100% of your estate to your spouse and then kids?
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100% of your estate to your spouse and then kids?
My spouse and I currently have things set up so our primary beneficiary is each other. After that (per our wills) everything would go to our kids, next in line is a couple family members and finally per stripes.
However, as our assets grow, I'm wondering if we should set up it as 100% or distribute our estate to more family and friends. I realize it's a very personal decision but am curious to hear from others on here as my spouse and I decide what we want to do.
EDIT: If you care to share as well, is the inheritance large enough to have your kids be financially independent?
However, as our assets grow, I'm wondering if we should set up it as 100% or distribute our estate to more family and friends. I realize it's a very personal decision but am curious to hear from others on here as my spouse and I decide what we want to do.
EDIT: If you care to share as well, is the inheritance large enough to have your kids be financially independent?
Last edited by ThankYouJack on Mon Dec 21, 2020 12:27 pm, edited 1 time in total.
- cheese_breath
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Re: 100% of your estate to your spouse and then kids?
DW's and I my will, and the trust specify everything goes to the spouse first and to the descendants next. Nobody else. DW is deceased now, so everything went to me. But the wills and trust specify each of us will consider the other's children as his/her children. Therefore, in addition to my natural children DWs children will also be treated as my descendants when I go.
The surest way to know the future is when it becomes the past.
Re: 100% of your estate to your spouse and then kids?
If it's community property, can you really give it to a non-spouse without spouse's consent?
When you divorce, you don't get to decide where all of the community property goes. Why should this be different when you die?
When you divorce, you don't get to decide where all of the community property goes. Why should this be different when you die?
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Re: 100% of your estate to your spouse and then kids?
Looks like in most states it's fine - https://www.investopedia.com/ask/answer ... ritira.asp
Re: 100% of your estate to your spouse and then kids?
Maybe if our estate was upper 8 or 9 figures I would consider this but I doubt it will ever reach that level.
Re: 100% of your estate to your spouse and then kids?
For us, the size of our estate doesn't matter. We have the same distribution plan now as we did back when we had little.ThankYouJack wrote: ↑Mon Dec 21, 2020 11:23 amHowever, as our assets grow, I'm wondering if we should set up it as 100% or distribute our estate to more family and friends.
If my wife and I were to pass today, our sons would be well off. At their ages, I suppose they could be financially independent if they chose to be. But I have no doubt they would continue to work.
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Re: 100% of your estate to your spouse and then kids?
You did not say whether your spouse is also the parent of your kids and I did not want to assume, there are many blended families. Assuming they are, then I think that's fine.
Re: 100% of your estate to your spouse and then kids?
I'm not asking about accounts that have beneficiary designation. And of course IRA's were never joint accounts to begin with. What about passing true community property thru a will to a non-spouse?ThankYouJack wrote: ↑Mon Dec 21, 2020 1:13 pmLooks like in most states it's fine - https://www.investopedia.com/ask/answer ... ritira.asp
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Re: 100% of your estate to your spouse and then kids?
You can only pass your separate property when you die. Death ends the community. If you leave spouse everything, you are only leaving spouse your half of the community property.gwe67 wrote: ↑Mon Dec 21, 2020 1:30 pmI'm not asking about accounts that have beneficiary designation. And of course IRA's were never joint accounts to begin with. What about passing true community property thru a will to a non-spouse?ThankYouJack wrote: ↑Mon Dec 21, 2020 1:13 pmLooks like in most states it's fine - https://www.investopedia.com/ask/answer ... ritira.asp
Re: 100% of your estate to your spouse and then kids?
We did it all to spouse.
If you have enough assets that federal (or state if applicable) inheritance taxes will be due may want to do some estate planning to minimize that.
If you have enough assets that federal (or state if applicable) inheritance taxes will be due may want to do some estate planning to minimize that.
Re: 100% of your estate to your spouse and then kids?
