An inheritance question that's a bit complicated.

[SteveSS]

Yay, today is Mom's birthday. She just turned 93. She's in pretty good shape for her age. Heck, she might make it to 103 although I know she doesn't want that. I do need to think about the inheritance situation. She probably has around $2.5 mil net worth. I have a brother and sister so that's $800.333 each. I don't especially need the money as much as my two kids do. They are doing the buying the first house stages of their life. If I took the whole amount I could only give my kids $17,000/year. If I come to an agreed amount, Mom can just will them $100,000 or so, right?

Here's the other catch. My son has only been married for a year. You know the probability of marriages lasting these days. It's not good. Can he just get the money and not his wife? What if they use it to buy a house? I bet that becomes community property automatically.

What say you?

 

[dadsbee]

Only thing I'm gonna say is your Mother hopefully has any real-estate she owns held jointly with at least a kid or someone is in trust on the deed and the same with her bank accounts or you're gonna lose 1/2 her estate value to probate and taxable income.

 

[WileERobby]

See a tax attorney now.

 

[68 Sport Satellite]

Only thing I'm gonna say is your Mother hopefully has any real-estate she owns held jointly with at least a kid or someone is in trust on the deed and the same with her bank accounts or you're gonna lose 1/2 her estate value to probate and taxable income.

Yep, make sure a Living Trust is setup with an attorney that specializes in writing them. They're a fixed fee between $2K - $2.5K and totally worth it. It's a lot of info to generate though, so be prepared for several weeks of work to gather the info. Ask for a referral or use yelp for a good living trust attorney. If you PM me, I can refer you to mine. They don't need to be local.

Another thing you can do for the house part is a deed on death. I lost my younger brother and he left me the house with a deed on death. Super easy, just a signed notary then file after she passes with a death cert and the deed on death at the county the house is in.

Inheritance is not community property for a marriage and it's also not taxable, but like you said, if you sell the house and now the house is exchanged for money, not sure how to protect that from a spouse if needed.

 

[Bennoel 10]

I think you should consult with an attorney that specializes in this subject. Also I believe things might be slightly different from one state to the other. I know that generally lawyers aren't the most liked people but sometimes you gotta do things that are uncomfortable. Another thing is I wouldn't be asking a group of lawyers for advice about one of my old mopars. Just my 2 cents. Good luck

 

[Detective D]

If it is 2.5 million, you NEED to pay for an attorney.

The issue with advice here, is we are not that attorney
Also the issue with advice here, is every state has different laws. Including about your son's situation. Only someone in your own state could possibly give advice, and if your son is in a different state then that complicates it also.

The tax laws are written to let wealthy people keep their wealth. Find a lawyer that knows how to do that for you.

 

[68BabyBlue]

If it is 2.5 million, you NEED to pay for an attorney.

The issue with advice here, is we are not that attorney
Also the issue with advice here, is every state has different laws. Including about your son's situation. Only someone in your own state could possibly give advice, and if your son is in a different state then that complicates it also.

The tax laws are written to let wealthy people keep their wealth. Find a lawyer that knows how to do that for you.

This is sound advice. I am a retired attorney and I payed a lot to a specialist to take care of my own stuff.

 

[Dennis H]

Hope my Mom lives to 105. Don’t want or need anything. My goal is to spend down the kids inheritance as they are on their own. No living siblings for me. Simplifies things right there.

 

[Cranky]

Yay, today is Mom's birthday. She just turned 93. She's in pretty good shape for her age. Heck, she might make it to 103 although I know she doesn't want that. I do need to think about the inheritance situation. She probably has around $2.5 mil net worth. I have a brother and sister so that's $800.333 each. I don't especially need the money as much as my two kids do. They are doing the buying the first house stages of their life. If I took the whole amount I could only give my kids $17,000/year. If I come to an agreed amount, Mom can just will them $100,000 or so, right?

Here's the other catch. My son has only been married for a year. You know the probability of marriages lasting these days. It's not good. Can he just get the money and not his wife? What if they use it to buy a house? I bet that becomes community property automatically.

What say you?

Don't be stooopid....go see an attorney before doing anything!!

 

[Scott Engelhardt]

happy birthday to your mom!

 

[451Mopar]

On the kids house, buy a house and rent it to him and his wife. If they get divorced, you still own the house.

 

[CudaChick1968]

MartindaleHubbell.com is the best reference site to locate counsel in any field of law. Broken down by state and area of practice, look for those in Taxation and Estate Planning with AV or AB ratings; they're the most qualified based on peer and client reviews.

Many states also have "look back laws" that come into play if your mom is or goes to live at any state-run care facility and/or if she qualifies for MediCare or other government benefits. Those laws protect the State more than its residents and will prevent elderly from gifting their assets to others within proscribed time periods. I.e., in Tennessee, it goes back seven years; if any assets were transferred / quitclaimed to children or grandchildren within that time period, the State can actually intercept those assets to cover the exorbitant sums charged to live in a care facility.

Don't trust these important issues to a bunch of gearheads. We know just enough to be dangerous.

P.S. Happy birthday to your Mom! My daughter turned 38 today.

