Beyond the Grave: the Right Way and the Wrong Way of Leaving Money to Your Children and Others

[lightreads]

Beyond the Grave: the Right Way and the Wrong Way of Leaving Money to Your Children and Others

3/5. A quick, plain language review of all the major estate topics – how to think about division, trusts, property, pets, second marriages, estrangement, etc. with an emphasis on the interpersonal and familial aspects of inheritance planning. I never took trusts and estates in law school, which I have come to regret. Particularly now that I'm probably going to need a living trust in the next couple years. Adulthood, what the fuck?

Yes yes, I realize that I actually read this book because my father Is dying and it was this weird free association sideways think way of coping with that, what of it.

Anyway, this is genuinely useful, if deeply heteronormative. And also just . . . weird? I mean, I shouldn't be surprised to discover just how tied up the notion of traditional family – and specifically blood relation – is with the passing of money. But boy. There are very few of the many, many anecdotes in this book that aren't about someone believing as a law of the universe that marriage and sharing DNA entail the intergenerational transfer of money, and any other arrangement is morally wrong. The intensity of this belief, the unthinkingness of it, it's just . . . weird to me.

Comments

[the_rck]

My mother, when she was studying for the Louisiana bar, explained inheritance law there to me, just a bit. Louisiana law is different from law elsewhere in the US, and up until recently, it was actually illegal to disinherit your biological children. When she talked to me, about ten years ago, it was illegal to disinherit a child under a certain age (29? 30? something like that), and it meant that, if she and my stepfather both died, my half-brother who was under that age would get two thirds of the estate while my sister and I might get one sixth each. (My sister and I were both a decade older and could be disinherited.) Joint property in a marriage is lifetime only in as much as a dead spouse's property must pass to their biological children when the other spouse dies.

[lightreads]

Woooow. There are actually a couple of comments in this book about Louisiana -- "yes, your living trust is formed under the law of a particular state, but it will mostly be honored in other states. Except Louisiana. Let's not talk about that."

[the_rck]

The possibility of disinheriting biological children is apparently a relatively recent development in Louisiana law, no older than the last few decades. The whole thing apparently complicates things like guardianship of minor children after one parent dies. The surviving parent is assumed to have a financial conflict of interest in relation to their minor children (they might remarry and want to leave things to children from that marriage), so a non-parental financial guardian is required.

[lightreads]

TBF, that's not actually a terrible idea. The non-parental financial guardian, anyway.

[the_rck]

I think there's a threshold in estate size when it makes sense, but for example, my husband and I have a car (on which we still owe thousands), a small house (which we own about 20% of), and about $3000 in savings. Oh, and my TIAA-CREF account and his 401K, neither of which are particularly robust because we've never made all that much money (and, as we're both 50, those aren't going to get much bigger).

Our levels of life insurance don't actually change that situation much. I'm kind of uninsurable due to having had cancer, and I can't convince my husband that life insurance beyond $100000 might be necessary given that my disability income is about half as much as he makes in a year.

I'm not convinced that a financial guardian would make sense under those circumstances, especially since such a person would almost certainly have to be paid.

[lightreads]

Yeah, honestly I was assuming there was some sort of threshold trigger for that. And yes, you would probably pay, even if it's a non-professional person. The arrangement I've casually gamed out for our living trust would involve a friend serving as co-trustee in the event something happens to me (since I'm the one who understands money things) and that friend would get paid something like $5k/year for helping make distributions and decisions and things.

[the_rck]

I worry about my grandmother's living trust. Well, I don't so much worry about it while she's alive, but part of the point of it is to support my aunt who has brain damage (menengitis combined with alcoholic malnutrition). My uncle who is local to both Grandma and my aunt is one of the two trustees and does a great job. The other, due to family politics, is my father who cannot be trusted with money and who we all know cannot be trusted with money. He's on the other side of the country. I worry that he'll 'borrow' from the trust once Grandma's no longer with us (she's 92).

My father is the only person I've ever met who thought that he could sell land and not pay the IRS their share. He was really peeved when they started garnishing his paychecks.

I should probably talk to my uncle about getting my cousin, his son, who is local and thoroughly reliable added as a trustee. He'd do a good job of making sure that our aunt doesn't starve or end up homeless. He'd also go after my father if it needed doing. I'm less confident that my uncle would. I also don't want to see my father end up sole trustee if something happens to my uncle. My father's older by about eight years, but bad luck can happen any time, and my uncle smoked for decades.

[lightreads]

Yeah, this stuff is always hard one way or another. And bringing it up is even harder, at least in my family of birth, where there is going to be an epic shitshow when my maternal grandparents die. I will stay on the opposite coast and keep my head down, thankyouverymuch.

There is such a thing as a special needs trust, which doesn't solve the trustee problem, but could provide a stream of support to a disabled person without endangering any governmental benefits like SSI. They're kind of a pain to deal with, though, Is my understanding.

[kate_nepveu]

Hence all the Golden Age mysteries about will construction.

. . . which is partly why I found Trusts & Estates so fun in law school, actually. The prof would write family trees up on the board and then vehemently X people out who'd died, very dramatic.

(To my pleasant surprise, I've developed a very minor specialty in it, because the New York State Attorney General's Office is the statutory representative of ultimate charitable beneficiaries of wills and trusts, so sometimes we appear in will contests, trust modifications, etc. I definitely wouldn't want to do it all the time, even if I could, because of the intensity of belief you mention, but I find it a nice change of pace.)

[lightreads]

That does sound interesting. Then again the thing I do for 10% of my practice is always a pleasure whenever it pops up, at least partly because it's only 10%. Mine is the Foreign Agents Registration Act. Great stuff! Twice a month.

And hey, I deal with the NYS AG's Charities Bureau sometimes in a professional capacity. The charitable registration law is broad enough to sweep in political 501(c)(4)'s, which is where I come in. That is . . . not really in the happymaking 10%.