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Personally I'm not a big fan on annuities, but I know my aunt owns some, and I think for this situation that could be a great solution for this situation. Maybe a 20% distribution could be made upon her death and annuities could be purchased with the rest of the monies for her son and grandson who is an adult. For her minor granddaughter, I know my aunt doesn't want the parents to be able to touch the monies, so for her my aunt doesn't want distributions till she is 22. Maybe the monies could be in trust, she could get a 20 % distribution at 22, and an annuity could also be purchased at that time. There are still the taxes, etc. on that, but this would shorten the distribution period and my involvement considerably. Other thoughts for the grand-daughter that would meet my aunt's wishes??
I have to say how much I appreciate you and others posting (all your brainstorming). I'm delighted to get some ideas of where to start and what options I might want to discuss with my aunt and then my aunt and her attorney for a quick trust modification.
The company that I work for thru our Employee Assistant Program offers attorney referrals and a free 1/2 hour consultation. It's not like I want to get anyone except for my aunt's attorney involved for a quick trust modification, but I'm thinking I go for a free 1/2 consultation with an estate planning attorney just to run some of the ideas you've presented me by that attorney for their thoughts before talking to my aunt too.
Thank you all!
I like the annuity idea. There is no way I would undertake, in my 60's, what you are undertaking. I imagine the heirs/beneficiaries of the trust are going to be angry and that anger will increase over the years. I like the idea of proceeding with a clean immediate solution of annuities paying out on the money and leave it at that.
I would be fearful of litigation from the potential heirs, and I see their point, so I would not want this mess hanging over my head.
I am not a fan of people trying to control things from beyond the grave, but that's just me. So I would not participate in what she has arranged.
Kathy, just some words of encouragement from someone who has a lot of family executor experience. I'm reading the comments from posters telling you to "bow out" and "decline politely" but I hear the love and care in your words and relate. When doing something like this for family it's not just a calculation about how much time and effort is involved.
I'm currently helping out a cousin who was left holding the bag of a huge tangle of estate headaches when he lost three family members over less than two years. I'm not in any of the wills but am stepping in because I loved this family and would do anything to help out. The work is relatively easy for me--it's in my wheelhouse and sort of fun, puzzle-solving kind of thing--and I have the time and space to devote to it. So I hear you and appreciate your big heart.
The timeline concern you express is real but I'm sure you will find a solution. I imagine that once your aunt passes and you become trustee there is an ability for you to name additional successor trustees yourself. Certainly you might want to discuss changing the terms with her now but if she is adamant about the timeline there is always a way to make it work. My uncle was the beneficiary of a trust that had helped several generations of his family and was managed by a small law firm in their hometown in Connecticut. When he passed the beneficiary shifted to another line in the same family, something the original bequest had originally set up more than 80 years ago. There had been several changes in Trustee during that time, finally landing with the law firm. The corpus of that trust is "only" now about $2M but it meant everything to my uncle while he was alive, paying for his healthcare needs his whole life.
You are doing your aunt a kindness and bringing peace to her when she needs it. I know what it's like to be that trusted family member and believe me, even if they don't express it in words they appreciate if deeply and wholeheartedly. You are a good person.
I understand the love and concern too but I belong to the school of No Good Deed Goes Unpunished. Like others have mentioned, annuities would be one option to ensure that the bequests would last throughout the beneficiaries’ lifetimes. Perhaps the large main trust could leave the assets to 3 separate trusts to the beneficiaries and have those trusts managed by a trust company or bank. Speaking to an experienced estate planning attorney is a must in this instance.
Are there any guarantees that these assets would last 30 years, especially when you consider federal estate taxes alone top out at close to 40%? Again, the OP’s aunt could potentially be leaving her estate to another beneficiary, everyone’s greedy uncle, Uncle Sam.
Kathy, just some words of encouragement from someone who has a lot of family executor experience. I'm reading the comments from posters telling you to "bow out" and "decline politely" but I hear the love and care in your words and relate. When doing something like this for family it's not just a calculation about how much time and effort is involved.
I'm currently helping out a cousin who was left holding the bag of a huge tangle of estate headaches when he lost three family members over less than two years. I'm not in any of the wills but am stepping in because I loved this family and would do anything to help out. The work is relatively easy for me--it's in my wheelhouse and sort of fun, puzzle-solving kind of thing--and I have the time and space to devote to it. So I hear you and appreciate your big heart.
The timeline concern you express is real but I'm sure you will find a solution. I imagine that once your aunt passes and you become trustee there is an ability for you to name additional successor trustees yourself. Certainly you might want to discuss changing the terms with her now but if she is adamant about the timeline there is always a way to make it work. My uncle was the beneficiary of a trust that had helped several generations of his family and was managed by a small law firm in their hometown in Connecticut. When he passed the beneficiary shifted to another line in the same family, something the original bequest had originally set up more than 80 years ago. There had been several changes in Trustee during that time, finally landing with the law firm. The corpus of that trust is "only" now about $2M but it meant everything to my uncle while he was alive, paying for his healthcare needs his whole life.
You are doing your aunt a kindness and bringing peace to her when she needs it. I know what it's like to be that trusted family member and believe me, even if they don't express it in words they appreciate if deeply and wholeheartedly. You are a good person.
Given the ages of all involved the OP should bow out or set a firm exit date not super far in the future.
Another thing to keep in mind is that right now, your aunt is alive, and people are deferential to her and to you. Once she dies, the gloves come off.
I went back and read the original post, and I don't see mentioned whether or not the beneficiaries know about this timeline for asset distribution. If they are unaware, and expecting all of the money right away, yes this has the potential to get really ugly.
I think the cheaper thing to do is just buy annuities for the 3 people and call it a day.
Otherwise financial/legal management is going to cost an arm and a leg.
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Originally Posted by 1insider
I was thinking the same thing unless the aunt wants trust to stay in equities for growth. Annuities, easy peasy, done.
I’d highly suggest you do not take this action if you are acting in the capacity as trustee. You have a fiduciary responsibility and making short cut decisions because it’s easier for you fails the role you are in and could come with legal/monetary issues. If you do not wish to be a fiduciary do not take the role of trustee, anyone is allowed to decline, you can decline being executor as well
I'm shocked that you are shocked. Did you think they would do it for free?
She explained what about the fee structure shocked her. It's clear from her post, that she wasn't expecting they'd do the job for free. Re-read her post, if you need to.
OP, it's highly questionable as to whether there is such a thing as a bank with a good trust department, or a good trust bank. The concern is not only about handling the distributions. It's about managing the assets so they'll last long enough for the named parties to get the designated distributions. It's a mine field out there, in terms of skilled investment managers at trust banks. If your aunt wants to go that route, spend a lot of time researching the field in your region.
OP, it's highly questionable as to whether there is such a thing as a bank with a good trust department, or a good trust bank.
No there isn’t.
Quote:
The concern is not only about handling the distributions. It's about managing the assets so they'll last long enough for the named parties to get the designated distributions. It's a mine field out there, in terms of skilled investment managers at trust banks. If your aunt wants to go that route, spend a lot of time researching the field in your region.
You don’t need investment managers at trust banks. That’s really not how the vast majority of managed investing works.
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