Thanks for the info. For clarification, let's say that a couple owns a nice widget, bought while married. Wife's will states that widget goes to a friend upon death, but husband objects, claiming that half of widget is owned by him and his half cannot be given away without his consent. What happens upon death of wife?Lee_WSP wrote: ↑Mon Dec 21, 2020 1:35 pmYou can only pass your separate property when you die. Death ends the community. If you leave spouse everything, you are only leaving spouse your half of the community property.gwe67 wrote: ↑Mon Dec 21, 2020 1:30 pmI'm not asking about accounts that have beneficiary designation. And of course IRA's were never joint accounts to begin with. What about passing true community property thru a will to a non-spouse?ThankYouJack wrote: ↑Mon Dec 21, 2020 1:13 pmLooks like in most states it's fine - https://www.investopedia.com/ask/answer ... ritira.asp
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Re: 100% of your estate to your spouse and then kids?
Depends on the state laws. But in general, the probate court will attempt to honor decedent's wishes; but you can't devise what isn't yours.gwe67 wrote: ↑Mon Dec 21, 2020 1:53 pm
Thanks for the info. For clarification, let's say that a couple owns a nice widget, bought while married. Wife's will states that widget goes to a friend upon death, but husband objects, claiming that half of widget is owned by him and his half cannot be given away without his consent. What happens upon death of wife?
This article may shed insight.
https://family.findlaw.com/marriage/wha ... 20a%20will.
See also this quote re: CA
https://www.aaepa.com/2017/03/basics-es ... -property/At death, each spouse has a right to transfer their one-half of the community property. However, if the decedent spouse does not choose to do so, all of the community property becomes the property of the survivor. Again, this discussion is based on California.
And this re TX
https://www.deedclaim.com/texas/community-property/On death the death of one spouse, a couple’s community property is divided equally. The surviving spouse gets to keep his or her half. The deceased spouse’s half is transferred through his or her will or, if there is no will, as provided in the Texas intestacy statutes.
Re: 100% of your estate to your spouse and then kids?
We have a trust that splits into 2 upon the death of a spouse. The half of the deceased goes into an irrevocable trust for the kids. Surviving spouse can use it for basic needs if needed and for the kids, but otherwise isn't supposed to use it. Mainly protects some money for the kids if the surviving spouse remarries, though of course not a perfect solution.
- Steelersfan
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Re: 100% of your estate to your spouse and then kids?
Everything to the spouse via beneficiary designations and will. If she's not around, everything's divided equally among the (adult) kids via beneficiary designations and will. If the one or more of the kids aren't around, their share goes to their descendants, per stirpes.
- jeffyscott
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Re: 100% of your estate to your spouse and then kids?
My spouse and I also currently have things set up so our primary beneficiary is each other and after that everything would go to our kids, equally divided. Nearly all assets are in accounts with beneficiaries designated, so the will only affects the house and about $20-30K at this time. All we have for a will is a standard form that our state allows you to fill in, since beneficiaries are the same as they would be without a will. We have no beneficiaries designated beyond our own adult children.
We have no desire to distribute our estate to more family or friends. If our grandchild were an adult, we might consider designating something there. Before the changes to inherited IRA rules, I had considered having each of us bypass each other with the TIRA money and have that portion go directly to the kids, but instead of actually doing that, decided that disclaiming can be considered at the time.
The inheritance will not large enough for the kids be financially independent (well maybe it will be for the one who spends nothing), but will likely provide a substantial boost to their retirement assets and/or allow them to retire early. All of them want to retire early (in their 50s), as their parents did, and we may begin regular early distributions as they reach that point in order to help them achieve that.
We did make an early distribution to one for a house down payment. We changed the percentages on one Roth account to balance this out. The other kids also do have the option to take those funds as early inheritance, if they ever want to.
We have no desire to distribute our estate to more family or friends. If our grandchild were an adult, we might consider designating something there. Before the changes to inherited IRA rules, I had considered having each of us bypass each other with the TIRA money and have that portion go directly to the kids, but instead of actually doing that, decided that disclaiming can be considered at the time.
The inheritance will not large enough for the kids be financially independent (well maybe it will be for the one who spends nothing), but will likely provide a substantial boost to their retirement assets and/or allow them to retire early. All of them want to retire early (in their 50s), as their parents did, and we may begin regular early distributions as they reach that point in order to help them achieve that.
