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Author: Trini209 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 5748  
Subject: Re: Poll: Do they share information on inheritan Date: 7/13/2004 7:28 AM
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My parents told me exactly what their plans were. They gave me their house, but retained a life estate so that I would get the stepped up basis. They left their stock (then-valuable baby Bell shares) to my 3 grown kids, enough to provide each with good-sized down payment on homes. Their checking account, into which their SS checks and dividends were deposited, listed me as joint owner, and I managed all their bills and expenses from that account (they were each 91 when they died), so the small amount in that account automatically went to me. Their "living trust," of which DH and I were trustees, insured that no estate taxes were due upon their deaths. Since my mother died a few years before my father, her 1/2 of their assets did accumulate some capital gains during those years that they were in her bypass trust, so when the assets were distributed to the kids after my father's death, they were each responsible for the capital gains tax on their 1/3 of her stocks when they sold my mother's shares immediately upon receiving them. No capital gains taxes were due on my father's stocks, since the distribution occurred right after his death, and the kids received the stepped up basis.

They had each prepaid their funeral expenses, and had ensured that I knew about the details of their plans. They had prepared a list of people I was to inform about their deaths (they actually outlived a good many of the people on their list!) During the years between the time they prepaid the funerals and their deaths, they actually received an annual check for the interest paid on the money that was being held in escrow till the funerals.

It took me about a week to settle the estate. No probate. No out of pocket expenses. I submitted the 706 (is that the right number - I forget) tax form myself. It was rather simple, and I had the advice and guidance of the attorney who had drawn up their trust - he had agreed to guide me, free of charge, at the time that he drew up the trust. If I remember correctly, I also asked a couple of questions on this board, and Edcosoft helped me with a few details (I still owe him a spaghetti dinner, if he ever comes to Long Island!)

In contrast, DH's parents' estate, which was actually smaller than my parents', took 3 years to settle! Nothing about it was simple! Probate was expensive and lengthy, even though DH, their executor, worked diligently. Forms would expire and have to be redone while other forms neared expiration. All kinds of complications.

As to our own plans, we're trying to follow the example my parents left. All our assets exept for our retirement accounts are in a trust. Our 3 kids know that upon the second of us to die, the assets will go to them - in fact, two of them are our trustees. We do debate how the distribution will occur, as they are all married now, one has a MUCH bigger income than the other two, and at present that one has yet to have children. Another has one child, but will always struggle financially. And the 3rd just presented us with a new granddaugher, having already given us 3 grandsons!

We're considering and re-considering how to divide our assets. What is the fairest way to divide the pile? Should we skip a generation and consider the grandchildren's welfare? Should we just leave 1/3 to each of our kids? Who knows what the "right" thing is to do? We love them all. Who knows what their financial positions will be when we die or later on in their lives?

We review our trust with our attorney every now and then. Laws change, and our financial condition certainly changes, too. We lost a bundle when everyone else did. Our home, on the other hand, more than doubled in value during the same time period.

Whatever changes, if any, that we make, will be told to all the kids, son/daughter-in-laws, and, when they're old enough to understand, the grandkids, too. With, presently, 11 beneficiaries, we want them all to know that we're doing our best to provide for every one of them. We want their input, too.

Maybe we'll provide for all the grandkids' educations, and then there'll be nothing left to leave anyone.

Trini
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