Appropriate age to communicate your will/wishes to your kids

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Theseus
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Appropriate age to communicate your will/wishes to your kids

Post by Theseus »

We have two kids 20 and 12. We are a very close family and both are very good kids and reasonably intelligent.

Our estate is significant in size - little over 8 figures. Our kids realize we are well todo but have no idea of our networth. On and off we have been mentally preparing the kids to build their own life and build their own wealth and not expect any inheritance. But reality is that despite our philanthropic efforts (as well as DW's insistence) there will be serious amount of money left for them so they won't have to struggle in life like we did.

I am struggling to figure out when do we tell them what's in the will? What are the pros-cons of telling them at this age, or other ages?
Mike Scott
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Re: Appropriate age to communicate your will/wishes to your kids

Post by Mike Scott »

I am very much in favor of giving kids a chance to grow up and make it on their own. They already know you have money but when you die is soon enough for them to find out how much. Maybe give them a generous gift or something at house buying time.
RenoJay
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Re: Appropriate age to communicate your will/wishes to your kids

Post by RenoJay »

I have similar sized estate. For my kids (currently 8 and 10), if I happen to go before they're of age, there will be someone to make sure they're ok. But aside from that, they won't get a "real" chunk of money til their mid 30's. It's important to me that they pursue their passions AND build a base of financial independence. If they turn into profligate spenders, then there will be serious restrictions on the inheritance. But if they turn out with pretty decent money values, they'll get a big chunk (if I'm gone) when they're old enough to have learned valuable lessons but young enough to still enjoy it and need it. As far as when I'll tell them, it probably won't be for a VERY long time. I was under the belief that my own parents were poor until I was close to 30, and I'll likely keep the secret from my own kids til around that same time in their lives.
TSR
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Re: Appropriate age to communicate your will/wishes to your kids

Post by TSR »

I would not want my children to "take their foot off the gas" in their own studies and/or work simply because they know they're going to be "set." That doesn't mean being dishonest. As you say, they already know you're comfortable. I would wait until they're somewhere in the late 20s to mid 30s to be describing the actual size of what they might expect. There is risk here of course: if you were to both predecease your children much sooner than expected, they might come into this money well before you had that conversation. But I think that risk is outweighed by the risk of telling them too soon. Additionally, as you well know, you could easily be telling them something that did not turn out to be true for some reason (faulty estate planning, a big lawsuit, economic collapse, some unexpected criminal activity, etc.), so you would not want anyone planning on a highly contingent future.

HOWEVER, that doesn't mean you should not be talking about the subject at all. I think it's important to talk about money in realistic terms. "You guys know we've been very lucky. My hope is that there will be some left over for you and your brother when we're gone." You could also make it clear that your estate plan leaves things equally to them, and you want them to honor the spirit of that. My father made a repeated point of mentioning any time he heard a story about family members squabbling over a will, expressing his displeasure and hope that his estate would never be like that. My brother and I know very well how disappointed he'd be if we ended up that way. In other words, it is important to talk about money and inheritances from a values perspective. But I would not have wanted to know at age 20 that I was going to inherit $x million. That would have made me very happy to learn, but it would not have made me very motivated to work harder.

Regardless of all of the above, it is perfectly appropriate to have the conversation about who to call in case of some tragedy, where important documents/accounts can be found, etc. This also imparts values: the importance of being prepared for an uncertain future.

Good luck!
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Peter Foley
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Re: Appropriate age to communicate your will/wishes to your kids

Post by Peter Foley »

We did it when our kids were married and settled down - mid to late 20's. I'm not sure this is the right answer for everyone.
Todd6060
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Re: Appropriate age to communicate your will/wishes to your kids

Post by Todd6060 »

You can gift up to $30,000 ($15,000 per parent) per child per year tax-free. I don't see any reason to tell them how much they would profit from your death.
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Summit111
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Re: Appropriate age to communicate your will/wishes to your kids

Post by Summit111 »

My wife and I held a family meeting with our adult children, ages 33-43...They are all out of college and have their own families. We read the wills and gave them a general idea of our net worth. They have copies of the wills and a listing of our financial accounts.

No surprises or drama. Everyone is being treated equally...

Summit
“Got my mind on my money, and my money on my mind!” Snoop Dog
Ybsybs
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Re: Appropriate age to communicate your will/wishes to your kids

Post by Ybsybs »

I knew for as long as I could remember who my siblings and I would go live with if something were to happen to my parents.

The details of my parents' wills with regard to finances were not made clear to me until I was an adult and they asked me to be the executor in the event that they predecease me.

These seem appropriate times for the information to be shared.
NotWhoYouThink
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Re: Appropriate age to communicate your will/wishes to your kids

Post by NotWhoYouThink »

I am struggling to figure out when do we tell them what's in the will? What are the pros-cons of telling them at this age, or other ages?
So what IS in the will? Or is it a trust?
If you and your spouse die tomorrow is Uncle Fred the Executor and successor Trustee, or is it Aunt Sue?
Do they get all the money immediately, or is it always in trust? Do they have complete control or partial control? At what age?

You might want to talk with them a bit about some of the above. Our kids, for instance, know they probably ought to stay on good terms with Aunt Sue at least until they are 30.

As to how much they will get, as others have said, no one knows, including you. You and your spouse might both live to 100. At least one of you might live until 100. If there is a re-marriage in there, or a divorce and a couple of re-marriages, then things can change. So the estate you have now is not likely to be the estate you will leave your kids. Who might be retired before you have an estate.

We've been talking in general terms to our kids about assets since they were in college. They saw a grandparent's estate handled badly and part of it squandered, and we have talked about how things could have been handled better. But we don't tell them that they will inherit any number of figures of assets, because we don't know yet.

