Trying to Decide on Inheritance Allocation: Who gets What?

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Cruise
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Trying to Decide on Inheritance Allocation: Who gets What?

Post by Cruise »

I know that this is an entirely personal decision, but one facing everyone who has an estate.

Our situation: We have a healthy estate and with an experienced attorney's help, we are finally articulating our needs in a trust document. We have no children and want the bulk of our wealth to assist charitable causes.

On our first effort to allocate inheritances, we ended up with a distribution that would give 26% of the estate to various family member (nieces/nephews, grand nieces/nephews, and siblings). We decided that the beneficiaries would get shares of either 0.025 or 0.005. For those getting the smaller number, the concept was that these beneficiaries either did not need the money or they would not be good stewards of the money. The distribution to these beneficiaries was designed to let them know that they were important to us and not forgotten. (One example is my sibling who does not need any of my money to live a great life). The remainder of the trust (74%) is intended for charitable purposes.

In reflecting on the above allocation model, I'm having second thoughts: Perhaps each family member should be given an equal share, despite some needing more/being closer to us vs. those needing less/being more distant. If everyone got a 0.025 share, that would bring the charitable contributions to 60% of the total. Of course, we could set the relative proportions to individuals/charities at any percentage we wanted. If we continued to want to allocate 26% to relatives, equalizing the distribution would have everyone getting 0.016. Depending on when we die, and under what circumstances, this still could be life-changing money to some of the beneficiaries.

My concern is that if we don't have equal distributions, instead of our gift being considered as an expression of our love, it will be divisive. I guess that even if I am dead, I'd like to remembered as a caring guy, rather than as someone who sowed divisiveness.

Just one more note: Our intention is for the estate to be distributed to beneficiaries at the time of our deaths. We are not interested in paying an institution to control the assets and dole them out for decades. If a spendthrift wastes their money, not our problem.

For those of you who have wrestled with this issue, how have you made allocation decisions to relatives? Have you changed your trust allocation over time? Have you had second thoughts and remorse about your allocation decision?

Many thanks for sharing your insights.
Last edited by Cruise on Tue May 11, 2021 6:30 pm, edited 1 time in total.
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rob
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by rob »

I don't think you can tell from outward appearances the financial situation. We have decided to ignore that or any complex stuff around tax paid value... and just split evenly.

With any luck... the check to the estate lawyer will bounce.... :D
| Rob | Its a dangerous business going out your front door. - J.R.R.Tolkien
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Munir
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by Munir »

My will will splits my estate equally among three adult children even though some need it more than others. You have articulated the reasoning for this quite well.
lazynovice
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by lazynovice »

I don’t really understand penalizing someone for doing well in life. And you don’t know what could happen between now and your death financially to any of the heirs. Some could do better and some could do worse.

It is your money and you can do what you want though.
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Ranunculus
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by Ranunculus »

Another vote for splitting equally. Even those who don’t need the money will find a good use for it, perhaps through their own charitable contributions. One thing we did is to keep the proportionality based lower on the family tree. In other words, rather than naming assorted grand-niece/nephews the split goes equally to our siblings then trickles down from there. If the siblings are still living, they can decide how to divide it among their offspring. If they are not living, the money is divided equally among their heirs. This avoids the bean counting and allows for distributions to unborn heirs.
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by youraveragejoe »

Cruise wrote: Tue May 11, 2021 6:16 pm
My concern is that if we don't have equal distributions, instead of our gift being considered as an expression of our love, it will be divisive. I guess that even if I am dead, I'd like to remembered as a caring guy, rather than as someone who sowed divisiveness.
This is how my grandparents did it. They split the inherence within the will equally amongst the children and grandchildren. Even though one side of the family does the majority of the tending to the grandparents, it was fair and no one can go after each other.

