Advising parents on how to set up will

[Anonymous]

Independent trustee!! Definitely request that an independent, hopefully corporate, trustee handle the administration of the estate. The corp trustee exists for families like yours.

Then you can legitimately tell your sister you have no control, because you won't.

Most trustees won't take on an estate admin without some continuing trust appointment, but sounds like there may be for your kids for some period of time.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I am confused. Do you think your sister should just give you her portion of the house? Of course you should pay fair market value

Yes of course I would buy her out at fair market value if we kept the house... however her version of FMV is not going to be what the appraisal comes in at, knowing her she will think we can get more if we were to actually sell it vs. just what it’s worth.

It seems like you are both very preoccupied with the inheritance. This may be why your parents haven’t volunteered any details about it.

[Anonymous]

OP, my parents' will is set up 50/50 between me and my sibling. However, parents have been paying tuition for my sibling's kids to attend private school for years (they are in high school now). At some point, you just have to live with the fact that your parents have the right to spend their money however they want and be thankful that they've thought of you at all.

[Anonymous]

My parents will is divided equally for their 3 children. They are also very generous with us equally and annually at Christmas but over time they do individual things that are not equal but need based (e.g. IVF treatments). My father has told us they will always be fair even if it’s not equal and that’s good enough for me. It’s their money and I’m lucky that they are so generous.

[Anonymous]

OP all I can say is hope your parents age well and stay mentally healthy. My parents were always about fairness, but mom is now about control, power and punishing with money. She passed a dementia test, but just has lost her filters and sense of decency with age and despite leading a pretty luxurious life she feels bitter, angry and entitled.

I was the key sibling who helped out throughout my father's long illness and gradually mom went from appreciating it to me having a target on my back. I became her scapegoat. Since he had passed away she has a long list of unrealistic expectations of what I alone should be doing for her. I have worked with a therapist to set boundaries. So she makes inheritance threats to try to challenge boundaries. I repeatedly tell her it's her choice.

Now she is giving huge financial gifts to my sibling and the sibling's child. She tells me as a way to try to feel powerful I suppose. She often tells me she plans to re-write the will and she threatens to make things less and less equal. Sibling makes a good living and child has no disabilities or health issues anything making her need more money. I once again stay out of it because it is not my money.

So I am the one there for her. I am the one who dealt with emergencies and the other child who does not live near by and who barely had a relationship with her for decades will end up possibly with the entire inheritance by the time this is over. I still feel like I had enough of a relationship with her years ago that I want to be in her life, but all this is to say...it's not over until it's over and in the end you could have nothing at all.

[Anonymous]

Anonymous wrote:If you want to keep the house and she does not, of course she will buy her out at half of the fair market value. It would have tax consequences for her if she did not do this. She would be giving you a gift. So let’s say half of the fair market value is 100,000. If you only give her 50,000, then she is gifting you $50,000 essentially. And she would have to pay 40% gift tax on that. So yes, you should pay her fair market value. Furthermore, it is very typical of estate attorneys to recommend that parents gift equally among their kids. What if your sister has kids later? Or even if she doesn’t it’s Moreno fair to leave her the same amount. In my family, money if left equally in trust to each child. Each child is allowed a testamentary limited power of appointment in which they can write a will leaving their portion of their trust to any of their parents’ descendants. So I don’t have kids, but I’m only allowed to leave my inheritance to my brothers’ kids. Given the fact that I am super frugal and he and his wife spend spend spend, their kids will probably inherit more from me than from them.

This is not true. OP, I’m assuming you’re smart enough to not take tax advice from random on the internet?

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you want to keep the house and she does not, of course she will buy her out at half of the fair market value. It would have tax consequences for her if she did not do this. She would be giving you a gift. So let’s say half of the fair market value is 100,000. If you only give her 50,000, then she is gifting you $50,000 essentially. And she would have to pay 40% gift tax on that. So yes, you should pay her fair market value. Furthermore, it is very typical of estate attorneys to recommend that parents gift equally among their kids. What if your sister has kids later? Or even if she doesn’t it’s Moreno fair to leave her the same amount. In my family, money if left equally in trust to each child. Each child is allowed a testamentary limited power of appointment in which they can write a will leaving their portion of their trust to any of their parents’ descendants. So I don’t have kids, but I’m only allowed to leave my inheritance to my brothers’ kids. Given the fact that I am super frugal and he and his wife spend spend spend, their kids will probably inherit more from me than from them.

This is not true. OP, I’m assuming you’re smart enough to not take tax advice from random on the internet?

Why isn’t it true? Yes it is. You aren’t allowed to just give money away, or give away the value of a house. If you do so, you have to pay gift tax or use lifetime exemption unless it is under 15k a year.

[Anonymous]

OP, you can ask if it's possible to be in on a meeting with their attorney. But your sister should be there too

Otherwise ~ They have a will (and a supposedly good lawyer) but they won’t provide any more details about how it’s structured

^ that is their right

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If you want to keep the house and she does not, of course she will buy her out at half of the fair market value. It would have tax consequences for her if she did not do this. She would be giving you a gift. So let’s say half of the fair market value is 100,000. If you only give her 50,000, then she is gifting you $50,000 essentially. And she would have to pay 40% gift tax on that. So yes, you should pay her fair market value. Furthermore, it is very typical of estate attorneys to recommend that parents gift equally among their kids. What if your sister has kids later? Or even if she doesn’t it’s Moreno fair to leave her the same amount. In my family, money if left equally in trust to each child. Each child is allowed a testamentary limited power of appointment in which they can write a will leaving their portion of their trust to any of their parents’ descendants. So I don’t have kids, but I’m only allowed to leave my inheritance to my brothers’ kids. Given the fact that I am super frugal and he and his wife spend spend spend, their kids will probably inherit more from me than from them.

