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Estate planning ...hmmm...

I think about this from time to time. We pulled our wills & living trust paperwork together around 7 years ago, and it's the normal spouse-first-kids-second type of will, but the tertiary inheritors, if we were all on an airplane and the Russians decided to shoot it down for some unknown reason...well...I change my mind about that. A lot.

The normal is to leave it to your parents/siblings/nieces/nephews but I wonder sometimes, because sometimes you like/respect people you AREN'T related to more than those you are. What if your family members are spendthrifts, or drug addicts, or conspiracy-theory-spouting wing-nuts who make you wonder if they're capable of rational thought. Wouldn't it be better to leave the money to people you respect more? Friends? The bagel lady who always makes you smile? Charities you've thoroughly researched?

How bout it? Anyone written the 'sibs out of the estate, or at least spread it around a little bit more?

Topic Du Jour.

Cross-posting to estate planning.

SG
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Actually I cross posted to the millionaire's board.
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When it comes to estates, treating all the relatives equally is safest. If you do anything else you risk someone getting angry and challenging your wishes. Defending your ideas while you are alive is easy enough, but after you are deceased it gets tougher. So special gifts while you are living could be more appropriate.

As to charities, special friends, even pets, I doubt that your heirs would object to modest contributions. Major ones should not be a surprise. Discuss them. Defend them. Make your wishes clear.

Family members with special problems can easily be taken care of through trusts. Of course you want well written documents and good choices on who and how they will be administered when individuals are unable to handle their own affairs.

In all of this, there is always the problem of who will be around when the event finally happens. Even charities seem to come and go these days. Backups if charity x no longer exists could be a good idea.

States have clear laws on who inherits if none of the heirs in your will survive. Those can always be a guide on how to do it if all else fails. But I can see it getting more complicated in a trust.

One would hope that an estate without heirs does not end up going to your state's unclaimed property office.
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The normal is doing whatever you want. That's what I am doing.
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It seems to me that the odds of all of the primary and secondary heirs passing at the same time is very small and I am willing to let the state take care of the situation.

Bob
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When it comes to estates, treating all the relatives equally is safest. If you do anything else you risk someone getting angry and challenging your wishes. Defending your ideas while you are alive is easy enough, but after you are deceased it gets tougher. So special gifts while you are living could be more appropriate.

Safest for who? If it's my money, then I get to decide who gets it after I am gone, and if someone is angry that I didn't give them enough, that seems to say that I was right anyhow.

It is for this reason that we have everything in a trust as it is much more difficult to contest the terms of a trust, which are private anyhow, than to contest a will.


As to charities, special friends, even pets, I doubt that your heirs would object to modest contributions. Major ones should not be a surprise. Discuss them. Defend them. Make your wishes clear.


Once again, I don't see why my heirs get to decide where my money goes, or how much of it they should get. And that's a big reason why we have everything in trust.

Right now, our kids will get everything when DH and I die, but they know we don't intend to purposely leave them with a large inheritance, and that we expect to spend what we have saved. If they have both predeceased us and do not have children, we would then leave some to my brother and some of DH's siblings, but not to all of his siblings, and that is all set up in the trust.

We are in the process of reviewing our trust and estate planning docs now, and do expect to make some changes now that the kids are much older. At some point down the road, I expect we will also be leaving more to charity as well, but worrying about who might be hurt of our siblings because of what they do or don't get when we die is of no concern.
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Really I'm also not leaving money to people out of fear they'll be angry the didn't get enough! I'll be dead! And my estate will be legally sound because I'm not using legal zoom, I've got an actual lawyer...

In two years my children will be adults which is when the estate will get another looksie....every decade or so is good. Laws change. People change. Lawyer says the living will laws changed because of the terry Schaivo fiasco. Thank you Jeb Bush! Nothing like taking a private family tragedy and politicizing it. Damn politicians.
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Excellent question. DH's & my wills are also spouse-then-kids-then-grandchildren-if-any. Actually, our wills put everything not already in trust into the trust, and the trust is spouse-then-kids-etc.