To them, and I agree, the most important thing was to not split up a family over such a thing.
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by runner3081 »

lazynovice wrote: Tue May 11, 2021 6:32 pm I don’t really understand penalizing someone for doing well in life.
Completely agree. I never understood this either.
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by Aged Maduro »

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golf101
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by golf101 »

As a couple without children, we’ve struggled as well. We are giving an equal dollar amount to our siblings and one nephew (there’s only one nephew on my side of the family) and nothing to our 8 other nieces/nephews on my husbands side as we don’t have a close relationship with them. We expect to have a fairly large estate which I would expect 95% of that going to charity after the amounts go to our family. I’m not working hard and saving to make anyone rich after I’m gone, but I believe the amount we are giving will be helpful to our siblings. I did struggle not giving anything to 8 nieces/nephews but we’ve decided it’s the right decision for us at this time. Maybe it will change at some point but that’s what’s in our trust at this time.
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by Lee_WSP »

I'd suggest you do your gifting while alive so you can see how it changes their lives for the good or not. At least up to the gift tax exemption.

If you treat everyone who receives a bequest equally, they have less to gripe about after you're gone. Those who do not receive a bequest may like you less, but if they aren't receiving one, I'd assume it's for good reason.

You may want to consider the very real possibility that one of you will outlive the other by many years. This may or may not change how your plan plays out.
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celia
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by celia »

The last time I read about possible changes in tax laws, the plan was to stick most of it to the “rich” who are already paying the most and lose out on things like tax credits and stimulus checks. I was thinking it would be nice for them to feel like a regular person and be treated like anyone else.

In choosing beneficiaries, it pays to be thoughtful of where the money would go if anyone disclaims their share. In some cases, I would disclaim and in other times not, depending on where my share would go. We tend to not think of this unless we are a beneficiary who is in a possible “disclaim” position. For example, if Uncle “Rich” were to disclaim and it went to his well-to-do kids who are also beneficiaries, maybe he’d be more likely to disclaim if his disclaimed money went to charity.
bluebolt
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by bluebolt »

I would just give an equal amount per stirpes to each sibling. Then it's meaningful and they can do with it as they please.

If there are specific expenses for the (grand) nieces/nephews like education or down payment, I would give those while alive as a gift.
5280Tim
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by 5280Tim »

My wife and I have been discussing this same situation. We have no children, 7 nieces and nephews, but plan to give the majority away to charity when we die. There are a couple of these kids who are older and as of now, I’m sure would squander whatever they inherit. We are still planning to give them an equal share, outlining what we hope they do with it, but not setting any sort of restrictions. It is, after all, a gift. No strings attached. Even outside of how they remember you, equal shares are more likely to remove a lot of potential animosity from their relationships with one another.
Thesaints
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by Thesaints »

I would hold a lottery. Imagine the excitement!
BillWalters
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by BillWalters »

Obviously a personal decision, but there will be a lot of resentment if you penalize success.
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by Minty »

For my own children, I will not penalize success. For cousins. nieces, and nephews, my cousin who is a doctor married to a doctor with no kids and has way more money than me, will get my love, while others who need a few bucks to develop their human potential will get much more.
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spammagnet
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by spammagnet »

Cruise wrote: Tue May 11, 2021 6:16 pm... For those getting the smaller number, the concept was that these beneficiaries either did not need the money or they would not be good stewards of the money. The distribution to these beneficiaries was designed to let them know that they were important to us and not forgotten. ...
Important, but less important or less valued than other beneficiaries? You're fomenting strife between them. Just make it all equal. Any beneficiary who "doesn't need it" can always disclaim the inheritance or donate it. For others that you label as irresponsible, why be judgmental?
ajcp
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by ajcp »

I'm (hopefully) a long way away from this, but as a single person I have thought about it, and had the same thought many others did. I think it's completely fair to give more to those you're closer too - I'd definitely leave more to my siblings and nieces/nephews than to cousins I'm not as close with. But I wouldn't feel comfortable making judgements based on how much people could use the money, and might feel hurt if I was on the receiving end of such a judgement.
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by Jablean »

As an only with an only married to a 1 of 9, I like the per scripts method where the amount is set even at a certain relationship level but doesn't reward families just because they have more kids. But telling a grandkid that I only like you one ninth as much as I like the other grandkid is tough too. Can you give some cash gifts in addition to percentages? Grandma always gives every grandchild $100 for Christmas type thing.
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by Thesaints »

Regardless of what the OP ends up doing, anyone who leaves 74% of their estate to charity is going to be remembered by their surviving relatives.
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by chris319 »

I would hold a lottery. Imagine the excitement!
What a horrible suggestion. If you think you're being funny or clever, it ain't working.

