How many are concerned with passing on assets to children?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills

How many are concerned with passing on assets to children?

Postby HardKnocker » Wed Jan 30, 2013 8:37 am

Is this a concern?

How much planning have you done to maximize this and what have you done?

Not just a will and simple estate plan but have you taken steps to minimize estate taxes and income taxes for your heirs?

I have done some planning using will and trusts to pass along considerable assets but have not gone to more complicated strategies like using life insurance trust and funding estate tax/income tax liabilities.
“Gold gets dug out of the ground, then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility.”--Warren Buffett
User avatar
HardKnocker
 
Posts: 2021
Joined: Mon Oct 06, 2008 12:55 pm
Location: New Jersey USA

Re: How many are concerned with passing on assets to childre

Postby reggiesimpson » Wed Jan 30, 2013 9:13 am

Much of the concern has been mitigated by Congress keeping the estate tax and gift tax exclusion the same as last year and made permanent. $10 million + (and inflation adjusted) per couple. As nothing the government does is "permanent" i would view this maneuver as "long term potentially temporary". Meaning CYA or cover your azz. Some thoughts to consider are a SLAT or Spousal Lifetime Access Trust. Just as it says you have lifetime access to it. Second to die insurance with the kids as beneficiaries in an irrevocable trust. Comes out tax free to them. Generation Skipping Trust. Just in case they get divorced after you are gone........never happen right? You also have the option of shifting any funds left in the childrens 529 plans to your grandchildren. Act accordingly. Theres more but this is a discussion you need to have with an estate atty.You may want to pick up the book "Beyond the Grave" by the Conlons. It covers much of your concern and is quite thorough ( i found it on BH). Good luck.
reggiesimpson
 
Posts: 1271
Joined: Mon Dec 19, 2011 1:47 pm

Re: How many are concerned with passing on assets to childre

Postby NYBoglehead » Wed Jan 30, 2013 9:18 am

I think the overwhelming majority of people won't have to worry about estate taxes. That said, if I ever find that I am approaching the threshold, I'll probably start having more fun for starters and then start gifting it away to my family while I'm still around.
NYBoglehead
 
Posts: 1588
Joined: Fri May 25, 2012 10:38 am

Re: How many are concerned with passing on assets to childre

Postby Grt2bOutdoors » Wed Jan 30, 2013 9:24 am

NYBoglehead wrote:I think the overwhelming majority of people won't have to worry about estate taxes. That said, if I ever find that I am approaching the threshold, I'll probably start having more fun for starters and then start gifting it away to my family while I'm still around.


+1 My wealthy relatives have been gifting the money - they fully funded UTMA's for their kids offspring before there were 529 plans and directly paid for schooling costs and housing repairs. They also have trusts set up since one of the offspring is absolutely terrible with money (no amount of teaching will help him). I'm sure they pass a few bucks along in untraceable cash, but that may just be conjecture on my part. :wink:

They have enough to gift to others - but they aren't that generous.
"Luck is not a strategy" Asking Portfolio Questions
Grt2bOutdoors
 
Posts: 10420
Joined: Thu Apr 05, 2007 9:20 pm
Location: New York

Re: How many are concerned with passing on assets to childre

Postby bsteiner » Wed Jan 30, 2013 10:34 am

The estate tax is still relevant to many of our clients.

About half the states still have state estate or inheritance taxes, many with exempt amounts lower than the Federal exempt amount. Since these taxes vary from state to state, a detailed discussion of this is beyond the scope of this forum.

There are also non-tax reasons to do proper planning, to protect your children's inheritances from potential creditors, including spouses.

If you buy life insurance, you'll only come out ahead if you die substantially before life expectancy. However, life insurance is the only way to protect against the risk of dying substantially before life expectancy. If you live to life expectancy, your family would be better off had they invested the premiums in other assets, assuming an average investment return.
bsteiner
 
Posts: 952
Joined: Sat Oct 20, 2012 10:39 pm
Location: NYC

Re: How many are concerned with passing on assets to childre

Postby MN Finance » Wed Jan 30, 2013 4:11 pm

Everyone needs to be concerned about doing a proper estate plan, though very few give it much thought. Someone might spend countless hours researching which fund will save them 5 bps a year on their portfolio, but could blow 100 times that with the wrong plan in place.

First, everyone needs to have the right plan in place. There has to be a smooth transition, so it's not just about wills and trusts, but about health care documents and financial powers of attorney. Most couples have one person that manages the finances. Well at some point, that person is going to be incapacitated or simply unwilling to manage investments. What does the other spouse do at the that point? Or the children? They're NOT going to come to a bogleheads forum for advice. They're going to find someone to manage the assets and/or take over other financial responsibilities. They will pay someone they don't know, or trust someone that doesn't have the expertise. That decision should be planned well in advance and be clearly defined today while we are able to be a part of that conversation.

