Will/Trust for immigrant family with small children

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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bengt
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Will/Trust for immigrant family with small children

Post by bengt » Tue Jul 12, 2016 4:23 pm

My co-worker asked for advice what should he and his wife do to ensure that their children would be taken care of, in case something were to happen to the parents. Some law firms seem to offer specialized service for immigrant families but they tend to cost a lot and it is still unclear how much they make sense. They might still pick one of the law firms but do any of the bogleheads have further high-level advise? They would like at least to understand things better before they go to talk to the ($500/hr?) attorney.

The family lives in California. Parents are dual-citizens. Their small children have citizenship of 3 countries (US, and countries of the both parents). Children are familiar with all three countries and the relatives there. The family does not have any relatives in the US. Parents have modest assets (house with mortgage, cars, 401k/ROTH, tiny bank account, life insurance).

In case something were to happen to both parents, they would like the children to live in country1 with aunt1. If she were unavailable, then they would live in country2 with aunt2. (Getting relatives to move to the US seem difficult given the visa requirements etc so that is ruled that out). Parents do not want to the children to live in any foster care etc in the US.

Would it make sense to prepare simply a will with clear instructions? Would the court or whatever body (immigration? airline?) allow the aunt from different country to pick up the children and take them abroad?

Money is secondary concern. Aunts in country 1 and 2 have enough assets to cover any short-term costs. Would it be enough simply to document the assets clearly and then (in very unlikely scenario) let some attorney to deal with the probate and paperwork? If that takes 6 months and costs some thousands, that it ok.
Some assets (401k, life insurance etc) seem to have some kind of secondary beneficiary designation, not sure if those would help and make some of the money available easier.

Maybe the will could designate any of the aunts in country 1 or 2 to be temporary guardian in the US (while some process takes place) and the permanent guardian is confirmed (by court?).

It seems the parents would be ok to let one of the aunts to manage the money until the children are adults.

I realize that some scenarios are not covered, e.g. both parents are in coma etc.

littlebird
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Re: Will/Trust for immigrant family with small children

Post by littlebird » Wed Jul 13, 2016 11:03 am

I'm sure any American trusts & estates lawyer could put together a trust for less than $500/hour for these folks. But whether they could do it as well and efficiently as lawyers who specialize in immigrant situations and, more importantly, whether their plan would work as well and as quickly if the worst occurred is a different question.

I would suggest that they shop carefully among their particular country-of-origin community for a firm which has done similar work for other families and who is familiar with and has contacts at "country 1".

jjface
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Re: Will/Trust for immigrant family with small children

Post by jjface » Wed Jul 13, 2016 11:13 am

I doubt it makes much difference if they are immigrants or not. I didn't do anything special with ours and someone from another country would look after our kid in the event we die and our only relative in the USA doesn't survive us. Our kid is a dual citizen. The aunt taking the kids abroad should be straightforward since the kids are citizens and the aunt would have court documentation stating their responsibility for the child I presume.

I would suggest your friends purchase life insurance more than anything and specify in the will who will look after the kids in case of both parents passing. Plus leaving the inheritance in some kind of trust or simply under the utma if you can really trust the aunts. (which you specified was the case) You can specify this with the life insurance too which will be most important.

Now you mention it I'm not sure what happens in the interim between death and the courts have finalized who is to be guardian - however I thought they would go to the guardian as specified until everything was approved. The aunt will have access to the life insurance money fairly quickly if they had life insurance that specified that it is to be held by the aunt until the kids come of age.

There may be tax issues that you need to consider and the usual Ira inheritance issues and rmds.

fh2000
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Re: Will/Trust for immigrant family with small children

Post by fh2000 » Wed Jul 13, 2016 11:30 am

If their countries have large enough immigrant population in California, they normally have newspapers, yellow pages, and TVs in their own language serving new immigrants. Local law firms that tailored to new immigrants will have ads on those media. So, look into those and find one from there.

bsteiner
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Re: Will/Trust for immigrant family with small children

Post by bsteiner » Wed Jul 13, 2016 11:44 am

Since the children are U.S. citizens, they'll probably want to make sure that the trusts for their children are considered domestic (U.S.) rather than foreign. That requires, among other things, that a majority of the trustees be U.S. persons.

Lots of families have family members in different countries. So any good trusts and estates lawyer should be familiar with this.

Topic Author
bengt
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Re: Will/Trust for immigrant family with small children

Post by bengt » Wed Jul 13, 2016 11:47 am

what I have heard is that the yellow page type ads in the immigrant communities are notoriously unreliable and in many cases outright scams (this applies especially to all kind of immigration help services which often take advantage of the unsophisticated immigrants). So I would assume that those ads have been ruled out.

I think I would encourage them to prepare a will first and ensure that life insurance beneficiaries are up to date (e.g. kids as secondary beneficiaries). The probate paperwork for rest of the stuff can take place afterwards in the extremely unlikely scenario of both parents dying (parents could identify few law firm candidates for the relatives).

I think the temporary guardianship is important. The process of getting court to confirm things (permanent guardian) may take long time (6 months?) and I assume the government will not allow some foreigner claiming to be a relative to pick up the kids in the meantime. So will with clear instruction would be important.

In general, in this kind of situation I assume the money (e.g. life insurance goes to kids) but the guardian (e.g. foreign aunt) would have absolute control of the money of underage kids. So the parents must really trust the aunt.

It may get complicated if at least two countries are involved (e.g. tax issues) but the guardianship is the most important.

Topic Author
bengt
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Joined: Wed Mar 26, 2008 4:29 pm

Re: Will/Trust for immigrant family with small children

Post by bengt » Wed Jul 13, 2016 11:50 am

bsteiner wrote:Since the children are U.S. citizens, they'll probably want to make sure that the trusts for their children are considered domestic (U.S.) rather than foreign. That requires, among other things, that a majority of the trustees be U.S. persons.
I think this is a problem. All the relatives are non-US persons.

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