How much do you trust you kids?

[jyoutz]

That’s an interesting thought. Actually, before I did anything I would get legal advice, and I was not writing off Elliott’s advice in any way.

I think, but I don’t know, that doing that would still offer similar risks as putting the property in the two girls names, should something go wrong in one of their minds for whatever reason, or for reasons beyond their control, due to a lawsuit or something.

I think the thread title actually may have been an error. I believe 99% of us really do put the ultimate trust in our children. At least until we see some reason not to. Unfortunately, in some cases, kids go down the wrong path and become drug addicts or whatever, and certainly at that point parents should (and probably do) reevaluate things.

I can’t answer anything about your trust for your kids. But if their names are on the property deed, vehicle titles, and financial accounts, this means they are co-owners. Then when you pass that co-ownership is legally owned by both of them and there is no probate of interpretation of the will. It just belongs to them. Now, you would need to have absolute trust because this means they are co-owners with you while you’re still alive. But this solution avoids the need for attorneys and legal procedures.

 

[JimmyJazz]

I keep coming up with strange questions...I know!

BUT getting older, I also know we all have limited time on the planet. And I do have a VERY close relationship with my two daughters.

So having "enough" but not a lot, I decided I would rather have some things pass fully to the kids, rather than give a percentage to the state, when I pass myself. BUT the real reason, is the risk of nursing home care cost, if I would end up in a nursing home for whatever reason, for an extended time, my resources would be drained totally before medicaid picked up the tab for my care.

So I put some (about 40 percent) of my liquid resources into my kids and their husbands names, in an irrevocable manner, as gifts that they have no access to, unless I give them to them when I am still alive. When I am gone they will have access to them.

But first, I talked with each of them, and told them of my plan, but that I would only do it if they agreed to one condition. That is, if I needed the money, I would transfer the gift to them and they would then give it back to me, but could keep a good bit of the value it gained between then and now.

But that is just money. There is also the house and property. I could transfer the property into my two daughters names, but what if one went insane or something, and turned totally different than she has been for what is now about 50 years?

I concluded the risk, even if just theoretical, and most unlikely to happen, is too great. I can lose the money I put side for them if something would happen, but that is spread among four people, so more than one would not likely go sour. Of course if in a nursing home, after all my liquid resources were consumed, if medicaid started picking up the tab, they would place a lien on the property when I passed.

So I kind of decided the kids will just have to deal with paying inheritance tax to the state on the property, and possibly suffer from medicaid liens, when I kick. I just can't seem to accept the risk, as improbable as it might be, to be able to transfer the deed to my kids.

How weird am I as a parent?

Asking a group tractor enthusiasts for legal advice is setting yourself up for trouble. Find yourself a competent lawyer that specializes in elder law and estate planning that is licensed in your state. There are well defined paths to follow. Everybody dies. I work for a bank and hear these concerns almost daily.

 

[Mark_BX25D]

that is licensed in your state.

This. Laws vary.

 

[AM28]

1: I wouldn’t trust the kids. Things change after someone dies and you can’t predict it.
2: Trusting the kids could create the problems that you re worried about.
3: Appoint someone, other than your kids and family, that you do trust, using legal counsel, and give them your exact instructions.

 

[yorkies77]

Some friends of ours who were in their 80’s willed their home to their daughter. The mom got cancer and the daughter and her husband said that they would take care of dad till he passed. She passed away and with in a week they told dad to get out that this was their home now. He ended up in a nursing home.

 

[The Evil Twin]

I trust my family more than I trust the government to protect my interests.

I trust your family more than the government.

 

[JimDeL]

Why not put everything into an irrevocable trust and make the kids the beneficiaries of the trust?
After a period of time (5 years?) Medicaid can't touch the trust's assets, so they're protected. In my state (Ohio) the beneficiaries won't have to go through probate, either.

 

[Siesta Sundance]

I keep coming up with strange questions...I know!

BUT getting older, I also know we all have limited time on the planet. And I do have a VERY close relationship with my two daughters.

So having "enough" but not a lot, I decided I would rather have some things pass fully to the kids, rather than give a percentage to the state, when I pass myself. BUT the real reason, is the risk of nursing home care cost, if I would end up in a nursing home for whatever reason, for an extended time, my resources would be drained totally before medicaid picked up the tab for my care.

So I put some (about 40 percent) of my liquid resources into my kids and their husbands names, in an irrevocable manner, as gifts that they have no access to, unless I give them to them when I am still alive. When I am gone they will have access to them.

