Father asking for advice on the will, regarding my irresponsible brother.

[ThreadingTheNeedle]

My father is asking me for advice on his will...

I have an older brother that lives with his family on my father's property in a mobile home that my father purchased 20 years ago. My brother got married at 18 and had 3 kids in a short order. No real careers for him or his wife. All of his kids, now out of high school themselves, still live at home. One of them has a child as well. My brother has always worked, but mostly at low paying jobs. He bought a house on an interest-only loan just before the housing crash, but lost it in about 2 years. Instead of asking my dad for the $200/month extra needed to cover the mortgage, he let them foreclose and asked for $10k to fix up the mobile home. He's good with neither money or planning.

On the other hand, I moved away quickly, got a good job, was in the right place at the right time and now live a comfortable life with my wife and young kids closing in on the FIRE. Our war chest could last 20 years in the worst of scenarios. 

My father doesn't have much money, but they own their home (and technically my brother's mobile home) on a 4 acre spread. It's worth about $250k.

My first response was to suggest my father just leave it all to my brother. My dad didn't like the plan for a couple of reasons, one emotional and one practical. First, he didn't want to "punish" me for being successful and, second, he was pretty sure my brother would just fail to pay the property taxes and lose the property anyway.

Given that, I don't know what to suggest. Is there a setup that would make sense for my father by giving him the satisfaction of splitting his estate but also ensuring that my brother's large family always has a place to live? There is about a 0% chance of my brother paying me rent or buying me out. I'd really like to avoid weirdness, if possible. Any ideas?

 

[VoteCthulu]

It sounds like your father is looking for an irrevocable trust with a spendthrift clause with all of his children as beneficiaries, but depending on the amount of assets he's passing down that may not be worth the expense of setting up. He should talk to an estate lawyer to see what legal vehicle might suit his situation best.

Sadly, as much as we might want to protect our loved ones from themselves, at some point there's nothing left to do but let them fail and hopefully learn for themselves.

[former player]

Can the property be split into two separate holdings?  If so, the house could be sold, the mobile home left to the brother, and the extra value in the house over half of the whole put in a trust to pay the property taxes on the mobile home.

If the property can't be split, I think the best thing is for the will to provide for the whole property to be sold.  Half the proceeds to each side of the family, possibly with the grandchildren on the other side getting part of that half so that they have the possibility of setting out on their own with it.

[Sydneystache]

Can you ask your dad to give/leave you some family heirlooms that you like that has emotional value to you and none to your brother? Then leave the property/estate to him. You don't need it and your father needs to realise that you don't need it. Having some heirlooms may assuage your father's guilt/legacy issues.

Sounds like you will have problems with your brother's clan if your dad splits the estate in half and I would side with you that you do not need the headache if your brother can't manage his share and you will have to sell it anyway. I don't fancy the burden you will have of kicking your brother's clan off the property to pay any taxes because of his mismanagement. The lingering resentment of you being the successful one and having any claims over the estate is going to be pretty sore since you don't have any daily presence or activity on the estate.

They're poor, you're well off. You don't need it, they do. Let them continue on their merry way. I feel for your father but the next thing you know you will be responsible for the financial well being of your brother and his extended family and that's a headache you don't need. People choose their own paths in life and he has made his. You have made yours and crossing your path with your brother's may lead to a great deal of unhappines. Let not your father's worry be yours.

[CheapScholar]

So glad I don't have siblings after reading this ...

[Spork]

His will could require the sale of the property and equal division... giving your brother enough to effectively purchase a small plot of land with a mobile home on it AND giving you an equal share.

FWIW: I had a sibling that was awful with finances and my dad did things specially to try to preserve her share.  He split her "share" between her and her children, knowing she would spend it and it wouldn't get passed to them.  She never understood why he did it and she never forgave him for it.  If he does do anything "special"... at minimum he should leave a letter explaining why.

[ThreadingTheNeedle]

Thank you for all the answers. I actually think just asking my brother what he wants would be a good idea, though he tends to get offended if you point his situation. At least I will have tried.

I'm going to look at those other options... getting closer to an answer!

[ol1970]

My parents are going through something similar now regarding me and my siblings.  I have an older sister and younger brother who are both abysmal with money.  My parents have already purchased and paid for a home for each of them years ago in the same small town they live in (yes a nice $100k or so home that a person should be perfectly happy living in forever)...pretty damn nice parents!  The homes are in my parents names because 1) My sister has not paid income taxes in over 10 years...yikes! 2) My brother is an alcoholic who has alienated the rest of the family from him.  Kind of sad really.  I on the other hand moved away at 18 and did well for myself never needing or asking for a dime, so I'm resented by my brother big time, and my sis to a much lesser degree.