We did make an early distribution to one for a house down payment. We changed the percentages on one Roth account to balance this out. The other kids also do have the option to take those funds as early inheritance, if they ever want to.
- bhwabeck3533
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Re: 100% of your estate to your spouse and then kids?
Cheese....we're on the same page. My current DW (as opposed to my former W) have seven children, four mine and three hers. We have the same estate plan, 100% to each other first, then divide by seven when we are both gone.cheese_breath wrote: ↑Mon Dec 21, 2020 11:42 am DW's and I my will, and the trust specify everything goes to the spouse first and to the descendants next. Nobody else. DW is deceased now, so everything went to me. But the wills and trust specify each of us will consider the other's children as his/her children. Therefore, in addition to my natural children DWs children will also be treated as my descendants when I go.
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Re: 100% of your estate to your spouse and then kids?
Have you talked to legal counsel about a trust (estate planning) that accommodates estate asset growth and changing family dynamics?ThankYouJack wrote: ↑Mon Dec 21, 2020 11:23 am My spouse and I currently have things set up so our primary beneficiary is each other. After that (per our wills) everything would go to our kids, next in line is a couple family members and finally per stripes.
However, as our assets grow, I'm wondering if we should set up it as 100% or distribute our estate to more family and friends. I realize it's a very personal decision but am curious to hear from others on here as my spouse and I decide what we want to do.
EDIT: If you care to share as well, is the inheritance large enough to have your kids be financially independent?
j
- lthenderson
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Re: 100% of your estate to your spouse and then kids?
+1decapod10 wrote: ↑Mon Dec 21, 2020 5:25 pm We have a trust that splits into 2 upon the death of a spouse. The half of the deceased goes into an irrevocable trust for the kids. Surviving spouse can use it for basic needs if needed and for the kids, but otherwise isn't supposed to use it. Mainly protects some money for the kids if the surviving spouse remarries, though of course not a perfect solution.
My parent's trust is set up in this manner and half of their state is now in an irrevocable trust for my brother and I. We have set up our trust to do the same thing for our two children as well. We also have age limits at which they can access the full trust. Before that they can only access it for education and living expenses.
Re: 100% of your estate to your spouse and then kids?
Who is the trustee? Who decides whether the surviving spouse is withdrawing money for "basic needs and for the kids?" Almost any purchase can be justified as being "for the kids"... "I bought a vacation home so I can spend quality time with the kids..." I'm sure you will agree that these words can be subject to interpretation, especially if the the person spending the money is the same person who gets to decide.decapod10 wrote: ↑Mon Dec 21, 2020 5:25 pm We have a trust that splits into 2 upon the death of a spouse. The half of the deceased goes into an irrevocable trust for the kids. Surviving spouse can use it for basic needs if needed and for the kids, but otherwise isn't supposed to use it. Mainly protects some money for the kids if the surviving spouse remarries, though of course not a perfect solution.
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Re: 100% of your estate to your spouse and then kids?
Thanks everyone, based on the feedback and what I was leaning towards I'll plan to keep things the way they are. Part of me feels like a little greedy with the setup since we have some friends and family who could use a little extra money (maybe a lower 5 figure amount). But then again, it's not like I'm dealing with unlimited money, so I think my main goal is to make sure my wife is FI if I die unexpectedly. And if we both died, maybe our kids wouldn't be FI, but their legal guardian would have more than enough to support them, they'd have plenty for college and a very solid nest egg.
What sort of change in family dynamics - like a divorce and remarriage? If a will states To my wife / husband the person's full name, it seems like that beneficiary would be disregarded if the couple is no longer married? But I would think most people update their wills after a divorce. It seems like a good idea to review one's will every ~5 years or major life changes just incase things need to be modified.
We have a trust under will set up by our attorney that we're both happy with. However, we're planning to make a few tweaks (like swap backup executors and trustees) so will seek further legal counsel to update it. But I wanted to get feedback with a couple things on here first to give me a better understanding.Sandtrap wrote: ↑Tue Dec 22, 2020 8:29 amHave you talked to legal counsel about a trust (estate planning) that accommodates estate asset growth and changing family dynamics?ThankYouJack wrote: ↑Mon Dec 21, 2020 11:23 am My spouse and I currently have things set up so our primary beneficiary is each other. After that (per our wills) everything would go to our kids, next in line is a couple family members and finally per stripes.