And what is just over 8 figures? 9 figures? 10 figures? 8.2 figures?
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FIREchief
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Re: Appropriate age to communicate your will/wishes to your kids

Post by FIREchief »

Many seem to equate "telling the kids what is in the will" with telling them how much. OP didn't address that, but it can make sense to do one without the other. 20 might be too young or might not be. 12 probably is. Once 20 yr old is ready, I see nothing wrong with letting him/her read the will and ask questions, especially if he/she is a contingent personal representative. If an adult child is stable and mature, there can be great benefit from letting them know what assets exist and where/how they are located. Amounts do NOT need to be included.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
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Re: Appropriate age to communicate your will/wishes to your kids

Post by EddyB »

TSR wrote: Fri Jan 25, 2019 6:18 pm I would not want my children to "take their foot off the gas" in their own studies and/or work simply because they know they're going to be "set."
That’s a view that’s worth considering, but knowing relatively early on that there’s financial security waiting can also permit those children to pursue worthwhile interests that aren’t necessarily their most financially rewarding options. I grew up in very modest circumstances, but was ultimately fortunate to attend the types of schools that have many students from extremely wealthy families; while I don’t know what details any one of those students may have known, when there are hundreds of millions or even billions of dollars involved, and truly prominent families, the kids presumably have a good sense of it. I was very impressed by the sense of opportunity and responsibility that several of them exhibited (in our early 20s!). Looking at the careers several of them have had, I’m sure I’ve made more money (and that’s been the right choice for me so far), but they’ve made commendable contributions to society. There’s a lot to be said for good parenting that produces hardworking kids who recognize their good fortunes and choose to make contributions to this world that don’t necessarily lead to the biggest paychecks.
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Re: Appropriate age to communicate your will/wishes to your kids

Post by fourwheelcycle »

We are just turning 70. Our children are mid-thirties, married, with children of their own. They were raised modestly and they are living modestly on their own. They know there will be significant money left-over when we die, but they have not asked how much and we have not told them. We don't see any need to tell them until we get old enough to need their help managing our own care and finances, or until I die and they need to help my wife manage her finances.

Our savings are very streamlined, mostly at Vanguard in a revocable trust with them as successor trustees or as IRAs that they will inherit. I have detailed instructions all set for them which they will be able to access if we happen to die early.
delamer
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Re: Appropriate age to communicate your will/wishes to your kids

Post by delamer »

Your 20-year-old is old enough to know where to find your will and who to contact if you and your wife die in a joint accident tomorrow. I’d certainly provide that information to her/him. That is probably unnecessarily upsetting for the 12 year old.

We told our kids when they were in high school what roughly to expect so they could be sure to get everything they were entitled to (like life insurance benefits), and where to find our account information.

But while our estate is enough to grease the path for them, we made it clear that isn’t enough to live on for 50 or 60 years. While yours, in theory, could be.

Good luck.
AlohaJoe
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Re: Appropriate age to communicate your will/wishes to your kids

Post by AlohaJoe »

Theseus wrote: Fri Jan 25, 2019 6:02 pm I am struggling to figure out when do we tell them what's in the will? What are the pros-cons of telling them at this age, or other ages?
I don't think there's any right or wrong answer. Everyone can point to examples that support their preference. For instance, those who are in favor of withholding details will point to spendthrift & lazy children. Those who are in the opposite camp will point to people who came from wealth and still exhibited a strong drive to achieve -- past Presidents, Bill Gates, Warren Buffet, and so on. Even if there were some kind of rigorous academic study on the subject it still wouldn't tell you what your children are likely to do.

My personal preference is to try to base relationships on openness & honesty as much as possible but realise there's always going to be a gap between theory & reality, especially with tough subjects like one's own children & money.

I think that around college graduation is when I'll start having conversations but I also expect it to be gradual disclosures rather than jumping right into my brokerage statement :). But early 20s seems mature enough to talk about will & wishes without going into specific numbers.
carolinaman
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Re: Appropriate age to communicate your will/wishes to your kids

Post by carolinaman »

DW and I are 76 and 74 respectively. Our estate goes to our 2 children, ages 49 and 46. We have given them copies of estate documents but not amounts of assets. We have documentation that is very clear about accounts, amounts, etc. that they can access at the right time. They are both eligible to be DPOA and executor of the estate of the whichever of us is last to die.

Our estate is only low 7 figures, but I still do not believe it is a good idea to give too many details about assets until the right time.
DarthSage
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Re: Appropriate age to communicate your will/wishes to your kids

Post by DarthSage »

We've been having general discussions for a long time. Currently, our oldest is 23, youngest is 12. The one thing that was a big incentive for us to talk to the kids was their grandmother's passing in 2017. She left a good sum of money to her grandkids--each was to get 25% of their portion upon college graduation, the balance at age 30. So, they're all getting something, and oldest has gotten her first payout.

We try not to talk about actual figures, although DS12 has shown an interest (also an interest in stocks generally, so we're utilizing that). But we emphasize things other than account balances. We talk about how some money is earmarked for college for our children, and hopefully to help future grandchildren. We talk about how their recently departed grandmother left us a legacy, that we need to protect and pass on. We talk about how Grandma valued education and travel, so these are priorities when we spend. We talk about having a duty, both to Grandma and to our children, to invest our money (and theirs) wisely. We talk about being fortunate, and helping those who have less. We talk about finding our own passions, and leaving the world a better place than we found it.

To the OP--you're doing quite well, but you have no idea what the ledger will say when you (and your spouse) finally pass. A devastating illness or financial catastrophe could change things in a hurry. Alternatively, prudent investing may grow your wealth substantially through the decades (here's hoping for the latter!). So, I would shy away from discussing actual figures. Instead, I would concentrate on how you achieved your success, what it means to you, and the values that you hope to be your legacy.
bob60014
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Re: Appropriate age to communicate your will/wishes to your kids

Post by bob60014 »

We (brother, sister and I) never had "the talk" with my parents but over the years they would say to us what their plan/intent/wishes were. Everything would be divided equally and they talked of their burial plans. They never showed us the will or mentioned what assets and dollar amounts they had. When they both passed we were surprised of what they accumulated, as they lived as if they were on their last dollar. We lived our lives and never gave their estate a thought.

Families can sometimes behave oddly when money/assets are involved and, though not our nature, if we had known what they had before hand who knows what may have happened. Only you can assess how your children will react to any information given. Sometimes it's a tough call.
delamer
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Re: Appropriate age to communicate your will/wishes to your kids

Post by delamer »

carolinaman wrote: Sat Jan 26, 2019 7:48 am DW and I are 76 and 74 respectively. Our estate goes to our 2 children, ages 49 and 46. We have given them copies of estate documents but not amounts of assets. We have documentation that is very clear about accounts, amounts, etc. that they can access at the right time. They are both eligible to be DPOA and executor of the estate of the whichever of us is last to die.