Second, there needs to absolutely be a plan w/r/t income and spend down strategy and not JUST how thats related to "safe withdrawal rates". Most prudent bogleheads are never going to run out of money because it's been examined to death. Well, if running out or not running out is the only measure of success, then the only people who need to be worried are the 5% on either side of the success line. The rest of the 90% probably can't change the "will it last question". BUT they can change the relative success. What asset do you spend? It depends on where the money goes and when. As well as multigenerational tax assumptions. When should assets be gifted to the next generation while still alive? It's not just a questions for someone who will owe estate taxes. If one plan means the kids get an extra $50k and the church an extra $50k, then that's better than the wrong plan.

And, as mentioned already, fed estate tax exemptions are $5M/person so the number of people impacted is now much smaller, but many states have much smaller thresholds. $1M -$2M isn't exactly a large estate and if planning can save 100k in taxes, it obviously makes sense.

I would also clearly put decisions like Roth conversions in the estate planning category.

See - ALL this needs to be done in concert. We can't have isolated discussions about allocation, estate planning, income strategies, etc.
MN Finance
 
Posts: 1249
Joined: Sat Dec 22, 2012 11:46 am

Re: How many are concerned with passing on assets to childre

Postby mephistophles » Wed Jan 30, 2013 4:19 pm

HardKnocker wrote:Is this a concern?

How much planning have you done to maximize this and what have you done?

Not just a will and simple estate plan but have you taken steps to minimize estate taxes and income taxes for your heirs?

I have done some planning using will and trusts to pass along considerable assets but have not gone to more complicated strategies like using life insurance trust and funding estate tax/income tax liabilities.


The answer depends entirely upon what you and your spouse's financial goals for your family are. Your thoughts, your feelings, your goals, your objectives are all that matter, as your situation is unique.
ole meph
User avatar
mephistophles
 
Posts: 2760
Joined: Tue Mar 27, 2007 3:34 am

Re: How many are concerned with passing on assets to childre

Postby MathWizard » Wed Jan 30, 2013 5:08 pm

No, this is not a concern.

I am giving my kids a better financial eduaction than I had, plus helping with the
education for their careers much more than I ever had.

That should give them a much better shot at life than whatever trinkets I (or more likely
my wife) will pass on to them.

I fully expect that they will inherit a substantial amount of assets (in the $100's of thousands
each in today's dollars) since I expect that my portfolio will sustain itself in retirement,
but by then I expect that they will already have amassed 100's of thousands on their own.
MathWizard
 
Posts: 1506
Joined: Tue Jul 26, 2011 2:35 pm

Re: How many are concerned with passing on assets to childre

Postby MN Finance » Wed Jan 30, 2013 5:58 pm

MathWizard wrote:No, this is not a concern.

I am giving my kids a better financial eduaction than I had, plus helping with the
education for their careers much more than I ever had.

That should give them a much better shot at life than whatever trinkets I (or more likely
my wife) will pass on to them.

I fully expect that they will inherit a substantial amount of assets (in the $100's of thousands
each in today's dollars) since I expect that my portfolio will sustain itself in retirement,
but by then I expect that they will already have amassed 100's of thousands on their own.


I would say the simple fact that they are inheriting money in a any substantial amount a need for proper planning. Will they get the right assets at the right time? Also, what happens if/when you can't/won't manage your own money and that burden falls on them? Do they live next door or in a different state? Do they know the details of your current and expected future position? Of course, as the generations change the lack of transparency between one generation and the next is far different than it was/is as the greatest generation aged and passed away when privacy dictated that financial matters generally weren't discussed intra-generationally.

I'm sure you've addressed these issues, just using it to point out that "estate planning" is not a simple conversation covered by a simple set of documents.
MN Finance
 
Posts: 1249
Joined: Sat Dec 22, 2012 11:46 am

Re: How many are concerned with passing on assets to childre

Postby Garco » Wed Jan 30, 2013 6:26 pm

I am definitely concerned about this but have only begun to set up a general estate plan. The first elderlaw attorney that we consulted did a minimum amount of work -- as a kind of test on our part -- but we need a full plan and someone we feel greater confidence in. So we're on the lookout now both for legal and financial advice. Where we keep the money, and in what form, has to be documented.

It's very likely that we'll have some money for the kids left over when we're gone, if only because my 401k will be designed to never exhaust itself. Also, some fraction of our savings are in a Roth and are specifically reserved to be treated as an inheritance and not something that we expect to tap. In the meantime because we are likely to receive some money from the estates of our own parents, we feel it's right to pay it forward to our own kids. I'm not worried about sheltering the money from estate taxes, but I don't want there to be any ambiguity over who would be receiving the benefits of our Roth IRA's and our 401k's as well as funds in our taxable accounts, the house, etc. It's hard to say how much this would add up to, but likely somewhere between 1 and 6 million depending on how our investments perform and how long we live.
User avatar
Garco
 
Posts: 385
Joined: Wed Jan 23, 2013 3:04 am

Re: How many are concerned with passing on assets to childre

Postby mac808 » Wed Jan 30, 2013 6:40 pm

I too want to give my children a "level playing field" on which to compete. Given so much increasing global competition, it's hard to understand what that will mean for the next generation. I work around a lot of people from other cultures and it seems like their families save, invest and plan to pass down wealth almost obsessively. Chinese families in particular seem keen on this. So if my kids (given a great, free education) will have to compete for goods and resources against their kids (given the same education + cash for a home), what does that mean?