But first, I talked with each of them, and told them of my plan, but that I would only do it if they agreed to one condition. That is, if I needed the money, I would transfer the gift to them and they would then give it back to me, but could keep a good bit of the value it gained between then and now.

But that is just money. There is also the house and property. I could transfer the property into my two daughters names, but what if one went insane or something, and turned totally different than she has been for what is now about 50 years?

I concluded the risk, even if just theoretical, and most unlikely to happen, is too great. I can lose the money I put side for them if something would happen, but that is spread among four people, so more than one would not likely go sour. Of course if in a nursing home, after all my liquid resources were consumed, if medicaid started picking up the tab, they would place a lien on the property when I passed.

So I kind of decided the kids will just have to deal with paying inheritance tax to the state on the property, and possibly suffer from medicaid liens, when I kick. I just can't seem to accept the risk, as improbable as it might be, to be able to transfer the deed to my kids.

How weird am I as a parent?

Do the girls even have intrest in keeping the property?

 

[Henro]

Asking a group tractor enthusiasts for legal advice is setting yourself up for trouble. Find yourself a competent lawyer that specializes in elder law and estate planning that is licensed in your state. There are well defined paths to follow. Everybody dies. I work for a bank and hear these concerns almost daily.

I wasn’t asking for legal advice, and if you read one of my previous replies you will even see that I said that I realized I titled the thread poorly, and that it should’ve been titled something like “what’s the chances?"

Actually I have consulted with an elder law firm and spent a fair bit on their services, so I do understand the importance of consulting with an elder law attorney when you get older. Actually the sooner the better is the reality, but most of us don’t do it sooner from what I understand.

As I mentioned above, this thread has helped jell my thoughts I greatly appreciate everybody’s input.

 

[Henro]

Why not put everything into an irrevocable trust and make the kids the beneficiaries of the trust?
After a period of time (5 years?) Medicaid can't touch the trust's assets, so they're protected. In my state (Ohio) the beneficiaries won't have to go through probate, either.

^^ This is true.

I think I am the root problem. I’ve always been independent and maintained maximum flexibility in my life, financially and otherwise. Putting assets into an irrevocable Medicaid compliant trust is the best way to protect those assets if one ends up in a nursing home five years and a day after the trust is established. But it sure limits flexibility.

It’s the “what if” side of my personality that overwhelms me at times…

 

[Henro]

Do the girls even have intrest in keeping the property?

Who knows? Actually I don’t really care, although it’s a nice piece of property and they have lots of memories growing up here… My only concern is trying to preserve something for them when I go up in smoke.

I’m bothered by the fact that there’s a fair number of people in our society that manage to live their lives on handouts rather than hard work. Should they need long-term care in a nursing home Medicaid approvals are almost immediate and easy. I’m not meaning to be critical of people who actually truly need help. I’m referring to some people that I have known or know now, that I think of as leeches… while those who work and accumulate some wealth, in the middle class sense, are expected to consume it all before they get the benefits the others I referred to above get from day one.

So I’m essentially torn between keeping maximum flexibility or reducing flexibility in my remaining years (hopefully many years).

 

[Elliott in GA]

Not Legal advice - shape your future by your choices. To me, there are many fates worse than death - especially when your quality of life is low.

Do not go to the nursing home; do not accept medical treatment. I have never understood how people can choose to put themselves or a relative through a process that they would not inflict on a pet. I have watched relatives go through years of intensive care at home and at a facility. As their bodies slowly declined, so did their minds. Other, well meaning relatives, made choices that simply prolonged a painful process.

Just say - No. I know that I will.

 

[Speed25]

Not Legal advice - shape your future by your choices. To me, there are many fates worse than death - especially when your quality of life is low.

Do not go to the nursing home; do not accept medical treatment. I have never understood how people can choose to put themselves or a relative through a process that they would not inflict on a pet. I have watched relatives go through years of intensive care at home and at a facility. As their bodies slowly declined, so did their minds. Other, well meaning relatives, made choices that simply prolonged a painful process.

Just say - No. I know that I will.

This is great advice based on my experiences as well. "Humane" treatment is only for animals, not people sadly. Set out your instructions to include a DNR (do not resuscitate) order for anything serious, discuss with your daughters what your wishes are in the event you become ill and need to appoint a medical power-of-attorney. Put it all in writing if needed. You can even prepay funeral arrangements and have all of your selections made ahead of time there, as well as a burial plot or cremation services. That's some money you don't have to worry about the state taking. Making these plans and discussing these things ahead of time reduces stress for those involved in the end.

As far as family goes, I trust the government more than my family, haha. My rugrat is in elementary school, so definitely not trustworthy yet either.