Our estate is only low 7 figures, but I still do not believe it is a good idea to give too many details about assets until the right time.
Your children are already in their 40’s.

What will be “the right time” for details?
Dottie57
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Re: Appropriate age to communicate your will/wishes to your kids

Post by Dottie57 »

When my parents hit their 80’s, they shared their info with me. It gave me perspective on how the future might roll out and how to help with financing nursing home.

I believe you should help your kids help you.
carolinaman
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Re: Appropriate age to communicate your will/wishes to your kids

Post by carolinaman »

delamer wrote: Sat Jan 26, 2019 10:35 am
carolinaman wrote: Sat Jan 26, 2019 7:48 am DW and I are 76 and 74 respectively. Our estate goes to our 2 children, ages 49 and 46. We have given them copies of estate documents but not amounts of assets. We have documentation that is very clear about accounts, amounts, etc. that they can access at the right time. They are both eligible to be DPOA and executor of the estate of the whichever of us is last to die.

Our estate is only low 7 figures, but I still do not believe it is a good idea to give too many details about assets until the right time.
Your children are already in their 40’s.

What will be “the right time” for details?
Our kids have all the details they need at this time. The only thing they do not have is the total amount of assets and investment accounts. We have documentation with account numbers, passwords, our investment approach, etc. They would be able to use that to quickly deal with anything related to our accounts. Although we have good kids and we trust them, we do not see a need for them to know that at this time. YMMV
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CABob
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Re: Appropriate age to communicate your will/wishes to your kids

Post by CABob »

Very interesting conversation which has given me some considerations. Our children are 50-ish and we have not had the discussion with them although they know we have wills and a trust. I don't believe they know the approximate size of our potential estate, but based on another family issue which came up a year or so ago I suspect that it is larger than they would probably guess. At this point I don't see any advantage and some potential disadvantages to talk about numbers at this time.
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Re: Appropriate age to communicate your will/wishes to your kids

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GmanJeff
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Re: Appropriate age to communicate your will/wishes to your kids

Post by GmanJeff »

Situated similarly to the OP, I have been transparent with my child. He knows about the provisions of our trusts, and the size of our estate, and I don't think it impairs his motivation to succeed on his own in the slightest. He has no idea when he will inherit, any more than I know when I will inherit from my still-living parents, so neither he nor I plan on money we do not yet have, and which might not be there later if consumed first by long-term care or other unanticipated expenses.

We have disclosed our assets to promote discussion around personal financial management and to develop investment acumen, which is more difficult to do in the abstract. We discuss how and why we are invested as we are, how we accumulated investments, and the pros and cons between spending more freely and with delaying gratification. In short, we try to model behavior and values which we think would be helpful to our heir when the time comes. I'm reasonably confident that if he inherited tomorrow, he'd largely leave our portfolio intact and would endeavor to increase its size over time to enhance his financial security further and to provide for the uncertainties of the future. Children with other levels of maturity and judgment might benefit from being treated differently, certainly, but then will probably also need more restrictive trust provisions to prevent undesirable future outcomes.
Topic Author
Theseus
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Re: Appropriate age to communicate your will/wishes to your kids

Post by Theseus »

OP here. This has been a great help. Some responses below.
RenoJay wrote: Fri Jan 25, 2019 6:13 pm It's important to me that they pursue their passions AND build a base of financial independence. If they turn into profligate spenders, then there will be serious restrictions on the inheritance. But if they turn out with pretty decent money values, they'll get a big chunk (if I'm gone) when they're old enough to have learned valuable lessons but young enough to still enjoy it and need it.
This is a good approach. Subconsciously I was thinking something similar.
TSR wrote: Fri Jan 25, 2019 6:18 pm HOWEVER, that doesn't mean you should not be talking about the subject at all. I think it's important to talk about money in realistic terms. "You guys know we've been very lucky. My hope is that there will be some left over for you and your brother when we're gone." You could also make it clear that your estate plan leaves things equally to them, and you want them to honor the spirit of that.

Regardless of all of the above, it is perfectly appropriate to have the conversation about who to call in case of some tragedy, where important documents/accounts can be found, etc. This also imparts values: the importance of being prepared for an uncertain future.
Thank you. These are good suggestions. We can talk about at least two things I can think of.

In the trust we are working on, we are setting aside 20% for philanthropic efforts that will transfer to an irrevocable trust (I think). And I am of the opinion to let the kids decided what cause is closer to their heart - rather than us dictating how it should be spent. They can choose to continue what we are doing - if that is still relevant - or decide to do something different.