However, as our assets grow, I'm wondering if we should set up it as 100% or distribute our estate to more family and friends. I realize it's a very personal decision but am curious to hear from others on here as my spouse and I decide what we want to do.
EDIT: If you care to share as well, is the inheritance large enough to have your kids be financially independent?
j
What sort of change in family dynamics - like a divorce and remarriage? If a will states To my wife / husband the person's full name, it seems like that beneficiary would be disregarded if the couple is no longer married? But I would think most people update their wills after a divorce. It seems like a good idea to review one's will every ~5 years or major life changes just incase things need to be modified.
- Sandtrap
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Re: 100% of your estate to your spouse and then kids?
Great points.ThankYouJack wrote: ↑Tue Dec 22, 2020 9:16 am Thanks everyone, based on the feedback and what I was leaning towards I'll plan to keep things the way they are. Part of me feels like a little greedy with the setup since we have some friends and family who could use a little extra money (maybe a lower 5 figure amount). But then again, it's not like I'm dealing with unlimited money, so I think my main goal is to make sure my wife is FI if I die unexpectedly. And if we both died, maybe our kids wouldn't be FI, but their legal guardian would have more than enough to support them, they'd have plenty for college and a very solid nest egg.
We have a trust under will set up by our attorney that we're both happy with. However, we're planning to make a few tweaks (like swap backup executors and trustees) so will seek further legal counsel to update it. But I wanted to get feedback with a couple things on here first to give me a better understanding.Sandtrap wrote: ↑Tue Dec 22, 2020 8:29 amHave you talked to legal counsel about a trust (estate planning) that accommodates estate asset growth and changing family dynamics?ThankYouJack wrote: ↑Mon Dec 21, 2020 11:23 am My spouse and I currently have things set up so our primary beneficiary is each other. After that (per our wills) everything would go to our kids, next in line is a couple family members and finally per stripes.
However, as our assets grow, I'm wondering if we should set up it as 100% or distribute our estate to more family and friends. I realize it's a very personal decision but am curious to hear from others on here as my spouse and I decide what we want to do.
EDIT: If you care to share as well, is the inheritance large enough to have your kids be financially independent?
j
What sort of change in family dynamics - like a divorce and remarriage? If a will states To my wife / husband the person's full name, it seems like that beneficiary would be disregarded if the couple is no longer married? But I would think most people update their wills after a divorce. It seems like a good idea to review one's will every ~5 years or major life changes just incase things need to be modified.
Also, ask legal counsel regarding "trust protectors", if you haven't already.
j
- cheese_breath
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Re: 100% of your estate to your spouse and then kids?
I guess we former Michinganders think alike.bhwabeck3533 wrote: ↑Tue Dec 22, 2020 7:50 amCheese....we're on the same page. My current DW (as opposed to my former W) have seven children, four mine and three hers. We have the same estate plan, 100% to each other first, then divide by seven when we are both gone.cheese_breath wrote: ↑Mon Dec 21, 2020 11:42 am DW's and I my will, and the trust specify everything goes to the spouse first and to the descendants next. Nobody else. DW is deceased now, so everything went to me. But the wills and trust specify each of us will consider the other's children as his/her children. Therefore, in addition to my natural children DWs children will also be treated as my descendants when I go.
The surest way to know the future is when it becomes the past.
Re: 100% of your estate to your spouse and then kids?
