How to Keep Inheritance Separate
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Anonymous
It doesn’t matter, see the other thread with the guy who is sure his wife is going to leave his money to his kids. LOL. She’ll give it to her kids, or other family, or blow it all. |
Anonymous
Agree. It's a no-brainer to keep the inherited money separate and then give it directly to the kids upon death. I'm sure OP has other money and assets that will transfer directly to her spouse, like a house if its titled as JTWROS, or a current 401k (by law). |
Anonymous
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Thank you for all of the great ideas.
Yes, I plan to pay taxes from the inheritance. It sounds like I should be able to move the inheritance to my brokerage so long as the inheritance is in a separate account with only my name and my kids listed as beneficiaries. I hadn't thought about a trust. I will look into that. I do not want the kids to get access when they are 18. That is too young, IMO. It sounds like I would need an executor. I have an idea... The kids are in elementary school. If my partner and I don't save enough to cover college, I would definitely tap the inheritance for that. For now I'd like to keep it more flexible. Who knows what life will bring? Hopefully I'll live a very long life but I'm planning just in case. |
Anonymous
You should have an estate plan regardless for your kids' futures, especially yes, you need an executor, but you can plan the estate in such a way that the kids can't access the money at 18. You can stipulate that the executors provide enough funds to cover education, medical, and living costs. When we first put our estate plan when the kids were in ES, we put in there that the kids must graduate from a 4 yr college before they can tap into the funds (outside of those costs mentioned), with some funds distributed at 25, and full access at 30. This was before we knew how the kids were going to be as young adults. We wanted to make sure that they would not rely on the estate and not work. They are now 17 and 20, and very responsible. Older one is about to graduate college this spring. We updated the estate plan, and changed it so that they can access the funds at 25. The oldest is a co-executor with my sibling until the youngest turns 25, then both kids can access the funds 50/50. |
Anonymous
No it does not. Those children will have their own living mother or living father if OP is a man. They will also have their own grandparents to inherit from. $300k is not a lot of money and that came from OP’s parents and they want it to survive their family not someone else’s |
Anonymous
Again Op, these people are answering and have no idea of what they are talking about. Inheritances are NON MARITAL PROPERTY in BOTH equitable distribution and community property states unless of course you do something to f that up. |
Anonymous
Uh huh. And he can do that with his money not your mommas |
Anonymous
Do you have estate planning with your spouse? An existing Will or Trust? If not, keep in separate account with only your name and your kids identified as the beneficiary. Or direct those funds to a trust for the kids. Keep in mind that there may be some elective shares that the spouse can claim. This is jurisdiction dependent and meant to not leave the other spouse destitute. |
Anonymous
The only way to control distributions is with a trust. You can have the marital and/or survivor's trust for your DH. The inheritance and any other non-marital property in a sep trust for the kids. You can stagger those distributions upon conditions, age, milestones, etc. You can always amend or revoke a living trust. |
Anonymous
Revocable trusts are useless. He needs to consult an estate planner. People here are just going to write what they did which isn’t relevant. |
Anonymous
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OP, I am in a blended family (two kids with my spouse, they have child from previous marriage). I am also in the midst of settling parent's estate and receiving inheritance. We recently did our estate plan. I have two trusts. One is a revocable trust that directs my 401k, my share of our brokerage, and house, to go to spouse if I pass first, and otherwise to our two kids, in a trust if they are under certain ages (have spouse, then family member and then good friend as back up trustees). This is what I would consider our "joint' money. Yes, its possible spouse could remarry and direct these assets elsewhere but I also have a separate trust for inherited assets which go straight to our two kids, and will remain in a trust until they are of determined age, with my family member as trustee. These funds will be in a separate account at the same brokerage spouse and I use. I can draw from it during my lifetime (its revocable) but I know that inherited assets will pass straight to my kids.
Spouse has a trust that directs our 'joint' assets (house, and a brokerage) to go to me but his 401k divided equally between all his kids . I get "less" from him than he would get from me, but I am the only one with a relatively substantial inheritance so I will be fine. while our two kids together will benefit from my inheritance, my stepchild will also be getting large inheritance from their other parent. We cant predict or control enough to make things equal, but we worked hard with our estate attorney to make them fair so that no kid would feel cut out by their bio parent. Again, there's always the possibility that one of us remarries and directs those revocable funds away from children, but we've done a reasonable amount to protect without all the issues of an irrevocable trust. |
Anonymous
We have a hot mess of a blended family in our family. My parents created a special trust for my sibling's share of their estate. My sibling receives an income for life; the remainder goes to my sibling's biological children/my parents' biological grandchildren when they die. |
Anonymous
You don't know what YOU are talking about. They are very useful. But not for everyone. In this situation, however, a trust would be beneficial. |