Is anyone else helping their parents with estate planning?

[barbara-cook]

My parents are both 83, in pretty good health (both have pacemakers), still live in their own home, and plan on living at LEAST another 10 years..... My brother and sister and I have been after them for the past few years to get their affairs in order so that "in case" something happens, there will be less of a mess to deal with.

My sister lives on the west coast and is more or less staying out of any decision making (her decision), but my brother and I live here and on Tuesday we met with my parents to get this rolling. They do have a will, but it's about 45 years old and most of what's in it doesn't apply anymore. My mom has put together a list of all their assets, accounts, bank accounts, etc., which is an excellent start. They are not wealthy by any means, but have been frugal and done a lot of investing over the years. They live on their social security and pensions and live comfortably. There is some money there, but not in life-changing amounts. There's enough to take care of them should they need care later on.

My question is this - has anyone out there done this with their parents and siblings and gotten through it without arguments and alienation? My brother wants to buy their house - which is ok with my sister and me - but we also don't want to be taken advantage of in any way. My parents want to stay there as long as they can, so if my brother buys it now, they can stay there as long as possible without having to worry about it. He says that he wants to live in it, not just update it and sell it, so we're happy it'll still be in the family.

My mom is making an appointment with an estate planning attorney, so I'm sure we'll be getting all the correct answers at that meeting. BUT...

I was amazed at how drained I was after our little meeting, and it really wasn't painful or anything. We're all pretty easy going, so that helps. But I was drained after 4 hours. I can't imagine what else is heading my way with this.

I'm thankful they are willing to work with us so this can be avoided after they pass - I just can't imagine doing it then! Any advice? Suggestions? I'm not looking for legal answers of any kind - more like coping ideas!

Thanks in advance!

[badunnin]

My brother and I went through this with my parents a few years ago, and updated it last year. They're still very young (early 50s) but they travel quite a bit, and gordie forbid something happen, wanted to have everything straight. To add to it, mom owns 2 business (we originally sat down when she had one business, then again after she started the second). My brother and I are quite close, and it was all quite amiable. But definitely draining.

Good luck to you. A good attorney will definitely help! You hopefully have time to go slow, so take advantage of that fact. I know that I'll have to sit through more meetings over time as things change to tweak, but the groundwork has been laid nicely at least.

[blazedog]

Yes I went through it with my father after my mother died.

They had initially gone to an attorney to set up a so-called "living trust" which is technically a revocable trust. This eliminates the need for probate as the assets of the trust pass directly to the designees. Before my mother died, my parents were the joint trustees with the surviving spouse the sole beneficiary and my brother and I the contingent beneficiaries.

After my mother's death, we made an appointment with the attorney to update it. I am a trustee which means that I can technically write checks and manage the corpus of the trust but solely for the benefit of my father while he is living. My father still handles all his finances but it's important to have a designated trustee if he became suddenly incapacitated or on his death so that I can deal with the assets. I would strongly urge you to set up a similar type of trust if your parents have any type of assets at all as probate can really tie things up and it costs money.

As to your brother buying the property, I would suggest the obvious - that you have it appraised by at least three different independent sources so that everyone is totally satisfied that the transaction is fair and square. You wrote that your brother intends to live in the home but situations change and you would need to be comfortable with his selling it and profiting. I would also think that selling it now and having your parents remain would need to be worked out carefully as it may trigger certain taxes and other issues which should be addressed head on -- do your parents pay rent? pay for all maintenance etc.

As to the division of the estate, most families find it best to split the assets equally between the children as opposed to the grandchildren.

I would also suggest your parents creating a "living will" which covers the express desires in terms of medical care and also creating a medical power of attorney which should designate both their spouse and the child who they wish to carry out their wishes.

[barbara-cook]

Thanks for your input blazedog. Some of this was discussed and I'm sure we will get through more of it with the lawyer and in future meetings. My brother and agreed we would be co-trustees and co-executors, so that much is settled. And I believe they do have living wills or health-care proxies in place. They do want to bequest certain things or amounts to the grandchildren (there are 8 altogether) but that's as far as they want to go. There also many great-grand children, but then it gets way too complicated.

I'm going to print out your statement and share it with my brother and parents (and sister too), just for reference.

Anyone else have any suggestions? TIA.

[hollysmom]

If your brother buys the house, I think you can write a 'life-estate' clause in the contract that guarantees your parents the right to live in the house until they pass. You also need to ensure that they cannot be involuntarily moved to a nursing home just to gain access to the house.

