Anonymous wrote:So is the $1.5m all the money? And your mom has the pension and social security left? Anything else for her? I assume there is a paid-off house? I would make sure that she is taken care of as well. If she ends up needing nursing home care, that pension/social security may not be enough for her.

I would focus on having available to pay for college, and leave it at that. Full pay for private college would take the vast majority of what is there.

OP here.

Before funding the trust there is 2.5 million in investment accounts and IRAs. The trusts will total 1 million dollars.

She also has a paid off house.

No other major assets.

So is the $1.5m all the money? And your mom has the pension and social security left? Anything else for her? I assume there is a paid-off house? I would make sure that she is taken care of as well. If she ends up needing nursing home care, that pension/social security may not be enough for her.

I would focus on having available to pay for college, and leave it at that. Full pay for private college would take the vast majority of what is there.

Anonymous wrote:We're both only children and are probably in a different place financially, but we asked our parents to take us out of their estate plans when we got more financially secure. We encouraged them to spend more on themselves, their churches and causes and not worry about leaving any money for us. They set up living trusts with our children as beneficiaries but us as trustees when the kids are under 18. Its pretty unrealistic to think they'll change their frugal ways, so there will likely be a significant amount left to our kids. Hopefully, they won't get it for a long time but in the mean time they get to live their lives knowing they have can take chances and pursue true interests/passions rather than chase a paycheck. If we ever get grandkids, we'll probably use the same model.

OP here.

I think this model makes a lot of sense especially as people are living longer and longer. My mother's mother passed away when my mother was 77. At that point, the money my mother inherited was not terribly beneficial to her as she had plenty of her own money and also had never really struggled. I think my dad noticed this and wanted to make sure that his money would go to help his grand-children when they needed it especially because he was still struggling financially in his 20s and 30s and knows that my sister and I are really past the truly struggling phase.

I might consider doing this myself as well if I have considerable assets by the time my grandchildren are born and my kids are older.

We're both only children and are probably in a different place financially, but we asked our parents to take us out of their estate plans when we got more financially secure. We encouraged them to spend more on themselves, their churches and causes and not worry about leaving any money for us. They set up living trusts with our children as beneficiaries but us as trustees when the kids are under 18. Its pretty unrealistic to think they'll change their frugal ways, so there will likely be a significant amount left to our kids. Hopefully, they won't get it for a long time but in the mean time they get to live their lives knowing they have can take chances and pursue true interests/passions rather than chase a paycheck. If we ever get grandkids, we'll probably use the same model.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here.

Sorry I was so confusing. It's a complicated situation.

Even reading and responding to these few posts has helped me clarify my thinking.

I really don't resent not inheriting at this point because I know the reason my sister and I didn't get it. And I get why my dad would have made this decision. I won't get into it here, but it's a good reason.

It is highly unusual for a person to leave money to children or grandchildren unless that person's spouse had predeceased him.

The normal course of business is for your mom to inherit the money, and to leave money to her children when she dies.

Actually, it's not unusual for those will plenty of assets to support the surviving spouse to establish a generation-skipping trust.

If the amount is several hundred thousand to be shared by 4 grandchildren, it's not really enough to fully fund college for all 4. The easiest thing to do would be to set up 529s for the kids. However, if you don't want to limit the use of the $$ to college/private school, a trust is the way to go. You can establish a trust that would turn the money over to the kids at a certain age (say 30, or portions at specified ages), with provisions that the trustee can distribute the funds prior to that. You can give the trustee full discretion, or you can specify that its for certain purposes -- education, house downpayment, etc.

pp here -- just saw that you clarified that it is a few hundred per kid. That may be (but might not be) more than the cost of college for the kids, so a trust probably is the best approach. If both sets of parents are reliable, I'd have the parents serve as trustees with full flexibility to use the funds to the benefit of the children. You can expect the trusts to throw off around $10,000-15,000 in income every year. That's plenty to fund camps, etc. Then use the principal for college, when the time comes. Then specify that the remainder gets distributed at a certain age.