Where can they find documents, who would we want them to consider their trusted advisors etc.
Ybsybs wrote: Fri Jan 25, 2019 10:13 pm I knew for as long as I could remember who my siblings and I would go live with if something were to happen to my parents.
Good point. We have not discussed this, but we can and will discuss this.
NotWhoYouThink wrote: Fri Jan 25, 2019 10:14 pm
I am struggling to figure out when do we tell them what's in the will? What are the pros-cons of telling them at this age, or other ages?
So what IS in the will? Or is it a trust?
If you and your spouse die tomorrow is Uncle Fred the Executor and successor Trustee, or is it Aunt Sue?
Do they get all the money immediately, or is it always in trust? Do they have complete control or partial control? At what age?
I am embarrassed to say that it is neither at this point. We have never had a will. But we have a draft trust that we have developed with a very competent attorney. And these questions are answered in the trust. They don't get money immediately. Gradually by the age of 35 they get all the money. We can discuss this with the kids without discussing the numbers.
NotWhoYouThink wrote: Fri Jan 25, 2019 10:14 pm And what is just over 8 figures? 9 figures? 10 figures? 8.2 figures?
It is $15 million give or take.
FIREchief wrote: Fri Jan 25, 2019 10:16 pm Many seem to equate "telling the kids what is in the will" with telling them how much. OP didn't address that, but it can make sense to do one without the other. 20 might be too young or might not be. 12 probably is. Once 20 yr old is ready, I see nothing wrong with letting him/her read the will and ask questions, especially if he/she is a contingent personal representative. If an adult child is stable and mature, there can be great benefit from letting them know what assets exist and where/how they are located. Amounts do NOT need to be included.
Good suggestion by you and others. We will be doing this without disclosing amounts.
EddyB wrote: Fri Jan 25, 2019 10:42 pm
TSR wrote: Fri Jan 25, 2019 6:18 pm I would not want my children to "take their foot off the gas" in their own studies and/or work simply because they know they're going to be "set."
That’s a view that’s worth considering, but knowing relatively early on that there’s financial security waiting can also permit those children to pursue worthwhile interests that aren’t necessarily their most financially rewarding options.
We are conflicted exactly because of these two reasons. I put up with a lot of crap in my life to be wealthy. I worked in a segment of a tech industry that I actually despised - but was financially rewarding. If I had financial assurance, I would have probably done something different. We encourage our kids to make sensible choices in their education and careers. Hopefully they will choose something that is rewarding across the board.
DarthSage wrote: Sat Jan 26, 2019 7:50 am To the OP--you're doing quite well, but you have no idea what the ledger will say when you (and your spouse) finally pass. A devastating illness or financial catastrophe could change things in a hurry. Alternatively, prudent investing may grow your wealth substantially through the decades (here's hoping for the latter!). So, I would shy away from discussing actual figures. Instead, I would concentrate on how you achieved your success, what it means to you, and the values that you hope to be your legacy.
This is a good point. Despite the possibility, I didn't consider our financial situation to get substantially worse. But there is always a chance, so ensuring kids are not planning their life around inheritance is a good suggestion.
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Theseus
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Re: Appropriate age to communicate your will/wishes to your kids

Post by Theseus »

GmanJeff wrote: Sat Jan 26, 2019 4:33 pm Situated similarly to the OP, I have been transparent with my child. He knows about the provisions of our trusts, and the size of our estate, and I don't think it impairs his motivation to succeed on his own in the slightest.
GmanJeff. How old was your son when you started disclosing financial information?
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Re: Appropriate age to communicate your will/wishes to your kids

Post by MathWizard »

We did it when the youngest graduated college.

We also added to will naming one executor and set them up to take care of finances and medical matters if neither of us is capable.

They know we have no debts, where we bank and that papers are in a safe and bank safety deposit box. The have a rough idea of our net worth, but will likely be OK without any inheritance.

I started talking to them about financial matters when the youngest was about 12.
delamer
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Re: Appropriate age to communicate your will/wishes to your kids

Post by delamer »

Theseus wrote: Sat Jan 26, 2019 4:58 pm OP here. This has been a great help. Some responses below.
RenoJay wrote: Fri Jan 25, 2019 6:13 pm It's important to me that they pursue their passions AND build a base of financial independence. If they turn into profligate spenders, then there will be serious restrictions on the inheritance. But if they turn out with pretty decent money values, they'll get a big chunk (if I'm gone) when they're old enough to have learned valuable lessons but young enough to still enjoy it and need it.
This is a good approach. Subconsciously I was thinking something similar.
TSR wrote: Fri Jan 25, 2019 6:18 pm HOWEVER, that doesn't mean you should not be talking about the subject at all. I think it's important to talk about money in realistic terms. "You guys know we've been very lucky. My hope is that there will be some left over for you and your brother when we're gone." You could also make it clear that your estate plan leaves things equally to them, and you want them to honor the spirit of that.

Regardless of all of the above, it is perfectly appropriate to have the conversation about who to call in case of some tragedy, where important documents/accounts can be found, etc. This also imparts values: the importance of being prepared for an uncertain future.
Thank you. These are good suggestions. We can talk about at least two things I can think of.

In the trust we are working on, we are setting aside 20% for philanthropic efforts that will transfer to an irrevocable trust (I think). And I am of the opinion to let the kids decided what cause is closer to their heart - rather than us dictating how it should be spent. They can choose to continue what we are doing - if that is still relevant - or decide to do something different.

Where can they find documents, who would we want them to consider their trusted advisors etc.
Ybsybs wrote: Fri Jan 25, 2019 10:13 pm I knew for as long as I could remember who my siblings and I would go live with if something were to happen to my parents.
Good point. We have not discussed this, but we can and will discuss this.
NotWhoYouThink wrote: Fri Jan 25, 2019 10:14 pm
I am struggling to figure out when do we tell them what's in the will? What are the pros-cons of telling them at this age, or other ages?
So what IS in the will? Or is it a trust?
If you and your spouse die tomorrow is Uncle Fred the Executor and successor Trustee, or is it Aunt Sue?
Do they get all the money immediately, or is it always in trust? Do they have complete control or partial control? At what age?
I am embarrassed to say that it is neither at this point. We have never had a will. But we have a draft trust that we have developed with a very competent attorney. And these questions are answered in the trust. They don't get money immediately. Gradually by the age of 35 they get all the money. We can discuss this with the kids without discussing the numbers.
NotWhoYouThink wrote: Fri Jan 25, 2019 10:14 pm And what is just over 8 figures? 9 figures? 10 figures? 8.2 figures?
It is $15 million give or take.
FIREchief wrote: Fri Jan 25, 2019 10:16 pm Many seem to equate "telling the kids what is in the will" with telling them how much. OP didn't address that, but it can make sense to do one without the other. 20 might be too young or might not be. 12 probably is. Once 20 yr old is ready, I see nothing wrong with letting him/her read the will and ask questions, especially if he/she is a contingent personal representative. If an adult child is stable and mature, there can be great benefit from letting them know what assets exist and where/how they are located. Amounts do NOT need to be included.
Good suggestion by you and others. We will be doing this without disclosing amounts.
EddyB wrote: Fri Jan 25, 2019 10:42 pm
TSR wrote: Fri Jan 25, 2019 6:18 pm I would not want my children to "take their foot off the gas" in their own studies and/or work simply because they know they're going to be "set."
That’s a view that’s worth considering, but knowing relatively early on that there’s financial security waiting can also permit those children to pursue worthwhile interests that aren’t necessarily their most financially rewarding options.
We are conflicted exactly because of these two reasons. I put up with a lot of crap in my life to be wealthy. I worked in a segment of a tech industry that I actually despised - but was financially rewarding. If I had financial assurance, I would have probably done something different. We encourage our kids to make sensible choices in their education and careers. Hopefully they will choose something that is rewarding across the board.
DarthSage wrote: Sat Jan 26, 2019 7:50 am To the OP--you're doing quite well, but you have no idea what the ledger will say when you (and your spouse) finally pass. A devastating illness or financial catastrophe could change things in a hurry. Alternatively, prudent investing may grow your wealth substantially through the decades (here's hoping for the latter!). So, I would shy away from discussing actual figures. Instead, I would concentrate on how you achieved your success, what it means to you, and the values that you hope to be your legacy.
This is a good point. Despite the possibility, I didn't consider our financial situation to get substantially worse. But there is always a chance, so ensuring kids are not planning their life around inheritance is a good suggestion.
Wait — by “draft trust” do you mean that you have no legally binding document as to how your estate will be distributed?
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Peter Foley
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Re: Appropriate age to communicate your will/wishes to your kids