SSM

[blazedog]

Since your parents want to stay in the house and can, it might make sense for your brother to inherit the house and have the FMV at that time be added to the estate and then taken as his share -- if over the 1/3 (assuming 3 equal beneficiaries) then he would need to pay that sum to the estate -- i.e. you and your sister.

Based on personal experience, it is a good idea for grandparents to leave specific bequests of personal property to chosen people. My grandmother who really had relatively nothing but some jewelry and various "antiques" she had collected over the years did this. However, I would not advice leaving disproportionate sums of money or other valuables to someone as it almost inevitably leads to bad feelings. If there is truly a reason and it is explained and agreed upon -- i.e. one child is a highly successful professional and the other has chosen a less lucrative career path, then it can turn out okay if the parties know that the reason the grandparents have left more money to a specific set of grandchildren is to help with education -- or whatever.

Anyway, it's quite good that you are approaching it head on and making sure that it's handled by an appropriate estate attorney who can advise on making wise decisions -- both financial and psychological. People can turn nutty after their parents die and start resurrecting long buried sibling rivalry which can damage relationships for years to come. :)

[blazedog]

One more random thought and caveat emptor as tax is not my expertise. :D

My understanding is that selling a house (even to an heir) is going to trigger capital gains taxes while the value of the house if left in the trust and passing to the heirs would not generate taxes unless it exceeded the current Federal maximum (and possible NY State tax amount). Given the description of your parent's assets, it's unlikely that they would be paying estate taxes -- but of course, this would be another thing to run by your estate attorney or accountant.

And of course, disclaimer that I rely on others for my OWN tax advice. :p

[AvrilH]

My mother, knowing her, is taking it all with her. I can't even IMAGINE successfully estate planning with her. Me: How do you want your assets divided up? Her: What are you talking about? Its all mine. Mine mine mine. Dad: Let's leave it to the boys for university. Her: What are you talking about? Nobody paid for my schooling. It's mine mine mine. Me: What about your house? Her: Bury it with me. It's mine mine mine.

Retirement planning has kinda gone this way: Me: when is Dad planning on retiring? Dad: As soon as possible. Her: Why retire when the money is so good? Dad: Easy for you to say, you are retired. Me: We'd love to have more time with both of you. Her: Why would he retire when the money is so good?

Rant over.

[stefania4]

I have been after my parents for years to appoint an executor. Right now all their will says is that my sister and I inherit everything and split it 50/50. As my DH said, "Your sister is so mean-spirited that you could give her everything and walk away and she'd stil come up with a reason to sue you." Truly, as awkward as it is, it's best to go through this process now than to go through it while also dealing with the pain of losing a parent.

[mbrogier]

My mom and dad (divorced) had a trust set up when my brother and I were kids, and then after they divorced they both redid their papers seperately. My dad is really savvy on that type of stuff so he had everything worked out. Neither parent really talks about it, but my dad did talk to me briefly after his brother died almost two years ago. He told me what he wanted as far as funeral arrangements and how he had set up his estate. My only concern was that his fiancee have legal rights to ensure that he get immediate medical attention as I live in Chicago and might not be able to arrive for a day. My dad has a heart condition and last time there was problems my brother was out in the hallway dividing up the estate in his mind. :eek: (his half is now in trust to his daughter--long story) I'm just happy that both my parents have living wills and trusts so we don't have to deal with probate.

Now my in-laws on the other hand... :rolleyes: I don't think any of the 3 children really know what is going on. On top of that they've saved everything from their children's childhoods...in the attic. Both SIL are packrats, so we'll get guilted into taking everything. All my MIL will say on the subject is she wants no disagreements. :rolleyes:

[Canice]

Well if there are three things that can stress a person out, family, money issues, and Important Conversations are right up there! No wonder you were drained. Sorry I don't have any coping strategies for you, but I think it's great that you're pushing the issue and making progress. It's so important.

[barbara-cook]

Thanks to all who have responded. AvrilH - How old is your Mom? Two? (I'm sorry - I just thought of that thing that got passed around at Day Care when my son was just starting to walk - "What's mine is mine, and what's your's is mine. And see that boy over there - that toy he has is mine too." )

I guess it's good to find something humorous (for me, but probably not for you) in all this. All of it has made me think long and hard about MY own will not being yet in place. Especially when I read badunnin's reply below about his parents ages..... AND I have to explore the situation with my ex husband with regard to our son (14). My ex had unexpected quintuple bi-pass surgery in October (he'd just gone in to have an angioram) - so you just never know (and he'd only turned 50 last April).

Thank you all so much - and I do hope things work out for each of you too!