 

[SlingLow]

My opinion is that if you go through life planning for a divorce, i.e. structuring assets so that they are protected, you most certainly will achieve that divorce. I was only married for a year at one point. It's 36 and counting now. @SteveSS you have gotten good advice. My wife and I procrastinated for years on writing a will as we have no children of our own. We finally executed a living trust a couple years ago and it was a huge weight lifted from our shoulders. The distribution of assets was the single most difficult part of the process for us, but if there are children, and an equal distribution among them, it is greatly simplified. You will avoid probate and assets can be distributed quickly. If mom decides to skip a generation and give your portion to your kids, or your siblings kids, that can be done individually for each of you in the trust. A deed on death can be used for real property or it can be deeded into the trust that details the distribution thereof. The cost for us was around $3k and it was $ well spent. An important factor is to find a trustworthy Trustee. Ours is my brother with his Pastor son as a generational backup. Often it's the oldest child or the one with the related skills and experience.

Happy Birthday Mom! Congrats on another trip around the sun!

 

[Billccm]

The advice to get an attorney involved is good, but keep a close eye on the activities. Attorneys can evaporate thousands of dollars in a blink of an eye. I saw my parent's hard earned funds get drained quickly because I was trying to get their legal business done long distance and gave the attorney free reins. I'd like to say find an attorney you can trust, but that is not realistic advice.

Also, blindly throwing everything into a 'trust' is not as good as it sounds as there are still nightmares you will encounter with various banks, etc.

 

[SteveSS]

Thanks so much. Yesterday I talked to Mom. Although she has a trust it is maybe 15 years old. I think it should be looked at as laws change.

 

[68BabyBlue]

The advice to get an attorney involved is good, but keep a close eye on the activities. Attorneys can evaporate thousands of dollars in a blink of an eye. I saw my parent's hard earned funds get drained quickly because I was trying to get their legal business done long distance and gave the attorney free reins. I'd like to say find an attorney you can trust, but that is not realistic advice.

Also, blindly throwing everything into a 'trust' is not as good as it sounds as there are still nightmares you will encounter with various banks, etc.

Good advice as well. I got badly ripped off when I formed my LLC in 2009. I used an AV rated firm, had met their transportation attorneys at conferences. They stuck me with a new associate, and billed me for his training time at $250 per hour. I raised a stink, and had the work completed by a partner. But I didn't get any of my wasted money back, several thousand bucks. I was in the twilight of my career by then, so they weren't concerned about a bad reference from me, or future business.

So when it came time to put a comprehensive estate plan in place, I spent three years vetting attorneys at my continuing legal education courses, a unique option a non lawyer doesn't have. I picked an attorney, this time a senior partner, who used flat rate billing for her estate work. I paid $11,000 for the mid range package, minus a $3000 discount for some of the work I did myself. My wife and I updated it last year at no cost. The upfront fee served as a lifetime payment. Better deal than hourly billing if you can get it.

My plan incorporates a living trust. Eliminates some probate hassles, but still needs to be properly executed.

 

[68 Sport Satellite]

An important factor is to find a trustworthy Trustee. Ours is my brother with his Pastor son as a generational backup. Often it's the oldest child or the one with the related skills and experience.

When I wrote my living trust, I took my attorney's advice and named the Trustee (in the event of my untimely death) as a local highly rated independent fiduciary that I found. They are bound by law to follow the contents of the trust. As an alternate trustee in the event that the first fiduciary has passed or is not available, we listed "any licensed and qualified fiduciary". This takes the burden off of any friends or relatives and covers things in the event that the first trustee dies before the trust is executed.

For all living trusts, create a "revocable" type. That means you can cancel or change it at any time while you are living.

 

[Dave6T4]

Before my mother passed, her lawyer suggested that she give annual gifts to her children to reduce the value of her estate. That way, there would be less taxes to pay at probate after her death.

 

[YY1]

While I was creating my LLC, I learned real fast that these people (Lawyers) are in fact "just" people, too, and anything they do is subject to oversight.

I basically did 90% of the "work" and research, and had them answer any questions I had (and then went and did research on that answer anyway) and had them write up the final paperwork to be legal.

In today's society, it pays to second guess (maybe that's too negative of a word) or at least verify, almost everything even a highly educated, trained professional does.

Because in the end it's your ***.

 

[68BabyBlue]

While I was creating my LLC, I learned real fast that these people (Lawyers) are in fact "just" people, too, and anything they do is subject to oversight.

I basically did 90% of the "work" and research, and had them answer any questions I had (and then went and did research on that answer anyway) and had them write up the final paperwork to be legal.

In today's society, it pays to second guess (maybe that's too negative of a word) or at least verify, almost everything even a highly educated, trained professional does.

Because in the end it's your ***.

I learned first hand when I was in law school that many of my colleagues were crooks or fools. About 20% were true pros, who took pride in what they did. Problem is, it's hard to tell the difference, and a law firm may have a mixture of all of them. I've been better equipped than most to spot the differences, and as I mentioned in my earlier post, I still got burned.

Unfortunately, the problem is not unique to the legal profession. During my school days, a medical student who lived above me in married student housing told me the exact same thing was going on in his neck of the woods. I fired my last primary care doctor, after he failed to make the connection between a low hemoglobin count, and an aspirin regimen to reduce heart attack risk. When I raised the issue, I was told, "the algorithm indicates the aspirin use until age 70. You need to see a specialist."

I had no cardiac risk factors other than age, so I quit the aspirin, discussed the issue with a new doctor, retested, and and came up normal. You need to be an informed consumer.