I see this a lot in NYC and San Francisco where it's become so expensive to live that many people are priced out or forced into sub-standard living conditions, regardless of their education, intelligence or work ethic.
mac808
 
Posts: 124
Joined: Mon Sep 19, 2011 9:45 pm

Re: How many are concerned with passing on assets to childre

Postby umfundi » Wed Jan 30, 2013 7:02 pm

Our kids are now 21 and 17.

I was much more concerned about this when they were younger, so we have a trust and proper wills and guardianship documents and custodians (including a bank) for our estate.

They both have fully funded college funds, and I intend to fund their IRAs until they are about 30.

Beyond that, my attitude is that beyond age 18, hey, I had my chance. Now, they are their own people. I will help them , but my opportunity to control or influence them in any major way is past.

Keith
Déjà Vu is not a prediction
umfundi
 
Posts: 3361
Joined: Tue Jun 07, 2011 6:26 pm

Re: How many are concerned with passing on assets to childre

Postby Culture » Wed Jan 30, 2013 7:18 pm

I would love to leave assets to my son, and I probably will. OTOH, I am not going to significantly impact my life in order to make sure he gets an inheritance. He got a stellar upbringing, a college degree, a trade degree, and a new truck at graduation, I figure anything else is gravy.

However, given I likely will leave assets (we expect a 2.5-3% withdrawal rate), and my estate will likely be above the exemption level, I recognized my limitations and hired an expensive estate attorney who knows how to handle these types of things. I also get the plan regularly updated, as things change rapidly in this area.

Our assets will go into a family trust, to which my son, wife and future (hopefully) grand children are the sole income beneficiaries. I do not have to worry about my wife's second husband (or third, forth or fifth :-)) or my son's future ex-wife (he is not even dating anyone now :-)) getting my principle.

OTOH, the also gives me a great excuse for not purchasing that Ferrari for the 19 year old stripper who is going to be my second wife if the worst happens :-). Sorry honey, the money it tied up in the trust!
User avatar
Culture
 
Posts: 238
Joined: Mon Nov 17, 2008 10:49 am
Location: Greater Houston, Texas

Re: How many are concerned with passing on assets to childre

Postby Culture » Wed Jan 30, 2013 7:23 pm

mac808 wrote:I see this a lot in NYC and San Francisco where it's become so expensive to live that many people are priced out or forced into sub-standard living conditions, regardless of their education, intelligence or work ethic.


I understand what you mean here, I lived in Boston where the same thing happens. However, I always wondered, if they were truly intelligent, why are they living in a favella in Boston instead of a 3200 SF home in Texas like I am? We do have open interstate borders in the USA.

My mortgage payment on a nice 2500 SF house in Texas was LESS than my rent on a one bedroom tenement in Sumerville, MA.
User avatar
Culture
 
Posts: 238
Joined: Mon Nov 17, 2008 10:49 am
Location: Greater Houston, Texas

Re: How many are concerned with passing on assets to childre

Postby LadyGeek » Wed Jan 30, 2013 7:25 pm

This thread is now in the Personal Finance (Not Investing) forum (estate planning).
To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
User avatar
LadyGeek
Site Admin
 
Posts: 19635
Joined: Sat Dec 20, 2008 6:34 pm
Location: Philadelphia

Re: How many are concerned with passing on assets to childre

Postby bsteiner » Wed Jan 30, 2013 7:50 pm

In response to Garco: if you might have between $1 million and $6 million, you might want to consult with a traditional trusts and estates attorney rather than an elder law attorney.

In response to reggiesimpson: I don't like the acronym SLAT. We have CLATs (charitable lead annuity trusts) and CLUTs (charitable lead unitrusts). We have CRATs (charitable remainder annuity trusts) and CLUTs (charitable remainder unitrusts). If we have SLATs, what will we have next? Actually this is just old wine in new bottles. It's just a trust for the spouse and issue, no different from a credit shelter (bypass) (family) trust in a Will, except that it's created during lifetime, and no different from an insurance trust except that the assets are other than insurance.

In response to umfundi: you said you had "a trust and proper wills." While you didn't say, it's possible from the context that you created a revocable trust. While revocable trusts are useful in some cases, and in some states, for most people they're not necessary, and they often tend to distract people from the important issues. We do them in the minority of cases where there's a reason to do so in the particular case, but not where there's no reason to do so in that particular case.
bsteiner
 
Posts: 952
Joined: Sat Oct 20, 2012 10:39 pm
Location: NYC

Re: How many are concerned with passing on assets to childre

Postby umfundi » Wed Jan 30, 2013 7:59 pm

bsteiner wrote:In response to umfundi: you said you had "a trust and proper wills." While you didn't say, it's possible from the context that you created a revocable trust. While revocable trusts are useful in some cases, and in some states, for most people they're not necessary, and they often tend to distract people from the important issues. We do them in the minority of cases where there's a reason to do so in the particular case, but not where there's no reason to do so in that particular case.