[AvrilH]

Thanks to all who have responded. AvrilH - How old is your Mom? Two? (I'm sorry - I just thought of that thing that got passed around at Day Care when my son was just starting to walk - "What's mine is mine, and what's your's is mine. And see that boy over there - that toy he has is mine too." )


ROFLOL - That's her! She claims her excessive possessiveness comes from being an only child. In fact, she got so sick and tired of me asking for her piano (which no-one plays, but we desperately needed for my ds that is studying) that she bought me one, rather than give up something of hers.

Come to think of it, I should start asking for one of her cars! :)

[lhall]

Yes I went through it with my father after my mother died.

They had initially gone to an attorney to set up a so-called "living trust" which is technically a revocable trust.
I would also suggest your parents creating a "living will" which covers the express desires in terms of medical care and also creating a medical power of attorney which should designate both their spouse and the child who they wish to carry out their wishes.

I agree with this. My dad has a Living Trust, and I am his Successor Trustee. As part of this he has a living will and a durable power of attorney for healthcare. Please make sure your parents get both of these. My dad almost died after a skiing injury in 1999, and having those made things much easier for me. You never know if/when you will need them, but it's better to be safe than sorry.

Leigh

[barbara-cook]

AvrilH - that is really too funny. I could use a new car too - so if she's got an extra, can you ask her for me? Just kidding of course, but that is funny.

Thanks, everyone, for all their suggestions. We are just waiting for the appointment with the lawyer right now. Then we'll take it from there.

If anyone else has hints, suggestions or ideas on how best to get through all this, I thank you in advance!

[barbara-cook]

Our meeting with the estate lawyer is tomorrow morning. I just went through the previous postings on this thread and took two pages of notes. I still don't feel thoroughly prepared, but do feel somewhat relieved that the lawyer will be in charge (basically) and that it's finally going to happen.

Then, once we get this one in place, I'll have to start talking to my husband about getting our will in place. We just did a financial summary because his oldest daughter is going off to college in the fall and the colleges, apparently, want to know what kind of money you have down to the change rattling around in your car! (Kidding, but boy are they nosey!). So now that we have that written down, we can sit down, divvy it up and get our own will in place.

Thanks again to all who participated in this thread. I do appreciate the time it took for you to read and respond. You guys are great!

[blazedog]

Well good luck but I do think you might be over-complicating it.

The amount of money in an estate can change so generally a heirs in a will situation or beneficiaries of a living trust don't get a specific dollar amount but rather a percentage of what is left after the specific bequests are fulfilled -- i.e. my ruby earrings to X, the Limoges china to Y, $10,000 to my beloved housekeeper -- etc.

If you are talking about a massive estate, then there is another degree of planning because there are huge tax complications and generation skipping trusts are set up to avoid taxation every time someone dies.

However, I am assuming that you are leaving the normal middle class estate in which whatever is left when you and your husband/your parents die is allocated among the children equally.

[Gumbeaux]

My parents are both 83, in pretty good health (both have pacemakers), still live in their own home, and plan on living at LEAST another 10 years.....

Barbara,

Are your parents serious in saying that they plan on living at LEAST another ten years? They are both past the average life expectancy in this country.

It seems like a lack of urgency is part of the problem.

Even though I am only in my late forties but I am constantly updating my wills, fine tune my investments, burial arrangements, and keep my house in repair as if today is my last day to live.

I cannot plan how long I will live but I can make plans to make a smooth transfer of my estate to the ones that I love.


Gumbeaux



.

[Jeanz]

According to US Department of Commerce numbers,

an 80-year-old white male has a life expectancy of 8 years, while an 80-year-old white female has a life expenctancy of 9.6 years.

My own parents (who are in their eighties) are planning until their nineties as well. God willing and please please please.

[barbara-cook]

Gumbeaux - AT LEAST another 10 years. And as I just told my sister, they really do act like time is not of the essence, even though as I tried to explain to them yesterday that ANYTHING can happen at ANY TIME! Here today, gone tomorrow. I told them (and my brother) that he and I should be made co-everything because who knows how long either he or I will be around either. (I'll be 50 this weekend and he's 52). Our family does have a history of longevity, but the odds are still what they are.

Anyway, yesterday's meeting was more of a "okay, here's what we've got, what's the best way to keep it all from going to the state?" The estate attorney did have some very valid points. But again, my parents need to do a few more things before everything it set in stone.

I would like to see it move a little more quickly, but they are set in their ways and I can only push so hard. I will see them this weekend and ask if they've followed up on what the woman advised.

Jeanz - thank you for the fact you provided. Interesting.