The surviving spouse is the trustee. Of course it's not perfect, and "who decides" is a weakness in most trust situations, but at least it does give the kids some legal recourse and also creates some friction if someone is trying to loot the kids' trust. These are the scenarios that I've considered:mptfan wrote: ↑Tue Dec 22, 2020 9:06 amWho is the trustee? Who decides whether the surviving spouse is withdrawing money for "basic needs and for the kids?" Almost any purchase can be justified as being "for the kids"... "I bought a vacation home so I can spend quality time with the kids..." I'm sure you will agree that these words can be subject to interpretation, especially if the the person spending the money is the same person who gets to decide.decapod10 wrote: ↑Mon Dec 21, 2020 5:25 pm We have a trust that splits into 2 upon the death of a spouse. The half of the deceased goes into an irrevocable trust for the kids. Surviving spouse can use it for basic needs if needed and for the kids, but otherwise isn't supposed to use it. Mainly protects some money for the kids if the surviving spouse remarries, though of course not a perfect solution.
1. Surviving spouse doesn't remarry - In this case, the trust will likely be a non-issue. Neither me or my wife are going to try to screw over our kids, lol. Even if she really did want to buy a vacation home with the money, I don't fundamentally have a problem with that since it's her money after all, but I don't think that would happen. And the kids would get the house after she dies anyway.
2. Surviving spouse doesn't remarry but develops dementia or otherwise starts to act erratically - In this scenario, I think it makes it easier for the kids at least to protect their half without having to prove complete mental incapacity (which can be difficult honestly even when the parent actually is incapactiated).
3. Surviving spouse remarries and the new spouse tries to loot the kids trust fund - Again, the trust at least gives the kids some legal recourse here to protect their half. It also does not allow the surviving spouse and the new Mr/Mrs to "write the kids out of the will" so to speak. If someone unscrupulous is trying to take advantage of the surviving spouse, hopefully they will just be happy taking half rather than going into full blown court battles trying to raid the kids' half.
Ultimately, the kids may not be able to do anything, but I think the trust at least gives some protection.
Re: 100% of your estate to your spouse and then kids?
At least in some states (NJ I know it is) it's possible for the beneficiary spouse to also be the trustee in such a 'Spousal Lifetime Access Trust' arrangement. The trustee will generally be permitted to withdraw for purposes of “health, education, maintenance and support", 'HEMS', which is the usual standard, not 'basic needs'. The risk is that the pattern of withdrawals is claimed by the IRS, after beneficiary/trustee (B/T) death (a 'real time' problem with the IRS is extremely unlikely) to have made the trust assets essentially the property of the B/T, to therefore be included in B/T's taxable estate. Cases in tax court though have given wide latitude to trustees to define 'reasonable' HEMS, with burden of proof on plaintiff to show they aren't, with some reference to previous lifestyle. So buying a vacation home might or might not cause a problem depending on previous spending pattern, but it's not a debate about 'basic needs' unless the trust were to say that specifically. Similarly with concerns about a B/T 'looting' the trust to the detriment of other beneficiaries, trustee will be in the driver's seat unless it's a clear violation (transfers mutual fund shares from the trust to new spouse, etc). But if you don't trust the person, you might not want to make them 'trustee'.mptfan wrote: ↑Tue Dec 22, 2020 9:06 amWho is the trustee? Who decides whether the surviving spouse is withdrawing money for "basic needs and for the kids?" Almost any purchase can be justified as being "for the kids"... "I bought a vacation home so I can spend quality time with the kids..." I'm sure you will agree that these words can be subject to interpretation, especially if the the person spending the money is the same person who gets to decide.decapod10 wrote: ↑Mon Dec 21, 2020 5:25 pm We have a trust that splits into 2 upon the death of a spouse. The half of the deceased goes into an irrevocable trust for the kids. Surviving spouse can use it for basic needs if needed and for the kids, but otherwise isn't supposed to use it. Mainly protects some money for the kids if the surviving spouse remarries, though of course not a perfect solution.
B/T may also have the ability to withdraw additional amounts at her complete discretion, up to 5% a year (including HEMS) is a customary figure. It's assumed the amount over HEMS that B/T has the right to withdraw as of death will be deemed part of her estate so the right may only be exercisable a few days a year so it won't be included if B/T dies on other days.
Disclaimers: a) consult a lawyer if actually thinking of doing this b) but don't imagine a lawyer can 100% guarantee future IRS actions or tax court case outcomes on even slightly different facts than previous ones.
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Re: 100% of your estate to your spouse and then kids?
