TokyoBayer - Just a note - my decision (and it was mine, not my mother’s) to disburse the financial part of the estate over 5 years was because some of my siblings would’ve blown their inheritance before they got the check, if it was given to them up front. I told them it was to lessen the tax implications. In fact, that reminds me of something my step-father once told me - when his parents died, on of his siblings had blown the money before the estate even paid out and one used it to drink herself to death. Coming into a great deal of cash suddenly isn’t the best thing for a lot of people.
My grandmother did something similar before she did. She had 2 houses - one in suburban Long Island and another summer house out in the Hamptons.
Long story short, giving people a house they can’t sell or live in kind of giving someone the gift" of paying for taxes and maintenance on someone else’s house. Particularly if that house is split between multiple parties. You run into all sorts of complications with partners and spouses.
What’s wrong with giving Carol the Utah house, Brenda the GA house and have Eric institutionalized I guess. I can think of a lot of issues with giving large sums of money to a mentally ill homeless person without some sort of care and oversight.
Your life may be much happier and simpler if you can convince your mom to give Carol the house, and exclude her from the rest of the inheritance, and the three of you split everything else.
For one, it avoids the problem, and this would be your problem, of, say, Carol not being able to pay the property taxes or the maintenance of the house she has the use of but is still part of the estate or a trust.
The freedom of being able to walk away is worth an infinite multiple of whatever such an arrangement would “short” you on what you maybe should have coming to you.
In light of the new details and supporting msmith537 just above.
From a family dynamic perspective it’s almost always better to distribute value as financial assets rather than real assets. In some situations tax considerations overwhelm that. But that’s pretty rare.
In the OP’s specific case all of you will be ahead if there’s a way to provide Carol with the general outcome of a living stipend rather than the specifics of that particular house at 123 Elm Street in Provo.
Carol’s mental state may make that difficult. But don’t assume that makes it impossible. Providing her the life estate in the form of the property creates very real costs for the other sibs. And not just financial costs.
You and Mom are the only ones able to assess the tradeoffs. But don’t assume that just because giving Carol possession of the house avoids her moving and the need to sell the house soonish it’s therefore simpler and easier. It’s neither.
You’ve not mentioned it, but Mom can also provide trusts to drip feed money to the crazy brothers. These can be done pretty cost-effectively with relatively low admin overhead. A helicopter drop of cash to a homeless person is all but guaranteed to be stolen by a third party. He won’t even get a good stash of drugs out of it. Much less money for food for a decade or more. Maybe that matters to Mom and maybe it doesn’t.
Thank you all again. Typing on the phone so I’ll reply more later.
Although I mentioned in the op, I didn’t explicitly state what the intention is for Eric, the homeless brother. We are looking at setting up a trust fund to slowly give him money. Dropping off that much cash would be foolish beyond measure and never our intention.
Doing a back of the napkin math, it looks like the amount my mother has already “given” my sister Carol in free rent over the last 30 years ago already far exceeds the value of each of the children’s share. Given that the Utah house if almost 40% of the estate and my sister wants cash as well, it ain’t gonna happen.
I may suggest that my mother allows them to remain in the house for the rest of their lives and the house goes to the surviving siblings rather than Carol’s children from her previous relationship. That would still give Carol the lion share of the estate in terms of total money she’s been given over her lifetime.
My mother has given tens of thousands of dollars to Eric over the years as well. My mother intends to not give him a strict equal share.
There have been some really good comments and suggestions. Thank you.
Yup. Will do. I’m just “thinking out loud” now to get ideas so that when we go and see the attorney, we’ll have at least the goals clarified and hopefully a strategy, with the lawyer being able to advice the best ways to accomplish that. There is zero percent chance of doing this without an attorney and a financial planner being involved.
Good point, that’s something we need to consider.
We would have to consider potential major repairs to the house because my sister would not be able to afford that and I don’t want to get stuck with that.
Can’t have Eric institutionalized against his will.
Brenda would not ask for the GA house, but would be able to buy the rest of us out.
I’m not really into the Puss-In-Boots laws of inheritance. More about that below.
[spoiler]Quick Excel calculations on the amounts of money and net values on contributions from my mother to her children. Minus numbers indicate a greater contribution from the child to my mother.
Carol $200,000 to $250,000 in rent free or minimal rent for almost 30 years and running. This will continue to increase.
Eric $64,000 cash in living expenses, cars etc.
Albert $0. First class asshole, but at least he’s not a leach.
Brenda -$10,000 to -$20,000 in help for moving, work done by her husband on remodeling the GA house and her time helping my mother. Note that this contribution will continue to increase as my sister will be required to spend more time taking care of Mother as Mother ages. (Also see the second spoiler as to why this number would not have been significantly in the black e.g.,with a far greater amount of money from Mom to them.)