This is not true. OP, I’m assuming you’re smart enough to not take tax advice from random on the internet?

Why isn’t it true? Yes it is. You aren’t allowed to just give money away, or give away the value of a house. If you do so, you have to pay gift tax or use lifetime exemption unless it is under 15k a year.

You flatly said 40% tax would be due. That is not true. You do not have to pay gift tax on gifts of over $15,000 a year. If you make a gift of over $15k in a year, you simply have to report it to the IRS, and it counts against your lifetime exemption for gifts and will reduce the amount of your estate that is exempt from the estate tax by that amount (otherwise $11.58 million for an individual and $23.16 million for a couple, as the exemption is portable between spouses). If OP and their parents were rich enough to be in danger of triggering estate tax they’d all have trusts and none of this would be an issue.

[Anonymous]

I hope you are a troll. What creepy ghouls you and your sister are. Total vultures. I hope they leave their money to charity.

[Anonymous]

OP, you can relay what your sister said to your parents, and leave it at that. Chances are, you'll lose your sister once your parents pass b/c she's obsessed with money and seems greedy. I understand your desire to minimize dealings with her when the inevitable comes, but it's not in your control.

[Anonymous]

Funny all this talk of fairness when your parents are alive and, from what it sounds like, well.

Personally, I don’t see the reason you shouldn’t pay your sister “top dollar” for a valued house she doesn’t want to be part of. What your children get for inheritance has nothing to do with you, or your sister. You don’t get more value of the house because you produced offspring.

I’m wondering about why you feel the need to tattle on your sister now... about what? You want the house, you pay for it, Period.

As far as your sister talking about your help with tuition, etc... tread carefully. It may be that your parents are hinting that they do that.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Tell your sister that you are clueless how the will is structured and that it's solely up to your parents to decide. Maybe she will piss off your parents and they will cut her out. We have four children and ten grandchildren but one of our kids doesn't have any children. We have set up well funded 529's for each grandchild but our kid without kids would make a big mistake bitching about the 529's and her not getting anything as an offset.

My sister has complained about exactly this several times. She asks me how much they have contributed to their 529s and I truly have no idea since they opened the accounts.

This is a legitimate complaint. My parents put into a trust whatever they gift to my sisters kids, the same amount to me. Well rather, this trust. The beneficiary is any children I may have, but I don’t have kids yet. If at age 50 I still have no kids, I become the beneficiary.

I am the youngest cousin and I got kind of screwed inheritance wise because my grandparents gifted the maximum to each grandchild each year. Well that’s nice and all, but I have cousins who are 20 years older than me and I was only five when my grandparents died. So they inherited a lot more than I did. There was no equalization provision in their will, Which could’ve solved this issue. So my parents want to make sure this doesn’t happen again. Because then not only what I inherit was for my grandparents, then my siblings and daughter cousins did, I would also then inherit less from my parents

Wow. I can't believe you are complaining about this. People can't forecast everything in life. Yes, it is unfair that your cousins got more money from the grandparents. But you were only 5 when they died. That's life, move on. And that feeling that you got screwed over the inheritance - well, that's on you.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I am confused. Do you think your sister should just give you her portion of the house? Of course you should pay fair market value

Yes of course I would buy her out at fair market value if we kept the house... however her version of FMV is not going to be what the appraisal comes in at, knowing her she will think we can get more if we were to actually sell it vs. just what it’s worth.

Gosh, op, you have an answer for everything. If you really think this is going to be that difficult, then just sell the house and find another house for your family. If your sister doesn't agree with the appraisal, then have three real estate agents come in and tell you both what they think the house would sell for and have them bring comps in the area. Plus, think about it from her perspective, if your kids are getting a lot of money in trusts, are you really going to quibble with her over a few thousand dollars on a house. That is what it seems like. Perhaps you can use this as a way to get her to not contest the amounts given to your kids (which seems like a bizarre thing for an aunt to do). Tell her that you will agree to a reasonable buy out price for the summer house if she drops her complaint about your kids. Although hopefully your parents lawyer had them put something in the will that says that if any beneficiary contests the will, they get nothing.

Gosh. Do you realize that if they sell the inheritance house and buy another house it will cost OP that much more money? But sounds like OP won't win with the house situation in any scenario whether they sell and divide the money and then OP's family buys a different house or OP buys out sister's part of the summer house.

[Anonymous]

Anonymous wrote:Funny all this talk of fairness when your parents are alive and, from what it sounds like, well.

Personally, I don’t see the reason you shouldn’t pay your sister “top dollar” for a valued house she doesn’t want to be part of. What your children get for inheritance has nothing to do with you, or your sister. You don’t get more value of the house because you produced offspring.

I’m wondering about why you feel the need to tattle on your sister now... about what? You want the house, you pay for it, Period.

As far as your sister talking about your help with tuition, etc... tread carefully. It may be that your parents are hinting that they do that.

And why is that? Just because you and OP's sister feel like that's fair?