Yes, we did that when our kids were young, basically to put our estate into responsible management for the benefit of our kids should something happen to us.

Now the kids are mature, we are just retired, and agonizing over our legacy is not a priority. Our trust and plan has, I think, well served its intent.

Thank you for your comments. A good reminder that we probably need to dust off the plan and totally redo it.

Keith
Déjà Vu is not a prediction
umfundi
 
Posts: 3361
Joined: Tue Jun 07, 2011 6:26 pm

Re: How many are concerned with passing on assets to childre

Postby reggiesimpson » Wed Jan 30, 2013 8:30 pm

bsteiner wrote:In response to Garco: if you might have between $1 million and $6 million, you might want to consult with a traditional trusts and estates attorney rather than an elder law attorney.

In response to reggiesimpson: I don't like the acronym SLAT. We have CLATs (charitable lead annuity trusts) and CLUTs (charitable lead unitrusts). We have CRATs (charitable remainder annuity trusts) and CLUTs (charitable remainder unitrusts). If we have SLATs, what will we have next? Actually this is just old wine in new bottles. It's just a trust for the spouse and issue, no different from a credit shelter (bypass) (family) trust in a Will, except that it's created during lifetime, and no different from an insurance trust except that the assets are other than insurance.

In response to umfundi: you said you had "a trust and proper wills." While you didn't say, it's possible from the context that you created a revocable trust. While revocable trusts are useful in some cases, and in some states, for most people they're not necessary, and they often tend to distract people from the important issues. We do them in the minority of cases where there's a reason to do so in the particular case, but not where there's no reason to do so in that particular case.

I am not an estate attorney. I used the term that was quoted to me by my own estate atty. Further, the WSJ has used the term SLAT quite extensively recently. Maybe there is change afoot?
reggiesimpson
 
Posts: 1271
Joined: Mon Dec 19, 2011 1:47 pm

Re: How many are concerned with passing on assets to childre

Postby NAVigator » Wed Jan 30, 2013 8:36 pm

I have two grown children who will be co-executors of my will and beneficiaries of my estate. I have read about and carefully planned to avoid probate as much as possible and have financial holdings pass outside of the will with properly named beneficiaries. I will have IRAs "stretch" to the children's ages so they grow tax deferred longer.

I have found several books helpful in this process. These include books by Ed Slott and Plan Your Estate by Nolo Press.

I have also used various resources, mostly Vanguard Philosophy pdf files to help my children learn about investing.

I have given them each a copy of "The Smartest Investment Book You'll Ever Read" by Dan Solin to serve as a quick refresher when they need it.

My accounts are all described in a document which they know how to obtain and decrypt. I also gave each a guide book for being an executor of an estate.

Jerry
"I was born with nothing and I have most of it left."
User avatar
NAVigator
 
Posts: 2458
Joined: Tue Feb 27, 2007 8:24 am
Location: Iowa

Passing it on: Now or later.

Postby Taylor Larimore » Wed Jan 30, 2013 9:02 pm

HardKnocker:
How many are concerned with passing on assets to children?


We are in our late 80s. Thanks to Jack Bogle, our portfolio should be more than adequate to last until we die. Accordingly, several years ago we began gifting to our beneficiaries.

The recipients are appreciative, taxes should be less, and it is a nice feeling to know we are helping when it is most needed.

Best wishes
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
User avatar
Taylor Larimore
Advisory Board
 
Posts: 20116
Joined: Tue Feb 27, 2007 9:09 pm
Location: Miami FL

Re: How many are concerned with passing on assets to childre

Postby Steelersfan » Wed Jan 30, 2013 10:16 pm

Not worried about estate taxes since they won't apply with the new law.

Not worried about state inheritance taxes, although they will be paid.

Have all the end of life documents done by competent legal council.

Have beneficiaries and secondary beneficiaries on accounts and in the will.

Have a capable, trustworthy and committed executor (and alternates if needed) for the estate.

Have sensible adult children who will inherit.

I trust them to do the right thing.

And I won't be around to second guess them.
User avatar
Steelersfan
 
Posts: 2481
Joined: Thu Jun 19, 2008 9:47 pm

Re: How many are concerned with passing on assets to childre

Postby sscritic » Wed Jan 30, 2013 10:59 pm

Steelersfan wrote:Not worried about estate taxes since they won't apply with the new law.
Not worried about state inheritance taxes, although they will be paid.
Have all the end of life documents done by competent legal council.
Have beneficiaries and secondary beneficiaries on accounts and in the will.
Have a capable, trustworthy and committed executor (and alternates if needed) for the estate.
Have sensible adult children who will inherit.
I trust them to do the right thing.
And I won't be around to second guess them.

