise!

[Ryan]

Jul 30, 2015 16:33:33 GMT -5 Bonny said:

Jul 30, 2015 15:17:10 GMT -5 happyhoix said:

Yes but I think if the sister gets 25% of the estate and the brother 75%, the sister will always hold it over his head that he got so much more than she did. It's true that the parents have every right to leave what they want to each child, but I think they should respect their son's wishes and divide it equally, so brother can flat out say "You got exactly as much as I did."

True the sister probably will still whine about it. I had a sister like this who felt her siblings with jobs had some kind of moral obligation to send her money just because she refused to work. But the brother can be completely guilt free because the money was split 50/50 - hopefully this will empower him to continue to tell her no (just like I did with my sister).

Maybe brother will be lucky and his parents will spend their last dime just as they kick the bucket - nothing to fight over.

I know I probably dodged this bullet with my brother when my mom died. But I fully expect he will bring up how I "got" Mom's condo (and made money on it) at some point in the future. I also suspect that he thinks his kids will inherit DH's and my money since we don't have kids and DH is an only child.

He's in for a rude surprise!

Who else would get the money?

[Bonny]

Jul 30, 2015 16:47:01 GMT -5 Ryan said:

Jul 30, 2015 16:33:33 GMT -5 Bonny said:

I know I probably dodged this bullet with my brother when my mom died. But I fully expect he will bring up how I "got" Mom's condo (and made money on it) at some point in the future. I also suspect that he thinks his kids will inherit DH's and my money since we don't have kids and DH is an only child.

He's in for a rude surprise!

Who else would get the money?

Two charities; a land Trust and a no-kill pet shelter.  Both of these causes are very important to me.

[Deleted]

Jul 30, 2015 15:17:10 GMT -5 happyhoix said:

Yes but I think if the sister gets 25% of the estate and the brother 75%, the sister will always hold it over his head that he got so much more than she did. It's true that the parents have every right to leave what they want to each child, but I think they should respect their son's wishes and divide it equally, so brother can flat out say "You got exactly as much as I did."

True the sister probably will still whine about it. I had a sister like this who felt her siblings with jobs had some kind of moral obligation to send her money just because she refused to work. But the brother can be completely guilt free because the money was split 50/50 - hopefully this will empower him to continue to tell her no (just like I did with my sister).

Maybe brother will be lucky and his parents will spend their last dime just as they kick the bucket - nothing to fight over.

It will be split 50/50, she got a bunch of her money before they died.

[kittensaver]

Jul 30, 2015 16:33:33 GMT -5 Bonny said:

Jul 30, 2015 15:17:10 GMT -5 happyhoix said:

Yes but I think if the sister gets 25% of the estate and the brother 75%, the sister will always hold it over his head that he got so much more than she did. It's true that the parents have every right to leave what they want to each child, but I think they should respect their son's wishes and divide it equally, so brother can flat out say "You got exactly as much as I did."

True the sister probably will still whine about it. I had a sister like this who felt her siblings with jobs had some kind of moral obligation to send her money just because she refused to work. But the brother can be completely guilt free because the money was split 50/50 - hopefully this will empower him to continue to tell her no (just like I did with my sister).

Maybe brother will be lucky and his parents will spend their last dime just as they kick the bucket - nothing to fight over.

I know I probably dodged this bullet with my brother when my mom died. But I fully expect he will bring up how I "got" Mom's condo (and made money on it) at some point in the future. I also suspect that he thinks his kids will inherit DH's and my money since we don't have kids and DH is an only child.

He's in for a rude surprise!

Bonny - is there any way you can subtly "set" his expectations/lower the bar now? (to prevent blow-back later).

As you know, I manage a family Trust. As you also know, it is for a severely disabled relative that no one (including me ) expects to live to be an old man. So there has in the past been some interesting speculation and salivating around the edges of that Family Money as to what it's disposition will be. No one *really* knows who the successor trustee is (    ), and I've simply allowed everyone to believe that it will be going to charity (I've never lied, I've just allowed that assumption - when someone else brought it up - to hang in the air).

As a result, no one has asked me about it in over 5 years - and no one has tried to "borrow" against it or come up with any other schemes either in that amount of time. *Some* people might be pleasantly surprised if they ever *do* get some of it, but in the meantime I have peace - AND lowered, realistic expectations from family.

Just a thought. On the other hand, you might not care!