Interesting. I just read about it briefly and not sure I'd want to go that route. I would trust the trustee with my life. She's also named as the legal guardian of our children. I don't think I'd want a trust protector looking over her or being able to fire her.
Re: 100% of your estate to your spouse and then kids?
Yes, officially we have the HEMS standard, I don't believe there is any ability for discretionary withdrawals otherwise. Ultimately I figure its like a security system for our kids inheritance. It makes it a hassle for people to try to take the money, and hopefully it's enough of a hassle that people won't try or can only get part of it, but otherwise if someone is smart and persistent enough they can probably get it ultimately. But I'd rather make them at least jump through some hoops first.JackoC wrote: ↑Tue Dec 22, 2020 10:32 amAt least in some states (NJ I know it is) it's possible for the beneficiary spouse to also be the trustee in such a 'Spousal Lifetime Access Trust' arrangement. The trustee will generally be permitted to withdraw for purposes of “health, education, maintenance and support", 'HEMS', which is the usual standard, not 'basic needs'. The risk is that the pattern of withdrawals is claimed by the IRS, after beneficiary/trustee (B/T) death (a 'real time' problem with the IRS is extremely unlikely) to have made the trust assets essentially the property of the B/T, to therefore be included in B/T's taxable estate. Cases in tax court though have given wide latitude to trustees to define 'reasonable' HEMS, with burden of proof on plaintiff to show they aren't, with some reference to previous lifestyle. So buying a vacation home might or might not cause a problem depending on previous spending pattern, but it's not a debate about 'basic needs' unless the trust were to say that specifically. Similarly with concerns about a B/T 'looting' the trust to the detriment of other beneficiaries, trustee will be in the driver's seat unless it's a clear violation (transfers mutual fund shares from the trust to new spouse, etc). But if you don't trust the person, you might not want to make them 'trustee'.mptfan wrote: ↑Tue Dec 22, 2020 9:06 amWho is the trustee? Who decides whether the surviving spouse is withdrawing money for "basic needs and for the kids?" Almost any purchase can be justified as being "for the kids"... "I bought a vacation home so I can spend quality time with the kids..." I'm sure you will agree that these words can be subject to interpretation, especially if the the person spending the money is the same person who gets to decide.decapod10 wrote: ↑Mon Dec 21, 2020 5:25 pm We have a trust that splits into 2 upon the death of a spouse. The half of the deceased goes into an irrevocable trust for the kids. Surviving spouse can use it for basic needs if needed and for the kids, but otherwise isn't supposed to use it. Mainly protects some money for the kids if the surviving spouse remarries, though of course not a perfect solution.
B/T may also have the ability to withdraw additional amounts at her complete discretion, up to 5% a year (including HEMS) is a customary figure. It's assumed the amount over HEMS that B/T has the right to withdraw as of death will be deemed part of her estate so the right may only be exercisable a few days a year so it won't be included if B/T dies on other days.
Disclaimers: a) consult a lawyer if actually thinking of doing this b) but don't imagine a lawyer can 100% guarantee future IRS actions or tax court case outcomes on even slightly different facts than previous ones.
Re: 100% of your estate to your spouse and then kids?
This is how my will is currently set up; however, I'm concerned about my spouse remarrying if I die first and pre-deceasing the new spouse and the kids getting disinherited. I'm assuming I can't do anything about the home since it's joint with right of survivorship, so I'm considering splitting my estate into two and leaving half outright to spouse and other half in trust to kids. Half of the investible assets is in an IRA and half is in a taxable brokerage. What are the pros and cons of leaving the IRA to the spouse versus the kids or vice versa?
- jeffyscott
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Re: 100% of your estate to your spouse and then kids?
Spouse can make the IRA their own and only have to take RMDs. Kids would have to withdraw all funds from an inherited IRA within 10 years.
Re: 100% of your estate to your spouse and then kids?
One possible consideration is that your taxable assets could get a step up in basis twice if they pass first to your spouse and then to your spouse's heirs. If they go to your desired remainder beneficiaries first, they will not get an intermediate step up before the death of the second spouse.ThankYouJack wrote: ↑Mon Dec 21, 2020 11:23 am
However, as our assets grow, I'm wondering if we should set up it as 100% or distribute our estate to more family and friends.