Now as my parents are in their mid-70's they are estate planning and they are for some reason motivated to give the money to us kids vs. spending it down.  Roughly $1M each would be the estate depending on a lot of factors of course, but for my brother and sister, that is ludicrous money, that my parents full well realize will be burnt through in short order.  I've urged my parents to not leave such a large estate and to live it up a bit more.  They are in a lucky position where my father has a $180k a year pension (plus SS for both) and they don't touch the investments to live off of, they are saving money still lol. 

What I have told my parents is to do something similar to myself, set up a revocable trust that structures the payout to make sure the money lasts for a while.  Once all the estate is settled, give each of us 10% of the amount.  The other 90% gets invested in a Vanguard Index fund, and annually there is a 5% distribution that is allowed to be removed (or let it ride, but they would never do that lol).  After 10 years they are allowed to have full access to the money, but hopefully they will have been taught one last lesson by my parents and have seen the money grow or at least still be a hefty amount, while still getting a nice $40K or so check each year.  If they choose after 10 years to blow it as somebody in their 60's themselves, you know you can't fight stupid and my parents did the best they could.

I told them I'm spending my money on boats and women, the rest I'll waste...so if they don't like that they should spend it themselves!   

[BlueHouse]

Thank you for all the answers. I actually think just asking my brother what he wants would be a good idea, though he tends to get offended if you point his situation. At least I will have tried.

I'm going to look at those other options... getting closer to an answer!

This is what I was going to suggest. The very worst your brother could come up with would be "give it all to me" and you are prepared to do this anyway.
I think you are beyond the point of what is fair and you just want to make sure that none of your brother's or his tribe's actions can harm you in the future. So whatever the resolution, make sure it unentangles you and that there is an explicit understanding that you have already given your half of any inheritance toward supporting his family.
I'm sorry you have to worry about keeping family claws off you and I hope that some of those kids start working toward a goal.
Good luck

[ambimammular]

Thank you for all the answers. I actually think just asking my brother what he wants would be a good idea, though he tends to get offended if you point his situation. At least I will have tried.

I'm going to look at those other options... getting closer to an answer!

This is what I was going to suggest. The very worst your brother could come up with would be "give it all to me" and you are prepared to do this anyway.
I think you are beyond the point of what is fair and you just want to make sure that none of your brother's or his tribe's actions can harm you in the future. So whatever the resolution, make sure it unentangles you and that there is an explicit understanding that you have already given your half of any inheritance toward supporting his family.
I'm sorry you have to worry about keeping family claws off you and I hope that some of those kids start working toward a goal.
Good luck

+1
Disentanglement from your brother's financial woes seems like the best parting gift your folks could give.

[pumpkinlantern]

Your father can make a will that gives both you and your brother shares in his estate.  You can then choose to gift your portion of the estate to your brother.

This way your father can feel that he gave you your share and your brother can have the money without any hard feelings about you getting equal money even though you are more "successful".  If pride is an issue, you can gently say that you appreciate him being there for your father in his old age (since many care needs probably do fall on your brother given that he lives with your father) and that you would like the money to go to him.

[Miss Piggy]

Your father can make a will that gives both you and your brother shares in his estate.  You can then choose to gift your portion of the estate to your brother.

This way your father can feel that he gave you your share and your brother can have the money without any hard feelings about you getting equal money even though you are more "successful".  If pride is an issue, you can gently say that you appreciate him being there for your father in his old age (since many care needs probably do fall on your brother given that he lives with your father) and that you would like the money to go to him.

I agree. OP, you can disclaim all or part of your inheritance when the time comes.

[Bicycle_B]

If discussions with brother and dad don't offer a better alternative, I second the idea of dividing the property.  Can it be subdivided?

For example, if Dad's house and 2 acres are sold for 175k, while the trailer and the other 2 acres are worth 75k (no idea what the real numbers are), then your half could be 125k in cash while brother's half could be his trailer + the land it's on + $50k.

Alternately, the brother's 50k could go into a trust that would pay his property tax. 

To me it seems Dad is right, the money gets wasted if just handed to brother.  But if it can be arranged to cover the trailer, a bit of land for it and an income that covers property tax, at least he has a place to live.  Dad would still know that your half went to you, therefore it was not wasted either. 

Also, nothing stops you from putting your half into a private account that you choose to use as Brother's Bailout Fund... except, arguably, wisdom! As others have argued, being a source of money for him may not be good for your life or your relationship with him.

Whether any of this causes hard feelings is up to Brother.  Best of luck!

[Drifterrider]

My father is asking me for advice on his will...
. Any ideas?

