momto4kiddos
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Jun 26, 2014 11:45:15 GMT
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Post by momto4kiddos on Jul 13, 2020 12:32:58 GMT
We have wills/trusts all set up and have a lawyer for it all so we're good. This was something that recently popped into my head and i'm kind of curious as to how/if it could be done. Let's say one of the spouses (let call them Joe and Karen) in the couple have parents who are well off. Parents will likely leave an inheritance to their child (let's say Karen.) Here's where my question comes in. If Joe and Karen's wills leave everything to spouse, followed by their kids...now Joe just inherited Karen's parents money if Karen dies first. Maybe not a big, maybe it is. I'm kind of curious if it could be done to keep that inheritance (or part of it) separate and go directly to Karen's kids if something where to happen to her. I know it's a lawyer question, but mainly it's a curiousity question here. I have had waaaayyyy too much time on my hands lately for what if type scenarios  Editing to add: I know the law in our state surrounding if Karen pre-deceases her parents. If that were to happen, Karen's kids inherit her share unless it is stipulated otherwise. My thoughts are along the line of Karen's inherited some money, but wants to make sure that money is earmarked for her kids IF she were to predecease Joe. You know in case Joe meets some money grubbing new woman who wants to spend her parents money after they've all gone |
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rickmer
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Post by rickmer on Jul 13, 2020 12:41:22 GMT
my impression was that once inheritance was in the "family coffers" it was considered 50/50 spousal asset. if the proceeds of the inheritance stays in a separate account and trackable, Karen could do whatever she wants with it and Joe would have no entitlement.
but i could be wrong... and of course estate law differs place to place.
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Post by hop2 on Jul 13, 2020 12:43:44 GMT
If Karen dies before her parents the money will go where the parents will says its goes, not Karen’s will.
If the parents will says it goes to Karen or if she is dead it goes to their favorite charity, then it will go to their favorite charity. Whatever their will says. Now if they say it goes to Karen and nothing else and Karen died before them then Karen’s will comes into play.
If Karen is NOT dead consult an attorney because wether or not that inheritance is joint property varies by state and by what you do with it. DO NOT just put it in a joint bank account to deal with at a later time that will be a mistake. ( trust me )
If Karen is still alive and does not live in a state where an inheritance is automatically joint property then I would presume Karen could set up a trust for that particular money which keeps it outside of Karen’s estate
Consult a lawyer
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SweetieBsMom
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Post by SweetieBsMom on Jul 13, 2020 12:44:09 GMT
My Dad wasn't wealthy by any stretch of the imagination. But when his will was drawn up, his estate was to be split between my sister (single) and I (married). Initially Dad wanted it in the will that if I passed, "my" part of the inheritance would go to DH. However DH had terminal cancer at the time so I told him that probably wasn't the way to go. Dad loved DH and actually passed less than 3 months after him, I swear he couldn't get over his death. Anyway so the will stated it would be split b/t my sister and I. If my sister passed, it would pass to me and if I passed it would go into a special needs trust for DS. So the will had very specific arrangements. I don't know what would happen if, say, I passed and DH was alive. I'd assume it would go 100% to my sister because my DH would never contest it.
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lizacreates
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Post by lizacreates on Jul 13, 2020 12:44:59 GMT
We have wills/trusts all set up and have a lawyer for it all so we're good. This was something that recently popped into my head and i'm kind of curious as to how/if it could be done. Let's say one of the spouses (let call them Joe and Karen) in the couple have parents who are well off. Parents will likely leave an inheritance to their child (let's say Karen.) Here's where my question comes in. If Joe and Karen's wills leave everything to spouse, followed by their kids...now Joe just inherited Karen's parents money if Karen dies first. Maybe not a big, maybe it is. I'm kind of curious if it could be done to keep that inheritance (or part of it) separate and go directly to Karen's kids if something where to happen to her. I know it's a lawyer question, but mainly it's a curiousity question here. I have had waaaayyyy too much time on my hands lately for what if type scenarios Yes. It's called a generation skipping trust. Karen's parents can set up the trust with her children as beneficiaries. |
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scrappinghappy
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Post by scrappinghappy on Jul 13, 2020 12:45:44 GMT
What if its set up as a trust with Karen as the beneficiary while she is alive and passing to her kids on her death? Can one also specify what the money can be used for if they are still young?