All this plus:
My children and my children-in-law all understand that inherited property is separate property in CA. When my komadres* die, their property will go to their children, not mine. My property will go to my children, not theirs. Now if any of them, by then probably 50 year olds, want to gift some of their property to their spouses, that's up to them. [repeat last line of above quote here]

* Every online dictionary I have looked at does not define komadre the way it is used in my family or in my komadre's family. I guess the correct term is baisan.
sscritic
 
Posts: 21858
Joined: Thu Sep 06, 2007 9:36 am

Re: How many are concerned with passing on assets to childre

Postby letsgobobby » Thu Jan 31, 2013 2:40 am

Count me among the ruminative/obsessive, maybe because my children are very young, maybe because we're over our state's estate tax exemption amounts, certainly for cultural reasons. We saw an elder planning attorney for our estate plan and while it is functional and much better than nothing, in retrospect it is probably not the right plan. It does not protect assets from the creditors of our kids or surviving spouses, nor does it protect assets for the kids from the future spouse of whichever of us survives, and it does not deal with our state estate tax burden beyond doubling the individual exemption. It also offers us no particular asset protection. So... getting this redone eventually is on my list of things to do.
letsgobobby
 
Posts: 7158
Joined: Fri Sep 18, 2009 2:10 am

Re: How many are concerned with passing on assets to childre

Postby sscritic » Thu Jan 31, 2013 2:55 am

letsgobobby wrote: nor does it protect assets for the kids from the future spouse of whichever of us survives,

You should be able to protect the assets of the dead person from the young stud/honey that hooks up with the survivor with a standard A/B trust. Leave your assets in trust (irrevocable after you die) to your children with income going to the surviving spouse. The surviving spouse can give all of the other half to the young stud/honey, but the half that belonged to the dead person would go to the dead person's children.

Do you not have living trust? It's not the answer to everything, but it is a pretty standard answer to this problem. Now some spouses like to think that they are going to get everything, but just realize that it works both ways, so your goal should be to die first. Plus, this gives each of you less incentive to murder the other.
Last edited by sscritic on Thu Jan 31, 2013 9:21 am, edited 1 time in total.
sscritic
 
Posts: 21858
Joined: Thu Sep 06, 2007 9:36 am

Re: How many are concerned with passing on assets to childre

Postby johnep » Thu Jan 31, 2013 9:03 am

I hope to leave a substantial amount of my AA to my son and daughter. Son will probably need it as he has no retirement savings or pension (he is 43). Daughter is in much better shape. I do not have to worry about the IRS estate limits (unfortunately). I do hope a special needs grandchild who will always need special care. I have considered setting up a trust for her. There is a special trust that can be done that will not affect any form of govt assistance she gets. Even though my daughter cares for her and she and her husband have a very good middle class income, she gets govt assistance for physical therapy and other care. Without it, her medical costs would be a huge burden. Like so many other things, i just have not gotten around to it.
johnep
 
Posts: 1126
Joined: Wed Dec 28, 2011 10:56 am
Location: North Carolina

Re: How many are concerned with passing on assets to childre

Postby Leesbro63 » Thu Jan 31, 2013 9:12 am

I would rather die with money than live without it. Accordingly my kids will probably be big-time beneficiaries, but mainly as a side-effect of my first statement, not as my main goal.
User avatar
Leesbro63
 
Posts: 3684
Joined: Mon Nov 08, 2010 5:36 pm

Re: How many are concerned with passing on assets to childre

Postby bsteiner » Thu Jan 31, 2013 11:09 am

In response to letsgobobby: if your estate is large enough that estate taxes (even if only state estate taxes) are relevant, you might wish to consult with a conventional trusts and estates attorney rather than an elder law (i.e., Medicaid) attorney.

In response to sscritic: while living trusts are appropriate in some cases, and in some states, they don't save (or cost) any estate taxes, and they generally don't provide any asset protection. We do them where there's some reason to do so in a particular case, but we don't suggest them absent some reason to do so in a particular case.

In response to johnep: the trust for a child or grandchild with a disability is almost the same as the trust for a child or grandchild without a disability. In both cases, in order to get the available protection, distributions have to be discretionary rather than mandatory. There are very special provisions needed in a trust created with the disabled person's own money, but that's very different from a trust created by a parent or grandparent. The trusts for your son, daughter, special needs grandchild, and other grandchildren, can all be in your Will.
bsteiner
 
Posts: 952
Joined: Sat Oct 20, 2012 10:39 pm
Location: NYC

Re: How many are concerned with passing on assets to childre

Postby reggiesimpson » Thu Jan 31, 2013 11:45 am

bsteiner wrote:In response to letsgobobby: if your estate is large enough that estate taxes (even if only state estate taxes) are relevant, you might wish to consult with a conventional trusts and estates attorney rather than an elder law (i.e., Medicaid) attorney.

In response to sscritic: while living trusts are appropriate in some cases, and in some states, they don't save (or cost) any estate taxes, and they generally don't provide any asset protection. We do them where there's some reason to do so in a particular case, but we don't suggest them absent some reason to do so in a particular case.