I get the "what if" questioning, and I wouldn't transfer anything to the family (were they trustworthy) ahead of time. If something happens, and I need that money back, I assume that gets tricky from a tax perspective for them. Definitely questions for a specialist though. As the years tick by and you've got less uncertainty in life, you can always considering "gifting" the daughters money ahead of time and so long as you keep it below the IRS gifting limit, you can do it tax-free.

 

[Henro]

Not Legal advice - shape your future by your choices. To me, there are many fates worse than death - especially when your quality of life is low.

Do not go to the nursing home; do not accept medical treatment. I have never understood how people can choose to put themselves or a relative through a process that they would not inflict on a pet. I have watched relatives go through years of intensive care at home and at a facility. As their bodies slowly declined, so did their minds. Other, well meaning relatives, made choices that simply prolonged a painful process.

Just say - No. I know that I will.

I’m with you Elliot! I’ve already told my kids that I want to die at home.

But I can imagine scenarios where a person could end up in a nursing home essentially against their will and escape from the situation could be extremely difficult…

A neighbor’s brother, never married and no kids, lives alone in a different state and started to suffer from dementia or Alzheimer’s I’m not sure which. His behavior was erratic and he ended up being committed under a court order. He ended up in a nursing home and has gradually been deteriorating. He might want to leave but the court may not permit it. He has ample money which is being consumed for his care.

I can see something like that happening to somebody with kids. I could be wrong but it could be a situation from which a person could not escape.

”Just say no" might not always work.

Hopefully for you and I, and the others here that feel the same way, this will not be the case.

 

[Henro]

[snip]

I get the "what if" questioning, and I wouldn't transfer anything to the family (were they trustworthy) ahead of time. If something happens, and I need that money back, I assume that gets tricky from a tax perspective for them. Definitely questions for a specialist though. As the years tick by and you've got less uncertainty in life, you can always considering "gifting" the daughters money ahead of time and so long as you keep it below the IRS gifting limit, you can do it tax-free.

Just a couple point of possible interest.

Currently an individual, for federal tax purposes, can gift a maximum of around $12 million tax-free over their lifetime. So gifting for most of us should not be an issue.

The only thing that needs to be kept in mind is if you exceed the annual IRS limit per recipient (roughly about $16,000 currently), it must be reported annually on a tax form. I forget the form number. I believe the person receiving the gift is not responsible for any kind of gift tax. It’s the giver that would have to pay that if such tax were due. I know I’ll never have to worry about that!

Also, in Pennsylvania, after a year and a day, the gift is not considered for estate tax purposes.

 

[skeets]

Yes my friend, I DO TRUST MY KIDS, I would have much of a Father if I didnt

 

[fried1765]

I’m still not communicating well. I’m not asking for legal advice. Or estate planning advice. I’m asking for peoples opinions on how much they trust their kids, with respect to the probabilities that the kids could change in the future. Could be I am more risk adverse than most.

Actually, I’m pretty sure I know what the legal answer would be: Don’t take the chance trusting your kids!

So I guess the question really is, how weird am I for thinking this way?

I mean, as far as basing my philosophy, pretty much on trust, rather than legal aspects of dealing with estate planning. For legal advice no question that I have and would use the services of an estate planning attorney. I believe that is even more important for a couple than a single person. But that’s not where I’m at in this thread…

edit: I may have made a mistake, giving background details that illustrated the reason I was even asking such a question because I do and will continue to trust my kids with my life.

I was trying to focus on how things external to the kids might affect my future. An illness that affected their way of thinking, a lawsuit (justified or not) against them, things like that.

Since a 1997 divorce agreement, my real property (residence+ acreage) has been in an irrevocable trust for my adult children.
I have "life estate".
I am nearly 84.
50% of stock ownership is joint, with my children.
I am not paranoid!
I have absolute faith in my children!

 

[Daylight]

We have completely separate accounts and properties and no children. The better half (rather, my 90%) of my life is independently wealthy, and after I disappear into nothingness she'll never set foot in Belgium again. So I want my nephew (also my godson) to have my property. Unfortunately, he faces an 80% (yes, eighty percent) inheritance tax...

I did find a way around that, though: sell him the house for lifetime annuities, which go into an account in my name but to which he has access (in my name).

And yes, I'd trust him with my life.

Just a couple point of possible interest.

Currently an individual, for federal tax purposes, can gift a maximum of around $12 million tax-free over their lifetime. So gifting for most of us should not be an issue.

Also, in Pennsylvania, after a year and a day, the gift is not considered for estate tax purposes.