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Old 03-28-2015, 03:49 PM
 
Location: Denver, CO area
10 posts, read 5,493 times
Reputation: 17

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I'm not quite sure how to approach this subject but fundamentally I'm looking for suggestions on how best to deal with my estate. I'll begin with a synopsis of my situation..

I'm 75, divorced for 22 years and I have been fully retired for about four years, once from a major employer and the second time from a small machine shop that I owned.
I spent the last 19 years single-handedly raising my granddaughter and today she is a beautiful young lady, a freshman at the University of Nebraska majoring in vocal performance. I adopted her at age seven so she is legally recognized as my daughter. She and I have a remarkable relationship and we enjoy many activities together. She does have a boyfriend and they've been together going on three years and he's a good kid. Although we see my natural daughter a couple of times a year it's not a close relationship for either of us because she was never a mother and never showed any appreciation for my having filled that role. I have a sister that is two years older than me who lives in Michigan with her husband.

I manage my own investments, two IRA's, three small broker accounts and a custodial account for my daughter. I have a small mortgage on my home. For the last five or six years I have fine tuned my Last Will and Testament which would leave the bulk of my estate to my daughter and smaller portions to a few close friends, churches and high schools.

A year and a half ago I received a surprise call from a woman looking for her father. It turned out to be an adopted daughter whom I had no contact with for over twenty five years. I won't go into details but her mother and grandmother purposely severed all contact. Today she is 52, a widow and living on partial welfare in Minnesota. She has three daughters, two of which are in college. I am very happy to have all of them in my life and I send them each a small amount periodically.

I'm now beginning to question how I should distribute my estate. I worked very hard to save for this moment in life, focusing on my own retirement as well as insuring that my daughter got a college education and was financially taken care of after that. My estate - investments + equity in my home and a couple of small properties - currently stands at about $1.25M. Originally my daughter stood to get the home - about $225000 equity - and about 70% of my investments. My fear is that that is excessive - I don't want her to become a "trust fund kid". I'm considering establishing a foundation or leaving much of it to the university. Here's the real issue for me. I've already included significant amounts in my will for my daughter in Minnesota and my "new" granddaughters. Because of the effort that I put into building toward my retirement I tend to be protective of my estate and I feel guilty not feeling an obligation to materially support them. So does anybody have any thoughts on what I should do? I'm open to all suggestions.
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Old 03-28-2015, 05:14 PM
 
Location: The Triad (NC)
26,905 posts, read 58,020,547 times
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Quote:
Originally Posted by rdoty View Post
A year and a half ago I received a surprise call from a woman looking for her father.
It turned out to be an adopted daughter whom I had no contact with for over twenty five years.
A "specific bequest" for some fixed amount... you cover any taxes as well.

Be as generous as you like... I won't presume to specify a number...
but the nature of it should be this sort of "once and done" arrangement.
Quote:
I spent the last 19 years single-handedly raising my granddaughter ...
My fear is that that is excessive - I don't want her to become a "trust fund kid".
She doesn't have to (shouldn't) get it all at once.

Some fixed amount immediately maybe enough to buy a modest home or finish college with.
And then a portion of the income from the invested funds (think growth)...
with perhaps 1/3 of the principle shifting to her name at fixed intervals of time.
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Old 03-28-2015, 06:26 PM
 
Location: Denver, CO area
10 posts, read 5,493 times
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Re my daughter. There's a lot of detail in the LW&T (7 pages) including putting the money into a managed trust. The estate doesn't include her custodial account which by the time she graduates should be close to $100k. Maybe that and the house (which she has to keep/maintain for 5 years minimum) is enough. Thoughts?
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Old 03-28-2015, 07:01 PM
 
Location: The Triad (NC)
26,905 posts, read 58,020,547 times
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Quote:
Originally Posted by rdoty View Post
The estate doesn't include her custodial account
which by the time she graduates should be close to $100k.
Then that should pass "outside of the estate" and be more than adequately get her through college.
Perhaps once graduated and earning adequately to allow the first 1/3 of the estate to pass.

Quote:
Maybe that and the house (which she has to keep/maintain for 5 years minimum) is enough.
Enough for what?

Quote:
Thoughts?
If she would a) want the house and b) be able to keep it up sure.
Nothing good comes from forcing an obligation.
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Old 03-28-2015, 08:59 PM
 
Location: WA
5,293 posts, read 20,734,401 times
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I leave all to my spouse but if I am the sole survivor I leave half to my son and split the other half amongst my step children. Anything different is too complicated for me.
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Old 03-29-2015, 10:20 AM
Status: "Cats know. Cats always know." (set 5 days ago)
 
Location: Pennsylvania
15,594 posts, read 9,616,105 times
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When you say 'my daughter' do you mean your adopted daughter, or your biological daughter?


It's as your concience dictates. Personally I wouldn't leave your new found family anything. You're giving them money now when you're alive. End of story.


as for leaving her the house, a gift with strings attached is not a gift. If she doesn't want it, don't give her an obligation. If she does, don't put a time limit on it. Things change. What if she gets a job someplace else but can't take it as the 5 yrs isn't up? Or needs the money for medical expenses for her child?

