OP, revising your estate plans as your children become self sufficient makes sense. This probably will not be the last time you update your estate plans. Unless there is a capacity or spendthrift concern, rather than trying to specifically prescribe all the ways the inherited funds can be spent consider leaving the funds in trust for each of your children with a HEMS-type of distribution and a trusted co-trustee with a similar financial attitude to you/spouse who can approve additional distributions should a major event with financial impact occur in your child’s life.
In addition to deciding how to leave the estate to your children, depending on the size of your portfolio and your projected retirement withdrawal rate, consider whether to gift with a warm hand during your lifetime to your children.
Spouse and I will be revising our estate plans in the near future as our children are in their 20s and now able to be named as successor executor / trustee / attorney-in-fact as well as manage our finances and care if one or both of us are incapacitated. They are self sufficient, finance savvy and have watched/helped us care for incapacitated parents over the last 8 years.
We likely will have a large estate. We plan to bequest to them an outright amount at each parent’s death with the bulk placed in trusts for which they will each be their own trustee and have right of appointment of the co-trustee. A trusted family member with similar attitudes on spending will be the initial co-trustee. The co-trustee will be able to approve larger-than-normal trust distributions, if needed. I don’t want to prescribe the types of additional distributions in the trusts’ documents which is why choosing the co-trustee carefully and discussing our wishes with them that the trusts be safety nets is very important.
Given our low retirement withdrawal rate, our portfolio will likely increase as we age. During our life time, we can be a backstop for our children and are giving annual gifts up to the annual exclusion to them. We pay for family vacations, dinners out, etc. We plan to pay for any future grandchildren’s education.
I don’t expect that this will be the last time we will update our estate plans. When the first of us passes, the survivor will need to update the key appointments (i.e., executor, etc.), update account beneficiaries and possibly fund the survivor’s revocable living trust (RLT) and make the child(ren) co-trustees as I think the RLT may make it easier for our children to manage the survivor’s finances. We also need to keep an eye on the Federal estate tax exclusion amount.
We have a large portfolio. We will either spend it on ourselves and our children/grandchildren, leave it to our children or a combination of both. If our children inherit a large amount, that is an inevitable consequence of over-accumulating and not spending it down. I am happy that my children are self sufficient and will inherit an amount that should hopefully make them financially secure for their lifetime.
In addition to deciding how to leave the estate to your children, depending on the size of your portfolio and your projected retirement withdrawal rate, consider whether to gift with a warm hand during your lifetime to your children.
Spouse and I will be revising our estate plans in the near future as our children are in their 20s and now able to be named as successor executor / trustee / attorney-in-fact as well as manage our finances and care if one or both of us are incapacitated. They are self sufficient, finance savvy and have watched/helped us care for incapacitated parents over the last 8 years.
We likely will have a large estate. We plan to bequest to them an outright amount at each parent’s death with the bulk placed in trusts for which they will each be their own trustee and have right of appointment of the co-trustee. A trusted family member with similar attitudes on spending will be the initial co-trustee. The co-trustee will be able to approve larger-than-normal trust distributions, if needed. I don’t want to prescribe the types of additional distributions in the trusts’ documents which is why choosing the co-trustee carefully and discussing our wishes with them that the trusts be safety nets is very important.
Given our low retirement withdrawal rate, our portfolio will likely increase as we age. During our life time, we can be a backstop for our children and are giving annual gifts up to the annual exclusion to them. We pay for family vacations, dinners out, etc. We plan to pay for any future grandchildren’s education.
I don’t expect that this will be the last time we will update our estate plans. When the first of us passes, the survivor will need to update the key appointments (i.e., executor, etc.), update account beneficiaries and possibly fund the survivor’s revocable living trust (RLT) and make the child(ren) co-trustees as I think the RLT may make it easier for our children to manage the survivor’s finances. We also need to keep an eye on the Federal estate tax exclusion amount.
We have a large portfolio. We will either spend it on ourselves and our children/grandchildren, leave it to our children or a combination of both. If our children inherit a large amount, that is an inevitable consequence of over-accumulating and not spending it down. I am happy that my children are self sufficient and will inherit an amount that should hopefully make them financially secure for their lifetime.
Statistics: Posted by HomeStretch — Sun Jul 07, 2024 10:07 am — Replies 56 — Views 4875