Me -$60,000 to -$80,000 in remodeling the Utah house, and the former family house (including contributions of time by my friends); presents including trips, etc., not including gifts which will be returned to me.
Naturally, there simply isn’t going to be a way of getting any kind of “justice” or “recognition” and I would simply go nuts if I expected that. I’m just throwing out some rough numbers to show what the family dynamics looks like.[/spoiler]
That’s how we feel about Eric. The chances of it hurting him outweigh the possible help.
Good advice. Any suggestions on what kind of structure would work?
Yeah, I see your point.
Thanks, just downloaded the kindle version.
Rant / blowing off steam / whining like a six-year-old, your call:[spoiler]Sometimes, I just fucking hate, hate, hate being the only sane, relatively sacrificing one on the block. (I whine here about the money / time I spend so I don’t talk about it to my mother. I really just do want my mother to have some peace in her life.)
So I have two manipulative, certified mentally ill siblings. One genuine asshole (Hi Albert!) and while my sister Brenda is kind to my mother, she and her husband are not beyond looking at ways of getting money for themselves.
One reason she and I don’t talk anymore was a blatant attempt by them to get access to a serious chunk of Mom’s money in Mom’s move to GA. Net result would have had them spending Mom’s money from the sale of the old family house to buy 10 acres of property and build two houses – one for Mom and a larger one for them – on the property while they could keep their current home for their personal rental income. At best that would have been really messy.
This is on the heels of an attempt by BIL to seriously screw me over on a joint venture we were – fortunately – still in discussions stages.
It really does take patience to attempt to set up things equably given my personal feelings towards everyone, but someone’s got to do it.
My mother was a battered wife who was unable to protect us from our psychotic, abusive father. She’s never really recovered and it’s been my job to watch out for her, including running interference between her and the abusive or greedy siblings.
While I hope she lives forever, I really hope this is the last major task I’ll have to do. I’m getting tired.
If anyone happens to have reasonable siblings and parents, give them a hug.[/spoiler]
I would suggest you ask to SEE the will, which my MIL refused to do. My MIL, before her death, told her children what was in the will and how she wanted her estate divvied up. Basically, since she had already given her children monetary gifts, she wanted what was left to go to the grandchildren.
However, that’s NOT what the will said. The will disbursed the assets to her children. Fortunately Ivylad comes from a functional family, so it was just a matter of depositing the money and cutting checks to the grandkids, but I shudder to think what would have happened in a more toxic family.
Your mom’s recent decision sounds to be the best outcome for you.
I realize you are in Asia, so it might be problematical, but if you feel any misgivings about Brenda’s reliability/honesty, you might gently prod your mother to make you co-executor (and if any trusts are created down the road, co-trustee). This will give you the ability to monitor accounts, access information, etc., if you feel that is necessary. Otherwise, you will be entirely dependent on Brenda providing you information on what is happening with the estate, etc.
This is excellent news. It greatly simplifies the process now and will save a lot of money at both set-up time and when the “estate matures” as we say in the biz.
You do still have the problem that if the UT house is a material fraction of the total estate it may have to be sold then to generate enough cash to divvy evenly.
From my position of relative comfort were I you might be just as happy to have crazy Carol get the house outright and therefore, say, 30% of the estate with the other three being content enough to split the remaining 70% three ways or 23-1/3% percent apiece. Given the alternative is to need to actually sell it out from under Carol over her objections, enforce her eviction, etc. All from halfway across the country.
OTOH, if the house is 70% of the estate that situation might not be as acceptable to the other three. Which is really just the other two; you and Brenda since Eric effectively isn’t around to cast his vote.
If the house is less than 25% of the value it gets easy: Carol gets the house and a small cash top-up and everybody else gets their money and runs the other way.
Good Luck.
Those of you in the know I need to ask a question along similar lines.
My mother died and left some $ to be equally divided between her children. I am executor and fear the cash will hurt my sister. She is poor and on medicaid. If she has assets such as this cash they will cut off her medicaid and she will soon be broke with no health insurance. The lawyer is looking into setting up a special needs trust for her.
Any experience with this?
Short version: Make sure you are using a lawyer who has a lot of experience in special needs trusts.
Yes, I had a similar situation. I think trust law depends on what state you live in, so this may or may not be available to you.
IANAL. Our lawyer set up a particular kind of special needs trust. used in this exact type of situation (The following explanation is probably incorrect, so listen to your lawyer not someone on the Internet.)