In the "ultimate disaster" scenario, half goes to DH's siblings, with whom he gets along. I didn't want my own siblings, who are problematic, to get anything. As it happens, years ago a childless uncle left his estate to a trust for his neices' and nephews' and their descendents' college costs. So the other half of DH's & my estates would go to that "education trust."

The "education trust" isn't perfect. So far it's provided my own kids and some of their cousins with a very modest (a pittance, compared to total cost of college) grant each year while they were in college, so it's not the huge help it was intended to be. OTOH, some of the beneficiaries were already getting substantial scholarships, and didn't need "huge help." Also, college is not for everyone, but there's nothing for kids pursuing other career paths (so it's probably just as well that the grants are small).

Also, there's nothing for my childless sibs. But at this point all my sibs have already reached middle age, and for those who are eff'd up, a portion of my estate will not solve their problems, or even provide more than a temporary band-aid. If there were any who weren't eff'd up, they wouldn't need my money.

So, it's not perfect, but considering the odds of "ultimate disaster," it's not worth making things complicated by trying to fine-tune everything.

If the "education trust" didn't exist, my half would go to my nieces-and-nephews-and-their-children-if-any. I'm rather fond of most of my nieces & nephews. There's some question whether non-custodial step-children would qualify, and one reason I'm happy the "education trust" exists is that its trustees can decide that.

If I weren't fond of my nieces & nephews, I'd name some charities.
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How bout it?Anyone written the 'sibs out of the estate, or at least spread it around a little bit more?

I am working thru these issues with my estate plan right now. I don't have children but do have many siblings and nieces & nephews. There are also step nephews & great nieces & nephews to consider.

Most of the plan is to make sure that my account & policy beneficiaries are updated. My estate is a lot simpler than most in that I don't own real estate or much other tangible real property. There is some family keepsakes that I want to account for. But the issue of making unequal -- or no -- bequests to the siblings has come up. It hasn't been a very comfortable situation to think thru. I have included much larger shares to my unmarried/no kids sibs than the others. They also happen to have the most precarious financial situations (little retirement savings or support systems in place). The rest goes to a few of the next generation but not all of them. Mainly just the ones who are especially close. I also have a couple amazing special cousins that I plan to pass some family keepsakes to for their kids (their moms gave me these things).

I would like to find a way to acknowledge some particularly special friends in my estate but am not sure how to do that. I plan to have a niece be the executor/PR and unfortunately her parent (my sib) was someone who didn't respect either the intent or the stated wishes of a deceased family member and was very ugly about the whole thing. So I am not sure how to benefit some non-family members in a plan when that sib may have some influence on the niece. I have always assumed that trusts were made to protect things like this but it seems I don't have so much to make a trust. Also I've seen trusts where the trustee had so much leeway that they just did whatever they wanted with the assests after the establisher died.
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This is why I question making a relative a executor or, especially a trustee. I believe the book "beyond the grave" addresses many cases where trustees got family pressures like this. Better to pay 1% and let a bank handle it perhaps.
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The concern I have with a bank or something similar is how often those things get swallowed up, change names, etc. Have you looked into it and been quoted the 1% ?
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This is why I question making a relative a executor or, especially a trustee.

That depends very much on your relationship with your family.

In my case, I'd have no qualms at all about making a sibling executor of my estate. I'm sure there are many others who feel the same.

But for other families, choosing a non-relative or a bank's trust department is the right choice. And there's a lot of folks in that situation as well.

--Peter
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In my case, I'd have no qualms at all about making a sibling executor of my estate. I'm sure there are many others who feel the same.

I would be fine having a couple of my siblings as executor, but I am trying to be practical. I am the youngest in my family and the youngest of all my cousins. The age spread among my siblings is such that I am closer in age to the oldest nephew then my oldest sib. The odds are -- if we all last according to actuary predictions -- that I may outlive some of my siblings. So I have taken the advice that you should try to have your executor one generation removed (at least). Also, having a lawyer do it means that I will have to revisit it if I get to an advanced age, since using my lawyer friend who is a contemporary means that she will be just as old. So going with a niece or nephew seems to be the best option.
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