Think of it this way. Take two siblings. One is financially comfortable and the other isn't. If the second sibling is a spendthrift and neglects his/her finances, by giving that sibling more you would be rewarding his/her spendthrift ways and general lack of attention to his/her finances. Is that what you want? It will drive a wedge between the siblings. Sibling #1 will forever feel [(removed) --admin LadyGeek].

My situation is more complicated. My brother and SIL have no kids. If I leave it all to my brother, when he passes it would go to SIL. When she passes it would go to her niece and nephews. They're nice kids, but my assets would wind up in the hands of people who are not even related to me. So the bulk of my estate will go to cousins who are blood relatives of mine. I feel very, very strongly about that.
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by Thesaints »

chris319 wrote: Tue May 11, 2021 10:37 pm
I would hold a lottery. Imagine the excitement!
What a horrible suggestion. If you think you're being funny or clever, it ain't working.

Think of it this way. Take two siblings. One is financially comfortable and the other isn't. If the second sibling is a spendthrift and neglects his/her finances, by giving that sibling more you would be rewarding his/her spendthrift ways and general lack of attention to his/her finances. Is that what you want? It will drive a wedge between the siblings. Sibling #1 will forever feel [(removed) --admin LadyGeek]

My situation is more complicated. My brother and SIL have no kids. If I leave it all to my brother, when he passes it would go to SIL. When she passes it would go to her niece and nephews. They're nice kids, but my assets would wind up in the hands of people who are not even related to me. So the bulk of my estate will go to cousins who are blood relatives of mine. I feel very, very strongly about that.
Good for you! Your brother is going to be especially pleased, not to mention his wife.
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by AlohaJoe »

chris319 wrote: Tue May 11, 2021 10:37 pm
I would hold a lottery. Imagine the excitement!
What a horrible suggestion. If you think you're being funny or clever, it ain't working.
I disagree. It was funny. Your definition of "funny" isn't the universal only definition on the entire planet.
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by sailaway »

With 20 nieces and nephews, more than half still underage, and mostly irresponsible siblings, we are currently leaving family money to our mothers. They created the situation, they can decide how to deal with it. I am hoping that they see all of their grandchildren reach adulthood, which gives us many years yet to ponder the alternatives. For me, it isn't about judging the siblings. It is worrying that at least one on each side of the family would use an inheritance to dig themselves into a deeper hole than they can manage of their own accord.

I just don't think you can thread a needle where an inheritance means someone is important to you and less inheritance doesn't mean less importance, which is what you seem to be striving for. It may make sense to to leave less to those you are less close to, but then to also leave less to certain people either because they don't need it or you don't trust them with it sends a mixed signal.
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by chris319 »

Good for you! Your brother is going to be especially pleased, not to mention his wife.
My brother will get something. I'm not cutting him off completely. If SIL passes first, leaving my brother, it will be back to he lawyer's office to rework everything, being more generous to brother.

SIL is another story. My brother supported her while she got an M.A. degree. After graduating she worked for a few years as a church lady. I can't imagine it paid very much, and it certainly didn't require an M.A. degree. To top it off, she retired at age 55! That church work must have been really burdensome :D Since then, my brother was laid off from his job. So now they have no income and are both too young for Medicare and soc sec. They have investments but no pension. Their fancy-a** AUM financial planner dazzled them with a Monte Carlo simulation. My brother thinks it's a crystal ball and they figure they can retire off the investments. Whatever. Their investment portfolio lacks much of an income component. When SIL is eligible for full soc sec in 9 years, her benefits will be meager because her earnings history is meager.

They are smart people but lacking in savvy, for lack of a better word. My brother was uninformed about Medicare, which tells me that fancy-a** AUM financial planner wasn't doing her job, so I enlightened him.

Now are you ready for the punch line? Their silicon-valley house is worth over $3 million! The mortgage is all paid off. House rich and cash poor. Before brother was laid off they spent money for a brand-new custom kitchen. My SIL has had it easy, to say the least.

