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I think a balanced approach is best in this case. Told kids not to expect anything, but baring something really gone haywire, there should be a smalll amount left. I don't plan ahead how much I should leave them because I don't know. But I want them to be successful on their own. Had Bill Gayes relying on his $5 millioninheritance, he might not become a billionaire today.
The other way to look at it, is Bill Gates was willing and able to take the risk of dropping out of Harvard because he knew that he had a landing pad if things didn't work out. As I understand it, he came from a family of means.
I like the idea of gifting each year for a Roth IRA or perhaps a house down payment but be aware of issues.
Keep in mind if your heirs are married, the spouse can walk off with half of the money you have gifted depending on state divorce laws. For example, if you gift for a house down payment and a divorce occurs, the heir's spouse will get half the proceeds if the house is in both names. If gifted money has been commingled, it will not necessarily be solely your heir's money.
Same for retirement funds. With a divorce, sometimes funds must be split and shared even though they may be totally in your child's name with money you have gifted.
I have had friends and family members really burned with their child's ex-spouse walking off with half their gifted funds, particularly with house down payments (one within 4 months - spouse alone knew she was leaving and got quite a bonus payout).
I know we can't control everything, but be aware and talk with a lawyer in your state.
My properties and bank accounts are in a revocable trust. Everything I have when I pass on will go to my two kids. I have no debt and no mortgage. I would like to set up a college fund in the event that there are grandchildren (but there are no grandchildren at this point).
I don't make my financial decisions based upon what will be left when I pass on, but I am frugal and live simply.
My properties and bank accounts are in a revocable trust. Everything I have when I pass on will go to my two kids. I have no debt and no mortgage. I would like to set up a college fund in the event that there are grandchildren (but there are no grandchildren at this point).
I don't make my financial decisions based upon what will be left when I pass on, but I am frugal and live simply.
It's hard to plan financially. The end of life is the most expensive, when you can no longer do things for yourself. A housekeeper, yard service, handyman, home health care and medical co-pays can cost thousands of dollars a year. It's always prudent to plan for extended disability as you age. In most areas you will be hard put to find a decent assisted living apartment for under $4,000/month, and prices are going up. A few years of that will put a big dent in your savings.
Only after you take care of yourself can you think about leaving an estate. You may enjoy excellent health until the day you die, or care expenses may eat all your assets and you die a pauper.
It really depends on how much there is to inherit.
If I'm worth $100 million, my kids will "know" that we're wealthy. It's not something I can hide. In that scenario, I'd donate some to charity while also preparing my to manage whatever their going to be given by me. If I'm leaving behind a smaller amount, I would just avoid talking about inheritances.
Rich people that give their heirs $0, do so because their kids/grand-kids etc., are spoiled and irresponsible. Often however, the parents are absentee and either overly permissive or highly overbearing. They basically create monsters and then act shocked and upset that the kids they raised to be brats.....turned into brats.
I started planning for retirement when I was in my early 20's when SS raised the retirement age. I'm almost 58 and planning to work for another 3-4 years. One thing I haven't had to do is make catch up contributions to my 401k because I maxed my contributions in the early days and they've had decades to compound. I saved for retirement, my wife saved for the down payment on the house and we delayed starting a family until we felt we could do it right. That included paying for college so they could start their work lives free from student loans.
We have discussed the options for leaving something behind but came up with an idea we think is better. That is to gift the kids money each year for about 10 years each from the time they're in their early 20's to their early 30's and put it in a Roth IRA for each. That gives them a nice sum that will allow for a few decades of compounding. There should still be funds to leave behind but it seems getting the kids started on thinking about their own retirement planning as early as possible is the best legacy we can leave.
I'm in the trusts business and I see lots of different outcomes. All sorts of different ideas that people have had turn out in unexpected ways. If you want to be remembered for a modest sum, tell your "kid" that you want them to buy their dream car with a portion of the inheritance to remember you by. They will think of you every time they drive. I know someone who drives his truck for 20 years because of this...
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Quote:
Originally Posted by shamrock4
I like the idea of gifting each year for a Roth IRA or perhaps a house down payment but be aware of issues.
Keep in mind if your heirs are married, the spouse can walk off with half of the money you have gifted depending on state divorce laws. ... be aware and talk with a lawyer in your state.
Our estate lawyer was very keen on avoiding the 'gold-digger / over aggressive spouse' of heir. Added a lot of clauses / distribution thresh-holds to the settlement of trust. No spouses of kids yet, none on the horizon, only a couple new farm / hunting 'grand-dogs' to care for
Quote:
Originally Posted by Submariner
I think that is a very good idea.
My properties have been shifted to LLC ownership.
Yes, we have a few LLCs that our trust recognizes / qualifies as solely owned by the trustees. (us) Trust specifies each LLC, but is able to leave the value adjustable (for future changes in LLC holdings)
Quote:
Originally Posted by Ulysses61
Many of us never inherited a single penny.
and some of us inherited a lot of DEBT, as well as our wayward parents!
I told my kids... "Some people have wayward kids, some have wayward PARENTS!, and I don't want BOTH!"
so far, so good (Kids are good, parents... not so good) Often parents can be a real handful to control!
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Many of us never inherited a single penny.
