Inheritance--would you be upset by this?

In My Humble Opinion
21

[QUOTE=jsgoddess]
According to all the lawyers when the plan was first revealed, it’s not theirs any longer. It’s mine. That may not be what they meant, but it was what they said. And if it’s mine, it’s right that I should be able to pass it along to the person I choose.
[/QUOTE]

Trusts are weird animals. I generally dislike dealing with them, because something about their “artificial” nature just kinda causes me cognitive dissonance.

The $ is yours essentially in name only, to the extent that it will not have to go through probate when your parents die. It will not have to be transferred/retitled to you and your siblings (and taxed as inheritance), because you already own it. In many respects, all it is is a tax dodge, plain and simple. But, your parents are the present beneficiaries, and throughout their lives their interest is superior to yours. As Jodi said, they can do pretty much whatever they want with it while they are alive (or, perhaps are declared incompetent). You have a residual interest only, and enjoy no beneficial interest in the subject matter of the trust until the current beneficiaries die.

Once your parents die, then yes, you will be able to pass it to whomever you choose. But until they die, you have nothing to pass. As it exists, your residual interest is not transferrable.

I probably shouldn’t say anything more, since I have intentionally avoided dealing with trusts in my professional and personal lives. They are an entirely “unnatural” creation, they can be structured in near infinite ways, and they can be quite complex and not necessarily easily understood. So long as they are consistent with applicable law, the terms of a particular trust control how that trust is interpreted and applied. But realize that the “terms” of the trust may not mean just what the average reader interprets them as meaning.

Usually the approach I find best is to simply wish everyone involved - you, your husband, and your parents and siblings, long and happy lives, and deal with the future when it comes. YMMV.

22

I just reread the original post. If you die before your mother there is nothing saying that she will not still help him out. He just will not inherit when she dies. So she would not necessarily have to just turn her back on him.

23

[QUOTE=jsgoddess]
According to all the lawyers when the plan was first revealed, it’s not theirs any longer. It’s mine. That may not be what they meant, but it was what they said. And if it’s mine, it’s right that I should be able to pass it along to the person I choose.
[/quote]

It’s not “yours” in any meaningful sense. You can’t access it or spend it, you have no say in what happens to it, and you don’t get taxed for it. If it helps you to choke down your parents chosen arrangements – and it would me – remind yourself that it isn’t yours. Because it isn’t. It may gall you that they choose to leave their money in a way you don’t approve of, but it is their money. IOW, the only thing that allows you to get really bent out of shape about it is the idea that they are doing something you don’t agree with, with money that you consider yours. If you can adjust yourself back to recognizing it isn’t yours, maybe you’ll be more at peace with them doing whatever the hell they choose with their money. They could set fire to it in the backyard if they wanted to and you wouldn’t have any cause to complain, right?

24

If she would set fire to the whole damn thing and stop me having to sign papers and talk to lawyers, I’d be delighted.

25

I think the reason this feels so unfair to me (and to jsgoddess) is because of the perception that she is being treated differently from her siblings, based on her life circumstance. Dealing with money & inheritance is so emotion-laden that even if you try to think rationally about what the parents were thinking, and the fact that they are entitled to do what they want with their estate, there is still a lot that can feel wrong or unfair.

My husband’s parents went to great pains to be sure that their entire estate was held in trust that would go 50/50 to both of their sons, and we STILL had trouble with bad feelings over splitting up household property that wasn’t included in the trust, and agreement about payout schedules, and all kinds of crap. Because of this experience, I have begged my parents to find as equitable way as possible of dividing their stuff up…you can’t believe how easy it is to have hurt feelings, when people feel that they are not being treated the same or getting the same deal as their siblings.

26

[QUOTE=Sarahfeena]
I think the reason this feels so unfair to me (and to jsgoddess) is because of the perception that she is being treated differently from her siblings, based on her life circumstance. Dealing with money & inheritance is so emotion-laden that even if you try to think rationally about what the parents were thinking, and the fact that they are entitled to do what they want with their estate, there is still a lot that can feel wrong or unfair.