I'd say give it to her to do with as she pleases. or leave it to a charity of some kind and let her inherit the money.
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Old 03-31-2015, 07:24 PM
 
Location: Denver, CO area
10 posts, read 5,493 times
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Boy, things got complicated when my 52YO adopted daughter with 3 granddaughters re-entered my life. Not just from the obvious financial issue but the term "daughter"....really confusing. I'll refer to the granddaughter that I raised and adopted as Daughter A...the one that's in college and stands to inherit the home.

Re the home, she has always indicated that she would like to live here but you make a good point...what if she gets a job in Florida or California or through some misfortune can't afford it? In the first case she could rent it out and in the second case maybe I should just eliminate the 5-year stipulation. After all, at that point who am I to complain???

Re the 52 YO daughter and 3 granddaughters. Here it gets sticky. The two granddaughters that are in college are absolutely wonderful, honest, hard working young ladies. If I gave them each $10k upon graduation I know they would appreciate it and use it wisely. If I gave $10k to their 52YO mother I might as well throw most of it away. She's not a completely bad person but she has a propensity to spend money on things she shouldn't e.g. alcohol and pot which is why I tend to give her gift cards to places like Kohls and Walmart. I'm inclined to give her a one time gift in the form of improvements to her house and some new furniture....and make it very clear that she'll just have to wait until my executor opens the envelope. "Envelope please"
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Old 04-01-2015, 09:33 AM
 
Location: Paranoid State
12,697 posts, read 9,472,640 times
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First, a big congratulations. Sounds like you have accomplished much in life. Good for you.



Quote:
Originally Posted by rdoty View Post
...My fear is that that is excessive - I don't want her to become a "trust fund kid"....
I know what you mean -- we have several friends, now retired, who "made it" in Silicon Valley start-ups, whose children are frankly quite lazy and will never be anything in life.


Remember the saying "The apple doesn't fall far from the tree?" Re-read what you wrote here:

Quote:
I spent the last 19 years single-handedly raising my granddaughter and today she is a beautiful young lady, a freshman at the University of Nebraska majoring in vocal performance. I adopted her at age seven so she is legally recognized as my daughter.
My guess is this young lady at University of Nebraska has learned her values from you and among those values are X, Y, and Z (fill in the blanks). If I had to guess, I would say X, Y and Z in your case might include the value of work and providing for yourself, the value of family ties, and perhaps of church.

Somehow, my guess is her values she's learned from you minimize the risk of here becoming a "trust fund kid."

You certainly have can have a trust established that would, for example, after you pass, provide periodic disbursements to this young lady at for example age 25, 30, 35, 40... and only if certain things happen (another for example: it is common for members of the LDS church stipulate that any inheritence is predicated upon completion of their LDS Mission... or perhaps graduating from college... or maintaining an annual income from work in at least the amount of $X... etc etc etc). Periodic disbursements minimize the potential for the trust fund brat problem.

I'm a naturally suspicious person, and as I read your post, I am suspicious of the motives of the 52 year old widow & her children whom have never been a part of your life until now - as you are aging and (ahem) getting closer to the end of your life and when your LWT will come into force. My fear is, once you are gone, these people somehow "guilt" your young granddaughter/adopted daughter currently in college into doing things with her inheritance that are substantially different than what you wish. I think this is where a trustee comes in. Make your wishes known through the establishment of your trust, naming someone trusted (say a bank) as the trustee. The trustee would not be influenced to disburse funds in any way separate from what you currently desire & specify.
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Old 04-01-2015, 12:33 PM
 
5,071 posts, read 3,342,955 times
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Quote:
Originally Posted by rdoty View Post
Boy, things got complicated when my 52YO adopted daughter with 3 granddaughters re-entered my life. Not just from the obvious financial issue but the term "daughter"....really confusing. I'll refer to the granddaughter that I raised and adopted as Daughter A...the one that's in college and stands to inherit the home.

Re the home, she has always indicated that she would like to live here but you make a good point...what if she gets a job in Florida or California or through some misfortune can't afford it? In the first case she could rent it out and in the second case maybe I should just eliminate the 5-year stipulation. After all, at that point who am I to complain???

Re the 52 YO daughter and 3 granddaughters. Here it gets sticky. The two granddaughters that are in college are absolutely wonderful, honest, hard working young ladies. If I gave them each $10k upon graduation I know they would appreciate it and use it wisely. If I gave $10k to their 52YO mother I might as well throw most of it away. She's not a completely bad person but she has a propensity to spend money on things she shouldn't e.g. alcohol and pot which is why I tend to give her gift cards to places like Kohls and Walmart. I'm inclined to give her a one time gift in the form of improvements to her house and some new furniture....and make it very clear that she'll just have to wait until my executor opens the envelope. "Envelope please"
If someone isn't responsible with money by 52, they'll never be responsible with money. Leaving money to her would just be wasted. She'll likely blow through it in less than a year.

In terms of wanting to avoid a trust fund baby, you have pretty liberal control over distributions from the trust, just have to write it properly. You could do something like x amount a year/x amount at y age, with her getting access to the full amount at her retirement age.
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Old 04-01-2015, 01:00 PM
 
5,501 posts, read 8,182,389 times
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I'm a big fan of releasing funds at different times, you cannot control what someone does, but perhaps, with several opportunities rather than one big chunk they will be more responsible.
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