Thank you. This is very useful. I think this is what we'll do.

Another clarification to offer is that three of the kids already have 529s my dad funded with around 100K in each and my youngest has one with just 15K. Fully funding my youngest's 529 is the first thing I want to do. My other kid is in early elementary so there's time for the money to grow.

The trust fund kid thing is really more of a mindset issue. I know that the $600K or so they will now have is not and will not grow to be enough to make them actually be trust fund kids. But kids have no concept of money and even 25 year olds often don't really have a concept of money or the future. (depends on the kid) and I don't want them to know about the funds and grow up without the drive or ambition that led their grandfather and me to be very careful with money. But ultimately, there's only so much that I can do to set them on a path towards financial common sense.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here.

Sorry I was so confusing. It's a complicated situation.

Even reading and responding to these few posts has helped me clarify my thinking.

I really don't resent not inheriting at this point because I know the reason my sister and I didn't get it. And I get why my dad would have made this decision. I won't get into it here, but it's a good reason.

It is highly unusual for a person to leave money to children or grandchildren unless that person's spouse had predeceased him.

The normal course of business is for your mom to inherit the money, and to leave money to her children when she dies.

Actually, it's not unusual for those will plenty of assets to support the surviving spouse to establish a generation-skipping trust.

If the amount is several hundred thousand to be shared by 4 grandchildren, it's not really enough to fully fund college for all 4. The easiest thing to do would be to set up 529s for the kids. However, if you don't want to limit the use of the $$ to college/private school, a trust is the way to go. You can establish a trust that would turn the money over to the kids at a certain age (say 30, or portions at specified ages), with provisions that the trustee can distribute the funds prior to that. You can give the trustee full discretion, or you can specify that its for certain purposes -- education, house downpayment, etc.

pp here -- just saw that you clarified that it is a few hundred per kid. That may be (but might not be) more than the cost of college for the kids, so a trust probably is the best approach. If both sets of parents are reliable, I'd have the parents serve as trustees with full flexibility to use the funds to the benefit of the children. You can expect the trusts to throw off around $10,000-15,000 in income every year. That's plenty to fund camps, etc. Then use the principal for college, when the time comes. Then specify that the remainder gets distributed at a certain age.

OP here.

Thanks for all of your thoughts and since I know that plenty of people with plenty of money visit these forums, I'd like to encourage all of you to update your wills.

This whole situation would have involved much less conflict if my dad had just written something, anything, down. He was a lawyer so he really should have known better.

Anonymous wrote:Use the money now for camps and 529s - that is the greatest benefit for your kids. I don't understand though why this affects your employment situation.

OP here.

Honestly, it doesn't really. It's just that my youngest just went to school full time so all of these life changes (father's death, kids in school full-time, kids getting a trust, managing family strife, possibly managing my mom's money because she's not really equipped to do it herself) are happening at the same time for me so it's hard to separate all the threads of this.

But I think 529 and camps absolutely makes the most sense. But mostly 529 and just a little bit to top up the camp spending.

Anonymous wrote:

Anonymous wrote:OP here.

Sorry I was so confusing. It's a complicated situation.

Even reading and responding to these few posts has helped me clarify my thinking.

I really don't resent not inheriting at this point because I know the reason my sister and I didn't get it. And I get why my dad would have made this decision. I won't get into it here, but it's a good reason.

It is highly unusual for a person to leave money to children or grandchildren unless that person's spouse had predeceased him.

The normal course of business is for your mom to inherit the money, and to leave money to her children when she dies.

Actually, it's not unusual for those will plenty of assets to support the surviving spouse to establish a generation-skipping trust.