They are both grown-ups and capable of making their own decisions, managing their own lives. I'm not going to get involved.
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by Thesaints »

chris319 wrote: Tue May 11, 2021 11:49 pm
Good for you! Your brother is going to be especially pleased, not to mention his wife.
My brother will get something. I'm not cutting him off completely. If SIL passes first, leaving my brother, it will be back to he lawyer's office to rework everything, being more generous to brother.

SIL is another story. My brother supported her while she got an M.A. degree. After graduating she worked for a few years as a church lady. I can't imagine it paid very much, and it certainly didn't require an M.A. degree. To top it off, she retired at age 55! That church work must have been really burdensome :D Since then, my brother was laid off from his job. So now they have no income and are both too young for Medicare and soc sec. They have investments but no pension. Their fancy-a** AUM financial planner dazzled them with a Monte Carlo simulation. My brother thinks it's a crystal ball and they figure they can retire off the investments. Whatever. Their investment portfolio lacks much of an income component. When SIL is eligible for full soc sec in 9 years, her benefits will be meager because her earnings history is meager.

They are smart people but lacking in savvy, for lack of a better word. My brother was uninformed about Medicare, which tells me that fancy-a** AUM financial planner wasn't doing her job, so I enlightened him.

Now are you ready for the punch line? Their silicon-valley house is worth over $3 million! The mortgage is all paid off. House rich and cash poor. Before brother was laid off they spent money for a brand-new custom kitchen. My SIL has had it easy, to say the least.

They are both grown-ups and capable of making their own decisions, managing their own lives. I'm not going to get involved.
I'm not trying to butt in your family affairs, but having no children they could sell their house and move across the bay to something about the same size and be left with a couple of millions (minus cg taxes).
Also, how about working an agreement with your brother in the sense of your money going to your cousins after he passes ? They are his cousins too, right ? Maybe you could set up a trust in that sense.
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by Luckywon »

chris319 wrote: Tue May 11, 2021 10:37 pm
Think of it this way. Take two siblings. One is financially comfortable and the other isn't. If the second sibling is a spendthrift and neglects his/her finances, by giving that sibling more you would be rewarding his/her spendthrift ways and general lack of attention to his/her finances. Is that what you want? It will drive a wedge between the siblings. Sibling #1 will forever feel [(removed) --admin LadyGeek].

My situation is more complicated. My brother and SIL have no kids. If I leave it all to my brother, when he passes it would go to SIL. When she passes it would go to her niece and nephews. They're nice kids, but my assets would wind up in the hands of people who are not even related to me. So the bulk of my estate will go to cousins who are blood relatives of mine. I feel very, very strongly about that.
In your hypothetical with two siblings, you empathize with Sibling #1 feeling "[(removed) --admin LadyGeek]" for getting less than Sibling 2. Yet in your own plan you either don't consider or don't care that penalizing your own sibling for not having kids, in favor of your cousins, will surely make him feel "[(removed) --admin LadyGeek]". :confused
Not suggesting you should do differently. Just pointing out this appears inconsistent.
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by chris319 »

having no children they could sell their house and move across the bay to something about the same size and be left with a couple of millions (minus cg taxes).
I don't think they'd go for that. Besides leaving behind their beautiful new custom kitchen, they would probably feel that they were moving to the slums and balk at the idea. SIL has a "thing" against the city of Tracy, CA. She thinks Tracy is like downtown H*ll.
how about working an agreement with your brother in the sense of your money going to your cousins after he passes ? They are his cousins too, right ? Maybe you could set up a trust in that sense.
I'm not sure that would work. If he receives my estate, what would happen to it when he passes? It would presumably go to SIL. If it's locked up in a trust he will never see the assets, so what's the difference?
in your own plan you either don't consider or don't care that penalizing your own sibling for not having kids, in favor of your cousins, will surely make him feel "[(removed) --admin LadyGeek]". :confused
Not suggesting you should do differently. Just pointing out this appears inconsistent.
Yup. I've thought long and hard about that. He'll just have to deal with it. If he doesn't like it he can come and get me in the afterlife :shock:

