Author Topic: Tell friend she is a beneficiary of our estate?  (Read 3971 times)

iris lily

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Tell friend she is a beneficiary of our estate?
« on: February 01, 2017, 08:05:44 AM »
We have a close friend who we have named, along with many other people and entities, as a beneficiary in our will. If we died today she would get about $200,000.

We have also named her as one of the people to act to settle our estate, but she is third down the line. It is highly unlikely she would ever have to take action because there are people in front of her. I have mentioned this briefly to her, that she is named in the taking action part.

My real dilemma is whether I should mention her "inheriting" from us. For one thing, she is a few years older than us. For another thing, she may move across the country and if we lose touch, I might delete her as a beneficiary in a few years.

 Our attorney suggests that we tell everyone their roles in our estate and why we made decisions about beneficiaries.

I have no problem talking openly and honestly with our siblings and another friend named in the will because they are all reasonable about money. The friend who is the subject of this post is not good with money, and thats why I have named her in our will. She spends money ridiculously. I am afraid that if she gets a hint that there may he money coming her way, she will count on it in her mind. I watched her do that with her mother's money, and she blew through that, about $350,000 plus an extra $100,000 she got from real estate that year.

She has not slowed down her spending.

It is HIGHLY  unlikely she will get money from us but I do want to leave her something if we die suddenly because she will need it. The $200,000 she would inherit from us today is about equal to her retirement savings. She doesnt have much in the bank.

I am really leaning to NOT telling her any of this, despite the suggestion of our attorney.

What do you all think?

« Last Edit: February 01, 2017, 08:08:21 AM by iris lily »

Another Reader

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Re: Tell friend she is a beneficiary of our estate?
« Reply #1 on: February 01, 2017, 08:10:51 AM »
I would not leave her "money."  I would leave her an annuity or money in a trust to be doled out by a trustee.   And I would not say a word.  If she does inherit, what you did will explain everything.

nereo

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Re: Tell friend she is a beneficiary of our estate?
« Reply #2 on: February 01, 2017, 08:11:27 AM »
my opinion:
You have an obligation to tell ask her that she is listed as one of the people (even third on the list) to act as executor of your estate.
This is a duty and you should give her the option of declining.

You do NOT have an obligation to inform any of your inherentees that their are listed in your will.

takemewest

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Re: Tell friend she is a beneficiary of our estate?
« Reply #3 on: February 01, 2017, 08:11:33 AM »
I wouldn't say a thing, for all the reasons you mentioned. But most importantly, things may change, and I wouldn't want to lose out on a friendship over money. There's truly no reason she needs to know other than yes, information is helpful. But let's say you do tell her, and she does change her habits and become even more frivolous--will that put a strain on your friendship watching her blow through money in anticipation of yours? Seems like there's little to be gained by telling but much to lose.

maizeman

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Re: Tell friend she is a beneficiary of our estate?
« Reply #4 on: February 01, 2017, 08:19:27 AM »
Write a letter explaining why you made the decisions you did with your will. File it with your will. That way if the current version of the will is ever used, people won't be left wondering why person X got money and person Y didn't, but if you end up updating the will later, person X never has to know they would have gotten money if you'd died between 2017 and 2020, but because you lived for decades and decades more and changed your minds they got nothing.

jwright

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Re: Tell friend she is a beneficiary of our estate?
« Reply #5 on: February 01, 2017, 08:20:04 AM »
my opinion:
You have an obligation to tell ask her that she is listed as one of the people (even third on the list) to act as executor of your estate.
This is a duty and you should give her the option of declining.

You do NOT have an obligation to inform any of your inherentees that their are listed in your will.

Agree, you need to ask this friend if she is comfortable with this responsibility, even if the chances are slim she won't have to do it.

AMandM

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Re: Tell friend she is a beneficiary of our estate?
« Reply #6 on: February 01, 2017, 10:38:00 AM »
Agree, ask her if she is okay with possibly being the executor, don't tell her she's a beneficiary.  The first is both courteous and self-interested: you want to avoid the possibility that your desires will have to be implemented by someone unwilling. The second is prudent, since the knowledge seems unlikely to do her good, may do her harm, and might change anyway.

I'm curious why you would name someone who's bad with money as an executor.

Livingthedream55

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Re: Tell friend she is a beneficiary of our estate?
« Reply #7 on: February 01, 2017, 10:54:48 AM »

We have also named her as one of the people to act to settle our estate, but she is third down the line. It is highly unlikely she would ever have to take action because there are people in front of her. I have mentioned this briefly to her, that she is named in the taking action part.


So - she agreed to be third in line to be executor? I am not an expert but is it wise to have someone who is not careful with money (and perhaps also not a detail person about paperwork, etc.) in that role?

I would not say a word about possible inheritance since you might change your mind and she might spend even more recklessly now with the thought that she has a "windfall" in the future.

