Advising parents on how to set up will

[Anonymous]

My parents are in their late 70s and are fairly well off. They have a will (and a supposedly good lawyer) but they won’t provide any more details about how it’s structured. I am married with 3 kids and my sister is married but did not want children. She is already vocal about wanting to make sure things are fair, which to her means she gets 50% of everything and my family gets the other 50%... but I am pretty sure this is not going to be the case because of my kids (pretty sure my parents are setting up separate trusts for them and then dividing the rest 50/50). My sister already makes tons of comments about she thinks its unfair how generous my parents are with my kids and is convinced my parents pay for their schooling and extracurricular classes (which they don’t).

My parents own two homes outright and did say they are leaving them to me and my sister to split 50/50. One of them is a summer home we use regularly but my sister told me she wants to get rid of it as soon as it comes to us whereas I would prefer to keep it. She said I can “buy her out at top dollar”.

I am worried that my sister is going to make this all very difficult and would really prefer that rather than leave us things to split, they leave us things separately. Is this something people do? I know she will contest or challenge my kids getting money if something significant is let to them. Is there something I can advise my parents to do or a way to structure things so there is no or less conflict? I am not trying to tell them how to allocate their estate, I just want to minimize dealing with my sister over this.

[Anonymous]

It is definitely not your role to advise your parents about how to leave more money to your kids.

[Anonymous]

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.

[Anonymous]

I have a similar situation with a difficult sibling. I'm the executor of my surviving parent's estate, and I've made my peace with the fact that no matter how equitable the estate is divided, or how fairly the will is written, my sibling is not going to be happy with it. I hear about it every time we talk. And I give the same answer - "parent x is still with us, and I have no decision making powers or knowledge of specifics of the will. And I'm not continuing this conversation."

So yeah, it's going to be ugly no matter what.

[Anonymous]

Anonymous wrote:It is definitely not your role to advise your parents about how to leave more money to your kids.

As I said, I am not trying to find out the specifics of the will or try to get myself or my kids more money, I just want my parents to set things up in a way that limits my dealing with my sister. Rather than have them split things between us I would rather some go to her and some go to me so I don’t have to deal with her watching over to insist things are fair.

[Anonymous]

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.

[Anonymous]

If they are well off and are setting up trusts for your kids, just have the summer house appraised when your last parent dies and pay your sister 50% of fmv. If neither of you want the other house, you will be selling it and will have proceeds from that to pay her. The alternative is together you sell both voided and then you can go buy a new summer house for your family. You are as bad as she is if you are quibbling about having to buy her out of an asset you will co-own. This is how it’s done and there is no reason she shouldn’t get fmv. Who knows what the market will be like when your parents die? The house may not be worth as much as it is now. Don’t interfere in how your parents have divided property bc you don’t want a hassle later.

[Anonymous]

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.

[Anonymous]

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

[Anonymous]

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

[Anonymous]

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.

[Anonymous]

I think the best you can do is mention to your parents that Sister has made some comments to you and, while you do not wish to be privy to any estate planning they are doing and you recognize there is an unequal distribution of family, you wish to ask them that in order to save your relationship with your sister you'd like them to avoid making any arrangements that require you two to split something tangible.

Perhaps they can gift your children in some way now so that Sister is not privy to any arrangements when they pass.

[Anonymous]

Anonymous wrote:I think the best you can do is mention to your parents that Sister has made some comments to you and, while you do not wish to be privy to any estate planning they are doing and you recognize there is an unequal distribution of family, you wish to ask them that in order to save your relationship with your sister you'd like them to avoid making any arrangements that require you two to split something tangible.

Perhaps they can gift your children in some way now so that Sister is not privy to any arrangements when they pass.

I think this is reasonable, except could be opening a can of worms if your parents want more details about what Sister is saying, especially if they have strong emotional attachment to their homes.

[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.

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.

[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

It is not a legitimate complaint. It is their money and they can decide how they wish to spend it. All of your relatives should sign the Buffet pledge and donate to a far more deserving charity.