I have no idea if my brother has even made a will. Our father died without one. For all I know, I could be dealt out of his estate.
The only person you have to please in life is yourself.
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by miket29 »

chris319 wrote: Tue May 11, 2021 10:37 pm My situation is more complicated. My brother and SIL have no kids. If I leave it all to my brother, when he passes it would go to SIL. When she passes it would go to her niece and nephews. They're nice kids, but my assets would wind up in the hands of people who are not even related to me. So the bulk of my estate will go to cousins who are blood relatives of mine. I feel very, very strongly about that.
I've struggled with how to leave my estate since I have a sibling who remarried to a woman with adult children and have concluded there is no ideal solution. If she outlives him or divorces, what I left goes to people I've never even met.

That said, in the situation above the estate could be left in a trust administered by a corporate trustee (eg. a bank or similar) for use by the brother for what is termed HEMS (Health, Education, Maintenance, and Support). You can look it up online, its a generally recognized term. Once brother passes then the trust can be left to whomever (charity, cousins, etc). Among the catches is this isn't free; you'll lose 1% or so annually in AUM fees. Furthermore the corporate trustee may have a minimum size estate they'll even consider. So not ideal, but an option perhaps worth considering.
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JoeRetire
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by JoeRetire »

Cruise wrote: Tue May 11, 2021 6:16 pm The distribution to these beneficiaries was designed to let them know that they were important to us and not forgotten.
So you also want to let them know that some are more important than others.
My concern is that if we don't have equal distributions, instead of our gift being considered as an expression of our love, it will be divisive. I guess that even if I am dead, I'd like to remembered as a caring guy, rather than as someone who sowed divisiveness.
Do you love your heirs unevenly and thus wish to express your love by giving uneven amounts?

It's a reasonable concern. And since you get to distribute the inheritance any way you please, doing it in hopes of how you would wish to be remembered is reasonable.

Remember, once you are gone, you won't know how you are actually remembered. It may be that you are remembered as the one who cared more for a charity than for their own family.

I think you are over-thing this. Do whatever feels right to you.

Our wills give everything equally to our two children. We have no desire to try and assess their needs, their ability to be a good stewart of their inheritance, or their relative closeness.
Just remember: it's not a lie if you believe it.
Stubbie
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by Stubbie »

Yes, unequal shares will probably turn into a devisive issue. Money and emotions can be a volatile mixture.
We are in a similar situation to yours. Most of our money is going to charity, the remainder of the estate will be split equally between 17 nieces and nephews. Do some "deserve" it more than others? Absolutely. Do some not "deserve" anything at all? Unfortunately, yes. However, we would prefer to be remembered as the generous aunt and uncle who thought of them in life and death. Not the jerks who are being vindictive from the grave. Of course, if I die first, my spouse might change everything based on her new life situation.
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by bluebolt »

chris319 wrote: Tue May 11, 2021 11:49 pm My brother will get something. I'm not cutting him off completely. If SIL passes first, leaving my brother, it will be back to he lawyer's office to rework everything, being more generous to brother.
Will you change it again if he gets remarried?
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by tigermilk »

No children, but we currently have one set of living parents, siblings on both sides, and nieces/nephews on both. As an engineer, I made it overly complicated for whoever has to process the will. At time of passing, our $$$ will be divided up as shares with allocations of

Parents - 5 shares (per couple, not per person)
Siblings - 3 shares per person
Nieces/nephews - 1 share per person

Process is simply to add up the total number of shares based on living relatives at time of our demise, get the per share price, and allocate per above. As of today that is 1 set of parents (5 shares), 6 siblings (6×3=18 shares), and 8 of their children (8 total shares) for a total of 31 shares outstanding, Say we had $3.1 million in assets then the share price is $100k. Each niece/nephew gets that, brothers and sisters go home with $300k, and my parents get $500k. If my parents both die before me and no one else does, the outstanding shares drop to 26, and the share price increases to $119k.