I also like the annuity idea.


Midwest

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Re: Tell friend she is a beneficiary of our estate?
« Reply #8 on: February 01, 2017, 11:04:12 AM »
No need to tell her about the potential inheritance.  You've informed her of her potential involvement in the estate, no need to let her know of money she may (or may not get).

People get weird (entitled) when they think they are getting something even among family.  Once you tell her about the money, she will depend on it.  If she doesn't know, it's a nice surprise if/when she receives.

Goldielocks

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Re: Tell friend she is a beneficiary of our estate?
« Reply #9 on: February 01, 2017, 11:55:01 AM »
I would listen to the attorney and tell her.

You don't have to mention the amount, but a simple expression of how much she means to you, and that you have listed her as an alternate executor and also left her a small sum of money because of it, would go a long way.  Oh, and that you need her to keep you current with her address and phone numbers even if you move apart.

You do not have to tell her how much, because you don't know how much.  you could spend it all.  It could grow tremendously, etc.

Dicey

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Re: Tell friend she is a beneficiary of our estate?
« Reply #10 on: February 01, 2017, 12:30:47 PM »
If she's bad with money, why have her in your executor plan at all? Seems like a bad idea, for exactly the reasons you state, especially her age.

My adamant vote is NOT to tell her.

Anecdote: This happened to one of my former customers, to the tune of $300k, about ten years ago. It was the biggest thrill of her life. She was not expecting it. She was also not asked/expected to be executor.

We had lunch recently. I hadn't seen her since she inherited the money. She was driving a very nice car, circa the year after she inherited (but now it's "old" and she's jonesing for a new one. Really.). She had remodeled her kitchen. When the market tanked, she went to part-time to reduce her (small business owner) boss's payroll burden. Decent choices, I guess, but bottom line: the money's mostly gone and my friend is back to working full time.

Is this how you would want your army of hard-earned little green soldiers to be deployed?

BTW, I don't want to close without complimenting you on your generosity. Very kind, your intentions.

GizmoTX

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Re: Tell friend she is a beneficiary of our estate?
« Reply #11 on: February 01, 2017, 01:37:26 PM »
I would never name anyone as executor who is not good with money. The fact that she 'needs' money is irrelevant & even potentially harmful to an executor position. I have asked every executor in my will in advance. You are wise to include more than one executor as not everyone will be able or willing to serve when the time comes, & you need an ultimate backup like an attorney or an investment bank if your estate will be sizable.

For any beneficiary not good with money or a minor, a testamentary trust is a really good idea. This is detailed in your will & created upon your death, & you name who the trustee(s) will be along with your bequest.

Bequests change over the years. We have not told anyone what we currently have in place other than the name of our attorney.

My grandparents were forever telling my father that "someday all we have will be yours". My father thought they were very well off (they always worked hard & were frugal) & didn't save or do much himself. Needless to say, he was disappointed & even bitter when he eventually received the bulk of their modest estate, about $40K thirty years ago. My grandmother left me a small savings account outside of her will as compensation for naming me the trustee of 3 small testamentary trusts for family members; she didn't want the rest of the family to think it was a bequest even though I would be doing a lot of work over 10 years managing them.


Cassie

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Re: Tell friend she is a beneficiary of our estate?
« Reply #12 on: February 01, 2017, 03:13:20 PM »
I agree with Diane C.

Dee18

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Re: Tell friend she is a beneficiary of our estate?
« Reply #13 on: February 01, 2017, 04:10:42 PM »
 I am not telling anyone that they will inherit from me.  I did ask the person designated as executor (and trustee if my daughter is not yet 25 at the time) if he was willing to do that.  This was the advice of the very experienced trusts and estates attorney I used.  Telling someone they will inherit money from you creates a weird dynamic.  I also do not think you need to tell the third person in line to be executor.  If they don't want to do it, they can decline at the time.

iris lily

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Re: Tell friend she is a beneficiary of our estate?
« Reply #14 on: February 04, 2017, 09:07:00 AM »
Thanks, everyone, for words of wisdom.
    I will not tell her about beneficiary status.

ditheca

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Re: Tell friend she is a beneficiary of our estate?
« Reply #15 on: February 09, 2017, 02:52:56 PM »
Telling someone they will inherit money from you creates a weird dynamic.

I agree.  My aged Uncle recently told me he's planning to leave his sizable estate entirely to my wife and I. It felt so awkward when he told me, and still feels weird to think about.

Apparently my parents are also planning on leaving a pile of money to my siblings and me.  Is this an old people thing?  I don't feel prompted to leave huge piles of cash to my own kids...  Maybe I'll have a change of heart in my later years.

Fortunately we should be FIRE long before anything happens to any of them!  I'm not sure I could enjoy retirement if it came with a lethal price tag.