Post by Peter Foley »

15M give or take. My goodness - spend the money on a competent attorney and set up a trust. This should be a high priority.
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Re: Appropriate age to communicate your will/wishes to your kids

Post by tim1999 »

At some point when I was in high school, my parents made me aware of the existence of their will, where it was physically kept in the house, and who the attorney was that drafted it.
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Re: Appropriate age to communicate your will/wishes to your kids

Post by msk »

"It is $15 million give or take. "
I ran into similar issues when my NW grew substantial enough to matter, but I am now older, mid 70s, with my kids ranging between 45 and 21. After much back and forth I learned a few things that you may wish to also think through:

$15 million in 100% stocks generates 5% real terms annually for eternity. That's $750k annually, rising with inflation, on average, as the years pass. The stock market going up and down is not really consequential upon your lifestyle. Being a BH I am confident that you can survive comfortably on $300k annually for years on end following a 50% market collapse. You can afford to do your charitable giving while still alive. I have always felt that giving after death is cheating. You are giving something away that no longer has any utility to you. Your heirs may feel cheated when you yank away, from the grave, a few million $ from their inheritance!

Do your charitable giving while still alive. It'll bring you ongoing joy for years on end. I gave an endowment to my alma mater and I have a great feeling of accomplishment each year when I get the annual report.

A major danger to your legacy, even amongst the heirs, is that your excellent stewarding of, and in building up your NW, gets damaged by incompetent handling after you are planted in the ground. The most innocent way this could happen is that the executor of your will hands over several million $ cash to one of your kids and he just leaves it in a bank account and lets inflation nibble it away. Of course it's much worse if he starts buying fancy yachts... I seriously considered setting up a trust but had to cancel that idea because my heirs are scattered all over the world with no common tax exposure. In your case a trust may be totally appropriate, e.g. dishing out 5% of a 100% stocks portfolio annually, or 4% of a stocks/bonds blended portfolio. For myself I settled on a will with a letter-of-instruction to all my heirs on how to invest their own fraction of the pot (100% stocks worldwide by market weight and withdrawing 5% or less annually). If you are not setting up a trust then you may consider leaving WRITTEN instructions accompanying your will. Chatting with the kids goes in one ear and out the other. My instructions are totally voluntary.

Your kids are still young, but some of mine have kids of their own approaching college age. I have decided to distribute a monthly stipend to all my heirs so that they get used to monthly withdrawals from their future portfolios (if they follow my letter-of-instruction) indefinitely. They will still get a jump in monthly stipends when I pop off, but at least, hopefully, each will view the inheritance bonanza as an upgrade on monthly stipends rather than a golden pot to fund new his and hers Lamborghinis. The kids' ages for receiving substantial stipends will of course depend on your perception of how financially responsible each gets. E.g. I have one kid in grad school. So I just double up the money he gets from his research and teaching assistantships. Makes his life comfortable, but not I do not think enough to kill ambition. The older kids get enough to substantially impact their lifestyles. That's OK by me because the money has much greater utility to them and their high school kids than to me or DW. Good luck in your deliberations!
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Re: Appropriate age to communicate your will/wishes to your kids

Post by Theseus »

Peter Foley wrote: Sat Jan 26, 2019 11:44 pm 15M give or take. My goodness - spend the money on a competent attorney and set up a trust. This should be a high priority.
I do have a competent attorney. We have worked with him over last few months.

delamer wrote: Sat Jan 26, 2019 10:45 pm Wait — by “draft trust” do you mean that you have no legally binding document as to how your estate will be distributed?
No. We don’t have anything so far that is binding. Attorney just delivered the trust documents for our review. So I consider it a draft. But hope to have everything in place in the next month or two.
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Re: Appropriate age to communicate your will/wishes to your kids

Post by bsteiner »

Theseus wrote: Sat Jan 26, 2019 4:58 pm ... They don't get money immediately. Gradually by the age of 35 they get all the money. We can discuss this with the kids without discussing the numbers.
...
It is $15 million give or take.
...
I do have a competent attorney.
Especially with an estate that size, a competent attorney would strongly recommend that instead of mandating distribution at 35, your Will provide for your children in separate trusts for your benefit with each child gaining control of his/her trust at 35. That would keep your children's inheritances out of their estates for estate tax purposes, and would better protect their inheritances against their creditors and spouses.

For this purpose, control means that the child has the right to become a trustee, may remove and replace his/her co-trustee (provided the replacement trustee is not a close relative or subordinate employee), and may appoint (give or leave) the trust assets to or in trust for anyone he/she wants (other than the child or his/her estate or creditors).
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Re: Appropriate age to communicate your will/wishes to your kids

Post by GmanJeff »

Theseus wrote: Sat Jan 26, 2019 4:59 pm
GmanJeff wrote: Sat Jan 26, 2019 4:33 pm Situated similarly to the OP, I have been transparent with my child. He knows about the provisions of our trusts, and the size of our estate, and I don't think it impairs his motivation to succeed on his own in the slightest.
GmanJeff. How old was your son when you started disclosing financial information?
Late teens, before university, when he opened and began to contribute to both a IRA and to a taxable account. He asked for advice regarding investments, and we discussed my investments, their rationale, and the pros and cons of various options, including micro-cap equities, actively managed mutual funds, index funds, target date funds, and cryptocurrencies.