My husband’s parents went to great pains to be sure that their entire estate was held in trust that would go 50/50 to both of their sons, and we STILL had trouble with bad feelings over splitting up household property that wasn’t included in the trust, and agreement about payout schedules, and all kinds of crap. Because of this experience, I have begged my parents to find as equitable way as possible of dividing their stuff up…you can’t believe how easy it is to have hurt feelings, when people feel that they are not being treated the same or getting the same deal as their siblings.
[/QUOTE]

I understand this. I’m in a similar boat as a single woman with two siblings who both have children (I don’t). I have no expectation that my parents’ estate will be divided up strictly in thirds; I don’t have kids to put through college and they do. Is that fair? Well, according to whom? IME, the only way to successfully deal with the emotions is to take the judgment of “fairness” out of it to the extent you can – and I realize this is hard to do. I try (with some, but not complete, success) to consider my parents’ assets their own to do with what they will, and to remind myself that if they leave me anything, it will be a gift, to which I am not entitled and for which I should have no expectations. I also try to keep firmly in mind the fact that I value my relationships with my parents and my siblings beyond any amount of money, and there is nothing that my parents have that I want so badly that I would risk my family relationships for. IOW, I try to talk myself into taking the high road, so that I don’t allow resentment of what my parents plan to do later, when they’re dead, to negatively impact my relationship with them now, when they’re alive. But I didn’t say it was easy; it’s not.

27

[QUOTE=Sarahfeena]
I think the reason this feels so unfair to me (and to jsgoddess) is because of the perception that she is being treated differently from her siblings, based on her life circumstance.
[/QUOTE]

I’d still be upset if it turned out that my nieces and nephews couldn’t inherit this from their parents. In fact, that’s what it initially looked like, and I called one of my sisters to ask if I was reading it correctly. I don’t want someone else’s share. I don’t even want mine, but when I thought it could be a safety net for my husband I couldn’t turn it down.

Now that I know that it isn’t a safety net for him in case of my death, I might turn it down entirely. I don’t want it. I don’t need it. The person who does need it can’t have it.

28

[QUOTE=jsgoddess]
Now that I know that it isn’t a safety net for him in case of my death, I might turn it down entirely. I don’t want it. I don’t need it. The person who does need it can’t have it.
[/QUOTE]

But the person who does need it can have it – through you. Statistically, the most likely scenario is that you you will survive your mother and inherit whatever your parents left to you. Then you can leave that money to whomever you want – including your husband.

I would hate for you to cut your husband off from a source of income that he (or you both) may find very helpful in the future, just because you’re not happy with your parents’ estate arrangements. You may think you have enough life insurance to take care of him if you predecease him before the trust kicks in, but you never know what your financial burdens may be in the future, in the much more likely event that your mother dies while you are still living. Then you’ll have no life insurance proceeds (being, thank God, alive) and no inheritance. And for what?

Not to mention, that turning your inheritance down under these circumstances is the very definition of making a big deal out of the perceived unfairness to your husband. While you might feel that unfairness very deeply, please ask yourself if you really want to get into a fight or create bad family feelings over it. Again, the arrangements your parents have made are extremely common in estate planning. Please consider just signing the papers and then doing your best to forget about it.

29

[QUOTE=jsgoddess]
My husband is disabled, and we’ve gone into debt with medical expenses. I’ve always told him that if something were to happen to me, I know my parents would help him out. We both believed it.

In an attempt to reduce the taxes on his estate, my parents and their lawyers and accountants all got together and put together a plan.

When my father died, the assets my parents had were split. Half went to my mother, and the other half went into an irrevocable trust. I’m a beneficiary of the trust. I just got the final paperwork.

I have five siblings. We are all equal beneficiaries. Sort of.

If my oldest brother dies before my mother, his share of the inheritance goes to his heirs–his wife and kids.

The same is true of my other siblings with kids.

But if I die before my mother, because I don’t have any kids, my share of the inheritance is redistributed to my siblings.

Because I don’t have kids, I don’t get to name an heir.

I don’t particularly want the money. I’d prefer never to collect it. But if I die, my husband will need it. (I’m getting life insurance. That was another thread!)

I’m very upset by this, but it’s hard to put into words without sounding overly dramatic. I trusted that they would consider my heirs, my life. Instead, if I die, I just sort of disappear, and because they wanted to avoid taxes, there isn’t anything that can be done about it now.

Okay, even a pile on would be welcome if someone can show me how silly I’m being.
[/QUOTE]

I’m told this is simply how it’s done. It’s all about blood. Nearly everyone gives it to children first, grandchildren second, and so on. I know it doesn’t sound fair, but that is pretty standard distribution.

