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Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Quote:
Originally Posted by kevxu
Great ideas.
oh yes, very important to consider age / financial responsibilities / relationship (spouses...) and legal issues (jail/divorce/garnishments/liabilities). My attorney seems to have a wealth of war stories and positioned distributions accordingly. (so much at certain ages).
I have very little to distribute (even less today...).
I set up a family (donor) advised fund back in the 1990's (when I was in my 30's). The kids participate in decisions, and will continue to direct the perpetual gifting from this 'foundation'. (scholarships, support for various agencies, community needs...).
I am very tempted to reallocate my future gifting to let the charities be stuck with some of my 'real property assets'. (and the tax / liquidation burden that accompanies that asset class). I just might be needing some of my earmarked assets (not the 'foundations / donor advised fund assets', they are out of my hands. I have recently switched my Donor advised fund from a 'community foundation' to Vanguard Charitable Endowment. It is REALLY nice and EZ to both manage and distribute.
Not sure how the kids feel about not getting any inheritance... They are still whining about having to pay 100% of their college... Even tho I had funded their ROTHS for 6 yrs (~$20k each) AND helped then A LOT with the houses they had to build as Jr High 'Home School' projects. (They each got about $70k profit from those).
I actually have left some 'subsistence' funding to very incompetent siblings who have pleasured in ostracizing me. Something about "heaping-hot-coals on their head"
But at least the kids won't be fighting over it... "It" was gone before they were 10 yrs old. darn... (I could actually use some of that today, but... I will stand by my decision to give more away than I keep. I'm still eating fine... (fresh Raspberry pie at the moment ! ) http://www.city-data.com/forum/membe...-ice-cream.jpg
We have 2 pensions 2 SS checks other income that brings us over 6 figures a year.We give our children money while we are alive and see them enjoy it while they are still young.A man once told me he spent his adult life making money,he retired and now is to old to do the things he always wanted to do.
My Mom died last year and everything is split equally.... but no one took more during Mom's life.
Have seen parents give kids money, loan them money that was never paid back -- and when time came for the final accounting, that money was taken off their inheritance, having it been noted that "Irmengarde borrowed 25,000 during her lifetime and never paid it back, and now that debt has been paid in full".
Did it cause hard feelings? Yes -- but no more so than the fact Irmengarde was a mooch and didn't deserve an equal share, since when she "borrowed" the money with no intention of paying it back she went on and on about getting her part of the inheritance now...
Do what you want with your money, but in my opinion, you shouldn't state how the money is to be used, unless it's tons of cash. That's controlling from the grave...
I guess my thinking is that if I make a suggestion or have an intent that the money be used for good . . .since it is a family legacy, it seems important to me to do that. Of course there will be no teeth in it, so if whomever wants to blow it, that's their karma, but I honestly don't see anything wrong with putting the wish out there.
Simple way to do this: give your entire estate to the spouse. After the spouse is passed on, their estate gives "share and share alike" to the kids. My parents did this and we are doing the same .
Precisely what we have in place. Works for us both in terms of simplicity and fairness. What the children do with it, if there's any "it" left, is strictly up to them. We'll be beyond caring.
Do what you want with your money, but in my opinion, you shouldn't state how the money is to be used, unless it's tons of cash. That's controlling from the grave...
There are also practical reasons not to include conditions for bequests, namely the difficulty of interpretation and enforcement.
Suppose I say that I bequeath X dollars to my niece on the condition that she stop smoking. Who is to determine that? Suppose she sneaks cigarettes late at night? Is the executor supposed to play detective? Suppose she quits but then resumes a year later?
Or suppose I say that I bequeath X dollars to my nephew on the condition that he go to college. Suppose he enrolls in college but then drops out after one semester? And who will monitor all that anyway? If the conditions attempt to specify a required grade point average, or a length of time, it just gets stickier and stickier with more things someone has to monitor.
Those kinds of things are quagmires and are best avoided.
I was not talking about any conditions . . . just making a videotape stating a general preference that the money be used "for good" (as opposed to wastefully) . . .
The thread title uses the term "ethical" question. For me, it's more of a philosophical question. Let's start with the example of someone who dies and who has two or more children still living. Not making an equal division runs the risk of creating life-long ill will between or among those surviving children, as others have pointed out. So other things being equal I would come down on the side of equal distribution. But other things are not always equal. Suppose one of the children has demonstrated a life-long pattern of quickly wasting any money he or she comes into, for example putting that money into sustance abuse and wild sprees with other neer-do-wells? Well, perhaps the parent doesn't want to subsidize that behavior. In that case, I think it would be justified to have an unequal division. After all, it is the parent's money. I think it was poster Kevxu who said he doesn't care whose nose gets bent out of shape (as it is his money), and I am very sympathetic to that point of view.
Now let's consider the case of someone who has multiple nieces and nephews. Suppose one niece or nephew has been especially generous, loving, and supportive over the years. I see nothing wrong with rewarding that person with a bequest. Yes, it may cause ill feelings if the others find out about it. But it is certainly rationally justified.
When my mother died, my sister and I inherited equally, with the exception that there were relatively small but not negligible separate bequests to her church, to one niece, to one surviving sibling (my uncle), to my sister's two children (my mother's only grandchildren), and to a younger woman who had become friends with my mother. As the executor, I wrote checks to all those people (and to the church). I saw absolutely nothing wrong with those bequests (I certainly did not resent them) and I doubt my mother's other surviving sibling (my aunt) or any of the other cousins (except the one who got something) ever knew about it.
There is a book called the Millionaire Next Door which discusses your question. As I recall, each family and child is different but it is the outcomes that should be considered. If one child is self suffiecient may she should be given less where her brother might be given a little extra because of medical issues for example. The books also provides lots of examples of irresponsible lifestyles and spending when a person never has to really work for anything.
For me, I'm giving whatever is left to charity as it will do the greatest good.
I guess my thinking is that if I make a suggestion or have an intent that the money be used for good . . .since it is a family legacy, it seems important to me to do that. Of course there will be no teeth in it, so if whomever wants to blow it, that's their karma, but I honestly don't see anything wrong with putting the wish out there.
The courts will usually decide whether a restriction is valid. It is easy to say that somone won't inherit until reaching an age certain but to base it on a behavior usually will not be considered. There has to be a particular degree of certainty for the courts to enforce a restriction. You could also state the money will go into a trust which will be restricted to paying for education or medical costs, for example, until the recipient reaches an age certain. Really, it is best to consult an estate lawyer as there a million and one rules and laws to consider and it is beyond the scope of the posters here.
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).
Even tho I had funded their ROTHS for 6 yrs (~$20k each) AND helped then A LOT with the houses they had to build as Jr High 'Home School' projects. (They each got about $70k profit from those).
)
Additional reasons to avoid conditional bequests
