Is it time to re-think how inheritance works?

[Prairie_Seagull]

Folks with some resources may want to consider giving some beneficiaries at lest part of their inheritances now. Put requirements on getting it. It would be up to you. I have and am considering doing more.

Who knows what the future holds and both of my daughters are now more involved with planning for their own futures.

Just tell them what they should expect in the future.

This has worked for us so far.

IMO

[marble falls]

1. A lot of people treat what they leave as a memorial. I think they should spend it before they go ...

... I also think they need to raise and enforce taxes on estates worth more than $5M. Get rid of tax sheltering.

[Prairie_Seagull]

2. In agreement sir.

[Ocelot II]

3. You have to take gift taxes into consideration if you give away your assets

while you're alive instead of leaving them to heirs. https://www.kiplinger.com/taxes/gift-tax-exclusion#:~:text=Federal%20gift%20tax%20exemption%202024,combined%202024%20limit%20is%20%2436%2C000.

[Prairie_Seagull]

6. We left all this to our CPA.

We explained what we wanted to do and she made it happen. I have never, never minded paying my share.

[sinkingfeeling]

4. It dawned on me a few years ago, that's it fine to

give money to my son when he needs it. He'll end up with it all in the end. I certainly don't want to reduce my base investments, but the dividends can be used now (pays for my world travel and granddaughter's tuition as well).

[MineralMan]

5. I think that anyone having a sizable estate to pass on

should think long and hard about planning for its distribution. Distribution before you die is one idea, and people with very much wealth often do that in one way or another. For smaller estates, though, it can be a bad idea. Health issues at the end of life can quickly eat up far more money than you might expect.

When my parents both died on the same day in 2021, they were 96 years old. They had done some estate planning, and had an attorney I could contact after their deaths. I was the executor and successor trustee for their estate. The attorney and I expedited the entire process as much as possible, but it still took a good deal of time to get the distribution done. They were both quite ill, and their healthcare costs had eaten deeply into their assets.

Had they distributed part of their modest wealth earlier, they might well have not had sufficient funds to pay for the care they needed. So, that's a consideration.

Fortunately, my family is a very fair and honest group of people. The documents distributed things as my parents wished and there were no conflicts. That is not always the case, of course.

There's no easy answer.

[Ocelot II]

7. That was also my experience with my dad's estate.

He was 92 when he died, and his last few years he had a lot of expensive medical problems. Most of the actual medical expenses were covered by Medicare, but he needed round-the-clock in-home care, which was not. He was concerned that he would use up all his money and have none to leave to his kids, but we assured him that we didn't care about that; it was his money and it would be used for whatever he needed. Fortunately I had power of attorney and could take care of all of that. As with your family, my siblings had no issues with these expenditures, and the estate was settled with no arguments - but there was a lot of paperwork. Fortunately he was very organized so at least I didn't have to search for all the documents I needed.

[MineralMan]

9. Thank goodness for rational families!

The only real complication in my parents' estate was that they had sold their farm property just before they died. So, there was a purchase agreement, but their attorney was not part of setting that up. So, I had to shepherd that transaction to its close, and do that from Minnesota, rather than in California, due to Covid.

There was a lot of finessing to do to keep the sale on track and keep the buyers happy, despite the delays, etc. That, along with dealing with the rest of the end-of-life complications.

I just quit working and put all of my efforts into making everything happen smoothly. In California, there's a 120-day minimum time between a death and being able to distribute assets. The attorney for the estate said that there was no way we'd be able to do the distribution for at least 6 to 9 months. I said, "Watch me." On the 121st day, the distribution took place with wire transfers going out here and there. We had closed on the farm sale in less than 90 days, and the attorney worked a bit of legal magic with another troubling issue. I coordinated all of the paperwork transactions. Lots of remote notarizations and other nonsense.

Finally, after four months, I was able to slow down and actually mourn my parents' deaths.

[Prairie_Seagull]

8. Well said and an excellent point. IMO

For us this is considered and planed for. I recommend having needed professionals in your corner. I certainly don't want to use up my remaining band width dotting I's and crossing T's. It will be significant. Pay now or pay more later.

I remember when you were going through this MM, I am glad it all worked out. Also nice to see you will be with us for a while yet, if genetics has any say.

[MineralMan]

10. Yes, some professional help is necessary, for sure.

However, it's important to stay on top of things and handle as much as you can yourself.

[getagrip_already]

11. Heard many stories of unethical caregivers as well...

Not so much the in home staff, but the institutions. They may coerce a family member to change a will, or sign over assets to receive better care or privelages. At least those are the stories I've seen.

So asset planning, control, and management is a must. Putting control beyond a simple signature can be done through proper planning. But you have to do it while everyone is still thinking clearly and is agreeable.

[SYFROYH]

12. I like the clause that if someone contests the will and loses, then they get nothing.

It keeps people in their lane when the will is essentially fair.

[Ocelot II]

14. It's called an "in terrorem" clause.

I suppose it's called that to scare people into not contesting the will. But in some states these clauses are unenforceable by statute, or there are exceptions and exemptions.

[DetroitLegalBeagle]

13. Estate planning was something i took care off early on

Prior to getting deployed to Iraq the first time I got a simple will set up to make sure anything and everything I had(which wasn't much lol) went to my parents. That stayed the same, with some revisions, until I got married. Then I switched it my wife. Then we had our first kid and both of us set things up to ensure our daughter would have access to any assets, or the proceeds of the sale of our assets, when she was older, with periodic distributions for special occasions or expenses like education costs, first car, prom, birthdays and Christmas, etc. With entirety of everything becoming hers with no restrictions at age 25. As our family has grown and our income/assets have grown, we have made adjustments, but the basics remain the same. Our kids will be taken care of, things that we would have normally helped them with financially (first car, college tuition, down-payment on first house, wedding) would be handled if possible and they would get access to everything that remains of their share when they turn 25. We even coordinated with my parents and my inlaws as both of us will likely be getting a decent inheritance from our parents, so if something unfortunate happens to both of us, our parents will transfer our inheritances to our kids.