If the amount is several hundred thousand to be shared by 4 grandchildren, it's not really enough to fully fund college for all 4. The easiest thing to do would be to set up 529s for the kids. However, if you don't want to limit the use of the $$ to college/private school, a trust is the way to go. You can establish a trust that would turn the money over to the kids at a certain age (say 30, or portions at specified ages), with provisions that the trustee can distribute the funds prior to that. You can give the trustee full discretion, or you can specify that its for certain purposes -- education, house downpayment, etc.

Use the money now for camps and 529s - that is the greatest benefit for your kids. I don't understand though why this affects your employment situation.

Anonymous wrote:You just have to remember that it isn’t your money and that no one is guaranteed an inheritance. Have you looked at the cost of college lately? If the trust will pay for college, then it will likely be used up on that and your kids won’t become spoiled trust fund kids. A few hundred thousand split four ways may not even pay for all four years. And if it’s a few hundred per kid, they’ll be able to pay for the undergrad and grad school of their choice and you won’t have to save for that. Looks like a win-win to me.

It's a few hundred per kid. So we are lucky. Thanks.

Anonymous wrote:

Anonymous wrote:OP here.

Sorry I was so confusing. It's a complicated situation.

Even reading and responding to these few posts has helped me clarify my thinking.

I really don't resent not inheriting at this point because I know the reason my sister and I didn't get it. And I get why my dad would have made this decision. I won't get into it here, but it's a good reason.

It is highly unusual for a person to leave money to children or grandchildren unless that person's spouse had predeceased him.

The normal course of business is for your mom to inherit the money, and to leave money to her children when she dies.

OP here

This is a good point. My father was VERY ill when he made this decision. This makes it more complicated.

I think the reason he wanted to make sure the grandkids got some of the money is because both my mother and my sister are terrible with money, but in different ways. My mother gives it away to random unreputable charities and to homeless people or others down on their luck. My sister also is not great with money. I think he just wanted to make sure this money he scraped together his whole career and worked hard to invest went, in part, to ensure his grandchildren's future.

On the other hand, again, he was very ill. I hope he was still with it enough to make this decision rationally.

If I didn't agree with his reasoning I would encourage my mom to just keep the money.

You just have to remember that it isn’t your money and that no one is guaranteed an inheritance. Have you looked at the cost of college lately? If the trust will pay for college, then it will likely be used up on that and your kids won’t become spoiled trust fund kids. A few hundred thousand split four ways may not even pay for all four years. And if it’s a few hundred per kid, they’ll be able to pay for the undergrad and grad school of their choice and you won’t have to save for that. Looks like a win-win to me.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Read the trust docs carefully to see how the money can be used. If it can be used for college then use it for college. Your children will benefit and you will benefit. In terms of going back to work if it's something you'd really like to do, do it and use the money to build up your retirement savings.

Sounds like there aren't trust documents, which is how OP has an opening to use the money for herself.

OP, what does your late dad's will say about who gets this money?

OP here.

1) The will wasn't updated so it says nothing about any of this.

2) A lawyer is writing up trust documents that the money will go to benefit the children. It's vague.

3) How is using the money for camps for a special needs kid that we couldn't otherwise afford, College and grad school for them, and possibly private high school for one kid if he needs it (again, he has autism) using it for myself rather than for my kids? I don't get it.

If your plans to work are changed by money that is not yours, that seems like using it for yourself.

I'm a bit confused by how a few hundred thousand dollars can cover all of what you list, much less create a situation in which your kids become "rich trust fund kids," but that's another story.

Anonymous wrote:OP here.

Sorry I was so confusing. It's a complicated situation.

Even reading and responding to these few posts has helped me clarify my thinking.

I really don't resent not inheriting at this point because I know the reason my sister and I didn't get it. And I get why my dad would have made this decision. I won't get into it here, but it's a good reason.

It is highly unusual for a person to leave money to children or grandchildren unless that person's spouse had predeceased him.

The normal course of business is for your mom to inherit the money, and to leave money to her children when she dies.