In response to johnep: the trust for a child or grandchild with a disability is almost the same as the trust for a child or grandchild without a disability. In both cases, in order to get the available protection, distributions have to be discretionary rather than mandatory. There are very special provisions needed in a trust created with the disabled person's own money, but that's very different from a trust created by a parent or grandparent. The trusts for your son, daughter, special needs grandchild, and other grandchildren, can all be in your Will.

+1 I for one certainly appreciate bsteiners imparting his prodigious knowledge of estate law. Thank you.
reggiesimpson
 
Posts: 1271
Joined: Mon Dec 19, 2011 1:47 pm

Re: How many are concerned with passing on assets to childre

Postby Go Blue 99 » Thu Jan 31, 2013 1:34 pm

Culture wrote:
mac808 wrote:I see this a lot in NYC and San Francisco where it's become so expensive to live that many people are priced out or forced into sub-standard living conditions, regardless of their education, intelligence or work ethic.


I understand what you mean here, I lived in Boston where the same thing happens. However, I always wondered, if they were truly intelligent, why are they living in a favella in Boston instead of a 3200 SF home in Texas like I am? We do have open interstate borders in the USA.

My mortgage payment on a nice 2500 SF house in Texas was LESS than my rent on a one bedroom tenement in Sumerville, MA.


I grew up in the Boston area and moved south partly due to cost of living concerns. But I think it's odd that you question the intelligence of someone that wants to live in an expensive area. Texas isn't exactly the ideal destination for a lot of native Northerners.
User avatar
Go Blue 99
 
Posts: 490
Joined: Thu Oct 09, 2008 4:42 pm

Re: How many are concerned with passing on assets to childre

Postby letsgobobby » Thu Jan 31, 2013 2:15 pm

reggiesimpson wrote:
bsteiner wrote:In response to letsgobobby: if your estate is large enough that estate taxes (even if only state estate taxes) are relevant, you might wish to consult with a conventional trusts and estates attorney rather than an elder law (i.e., Medicaid) attorney.

In response to sscritic: while living trusts are appropriate in some cases, and in some states, they don't save (or cost) any estate taxes, and they generally don't provide any asset protection. We do them where there's some reason to do so in a particular case, but we don't suggest them absent some reason to do so in a particular case.

In response to johnep: the trust for a child or grandchild with a disability is almost the same as the trust for a child or grandchild without a disability. In both cases, in order to get the available protection, distributions have to be discretionary rather than mandatory. There are very special provisions needed in a trust created with the disabled person's own money, but that's very different from a trust created by a parent or grandparent. The trusts for your son, daughter, special needs grandchild, and other grandchildren, can all be in your Will.

+1 I for one certainly appreciate bsteiners imparting his prodigious knowledge of estate law. Thank you.

I agree, and not only on Bogleheads but on Ed Slott's forum as well.
letsgobobby
 
Posts: 7158
Joined: Fri Sep 18, 2009 2:10 am

Re: How many are concerned with passing on assets to childre

Postby umfundi » Thu Jan 31, 2013 2:26 pm

Go Blue 99 wrote: But I think it's odd that you question the intelligence of someone that wants to live ...

Given the recent weather in Michigan, I question my own intelligence. Today is just miserable.

Keith
Déjà Vu is not a prediction
umfundi
 
Posts: 3361
Joined: Tue Jun 07, 2011 6:26 pm

Re: How many are concerned with passing on assets to childre

Postby ddunca1944 » Thu Jan 31, 2013 2:40 pm

Not worried about estate taxes since they won't apply with the new law.


+1

Not worried about state inheritance taxes, although they will be paid.


Won't apply to us unless the laws change

Have all the end of life documents done by competent legal council.


+1
Have beneficiaries and secondary beneficiaries on accounts and in the will.


+1

Have a capable, trustworthy and committed executor (and alternates if needed) for the estate.


+1

Have sensible adult children who will inherit.


My adult children will most likely blow through it. I used to worry about that, but have decided they are adults and will make choices I would not approve of. So be it. I'm not going to try and dictate from the grave.

I trust them to do the right thing.


I'm pretty sure they won't but have made peace with the fact.

And I won't be around to second guess them.


+1. Not even going to try. I've done my part. That is all anyone can do.

We've made provisions for a disabled granddaughter. She is the one I am really concerned about.
ddunca1944
 
Posts: 805
Joined: Fri Apr 01, 2011 2:49 pm

Re: How many are concerned with passing on assets to childre

Postby letsgobobby » Thu Jan 31, 2013 2:43 pm

it's the having minor children part which makes things so much more complicated. I can't say with great confidence how either of them will turn out - I have my hopes and my optimism, and we work hard to raise them with the right values, but nurture and nature fight a fierce battle for the soul.
letsgobobby
 
Posts: 7158
Joined: Fri Sep 18, 2009 2:10 am

Re: How many are concerned with passing on assets to childre

Postby johnep » Thu Jan 31, 2013 3:40 pm

bsteiner wrote:In response to letsgobobby: if your estate is large enough that estate taxes (even if only state estate taxes) are relevant, you might wish to consult with a conventional trusts and estates attorney rather than an elder law (i.e., Medicaid) attorney.