The trust allows the inheritance to be used for the beneficiary’s benefit while alive, with some restrictions. When the beneficiary passes away, the proceeds are used to re-imburse the state for things that the state paid for, such as the person’s medical care. If the funds in the trust are inadequate to re-imburse the state 100%, nothing is owed for the shortfall. If there are funds left over after re-imbursing the state, those can be used for any secondary beneficiaries in accordance with the trust’s terms.
There is also a new type of trust just coming into existence that might be applicable. I’m sorry, I can’t remember the name. It allows for the accumulation of more savings (assets) for a special needs person without violating the $2000 limitation on assets, but after the person passes away, the savings all go to the state.
Remember, your state’s rules may be completely different.
You mentioned that your lawyer is looking into it. If your lawyer is not very experienced with special needs trusts, I highly recommend finding one who is. The laws and rules covering these trusts are very complicated, and if something is done incorrectly, it can be extremely expensive to fix and you can also risk losing benefits and possibly even have to repay benefits that were received.
Also, the funds in the inheritance might possibly be used to pay for the lawyer, if that is a concern. Good luck.
wellanuff, Thanks. My lawyer is looking for another lawyer that has more experience in these trusts in the state where she lives than he does. Also trying to find law firm that won’t take all the $ just to set up the trust. I feel he is looking out for our best interests.
I knew nothing about these trusts and have just started reading about them in the last few months.
Any other tips?
I can only hope this works out for the best as my mother wanted. Who would have thought it would be a disadvantage to inherit money if you are poor?
There are actually five of us in total. There is an older brother Albert. He has cut himself out of the family and only infrequently contacts my mother.
The house is about 40% of the total, but the problem is that if Carol were to get the house, then she would be kicked off SSI and would not have money for groceries, etc. without reverse mortgaging the house. She would need more than 50% of the estate in order to have the house and money enough to live. That’s too much for my mother.
My mother discussed this with Brenda, the older of the sisters, and I think she’s behind the idea of just giving them cash and let whatever happen.
Another major concern for my mother would be if she were to require an assisted living facility which would burn up cash. My mother doesn’t want to earmark a property which could become an increasingly large percentage of the estate.
I’ll ask her to talk to the attorney about the type of trusts which wellanuff mentioned.
My mom said that Carol had been feeling suicidal, then had a bad reaction to a drug giving to her in a psych ward and is fighting the effects of that now three months later.
I have a hard time listening to my sister’s complaints. It just doesn’t make any sense to me.
I have a feeling that it’s going to be that much worse when my mother eventually passes away. I really want to have a good solution in place before then.
My mother is waiting for the attorney to get back from vacation to get it all signed, but basically things are finalized.
The real estate agent in Utah went through and found that the assessed value is too high for the Utah house. That’s the residence in which Carol is residing in. His assessment brings down the value to about her share of the estate. There will be a trust fund set up in which my sister will be able to live in the house, but she will continue to be able to receive the SSI.
Previously, my mother had had her entire IRA earmarked for my younger brother. She is changing that so that he will get a trust fund with his share of the estate, with a monthly stipend put into a debit card. This avoids the problem of giving a mentally ill homeless man a large chunk of cash.
It looks like the major problems have been taken care of.
Congratulations. it sounds like this has settled about as well as it possibly could have.
The amount of angst you all have avoided later is huge. Mom’s decline and demise will not be happy events of course. But she’s done the responsible thing to make her final years and the immediate aftermath as good as possible.
Would that more folks had the wisdom and maturity to do that.
During the process, I talked to her attorney, offered some suggestions and thoughts; but found I was getting too involved and upset about it. I remembered this thread and the advice to be willing to step away from it wall.
I think I was trying to use the will to get some of the love she wasn’t able to provide for us when I was growing up. That was why I was upset about not getting my “share” even though I have done so much for her than the rest of my siblings (except for the oldest sister, Brenda, the responsible one).
So it took re-examining my desires. I don’t regret doing the things I did for her, and wouldn’t want to take them back. Demanding special payment for being nice isn’t being nice at all. It was good to be able to vent here and get feedback so that I was able to see what I was doing.
Letting go of all of that made things so much easier. I’m glad that I was able to help my mother over the years. She got a lot of out of that and I’m happy.
I’m that she decided to be fair, but it’s not so important anymore.
Realizing that, I stepped out of the drama between the sisters, letting my mother and her attorney come up with the final solution.
I think it will making things go smoother after she passes away. As I’ve said several times in this thread, I don’t expect things to be peachy. There are too many crazy people in the family, but at least it will eliminate fights over property and any money.
(Also, although I seriously doubt that there would be any legal challenges, I documented everything in email exchanges with my mother and her attorney on her intentions.