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Re: 100% of your estate to your spouse and then kids?
My wife and I have agreed to give 25% of our savings to charity. This will be accomplished through beneficiary designations. Our two adult children will inherit equal shares of our remaining assets. If we, and both of our children, should happen to die near in time to each other, as in a plane crash, our siblings and our children's spouses will inherit equal shares of our remaining assets.
Re: 100% of your estate to your spouse and then kids?
Thanks. That's what I thought, but I was wondering if there was anything else I missed, like the double step-up of husband inheriting and then kids inheriting; however, I'm not counting on my kids inheriting from my husband since his second wife could outlive him and disinherit them.jeffyscott wrote: ↑Tue Nov 30, 2021 5:11 pm Spouse can make the IRA their own and only have to take RMDs. Kids would have to withdraw all funds from an inherited IRA within 10 years.
Re: 100% of your estate to your spouse and then kids?
Losing out on the step up one of the costs of a protection trust.remomnyc wrote: ↑Tue Nov 30, 2021 6:54 pmThanks. That's what I thought, but I was wondering if there was anything else I missed, like the double step-up of husband inheriting and then kids inheriting; however, I'm not counting on my kids inheriting from my husband since his second wife could outlive him and disinherit them.jeffyscott wrote: ↑Tue Nov 30, 2021 5:11 pm Spouse can make the IRA their own and only have to take RMDs. Kids would have to withdraw all funds from an inherited IRA within 10 years.
That said, I usually recommend just leaving the spouse the IRAs for several reasons including tax efficiency and overall fairness.
Re: 100% of your estate to your spouse and then kids?
Single parent, so in a different situation, but I'm surprised how few people would leave something to friends & community (assuming there is enough for spouse and children, which, with life insurance, seems like a given).
A factor nobody has mentioned: in leaving bequests to friends and community organizations like our church, part of my thinking has been about honoring the web of connection that will hold my son after I am gone. I think bequests can express the depth of relationships, and even solidify/concretize that meaning after someone has passed. This seems to be to be of value to my son's life. I want our community to continue to feel and act on the vitality of the connections I've formed. And I want my friends, church, etc. to continue to feel invested and connected in his growth. Not that they wouldn't, if I had no money to share . . in fact, they would, and likewise, if I died, there *would* be money to share, so that's how I structured my estate.
It might be that I see things that way because I am a single parent. Interesting thread.
A factor nobody has mentioned: in leaving bequests to friends and community organizations like our church, part of my thinking has been about honoring the web of connection that will hold my son after I am gone. I think bequests can express the depth of relationships, and even solidify/concretize that meaning after someone has passed. This seems to be to be of value to my son's life. I want our community to continue to feel and act on the vitality of the connections I've formed. And I want my friends, church, etc. to continue to feel invested and connected in his growth. Not that they wouldn't, if I had no money to share . . in fact, they would, and likewise, if I died, there *would* be money to share, so that's how I structured my estate.
It might be that I see things that way because I am a single parent. Interesting thread.
Re: 100% of your estate to your spouse and then kids?
A QTIP qualified trust can allow you to control the remainder beneficiaries, provide for your spouse, and still have a double step up. As it's name implies, It also qualifies for spousal federal estate tax exemption.remomnyc wrote: ↑Tue Nov 30, 2021 6:54 pm
Thanks. That's what I thought, but I was wondering if there was anything else I missed, like the double step-up of husband inheriting and then kids inheriting; however, I'm not counting on my kids inheriting from my husband since his second wife could outlive him and disinherit them.
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Re: 100% of your estate to your spouse and then kids?
I’m an estate planner. The large majority of couples with no kids outside of that relationship leave 100% to the surviving spouse. However, some of those do use a marital trust to control where the leftovers go after the surviving spouse. Couples with kids outside the marriage will more frequently use a marital trust, and more often make non-marital bequests as well.
Of course many people have legitimate reasons to deviate from the norm. Really just comes down to personal preference.
Of course many people have legitimate reasons to deviate from the norm. Really just comes down to personal preference.