In response to sscritic: while living trusts are appropriate in some cases, and in some states, they don't save (or cost) any estate taxes, and they generally don't provide any asset protection. We do them where there's some reason to do so in a particular case, but we don't suggest them absent some reason to do so in a particular case.

In response to johnep: the trust for a child or grandchild with a disability is almost the same as the trust for a child or grandchild without a disability. In both cases, in order to get the available protection, distributions have to be discretionary rather than mandatory. There are very special provisions needed in a trust created with the disabled person's own money, but that's very different from a trust created by a parent or grandparent. The trusts for your son, daughter, special needs grandchild, and other grandchildren, can all be in your Will.


Thanks Bsteiner. I appreciate you advice. Regards,

John
johnep
 
Posts: 1126
Joined: Wed Dec 28, 2011 10:56 am
Location: North Carolina

Re: How many are concerned with passing on assets to childre

Postby MN Finance » Thu Jan 31, 2013 3:57 pm

letsgobobby wrote:it's the having minor children part which makes things so much more complicated. I can't say with great confidence how either of them will turn out - I have my hopes and my optimism, and we work hard to raise them with the right values, but nurture and nature fight a fierce battle for the soul.


I agree this is slightly more difficult. It's not hard to set up trusts (or trust the right guardian with the money,) so that if something happens the money is in trust until they're, say 30 yrs old. But it becomes harder to perpetually protect the money should they make bad life choices or marry the wrong person. That becomes "easier" to conceptualize and handle if they're already married with children because then you can set up a trust for the kids, with protection from themselves and bad spouse and eventually the corpus is distributed to the grandkids. At some point the money is going to be out of your control - if there's anything left at that point. And the longer the trust lasts, the more cost their is with managing the money and trust, assuming a 3rd party is eventually involved.
MN Finance
 
Posts: 1249
Joined: Sat Dec 22, 2012 11:46 am

Re: How many are concerned with passing on assets to childre

Postby Culture » Thu Jan 31, 2013 4:18 pm

Go Blue 99 wrote:I grew up in the Boston area and moved south partly due to cost of living concerns. But I think it's odd that you question the intelligence of someone that wants to live in an expensive area. Texas isn't exactly the ideal destination for a lot of native Northerners.


Well, to be fair, I meant to direct that to those who live in expensive areas and complain they can't afford a decent place to live. I did not mean to question the intelligence of everyone who lives in a pricey area. I would live to live in Manhattan for a year or two, and I loved Boston but wanted to own a house.

Personally, having lived and traveled all over the country, I think the whole north v. south east v. west thing is overblown. Once you get to know them, most people are pretty decent everywhere and willing to accept you, with a few notable exceptions like Colorado City, AZ.
User avatar
Culture
 
Posts: 238
Joined: Mon Nov 17, 2008 10:49 am
Location: Greater Houston, Texas

Re: In my family it is "comadre", not komadre

Postby pennywise777 » Thu Jan 31, 2013 5:16 pm

pennywise777
 
Posts: 9
Joined: Sat Mar 10, 2007 2:27 pm

Re: In my family it is "comadre", not komadre

Postby sscritic » Thu Jan 31, 2013 5:31 pm

pennywise777 wrote:Dictionary.com has:

http://www.reference.com/browse/Compadre

Which is not the same as baisan. Compadre is between parents and god parents. Baisan is between the two sets of actual parents.
2. relationship between parents of a married couple
http://tagalog.pinoydictionary.com/word/baisan/

As I said, we use komadre in the sense of baisan in my family. My Mama and Pappa always called my Mom and Dad kampadre and komadre and vice-versa. The mother of my daughter-in-law calls me kompadre and I call her komadre. That's not the dictionary definition, but that's how it is used in my family (my original statement).

The alpabetong Pilipino has no c (nor an f), but when sending birthday or Christmas cards, to each other, my komadre and I both use the c rather than the k.
sscritic
 
Posts: 21858
Joined: Thu Sep 06, 2007 9:36 am

Re: How many are concerned with passing on assets to childre

Postby umfundi » Thu Jan 31, 2013 5:55 pm

MN Finance wrote:
letsgobobby wrote:it's the having minor children part which makes things so much more complicated. I can't say with great confidence how either of them will turn out - I have my hopes and my optimism, and we work hard to raise them with the right values, but nurture and nature fight a fierce battle for the soul.


I agree this is slightly more difficult. It's not hard to set up trusts (or trust the right guardian with the money,) so that if something happens the money is in trust until they're, say 30 yrs old. But it becomes harder to perpetually protect the money should they make bad life choices or marry the wrong person. That becomes "easier" to conceptualize and handle if they're already married with children because then you can set up a trust for the kids, with protection from themselves and bad spouse and eventually the corpus is distributed to the grandkids. At some point the money is going to be out of your control - if there's anything left at that point. And the longer the trust lasts, the more cost their is with managing the money and trust, assuming a 3rd party is eventually involved.