30

[QUOTE=Jodi]
I would hate for you to cut your husband off from a source of income that he (or you both) may find very helpful in the future, just because you’re not happy with your parents’ estate arrangements.
[/QUOTE]

It would be because I’m not happy inheriting from an estate. When it seemed like the only way I could take care of my husband in the event of something happening to me, it was something I could accept. But I don’t have that excuse, since if something happens to me, he’s out of it anyway.

Most people don’t have this potential source of income. I am uncomfortable with it, especially the attempt to avoid estate taxes, but was trying to be pragmatic about it. I probably still will be, but it’s frustrating to find that the one circumstance I thought was covered isn’t, and the one circumstance that doesn’t need covered is.

31

[QUOTE=jsgoddess]
I’d still be upset if it turned out that my nieces and nephews couldn’t inherit this from their parents. In fact, that’s what it initially looked like, and I called one of my sisters to ask if I was reading it correctly. I don’t want someone else’s share. I don’t even want mine, but when I thought it could be a safety net for my husband I couldn’t turn it down.

Now that I know that it isn’t a safety net for him in case of my death, I might turn it down entirely. I don’t want it. I don’t need it. The person who does need it can’t have it.
[/QUOTE]

Don’t do that. If you do inherit it, you will leave it to your husband. I know it doesn’t look fair, but unless you are planning on dying before your mother, it is going to benefit your husband.

32

[QUOTE=jsgoddess]
It would be because I’m not happy inheriting from an estate. When it seemed like the only way I could take care of my husband in the event of something happening to me, it was something I could accept. But I don’t have that excuse, since if something happens to me, he’s out of it anyway.

Most people don’t have this potential source of income. I am uncomfortable with it, especially the attempt to avoid estate taxes, but was trying to be pragmatic about it. I probably still will be, but it’s frustrating to find that the one circumstance I thought was covered isn’t, and the one circumstance that doesn’t need covered is.
[/QUOTE]

You don’t need to share this info if you don’t want to, but are we talking “inheritence” or “Inheritence” here?

33

My grandma had someone put a bug in her ear about what if she dies, the money goes to my parents (Pop is her only child), Pop dies, Mom remarries and some strange man is spending “her” money. :smack: Good God.

34

Just a little more legal chatter for grins:

The 2 main ways of dividing an estate, as per my law school days, were “per stirpes” (as mentioned, it sounds like the trust in question is doing a modified version of this) and “per capita.” The estate gets divided “by the branch” or “by the head.”

In per stirpes, each member of the first generation takes an equal share, and if a first generation member does not survive the testator, that share goes to the children of such first generation member.

In per capita, the number of each surviving member of generation 1 and each child of a non-surviving generation 1 member is counted up and everyone in that count gets an equal share (you can vary this in lots of ways).

Both methods look to blood ties–not necessarily irrational from a policy standpoint given the complications of divorce and the fact that statistically it is likely that a non-inheriting spouse will get similar treatment from his/her side of the family.

Note that plenty of people have argued about whether per capita is more or less fair than per stirpes.

If Grandma has 10 grandkids (1 by her daughter and 9 by her son) should each grandkid get 1/10th of the estate (per capita)? Or does each branch of the family get 50%? After all, it is not daughter’s “fault” that she has sensibly had 1 child while her “crazy fundie” brother has had 9 kids.

It doesn’t necessarily work any better when people try to write wills taking special circumstances into account. There is nothing that beats family, money and death.

35

[QUOTE=Kalhoun]
You don’t need to share this info if you don’t want to, but are we talking “inheritence” or “Inheritence” here?
[/QUOTE]

Not the Rockefellers.

High 6 figures. In that neighborhood.

36

[QUOTE=gigi]
My grandma had someone put a bug in her ear about what if she dies, the money goes to my parents (Pop is her only child), Pop dies, Mom remarries and some strange man is spending “her” money. :smack: Good God.
[/QUOTE]

Well, that type of concern can be quite legitimate - especially when there are multiple generations involved. Here’s a situation from my immediate family:

-After Grandpa dies, Grandma remarries Arthur.
-Grandma gets ill and dies, leaving Arthur a life estate in all of her assets (house, cash, and possessions), with the remainder to her kids.
-Arthur hooks up with a septuagenerian golddigger, who proceeds to fleece the old goat for everything Grandma left him. He buys her multiple cars, and gives her all of Grandma’s jewelry, mortgages the house, and ends up destitute in a nursing home. Burns through a couple hundred grand in maybe 2 years.
-As a result, nothing at all goes to Grandma’s kids or grandkids.
-The only thing the grandkid I’m married to is really upset about is that she doesn’t have a single piece of her grandma’s jewelry.

