Author Topic: Lawyers or the like mustachians...need your guidance! (Will/inheritance)  (Read 2824 times)

astvilla

  • Stubble
  • **
  • Posts: 234
So my parents have a will from '98 and things have changed that they want to change.

I'm clueless on terms like per stirpes and the methodology.  For now, I'm an only child, no children. 

Currently, the will is that if 1 spouse dies, the rest goes to remaining spouse.  If both are gone and if the children are under 18, it goes into a trust held by a trustee and they use the money to take care of kids.  The trustee manages it and disburses it I guess. This estate goes in shares "per stirpes" unless someone is under 18, then this trust is paid to/held by Trustee.

If no kids are alive "no living child who has not attained the age of 18" trust terminates/voids and everything is per stripes.  This gets confusing.  Does this mean if I'm over 18 or if all the kids were 18, everyone is equal and that's it?  This legal speak is so confusing with double negatives.

More important is lack of any mention of what happens if I die or I have no kids or siblings. Nothing is mentioned.  Does it automatically go to my parents' siblings (my aunts/uncles) and if they're gone, their kids (my cousins, if gone, my cousins' kids)? Do they need to be specific on who gets what if they don't want someone in particular to not receive anything?

Their worry is basically the Executor of the Will will get money.  Currently the executor is an aunt/uncle that they don't want to give anything to. (Drama between them...I try to stay out of it).  They really want to leave out this one person.

And if I'm an only child and the potential estate is over $1 million, is it worth to go through more legal costs to cover all the bases, even if they're no siblings? What happens if I get married, my wife slips me some poison, can she just get anything unless the will specifies how it's spent? In other words, how specific do they need to be? And it is normal to cover as many different scenarios?  Do they have to be specific that it should go to kids and charity but not relatives? And is 2 pages kind of short for a million dollar will? And what about investment accounts, IRAs, etc?   

They should also attach strings for me too right?  One can attach conditions like "save for college education for grand kids or something" to prevent reckless spending from kids.  Can one do that w/a will or does that need a trust?

Astatine

  • Magnum Stache
  • ******
  • Posts: 3675
  • Location: Australia
  • Pronouns: they/them
Re: Lawyers or the like mustachians...need your guidance! (Will/inheritance)
« Reply #1 on: October 26, 2015, 11:05:41 PM »
I am not a lawyer and estate laws are probably very different where I live. But... it seems weird that your parents don't seem to trust the executor of their will. Is there a reason that you couldn't be executor of the will (assuming you're old enough)? We put a lot of thought into who would be executor of our will. We ended up choosing a friend who we trust will do the right thing and who has the capacity to do it if the worst should happen and we both die. (if just one of us dies, the entire estate goes to the surviving spouse)

former player

  • Walrus Stache
  • *******
  • Posts: 7002
  • Location: Avalon
Re: Lawyers or the like mustachians...need your guidance! (Will/inheritance)
« Reply #2 on: October 27, 2015, 03:33:00 AM »
You don't say where you are, so you (or more properly your parents) need to take qualified legal advice for your jurisdiction.

That said, and with due caution about taking advice over the internet, I would say -

1.  Your parents have old wills that they need to update.  They each need to make a separate will with provisions that deal with the a) will-maker being survived by their spouse and b) the will-maker being the survivor.  If inheritance tax is an issue, it is usual to put in a provision which deals with both spouses dying within a short time of each other (such as a car accident in which one dies immediately and one shortly after, in order to avoid the estate being taxed twice).

2.  Your parents need to settle on an executor they trust to carry out their wishes.  A sibling they have issues with is not a good bet.  Their only child probably is.  I'm guessing their previous will was made while you were still a minor, in which case one of the updates they need to make is to make you the executor.

3.  If your parents want you to get the money and if you die first for your children to get the money, then the formulation will be something like "to my son X and if he predeceases me then to his surviving children (including children in utero) in equal shares, his wife Y to be trustee if they are underage". 

4.  The "per stirpes" thing is about making sure the second generation down gets its share.  It isn't relevant at the moment because you are an only child (ie you have no dead siblings with children who should inherit their dead parent's share equally between them - which is what "per stirpes" means) and you don't yet have kids who are old enough to have their own kids.  They could put it in now to protect your potential grandkids, I suppose, if they wanted to future-proof for a couple of decades.

5.  If you die without having kids, then the choices are either that the will makes specific provision for what happens (eg "all to the cat's home") or anything which is not made provision for, including anything left to you, will be distributed according to the laws applying in the jurisdiction they were living in when they died.  Typically for someone dying without spouse or kids that could mean equally between siblings and if siblings are dead the sibling's share equally to their kids (the per stirpes thing again).  The only way to avoid this is to make specific provision in the will.

6.  Murderers can't benefit from their crime, so a poisonous wife, if convicted, would not inherit.  Better to choose your wife carefully and build a good relationship with her than rely on this legal safeguard.

7.  Trusts are used when you want a person to have the benefit of the money but you trust the person getting the benefit a lot less than the person you appoint as trustee.  They are usually compulsory for gifts to children who are underage.  Trusts can be expensive, inefficient, inconvenient and the cause of bitter dispute.  On the whole, and unless there are specific known problems (eg drug abuse), better to express an informal wish and hope for the best.  As long as you are a normal responsible person there is no need for your parents to create a trust to force you to only spend the money on your non-existent kids' college education.

8.  You should make your own will too, even if it just says "everything to my parents" it will simplify things for them at a difficult time.  It would probably become ineffective if you marry.