I think Bobby is similar to me.

Fifteen years ago, my kids were young, we were concerned about what might happen to them if something happened to us. So, we set up a revocable trust with a responsible relative AND a bank as co-administrators. And, all the needed documents for guardianship, etc. That served us well.

Now, we are newly retired, the youngest is entering college, and our financial picture is completely different. At some point (it is not a high priority) I think we will trash our previous trust and make a new one.

Your kids will grow up to be their own persons. Your attitude to how much control you want (or actually have) over their lives will dramatically change from when they are age 3 or 23 or 43.

Keith
Déjà Vu is not a prediction
umfundi
 
Posts: 3361
Joined: Tue Jun 07, 2011 6:26 pm

Re: How many are concerned with passing on assets to childre

Postby Bustoff » Thu Jan 31, 2013 6:03 pm

I like the line from the movie "The Descendants"

"give your children enough money to do something but not enough to do nothing."
“There are two times in a man's life when he should not speculate: when he can't afford it, and when he can.” | ― Mark Twain
Bustoff
 
Posts: 1084
Joined: Sat Mar 03, 2012 7:45 pm

Re: How many are concerned with passing on assets to childre

Postby ddunca1944 » Thu Jan 31, 2013 7:44 pm

Bustoff wrote:I like the line from the movie "The Descendants"

"give your children enough money to do something but not enough to do nothing."



+1

This is my goal. If we both died tomorrow and my kids inherited everything, they'd think they never have to work again (and they'd be wrong). I want to leave them enough that they feel they got a windfall, but not so much that they think they don't ever have to work again....
ddunca1944
 
Posts: 805
Joined: Fri Apr 01, 2011 2:49 pm

Re: How many are concerned with passing on assets to childre

Postby sscritic » Thu Jan 31, 2013 7:52 pm

Bustoff wrote:I like the line from the movie "The Descendants"

"give your children enough money to do something but not enough to do nothing."

That's why I am giving my money to my grandchildren.

I have more grandchildren than children. Each grandchild will get less than each child would have. I am not sure, but I think that that drops the number from do nothing territory to do something territory. Although there is a chance that I will have enough that, while my children will have to do something (since I will give them nothing), my grandchildren won't.*

* If my investment plans work out, I might have to leave my money to my great grandchildren, if there are enough of them, so that even my grandchildren have to do something. It's all just math, division in particular.
sscritic
 
Posts: 21858
Joined: Thu Sep 06, 2007 9:36 am

Re: How many are concerned with passing on assets to childre

Postby Rodc » Thu Jan 31, 2013 9:27 pm

HardKnocker wrote:Is this a concern?

How much planning have you done to maximize this and what have you done?

Not just a will and simple estate plan but have you taken steps to minimize estate taxes and income taxes for your heirs?

I have done some planning using will and trusts to pass along considerable assets but have not gone to more complicated strategies like using life insurance trust and funding estate tax/income tax liabilities.


Same here
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.
Rodc
 
Posts: 10384
Joined: Tue Jun 26, 2007 10:46 am

Re: How many are concerned with passing on assets to childre

Postby exoilman » Fri Feb 01, 2013 9:17 am

reference
exoilman
 
Posts: 558
Joined: Wed Oct 15, 2008 2:38 pm
Location: New Jersey

Re: How many are concerned with passing on assets to childre

Postby MathWizard » Fri Feb 01, 2013 2:25 pm

Bustoff wrote:I like the line from the movie "The Descendants"

"give your children enough money to do something but not enough to do nothing."


That line probably came/evolved from a Buffet quote, in a Sept. 29th isue of Money, in 1986:

http://money.cnn.com/magazines/fortune/ ... /index.htm

Buffett is not cutting his children out of his fortune because they are wastrels or wantons or refuse to go into the family business -- the traditional reasons rich parents withhold money. Says he: ''My kids are going , to carve out their own place in this world, and they know I'm for them whatever they want to do.'' But he believes that setting up his heirs with ''a lifetime supply of food stamps just because they came out of the right womb'' can be ''harmful'' for them and is ''an antisocial act.'' To him the perfect amount to leave children is ''enough money so that they would feel they could do anything, but not so much that they could do nothing.'' For a college graduate, Buffett reckons ''a few hundred thousand dollars'' sounds about right.


I remember talks around that time about "affluenza", a condition affecting children of those who were very wealthy. Some
believed that a steady stream of parental money sapped the incentive of the children.

I believe that Buffet has softened his stance since then, as his children have gotten older, and he sees them as adults.
I seem to remember reading in Snowball that has been giving his kids $5M each every five years.
MathWizard
 
Posts: 1506
Joined: Tue Jul 26, 2011 2:35 pm


Return to Personal Finance (Not Investing)

Who is online

Users browsing this forum: anonforthis, baseball56, cheapskate, Dale_G, eschaef, fsrph, jsl11, kaudrey, Millennial, MissMolly, Sidney, Slowmaha, surfstar, vectorizer and 85 guests