The discussions have been wide-ranging, including tax issues, and the relationship between investments, lifestyle, risk management, and family security. He usually initiates such conversations when he has some new money he wants to add to an existing or possibly a new investment. My feeling has been that should my son inherit unexpectedly, ignorance in this area would leave him unprepared to seamlessly take over the assets he had become responsible for. I hope that by being well informed, he will be less inclined to make hasty and/or poorly considered expenditures from or adjustments to the investments, and less likely to take bad financial advice, if he more completely understands how and why the portfolio came to be what it is, and what purposes it is intended to serve.

I'll add that when he was first born, we created fairly restrictive trusts which contained provisions intended to preserve our estate if he turned out to be a spendthrift, but when we revised our estate plans recently we dropped most of those restrictions because we now have a strong sense of his maturity, stability, and judgment. Provisions still are included to him protect against things like an imprudent first marriage (should he marry at some point), but we are more comfortable now that the estate wouldn't be squandered by someone unprepared or ill-suited to be its custodian and the trusts were revised accordingly.
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Re: Appropriate age to communicate your will/wishes to your kids

Post by TSR »

EddyB wrote: Fri Jan 25, 2019 10:42 pm
TSR wrote: Fri Jan 25, 2019 6:18 pm I would not want my children to "take their foot off the gas" in their own studies and/or work simply because they know they're going to be "set."
That’s a view that’s worth considering, but knowing relatively early on that there’s financial security waiting can also permit those children to pursue worthwhile interests that aren’t necessarily their most financially rewarding options. I grew up in very modest circumstances, but was ultimately fortunate to attend the types of schools that have many students from extremely wealthy families; while I don’t know what details any one of those students may have known, when there are hundreds of millions or even billions of dollars involved, and truly prominent families, the kids presumably have a good sense of it. I was very impressed by the sense of opportunity and responsibility that several of them exhibited (in our early 20s!). Looking at the careers several of them have had, I’m sure I’ve made more money (and that’s been the right choice for me so far), but they’ve made commendable contributions to society. There’s a lot to be said for good parenting that produces hardworking kids who recognize their good fortunes and choose to make contributions to this world that don’t necessarily lead to the biggest paychecks.
This is an extremely valid point. I also went to some schools where a lot of people were a whole lot richer than I was. I did know some people who knew they were going to inherit x number of dollars at age 21 (or whatever)---some of whom came from families that you would recognize by name---who went on to do extraordinary things. I think most of those people were the types that were going to do extraordinary things no matter what. At the same time I knew a lot of people who seemed positively ruined by their own privilege. How can one know which kind of kids one has? You probably can't. As others have suggested, it likely has a lot to do with good parenting and finding ways to instill values. I think in my own case, I am someone who can be lazy if he doesn't have something he's chasing after (or something chasing me). It would have been hard knowing that things were all laid out for me in some not-too-distant future. OP knows his kids best, of course.
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Re: Appropriate age to communicate your will/wishes to your kids

Post by dknightd »

My kids know where to find my will. In a safe deposit box. They can access it when I die. They know where the key is. The bank will not let them in without a death certificate. I don't know what my parents have planned for me, I'm assuming an even split. I'm not the executor, but I assume the executor does not know either. For planning purposes I'm assuming they will have nothing left, but will probably be wrong.

You need to pick somebody to take care of your 12 year old. And make sure they are agreeable. Once they are all 21 give them both access to all information you want to share. IMO really no need to share dollar amounts. That could easily change.

Edit: my kids will be lucky if they get to split $1M. So 1/10 of what you are considering.
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Re: Appropriate age to communicate your will/wishes to your kids

Post by GAAP »

The level of detail necessary or appropriate for a 12 year old is different than for a 20 year old -- but not by as much as you might think. I would lean toward very basic generalizations about guardians and non-specific inheritance until late 20's at least. However, some kids are ready sooner than others -- some are buying houses at 23, others never learn.

FWIW, my mother created wills (for the kids too) and a trust when my dad died -- fully communicating the details to both of us. I was 21, my brother was 17.
“Adapt what is useful, reject what is useless, and add what is specifically your own.” ― Bruce Lee
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Re: Appropriate age to communicate your will/wishes to your kids

Post by NotWhoYouThink »

dknightd wrote: Sun Jan 27, 2019 6:11 pm My kids know where to find my will. In a safe deposit box. They can access it when I die. They know where the key is. The bank will not let them in without a death certificate. I don't know what my parents have planned for me, I'm assuming an even split. I'm not the executor, but I assume the executor does not know either. For planning purposes I'm assuming they will have nothing left, but will probably be wrong.

You need to pick somebody to take care of your 12 year old. And make sure they are agreeable. Once they are all 21 give them both access to all information you want to share. IMO really no need to share dollar amounts. That could easily change.

Edit: my kids will be lucky if they get to split $1M. So 1/10 of what you are considering.
Who is your executor? How will they get to the will if they don't have the will to know who to appoint as executor? They could petition the court to be named executor, but by then you may be buried, so if your will says anything about your funeral preferences they won't know about it until too late. And if your will nominates a different executor there might be a mess.

Better to have the will somewhere in the house that they know about, and a copy at the attorney's office, and your kids (or named executor) knows who the attorney is. That way they can get to the will immediately after you die, not wait until the bank sees the right paperwork to agree to open the safe deposit box.
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Re: Appropriate age to communicate your will/wishes to your kids

Post by RadAudit »

TSR wrote: Fri Jan 25, 2019 6:18 pm I would not want my children to "take their foot off the gas" in their own studies and/or work simply because they know they're going to be "set."
I'm working with smaller numbers. I'm in my early 70's. Kids are in the early to late 30s. Two grandkids are under 7. I guess they have an idea of how much DW and I have. But, I know they won't be set with what we have left over even if they think they will. Too many variables, unknowns and unknown unknowns. I'm waiting for them to find the gas pedal to press on. Not concerned about them taking their foot off the gas.