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Post by mom2jnk on Jul 13, 2020 12:47:15 GMT
I believe that this is routinely spelled out in a (newly deceased) person's will. I think that this is a pretty common situation that is addressed by default in most professionally prepared wills. I know that we had to make specific guidelines for the potential possibility of this should our children marry and have their own families.
So, the person making the will has several options to choose from when addressing what would happen should a child predecease a parent. Sometimes, the inheritance money is now only divided among the surviving children. Sometimes, the deceased sibling's portion of the inheritance would go into a trust fund for the kids. Or it could be more loosely structured, specifying that the money goes to the surviving spouse "for the benefit of" the kids.
I believe that if a child were to predecease a parent, if the parent did not leave a will, by default, the estate would be split evenly amongst the surviving children only. At least that was the way that it was explained to DH and I when we wrote our will years ago.
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Post by Linda on Jul 13, 2020 13:05:59 GMT
my understanding is that:
If Karen dies before the parents - then her children inherit in her place.
If Karen inherits FROM her parents, then HER will will specify where that inheritance goes to once she dies. She can specify the kids, she specify her spouse, she can leave it to charity. If she doesn't leave a will, then state law determines who inherits her estate. But yes - if her will states Joe inherits all, then he'll get that $
She can put that money in an account with payable on death and name the kids if she wants to leave it out of the will
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Post by threegirls on Jul 13, 2020 13:07:04 GMT
We have wills/trusts all set up and have a lawyer for it all so we're good. This was something that recently popped into my head and i'm kind of curious as to how/if it could be done. Let's say one of the spouses (let call them Joe and Karen) in the couple have parents who are well off. Parents will likely leave an inheritance to their child (let's say Karen.) Here's where my question comes in. If Joe and Karen's wills leave everything to spouse, followed by their kids...now Joe just inherited Karen's parents money if Karen dies first. Maybe not a big, maybe it is. I'm kind of curious if it could be done to keep that inheritance (or part of it) separate and go directly to Karen's kids if something where to happen to her. I know it's a lawyer question, but mainly it's a curiousity question here. I have had waaaayyyy too much time on my hands lately for what if type scenarios I'm actually in this situation right now. Both of my parents are deceased. I inherited part of their estate. I have kept my inheritance in my name only. I do not have a will. If I died today, my husband would inherit everything I have including my inheritance from my parents. Not a big deal. But if he gets remarried and then dies, his new wife would inherit everything including the inheritance I received from my parents. Our three girls would get nothing. This is assuming that he and his new wife do not have a will/trust. I have to fix this situation and I have talked to my attorney about it and she said it could be taken care of and we can get it taken care of when she returns from vacation. Right now however, I'm not sure how it will be taken care of. |
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Post by 16joy on Jul 13, 2020 13:35:43 GMT
In Georgia Karen sets up a trust for her inheritance to keep it separate and stipulates her wishes in the trust documents.
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Post by pjaye on Jul 13, 2020 13:51:18 GMT
But if he gets remarried and then dies, his new wife would inherit everything including the inheritance I received from my parents. Our three girls would get nothing. T That's exactly what happened to friends of my parents. They were married and had 3 daughters, then the wife died, the husband eventually met someone else and they were together for 10 years. The husband wasn't well, had a stroke etc and the new wife cared for him. When he died, he left everything to his second wife and his girls were OK with her getting the house so she had somewhere to live and she had enough money to live on for the rest of her days. She was only in her 70s and she could have lived for another 20 years. Unfortunately she died within 6 months and her old will left everything to her children, so his girls got no inheritance from their parents. His daughters were OK with everything going to his second wife, but they weren't OK with it all going directly to her two children. They ended up having to contest the will and everything was eventually split equally to all the children, even though none of the inheritance was hers...everything was from his side. |
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Post by crazy4scraps on Jul 13, 2020 14:19:11 GMT
The way things were set up in our situation was that if the parent passed before the grandparents, the grandkids would get the money eventually, not the surviving spouse. But because it was in a trust, the surviving spouse would be named as the trustee to handle the money if the children are minors, or until they reach a specified age over 21. The trustee could pull money out for housing, education/college expenses or other necessities for the grandkids but it couldn’t just be spent on anything. In our case MIL and FIL each also had their own trusts with their own set of rules. Each was the beneficiary for the other, and once the last parent had passed whatever was left was split right down the middle because DH and his sister were both over 35. Because life partners may come and go, the money tends to follow the direct bloodlines.