On my side I have 4 brothers and sisters and 6 nieces and nephews. Wife has 2 brothers and 2 nieces/nephews. Is it fair in terms of familial split? No. But it is fair based on a per capita basis.
chris319
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by chris319 »

bluebolt wrote: Wed May 12, 2021 6:29 am
chris319 wrote: Tue May 11, 2021 11:49 pm My brother will get something. I'm not cutting him off completely. If SIL passes first, leaving my brother, it will be back to he lawyer's office to rework everything, being more generous to brother.
Will you change it again if he gets remarried?
Sometimes you don't cross a bridge until you get to it.
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by JackoC »

Cruise wrote: Tue May 11, 2021 6:16 pm I know that this is an entirely personal decision, but one facing everyone who has an estate.

In reflecting on the above allocation model, I'm having second thoughts: Perhaps each family member should be given an equal share, despite some needing more/being closer to us vs. those needing less/being more distant.

My concern is that if we don't have equal distributions, instead of our gift being considered as an expression of our love, it will be divisive.
Any difference based on 'who is doing well' (penalizing them for it) and who is 'closer' among people the same distance on the family tree...you can pretty much count on that causing a degree of divisiveness IMO. Whether it totally blows up relationships or the people involved just get a bit chillier to one other depends on the people involved.

We have kids so it's *relatively* easy to avoid this problem: we'll just split equally among them. People are generally used to the idea of even splits among children, with all other relatives 'cut out', regardless of most other factors ('need', 'degree of responsibility', how many kids/grandkids the kids each have by the time we die, etc.), subject to exceptions like true special needs, chemical dependence, decades long estrangement, etc. but those don't apply in our case.

OP case is tougher in this respect because there's less of an accepted standard for people without kids. But I think if in that situation I'd steer for the most 'conventional looking' alternative, if the outcome is not truly distasteful to OP. So evenly to siblings, per stirpes as to nieces, grand nephews for example, not 'perfectly fair' but seldom are things 'fair' from the perspective of everyone involved. A simple conventional/traditional solution though has the advantage that disappointed people can say 'OK they just left it on autopilot I guess' and be less likely to interpret it as a negative judgement from the grave. That's what really upsets people. And some people *want* to do that to heirs, but doesn't seem OP is one of those people.

I can see this from the other side, coming. I guess my childless brother, who has done OK though not as fortunate as I've been, not only won't give me anything but probably not my kids. At least some will go to kids of a friend of his, he's said so (while not mentioning anything going to my kids). Our branch of the family does not 'need' the money, and he's not in my will. Then again there's family and there's other people. People have varying conscious or professed attitudes toward this distinction, and sometimes subconscious attitudes different than their conscious or professed ones. If it turns out as expected I can't guarantee zero negative feeling on my part, though I certainly won't say it out loud, in real life. Not complaining, just making the point that *total* absence of negative feeling might not be a realistic goal either.
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by RadAudit »

Cruise wrote: Tue May 11, 2021 6:16 pm how have you made allocation decisions to relatives? Have you changed your trust allocation over time? Have you had second thoughts and remorse about your allocation decision?
Condolences. Money is suppose to help alleviate concerns, not make them.

I was executor of one estate and a trustee of an educational trust. (Very small estate / trust.) Here's what I learned. No matter how well a trust is written, and you're following the trust as written, someone is going to say "Dad couldn't have meant that." Trans: I didn't get enough. You're mean.

If you leave something in a will, no matter how large or small or equally divided, some folks won't send a thank you note to the surviving member of the family. Mom left small CDs to her sisters and SIL. Some were thrilled beyond belief over these small gifts. Haven't heard a word from the rest of them.

And finally, from BHs, I've learned that no matter how much you leave, it'll be gone in two or three generations. So, so much for using a legacy to try to be remembered fondly by anyone.