I have expressed my wishes that they split the estate (ha!) 50 / 50 and not fight over it. It's in the trust. I send them both an update of my IPS and a general update of portfolio performance at the end of the year; but, I do not provide hard numbers. However, I do remind them that their concern shouldn't be how much they'll inherit; their concern should be what they are going to do when we show up on their doorstep old and broke. (One kid moved farther away so I guess we'll have farther to walk.)
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Re: Appropriate age to communicate your will/wishes to your kids

Post by Theseus »

bsteiner wrote: Sun Jan 27, 2019 8:21 am
Theseus wrote: Sat Jan 26, 2019 4:58 pm ... They don't get money immediately. Gradually by the age of 35 they get all the money. We can discuss this with the kids without discussing the numbers.
...
It is $15 million give or take.
...
I do have a competent attorney.
Especially with an estate that size, a competent attorney would strongly recommend that instead of mandating distribution at 35, your Will provide for your children in separate trusts for your benefit with each child gaining control of his/her trust at 35. That would keep your children's inheritances out of their estates for estate tax purposes, and would better protect their inheritances against their creditors and spouses.

For this purpose, control means that the child has the right to become a trustee, may remove and replace his/her co-trustee (provided the replacement trustee is not a close relative or subordinate employee), and may appoint (give or leave) the trust assets to or in trust for anyone he/she wants (other than the child or his/her estate or creditors).
Currently we have following schedule(in addition to providing for variety of things at the discretion of the trustee).
Age 25 - ability to withdraw 10%
Age 30 - ability to withdraw 20%
Age 40 - ability to withdraw 100%

So funds remain in the individual trusts for DDs to withdraw. There is no language requiring a distribution to them at the specific age. Actually there is a language that allows them to keep the money in the trust and be able to withdraw at a future date. E.g. withdraw 3% at the age of 25 and then withdraw remaining 7% at the age of 28 (or 38 for that matter).

Looking at the draft, our DDs do not become trustees when they turn 40. According to the current draft the corporate trustee will take over when our assigned friend is no longer able to be a trustee. Should we change the language to make DDs the trustees once they turn 40? Not sure what are the pros-cons.
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Re: Appropriate age to communicate your will/wishes to your kids

Post by snackdog »

History has shown that the first generation works to build wealth (through hard work, long years and frugality) and the second generation almost always squanders it (through aversion to hard work, lack of persistence and spendy ways). Large estates frequently lead to sibling disputes in which legal fees eat most of it. But it can depend on the family and the kids. I have known a few, rare kids that inherited ~$10MM each at age 21 who worked their butts off their whole life and didn't spend much. But I know ten times as many who were lazy as hell and fought with their siblings for decades and never amounted to squat.
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Re: Appropriate age to communicate your will/wishes to your kids

Post by bsteiner »

Theseus wrote: Tue Jan 29, 2019 10:28 am
bsteiner wrote: Sun Jan 27, 2019 8:21 am
Theseus wrote: Sat Jan 26, 2019 4:58 pm ... They don't get money immediately. Gradually by the age of 35 they get all the money. We can discuss this with the kids without discussing the numbers.
...
It is $15 million give or take.
...
I do have a competent attorney.
Especially with an estate that size, a competent attorney would strongly recommend that instead of mandating distribution at 35, your Will provide for your children in separate trusts for your benefit with each child gaining control of his/her trust at 35. That would keep your children's inheritances out of their estates for estate tax purposes, and would better protect their inheritances against their creditors and spouses.

For this purpose, control means that the child has the right to become a trustee, may remove and replace his/her co-trustee (provided the replacement trustee is not a close relative or subordinate employee), and may appoint (give or leave) the trust assets to or in trust for anyone he/she wants (other than the child or his/her estate or creditors).
Currently we have following schedule(in addition to providing for variety of things at the discretion of the trustee).
Age 25 - ability to withdraw 10%
Age 30 - ability to withdraw 20%
Age 40 - ability to withdraw 100%

So funds remain in the individual trusts for DDs to withdraw. There is no language requiring a distribution to them at the specific age. Actually there is a language that allows them to keep the money in the trust and be able to withdraw at a future date. E.g. withdraw 3% at the age of 25 and then withdraw remaining 7% at the age of 28 (or 38 for that matter).

Looking at the draft, our DDs do not become trustees when they turn 40. According to the current draft the corporate trustee will take over when our assigned friend is no longer able to be a trustee. Should we change the language to make DDs the trustees once they turn 40? Not sure what are the pros-cons.
The right to withdraw is equivalent to a manadatory distribution. To the extent they have the right to withdraw the assets, the assets will be included in their estates for estate tax purposes, and will be subject to their creditors and spouses. While most people don't have taxable estates, if they inherit that much money, they may have taxable estates.

Obviously if you were willing to let them withdraw all of the assets at age 40, you should be willing to let them become trustees and have the right to remove and replace their co-trustees at that point.
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Re: Appropriate age to communicate your will/wishes to your kids

Post by dknightd »

NotWhoYouThink wrote: Mon Jan 28, 2019 11:48 am
Who is your executor? How will they get to the will if they don't have the will to know who to appoint as executor? They could petition the court to be named executor, but by then you may be buried, so if your will says anything about your funeral preferences they won't know about it until too late. And if your will nominates a different executor there might be a mess.

Better to have the will somewhere in the house that they know about, and a copy at the attorney's office, and your kids (or named executor) knows who the attorney is. That way they can get to the will immediately after you die, not wait until the bank sees the right paperwork to agree to open the safe deposit box.
Our executor is our daughter. Both she and brother have a rough idea of what we want. They are both over 26 and can take care of themselves.

We have a copy of our will in the house. Should be easy to find. If we both die in a house fire the key to safe deposit box will hopefully survive. Both of them know where the key is. And where the bank is. It should not take them too long to get a death certificate if needed.

That reminds me, we should really revisit our will and find a new attorney (he is dead and his office is closed)

edit: they are both listed as secondary beneficiaries on bank and retirement accounts. So they should be able to get most of our liquid assets pretty quickly once they can confirm we are dead. At least that is my understanding.
If you value a bird in the hand, pay off the loan. If you are willing to risk getting two birds (or none) from the market, invest the funds. Retired 9/19. Still working on mortgage payoff.
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Re: Appropriate age to communicate your will/wishes to your kids

Post by dknightd »

Ybsybs wrote: Fri Jan 25, 2019 10:13 pm I knew for as long as I could remember who my siblings and I would go live with if something were to happen to my parents.

