Estate Planning

[General Snoopy]

Based on my calculations I will be able to live on my pension (early or standard and supplemented eventually with social security); consequently, I have no need for my investments to support myself. Additionally, I have expectations to receive a significant inheritance. So, the question is what to do with it all?

I am not married and I have no children of my own. I do have a nephew (age 17) and a niece (age 23). For both, their parents seem to be doing well, so I anticipate that my nephew and niece will not have significant financial pressures. 

I’ve decided the majority of my assets should go equally to my nephew and niece. However, I’ve been thinking it would be better to earmark the funds to their eventual children to be set aside for a private school education. However, would I be meddling too much in their affairs by this maneuver? Perhaps it is best to just give it to my niece and nephew and let them use it as they see fit?

[arebelspy]

How taboo is money in your family as a discussion topic?

Would it be appropriate to discuss it with them and their parents?  That to me seems the best idea.

Although I think if you do want it for their kids, I probably wouldn't mention it until one or both have kids.  A typical 17- and 23-year old probably won't be thinking too much about private school for their nonexistent kids and any sort of gift can present entitlement and resentment problems.. whereas presenting it later (say, on the birth of the child) may have a more warm reception.

IMO, and I'm sure you'll get a few different opinions here to think about.

Good luck.  :)

[Jamesqf]

Do you feel that you need to leave it all to family?  If not, spreading it around among friends and/or things that you think are worthy causes is an option, and one I've chosen for myself.

[smalllife]

Leaving it to their kids is assuming they have kids, or would pressure them to have kids in order access the money.  Probably not the best idea (Full disclosure: I say that as someone who doesn't want kids, an inheritance for never-to-exist human beings would piss me off).

Are there any charities or foundations who could also use the money?  Want to set up an endowment for a school, etc.? 

If you do want to give it to family, I think the best way would be to give it directly to your niece and nephew.  I didn't get a sense of your age.  I agree with arebelspy about knowing how open extended family is with money.

[mechanic baird]

You can go set up a living trust to spell however your money shall go..Then, you can word it to have the money to go to your nephew or niece's future kids if they ever have any.. it's very flexible and you can also name them as trustees. You don't have to tell them when you get all that up... But if something is to happen to you, your estate doesn't have to go to court and everything will be distributed based on what you wanted...

Typical lawyer fee for a family trust will run you around $1000 or more though..

[General Snoopy]

My father practiced stealth wealth, so finances were taboo. With his recent passing there has now been more discussion. However, I am the only one in the family that is familiar with my mother’s finances. I don’t discuss finances with my siblings.

Some years ago I was in a hazardous line of work, so I set up a Revocable Living Trust. Per the terms of the trust most of the assets would be distributed to my niece and nephew. As they were minors per the terms of the trust a children’s sub-trust would be established for each of them and my sisters would be the trustees. This is the current setup although now my niece would get the money directly. Naturally, when I was setting this up I had a discussion with my sisters on the arrangements.

Given the ages of my niece and nephew the funds would not be needed for their childrens’ educations (middle school and high school) for another ten to fifteen years. Ideally, when the time came I could establish trust funds at that time; however, what if I have an early death?

As mechanic baird stated trusts are very flexible and if written properly can accommodate most contingencies. So, if my nephew and niece choose not to have children then they could still get the money. The legal tools are available.

We have a family get-together set for Thanksgiving, so I’ll discuss the idea with my sisters. I’m leaning towards the idea of keeping it as is (all towards my nephew and niece), but as children are born I’ll setup trusts at that time.  I'm not the parent, so it may be best for me to set the purpose of the trust for the general benefit of the child and not restrict it only for educational purposes.

Thanks for your comments.

[herisff]

As a single person with no children, this is what I did with my trust - set aside 10% to go to local charities, with the remaining 90% to go to my 3 nephews & nieces. Since I believe in a college education and they were young at the time (all under 10), I gave them 1/3 of the funds at graduation from college, 1/3 at age 25, and 1/3 at age 35. That way if they did decide to fritter the funds away they would still be able to make a deposit on a home or other such things. Flexible and I've never had to change it. They have all now graduated from college and one of them is past 25, but the terms of the trust still work.