9.  It would be helpful for your parents to make sure that records of all their assets are kept in a way which their executor will be able to easily access and understand, so that nothing gets "lost".  Otherwise nothing special needs to be done with regard to the way in which the assets themselves are held, as this can all be dealt with at the time.

RetiredAt63

  • Senior Mustachian
  • ********
  • Posts: 15912
  • Location: Eastern Ontario, Canada
Re: Lawyers or the like mustachians...need your guidance! (Will/inheritance)
« Reply #3 on: October 27, 2015, 12:42:46 PM »
What Former Player said.

Plus, when I made my will, my lawyer kept coming back with "what if?"  i.e. what if main beneficiary dies?  Then what if secondary beneficiary dies? And so on, until everything went to institutions (after I ran out of relatives).  He also asked for a back-up executor, what if first choice dies or refuses to be executor?  He also said I should review it every 10 years or when my circumstances change.  So your parents are way overdue for a will review.

Re spouses/children there are ways to word it so if you die, the money is in trust for your children.  And if you divorce, it can be worded so the other spouse does not have a claim on it.

So your parents need to see a lawyer who specialises in family law, and will ask them all those questions.  If the lawyer doesn't do this, they should find another one who will. Lawyers do not charge a lot for wills, and will usually do a two-fer - i.e. one fee for both parents.  And both parents should have wills.  Speaking of which, I trust you have made out your will?  With all the what-ifs?

Remember in most (all?) jurisdictions the state determines where the estate goes if there is no will.  Even if you have no living close relatives, you need a will - maybe your favourite charity or university or something should get your money?  It won't if you have no will.  In essence by having no will you agree with where the state will assign your money.

Frankies Girl

  • Magnum Stache
  • ******
  • Posts: 3646
  • Age: 83
  • Location: The oubliette.
  • Ghouls Just Wanna Have Funds!
Re: Lawyers or the like mustachians...need your guidance! (Will/inheritance)
« Reply #4 on: October 27, 2015, 01:03:32 PM »
Definitely get them to see a lawyer to draw up their new will and put in all the things they want to have happen... but if they don't like the person they selected for the executor, why on earth don't they just make you - their only child - the executor so you can handle everything? And as you are an only child, they should just simplify - it all goes to the surviving spouse, if both are gone, then you or your decedents, and name charities they might like in the event you predecease them with no offspring, and be done with it.

If they dislike the aunt/uncle and don't want them to get anything, then they should be aware that the executor gets to use the estate to pay themselves an executor's fee for the trouble, and will be able to drag out and mess with the estate and could be leaving you a real mess if you have to go after them if they are untrustworthy. Just avoid the headache completely and name you be the executor. You can handle it as long as you are a reasonably intelligent adult and you can get the help of an estate lawyer and accountant (you can hire whomever you'd like and pay them out of the estate's funds) if needed.

But all nice and proper with a lawyer to get it all hammered out legally.

astvilla

  • Stubble
  • **
  • Posts: 234
Re: Lawyers or the like mustachians...need your guidance! (Will/inheritance)
« Reply #5 on: October 29, 2015, 12:15:29 PM »
Thanks for the advice everyone.

Times changed.  Who they once trusted as an executor they no longer do. The wills are from 17 years ago so they do need to update and I was under 18 at the time.

I guess another concern was about spouses trying to get their in-laws fortune.  Of course the best is to not have to resort or to think about those things.  Maybe I'm just reading too many tragic internet stories.

I actually do wonder if I need a will.  I'm 25, w/almost 90K, and I'd like for it to go to my parents.  I was told that if parents don't have a will but have kids, it automatically goes to the kids.  But if the kid dies before parents, does the money automatically go back up a generation to parents?  And I'm not sure what kind of will I should get, being single with a little bit of money and no siblings.  I'd like to donate but haven't really thought too much on it.  Or if it's something to ponder on for a long time.

ReadySetMillionaire

  • Handlebar Stache
  • *****
  • Posts: 1688
  • Location: The Buckeye State
Re: Lawyers or the like mustachians...need your guidance! (Will/inheritance)
« Reply #6 on: October 29, 2015, 01:02:20 PM »
Thanks for the advice everyone.

Times changed.  Who they once trusted as an executor they no longer do. The wills are from 17 years ago so they do need to update and I was under 18 at the time.

I guess another concern was about spouses trying to get their in-laws fortune.  Of course the best is to not have to resort or to think about those things.  Maybe I'm just reading too many tragic internet stories.

I actually do wonder if I need a will.  I'm 25, w/almost 90K, and I'd like for it to go to my parents.  I was told that if parents don't have a will but have kids, it automatically goes to the kids.  But if the kid dies before parents, does the money automatically go back up a generation to parents?  And I'm not sure what kind of will I should get, being single with a little bit of money and no siblings.  I'd like to donate but haven't really thought too much on it.  Or if it's something to ponder on for a long time.

Lawyer here. Your parents need a lawyer to draft current wills for them. Each of the reasons you stated (17 years since their last will and they don't trust the named executor) are reasons enough to hire a lawyer and get things switched around. Furthermore, each state has its own laws for when you want to revise/replace/amend your will...you need to make sure you follow these if you truly want to make their current wills null and void.

You should also hire an attorney to make a will for you. It's cheap to not hire a lawyer and pay $500 (or whatever) to make sure your affairs are in order if you die. And honestly, think about how minimal of an expense that is to make sure $90k goes where you want it to go (.55%). I'm sure your parents' estate is even larger, so the expense is even smaller for them.

TL;DR: this is a life expense like food and water. Don't try to be cheap. Lawyer up.