As for what happens to it after a person inherits it, that’s up to the beneficiary. If it’s kept in that beneficiary’s sole name, it goes to where ever their will directs it to go (if they have a will). If the money is put into a joint account with someone, it goes directly to the other person on the account.
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momto4kiddos
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Jun 26, 2014 11:45:15 GMT
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Post by momto4kiddos on Jul 13, 2020 14:28:44 GMT
my understanding is that: If Karen dies before the parents - then her children inherit in her place. If Karen inherits FROM her parents, then HER will will specify where that inheritance goes to once she dies. She can specify the kids, she specify her spouse, she can leave it to charity. If she doesn't leave a will, then state law determines who inherits her estate. But yes - if her will states Joe inherits all, then he'll get that $ She can put that money in an account with payable on death and name the kids if she wants to leave it out of the will Ah from my limited knowledge with our own wills, that may be an option that would work. The one account being separate. Was curious how people get around these type of situations. Not a real life situation or i'd be consulting the lawyer who drew up our wills  |
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momto4kiddos
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Jun 26, 2014 11:45:15 GMT
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Post by momto4kiddos on Jul 13, 2020 14:31:50 GMT
But if he gets remarried and then dies, his new wife would inherit everything including the inheritance I received from my parents. Our three girls would get nothing. T That's exactly what happened to friends of my parents. They were married and had 3 daughters, then the wife died, the husband eventually met someone else and they were together for 10 years. The husband wasn't well, had a stroke etc and the new wife cared for him. When he died, he left everything to his second wife and his girls were OK with her getting the house so she had somewhere to live and she had enough money to live on for the rest of her days. She was only in her 70s and she could have lived for another 20 years. Unfortunately she died within 6 months and her old will left everything to her children, so his girls got no inheritance from their parents. His daughters were OK with everything going to his second wife, but they weren't OK with it all going directly to her two children. They ended up having to contest the will and everything was eventually split equally to all the children, even though none of the inheritance was hers...everything was from his side. What a nightmare. Makes me think i'm not crazy for thinking these things up because that is worse than what I was thinking!! |
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GiantsFan
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Jun 27, 2014 14:44:56 GMT
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Post by GiantsFan on Jul 13, 2020 15:02:05 GMT
It's all about using the correct terminology. Our local paper runs an Elder Law advice article every Sunday. Think Ann Landers, but elder law.
Anyway...Yesterday's article is similar to your question. I can link because it's a paid newspaper subscription (Maybe you can search "Len and Rosie Elder Law"). But look into the terms Right of Representation and Right of Survivorship. My interpretation of this article that if the parents want Karen and then Karen's children to inherit, the parents will needs to state by Right of Representation. Best to check with an estate attorney, though. And laws might change depending on the state.
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Post by femalebusiness on Jul 13, 2020 15:16:29 GMT
Keep it really simple. Put the money in your name only, into an account with your children as beneficiaries. Then if you want to spend it or give some to your husband you can take withdrawals. When you die, whatever is left over goes to your beneficiaries. You keep total control while you are alive and your kids/beneficiaries get it when you die.
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Post by Restless Spirit on Jul 13, 2020 16:35:21 GMT
Not an odd question at all.