Now Grandma was certainly free to do whatever she wanted with her assets. But can’t you understand why someone might wish to avoid such a situation?

I think the OP should look into the possibility of having her hubby off her parents. It probably wouldn’t work for the OP to kill them herself, because many laws prohibit individuals from profitting from their crimes. But if hubby did the deed and didn’t finger the OP as a co-conspirator, the OP might still be able to inherit without worrying about whether or not her inconsiderate parents might outlive her. Then, after hubby serves his time (might be a good idea to style it as a crime of passion or self defense, to avoid life imprisonment or the death penalty!), the OP could die happily, leaving her entire estate to hubby!

Damn, I love happy endings!

37

[QUOTE=jsgoddess]
I am uncomfortable with it, especially the attempt to avoid estate taxes, but was trying to be pragmatic about it.
[/QUOTE]

Why? There’s nothing illegal, unethical or immoral about it. Putting assets in a trust also avoids probate, so heirs don’t have to wait around until that’s finished to claim their inheritance. Why lose what are probably hard-earned assets to the government if there is a perfectly legal way to avoid that? There’s nothing wrong with someone wanting to hang on to assets that belong to them.

I think you are making a much bigger deal about this than you should. Yes, it sucks that your parents didn’t keep your particular situation in mind, but unless you have some serious illness you haven’t said anything about, odds are very much in your favor that you will outlive your mother, and you can sign over every dime to your husband if that’s what you want to do.

Refusing to cooperate will just make you look like a petulant child, and to what end?

38

[QUOTE=Jodi]
I understand this. I’m in a similar boat as a single woman with two siblings who both have children (I don’t). I have no expectation that my parents’ estate will be divided up strictly in thirds; I don’t have kids to put through college and they do. Is that fair? Well, according to whom? IME, the only way to successfully deal with the emotions is to take the judgment of “fairness” out of it to the extent you can – and I realize this is hard to do. I try (with some, but not complete, success) to consider my parents’ assets their own to do with what they will, and to remind myself that if they leave me anything, it will be a gift, to which I am not entitled and for which I should have no expectations. I also try to keep firmly in mind the fact that I value my relationships with my parents and my siblings beyond any amount of money, and there is nothing that my parents have that I want so badly that I would risk my family relationships for. IOW, I try to talk myself into taking the high road, so that I don’t allow resentment of what my parents plan to do later, when they’re dead, to negatively impact my relationship with them now, when they’re alive. But I didn’t say it was easy; it’s not.
[/QUOTE]
I get what you are saying, I really do, and I agree that the best thing to do, as one of the beneficiaries, is to not think about what is fair or not fair. (Besides which, everyone has a different idea about what is fair…there was some flap in my family over the fact that my in-laws estate was divided 50/50, when my brother-in-law had kids & we didn’t, at the time. So his idea of “fair” was obviously different from his parents’ idea…not much that can be done about that.) To me, my mind set is the same as yours…maintaining my relationships with my siblings is more important than anything. I wish my brother-in-law felt the same!

39

[QUOTE=jsgoddess]
I’d still be upset if it turned out that my nieces and nephews couldn’t inherit this from their parents. In fact, that’s what it initially looked like, and I called one of my sisters to ask if I was reading it correctly. I don’t want someone else’s share. I don’t even want mine, but when I thought it could be a safety net for my husband I couldn’t turn it down.

Now that I know that it isn’t a safety net for him in case of my death, I might turn it down entirely. I don’t want it. I don’t need it. The person who does need it can’t have it.
[/QUOTE]
Don’t do that, really. You are thinking about this emotionally, and I don’t blame you…but it is a nest egg for you, and once it is yours, it is your husband’s as well.

40

I think what your parents have done is not only reasonable but fairly common. The part about the grandkid’s spouses inheriting is the only thing that seems odd.

When I die I want my money to go to my natural children. Selfish, yes but it is money I have earned and I get to do with it what I want.

The reality is that many marriages do not last and why have to deal with that situation down the road? You seem to feel like you are being penalized but you’re not. You’re dead in this scenario. Your parents would rather the money go back to their grandchildren than your husband. I think it is reasonable and you should deal with it as their choice.