So, I decided to leave my estate - what's left of it - in trusts per stirpes to the two kids. If the grandkids don't get what they consider a fair share, they'll know whom to blame. If the kids want to share their part of the estate with their spouses and their kids, it's their decision. At least they'll have a chance to decide

As for leaving money to cousins, I've got too many and couldn't find them if I looked. If I was to give money to them, I'd give the money while I was alive. And, as for the grandkids, I am thinking I can help with their educations. Depends on when my DW dies. (I assume I'll go first). Now all of my plans could be changed by whomever gets to the money first. Can't help that.
Last edited by RadAudit on Wed May 12, 2021 10:06 am, edited 2 times in total.
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by Carousel »

Cruise wrote: Tue May 11, 2021 6:16 pm On our first effort to allocate inheritances, we ended up with a distribution that would give 26% of the estate to various family member (nieces/nephews, grand nieces/nephews, and siblings). We decided that the beneficiaries would get shares of either 0.025 or 0.005. For those getting the smaller number, the concept was that these beneficiaries either did not need the money or they would not be good stewards of the money.
You have three categories of relatives: siblings, nieces/neph, grand nieces/neph. I would not allocate different amts of money to individuals within a single category. It will create division, and that creates a problem for all of the people who survive you.
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by delamer »

tigermilk wrote: Wed May 12, 2021 7:07 am No children, but we currently have one set of living parents, siblings on both sides, and nieces/nephews on both. As an engineer, I made it overly complicated for whoever has to process the will. At time of passing, our $$$ will be divided up as shares with allocations of

Parents - 5 shares (per couple, not per person)
Siblings - 3 shares per person
Nieces/nephews - 1 share per person

Process is simply to add up the total number of shares based on living relatives at time of our demise, get the per share price, and allocate per above. As of today that is 1 set of parents (5 shares), 6 siblings (6×3=18 shares), and 8 of their children (8 total shares) for a total of 31 shares outstanding, Say we had $3.1 million in assets then the share price is $100k. Each niece/nephew gets that, brothers and sisters go home with $300k, and my parents get $500k. If my parents both die before me and no one else does, the outstanding shares drop to 26, and the share price increases to $119k.

On my side I have 4 brothers and sisters and 6 nieces and nephews. Wife has 2 brothers and 2 nieces/nephews. Is it fair in terms of familial split? No. But it is fair based on a per capita basis.
Seems like that would work for the OP.

Fair often isn’t binary, in that it isn’t obvious that one action is clearly right and the other is clearly wrong.

In the unlikely event that both of our adult children predecease me and my husband, my inheritance from my parents will go to charity. The rest of our estate will go to my husband’s extended family. I’m sure that my parents wouldn’t have wanted their money to end up with my in-laws (no reflection on the in-laws, who my parents met just a few times).

One of our children got married this year, and I’m mulling over what, if any, changes I want to make to the inheritance (or other assets) disposition as a result. Maybe no changes until there are grandchildren? :D
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by Ramjet »

chris319 wrote: Tue May 11, 2021 10:37 pm
I would hold a lottery. Imagine the excitement!
What a horrible suggestion. If you think you're being funny or clever, it ain't working.

Think of it this way. Take two siblings. One is financially comfortable and the other isn't. If the second sibling is a spendthrift and neglects his/her finances, by giving that sibling more you would be rewarding his/her spendthrift ways and general lack of attention to his/her finances. Is that what you want? It will drive a wedge between the siblings. Sibling #1 will forever feel [(removed) --admin LadyGeek].

My situation is more complicated. My brother and SIL have no kids. If I leave it all to my brother, when he passes it would go to SIL. When she passes it would go to her niece and nephews. They're nice kids, but my assets would wind up in the hands of people who are not even related to me. So the bulk of my estate will go to cousins who are blood relatives of mine. I feel very, very strongly about that.
Why are you so offended?
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by vitaflo »

Cruise wrote: Tue May 11, 2021 6:16 pm My concern is that if we don't have equal distributions, instead of our gift being considered as an expression of our love, it will be divisive. I guess that even if I am dead, I'd like to remembered as a caring guy, rather than as someone who sowed divisiveness.
Every estate I've seen with unequal distributions caused divisiveness. Usually aimed at the deceased person (playing favorites). It's acceptable to give different amounts to siblings vs 3rd cousins, but if two people are at the same level on the family tree, they should probably get equal amounts lest it cause contention.

I also agree with others on not punishing those who've "done well". You don't know what their finances really are, nor do you know if they'll have some debilitating illness or accident after you pass where they could use your inheritance.
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Re: Trying to Decide on Inheritance Allocation: Who gets What?

Post by Flyer24 »

Thread has run its course. This is a family relationship issue which is off-topic for this forum.
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