The details of my parents' wills with regard to finances were not made clear to me until I was an adult and they asked me to be the executor in the event that they predecease me.

These seem appropriate times for the information to be shared.
agreed.
If you value a bird in the hand, pay off the loan. If you are willing to risk getting two birds (or none) from the market, invest the funds. Retired 9/19. Still working on mortgage payoff.
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Re: Appropriate age to communicate your will/wishes to your kids

Post by dknightd »

Theseus wrote: Tue Jan 29, 2019 10:28 am

Currently we have following schedule(in addition to providing for variety of things at the discretion of the trustee).
Age 25 - ability to withdraw 10%
Age 30 - ability to withdraw 20%
Age 40 - ability to withdraw 100%

Honestly I would not worry too much about how and when they get the money. Granted 15M is much more than 1.5M. But we are not talking about 15B here.

My biggest concern would be who would take care of your kids. Especially the 12 year old!
If you value a bird in the hand, pay off the loan. If you are willing to risk getting two birds (or none) from the market, invest the funds. Retired 9/19. Still working on mortgage payoff.
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Re: Appropriate age to communicate your will/wishes to your kids

Post by Theseus »

dknightd wrote: Tue Jan 29, 2019 6:54 pm Granted 15M is much more than 1.5M. But we are not talking about 15B here.

My biggest concern would be who would take care of your kids. Especially the 12 year old!
I completely agree. That’s why I didn’t give the number in the first post. Main concern is to provide the balance such that they don’t loose motivation but at the same time they still have resources to pursue something and if they fail then they are still taken care of. We are blessed to be able to offer that to our kids.

Since we have a large family and fairly close we did have a few choices. My wife’s sister and husband that we are very close to have agreed to be guardian. We have seen them raise their kids so we know what kind of parents they are. And they would be closer to our ideals than any other family member.
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Re: Appropriate age to communicate your will/wishes to your kids

Post by flyingaway »

My father will be 88 in a few days. He has told us how to deal with his death, but never told us how much money he has and how to deal with it after his death.

I am around 55, I have told me children that I have written something for them and put it in the safe. Most accounts have listed them there.
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Re: Appropriate age to communicate your will/wishes to your kids

Post by NotWhoYouThink »

dknightd wrote: Tue Jan 29, 2019 6:16 pm

Our executor is our daughter. Both she and brother have a rough idea of what we want. They are both over 26 and can take care of themselves.

We have a copy of our will in the house. Should be easy to find. If we both die in a house fire the key to safe deposit box will hopefully survive. Both of them know where the key is. And where the bank is. It should not take them too long to get a death certificate if needed.

That reminds me, we should really revisit our will and find a new attorney (he is dead and his office is closed)

edit: they are both listed as secondary beneficiaries on bank and retirement accounts. So they should be able to get most of our liquid assets pretty quickly once they can confirm we are dead. At least that is my understanding.
Have you verified with the bank that they will allow someone to open your safe deposit box just by showing up with a death certificate? Because most banks won't do that. In fact, they will prevent access to the box until someone shows up with letters from the probate court naming them the executor.
The bank doesn't know if you left the contents of the box to your daughter or your son or your new girlfriend or your favorite charity. The will is needed to determine that, and it doesn't do any good in the box. And a copy is probably not good enough either.
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Re: Appropriate age to communicate your will/wishes to your kids

Post by dknightd »

NotWhoYouThink wrote: Tue Jan 29, 2019 7:16 pm
dknightd wrote: Tue Jan 29, 2019 6:16 pm

Our executor is our daughter. Both she and brother have a rough idea of what we want. They are both over 26 and can take care of themselves.

We have a copy of our will in the house. Should be easy to find. If we both die in a house fire the key to safe deposit box will hopefully survive. Both of them know where the key is. And where the bank is. It should not take them too long to get a death certificate if needed.

That reminds me, we should really revisit our will and find a new attorney (he is dead and his office is closed)

edit: they are both listed as secondary beneficiaries on bank and retirement accounts. So they should be able to get most of our liquid assets pretty quickly once they can confirm we are dead. At least that is my understanding.
Have you verified with the bank that they will allow someone to open your safe deposit box just by showing up with a death certificate? Because most banks won't do that. In fact, they will prevent access to the box until someone shows up with letters from the probate court naming them the executor.
The bank doesn't know if you left the contents of the box to your daughter or your son or your new girlfriend or your favorite charity. The will is needed to determine that, and it doesn't do any good in the box. And a copy is probably not good enough either.
They told me as long as they were listed as beneficiaries on my accounts at the bank, and had a key, and a death certificate, they could access the box. Perhaps I misunderstood what they told me, or, perhaps things have changed since then. What would you suggest? Thanks
If you value a bird in the hand, pay off the loan. If you are willing to risk getting two birds (or none) from the market, invest the funds. Retired 9/19. Still working on mortgage payoff.
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Re: Appropriate age to communicate your will/wishes to your kids

Post by NotWhoYouThink »

I would suggest keeping the will somewhere besides the safe deposit box. In a fire-proof box in your bedroom or basement, maybe.

If you want to keep jewelry and other items in the box at the bank, fine. But not the will.

Maybe a small or small-town bank will do things differently, but the big banks know that the family doesn't always get what they think they are getting for an inheritance, and they wait for the courts to direct them to hand over the assets.

For your accounts, you can name beneficiaries and that's good enough. I've never heard of a beneficiary being named for a box.
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Re: Appropriate age to communicate your will/wishes to your kids

Post by FIREchief »

A few comments....

I really wish more folks on the forum would follow Bruce's advice about how to provide/preserve asset protection through a trust. We see so many posts by people who allow their heirs to withdraw xx percent at age yy, etc. which clearly jeopardizes the trust's asset protection; which for many heirs is the main benefit from a trust.

Also, I think that anybody who is nominated as executor of a will should be provided with a copy of the full will along with very clear communication regarding how to obtain the original as well as open discussions regarding asset locations and how the assets were going to be inherited (i.e. estate versus TOD/POD). I would never petition the courts to be appointed executor if I wasn't highly confident that the estate would contain sufficient liquid assets to hire an attorney and pay all final bills.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
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