Trust or other mechanism for sibling

[Anonymous]

I am looking for ideas how to help sibling in this situation. Sibling has depression and a very spotty work history. As I am trying to sort out our father's finances, I realize he funds the sibling's life. There is a checking account that is in the father's name but only my sibling writes checks for personal, home expenses from. It appears my father puts money in and sibling transfers it to sibling's savings account or pays bills. We are going to divide estate equally and I think the money could fund sibling's life for about ten years. Sibling is 55. Should I attempt to put sibling's inheritance in a trust or ask my father to? Any help is appreciated. If this is helpful, I am not in a position to fund sibling so I am also trying to protect myself for when sibling needs money later in life.

[Anonymous]

There are two issues here.

1) Can your sibling manage his personal finances prudently? Does he spend more than he needs to for housing and other expenses? In other words, if he had less monthly income, would he still be able to keep a roof over his head, food on the table, and pay for his medical expenses? If not, planning should begin now for a pared-down lifestyle in anticipation of a future reduction in his cash flow, necessary to stretch his inheritance out for as long as possible. He may need to begin thinking of relocating to a less expensive place to live when the time comes, not something to spring on him at the last minute.

2) Your sibling will receive his share of the inheritance in a lump sum with no restrictions unless it is in trust for him, with a separate trustee making decisions about making payments. If you're that trustee, you can probably expect pressure and tension from your sibling's desire to receive money from the trust and your (presumed) desire to stretch the money out for as long as possible. If another person is the trustee, planning should be happening now around who will be designated, making sure they are willing and able to serve in that role. If you plan on a corporate trustee, which de-personalizes the decision-making around how much should be paid out and when, expect to pay for the service - shop around now, so you have time to carefully evaluate different corporate trustee services and fees. Among the least expensive such services is Vanguard National Trust Company. You may want to have a conversation with them about their suitability for your needs. https://investor.vanguard.com/advice/trust-services

It sounds like it's time to consult with an attorney who specializes in estate planning, as your father probably will not only want to create a trust for his son, but also medical and durable powers of attorney for himself, and he may also want to create (and fund!) his own living trust now to avoid probate later, a typically tedious and potentially expensive process. He also needs to be sure that beneficiary designations are in place and are up to date for all his financial accounts, that his real estate and car(s) are titled appropriately to make later ownership transitions as seamless as possible. An attorney can help with such advice.

[Anonymous]

I agree with the PP's response.

The other factor is this: your brother is likely someone who would qualify for SSDI. It would be a good thing to do to get him "in the system." This would then entitle him to Medicaid if your father dies before he's eligible for Medicare. Incorporating his disability within the trust planning process (and finding a lawyer with experience in this) is something worth considering.

[Anonymous]

Also interested in this exact topic, OP. Just know you’re not alone.
-NP