Since you asked:

Your father doesn't want advice, he wants corroboration. 

He already knows the answer and wants you to agree with him.  He already knows his children and how they behave.  You can't win.  You can't change his mind.

Ask him specifically what outcome he desires (and make him spell it out), then you can assist him by putting him in contact with an attorney.  I'd recommend an eldercare attorney who should be well versed in not just wills but also in the various types of trusts.

[Proud Foot]

My father is asking me for advice on his will...
. Any ideas?

Since you asked:

Your father doesn't want advice, he wants corroboration. 

He already knows the answer and wants you to agree with him.  He already knows his children and how they behave.  You can't win.  You can't change his mind.

Ask him specifically what outcome he desires (and make him spell it out), then you can assist him by putting him in contact with an attorney.  I'd recommend an eldercare attorney who should be well versed in not just wills but also in the various types of trusts.

I would second this.  Also, how is your relationship with your brother?  I would hesitate to give your father advice as a lot more damage could come from this rather than good. 

[Rosy]

My first response was to suggest my father just leave it all to my brother. My dad didn't like the plan for a couple of reasons, one emotional and one practical. First, he didn't want to "punish" me for being successful and, second, he was pretty sure my brother would just fail to pay the property taxes and lose the property anyway.

Given that, I don't know what to suggest. Is there a setup that would make sense for my father by giving him the satisfaction of splitting his estate but also ensuring that my brother's large family always has a place to live? There is about a 0% chance of my brother paying me rent or buying me out. I'd really like to avoid weirdness, if possible. Any ideas?

I like the idea of subdividing the property - outright leaving the mobile home and a bit of acreage to your brother.
Set up a trust from the sale of your dad's home, allocating a forced payment of the property taxes for your brother as long as he keeps or lives in the mobile home.
In addition - like someone already suggested - an annual payout to everyone, which can be let to accrue or withdrawn.

I can fully understand your dad's frustration at knowing everything will be lost in a few years due to poor money management. Setting up a trust will give your brother one last opportunity to secure a roof over his head and a small income to shore up his financial inequities.

You mentioned he has worked all his life and tried to buy his own home. Assuming he is not into drugs and alcohol, simply financially inept and if you think about it, you know that a low paying job is a huge problem, since it never produces enough money for a good life or a home of your own - therefore, the best alternative is a trust that will put a brake on the full availability of these monies.

Something not yet mentioned, I would consider adding the grandkids into the trust - to open up the possibility of an education fund, whether it is nursing or college or a welding class - so their lives have a better chance and the good start that your brother cannot currently or ever provide them with. Perhaps, one of his kids has potential and this is their chance to build a life for themselves.

Just one more thing to think about:) and yes, I do think you should talk to your brother and find out what his expectations are. Unless you are very well off, I would not reject your inheritance for two reasons. First you never know what the future holds (that land could suddenly turn into a goldmine:) for real estate and secondly, it is definitely a way to hold onto some money for your brother. Make it grow or send his kids a nice check for Christmas or offer to pay for school if they are interested.

 

[intellectsucks]

Some thoughts:
Not every asset needs to be divided 50/50.  If your father has significant other assets besides his house, maybe you could inherit the bulk of those and your brother could inherit the house.  For example if he has a $250k house and $250k in investments, then he could get the house and you could get the investments.
A trust to be used to pay the property taxes is a fantastic idea, assuming the assets are there to cover it, especially if the property could be divided.  If the inheritance is enough, it might be a good idea to name a third party (bank, brokerage, attorney, etc) so that they are taking responsibility for the administration and management of it.  If not, and you are going to be the trustee, make sure that the trust is very specific about which types of investments are appropriate and in what percentages.  If the trust is not able to pay the taxes indefinitely, then you want to make sure you have protection against liability when the money runs out.  Trustees can be sued for mismanagement of trust assets.
Just because you are a named beneficiary doesn’t mean that you have to accept the assets.  Every state will allow a beneficiary to refuse the inheritance.  You could also accept the inheritance, pay the inheritance tax out of that and then gift the assets to your brother, either directly or through a trust.
In any case, a good heart to heart talk with all parties would be the best thing at this point.  Get everyone together, stock up on the preferred beverages and snacks, and hash everything out.  Maybe your brother has an unrealistic idea of how much he will be inheriting.  If he thinks that he’ll be getting a ton of money and a free house when your father passes, the reality may create ill will (“I was supposed to be all taken care of when dad died, but my asshole brother screwed me out of it”).  Surprise inheritance issues can amplify deep seated negative feelings and resentments or even create them.  When everything is known beforehand, you tend to not run into those issues.