Estate plan question

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Estate plan question

Post by Theseus » Fri Aug 10, 2018 8:17 am

We are working on our estate plan with an attorney. One of the question he has asked us is below.

- Whether to include any provisions for your parents, should they survive you.

DW and I agree we do want to take care of them and not have them struggle in their old age. We will be able to leave enough for our children even after taking care of our parents (they already have fully funded 529, etc.). So this is not an either or question. My mother is 78 and very healthy (takes no medicine and is very active) and I think she will easily live past 90. MIL & FIL are 82-84. Average health but no major issues. They will live to 90 or longer.

My mother has no real assets and lives with us - no SS income. Has medicaid and medicare. I guess she can apply for SSI - but since we can afford to take care of her, we never bothered with that.

My in-laws own their house free and clear, have SS income which is sufficient for them to live. Don't know their net worth - but probably they have about $200k.

1. How do we estimate the expenses for the last 15-20 years of their life? I am sure the expenses will increase/vary as they age.

2. As they age they are not going to be in a sharp mind to make financial decisions. Should we leave the amount to be administered by our very children? (19 and 12 - but very responsible and we have no doubt they will take care of the grand parents). Or should be leave all the money to our children with instructions to take care of grand parents like we would.

3. Are there any other options we should consider?

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Re: Estate plan question

Post by bsteiner » Fri Aug 10, 2018 8:42 am

You could set aside some amount in trust for them, with remainder at their deaths to be added to your children's trusts.

Or you could include them as beneficiaries of your children's trusts, so that the trustees of each child's trust would have discretion to make distributions to that child and his/her issue, and also to your parents and your wife's parents.

You could include the usual special needs language that as to them the trusts are intended to supplement but not supplant means-tested government benefits given that your mother receives Medicaid and your in-laws might at some point receive Medicaid.

It's hard to predict what the future will bring.

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Re: Estate plan question

Post by megabad » Fri Aug 10, 2018 10:04 am

We had a similar situation in our family. Dependent in-law was left the house. The others were not named in will, but children were specifically instructed to ensure that they are taken care of. The added complexity of adding these other in-laws basically precluded their inclusion in the will. This was explained to in-laws and they laughed and said they will be long dead before it mattered. They were right. The expenses were too hard to estimate.

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