My answer: Trust Fund
When I inherited a little money from my brother, I went and saw my financial adviser and attorney. I saw them together (with my DH present) to discuss my options regarding taxes, will, Power of attorney, health directive and trusts. Best money I ever spent.
When it came to setting up my investments, my attorney said that he has many stories of inheritances not going where the person wanted it to go because they didn't have the proper documents, financial setup and wording. He also said the single biggest mistakes happened when a wife died, the husband inherits, a 2nd wife with children comes along and the 2nd wife and HER kids end up inheriting it all, shutting out the husband's children. It happens.all.the.time. He said older, lonely men with a paid for house and money in the bank are in such a rush to remarry that they often don't or won't take the proper steps to make sure his children are treated fairly.
My trust is setup so that my DD & grandson will inherit, not a second wife or her children.
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Post by lisae on Jul 13, 2020 17:04:38 GMT
The most important thing to keep in mind regarding a will is that the will only comes into play with financial assets if there are no beneficiaries listed. Whoever is named beneficiary gets the CD, annuity, stock if there is a POD (payable on death), etc regardless of what the will says. The will covers things like the house and personal property and any financial asset not covered with a beneficiary.
So if Karen in your example wants to leave the money she gets from her parents to her children, all she has to do is keep it in her name only and designate the children as beneficiaries.
Joint assets go to the surviving spouse.
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Dallie
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Feb 25, 2020 16:33:25 GMT
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Post by Dallie on Jul 13, 2020 17:27:52 GMT
My grandfather's will was written so that if any of his kids predeceased him, the money went to that kid's kids (the grandkids). So because my father had predeceased my grandfather, that cut of the estate went to me and my siblings.
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tincin
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Jul 25, 2014 4:55:32 GMT
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Post by tincin on Jul 13, 2020 18:03:41 GMT
In MI, your inheritance is not coming considered joint assets UNLESS you put it in a joint account. If the inheritance is placed in an individual name with the children listed on the account with survivor rights they would get the money. Once it hits a joint account it becomes part of the pot. I’ve suggest my DS do just that when I pass because I cannot imagine his marriage lasting for a lifetime.
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tincin
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Jul 25, 2014 4:55:32 GMT
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Post by tincin on Jul 13, 2020 18:10:05 GMT
But if he gets remarried and then dies, his new wife would inherit everything including the inheritance I received from my parents. Our three girls would get nothing. T That's exactly what happened to friends of my parents. They were married and had 3 daughters, then the wife died, the husband eventually met someone else and they were together for 10 years. The husband wasn't well, had a stroke etc and the new wife cared for him. When he died, he left everything to his second wife and his girls were OK with her getting the house so she had somewhere to live and she had enough money to live on for the rest of her days. She was only in her 70s and she could have lived for another 20 years. Unfortunately she died within 6 months and her old will left everything to her children, so his girls got no inheritance from their parents. His daughters were OK with everything going to his second wife, but they weren't OK with it all going directly to her two children. They ended up having to contest the will and everything was eventually split equally to all the children, even though none of the inheritance was hers...everything was from his side. It happened to my niece and nephew as well. Their father told them he didn’t need a will because his second wife would make sure they were taken care of. Yeah that did not happen. My nephew got his father’s toolbox AFTER the witch emptied it, my niece got a flannel shirt and some photos. My nephew has not spoken to her since. My niece is fine with it because she likes to keep the peace at any cost. |
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Post by lisacharlotte on Jul 13, 2020 18:54:27 GMT
DH and I just set up a trust. Our trust has a remarriage clause. If I die first my husband is now the sole owner of the trust with DS as his heir. If DH remarries, the new wife is not the beneficiary. If DH dies, DS still inherits the trust.
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bethany102399
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Post by bethany102399 on Jul 13, 2020 20:57:59 GMT
This is interesting. When mom died I inherited everything (only child). It never occurred to me to not share what was inherited with DH, or stipulate that should something happen to me it goes to him. If we're both gone then the kids are listed as splitting everything 50/50. We made long term choices together about what to do with some of the money, and have had open conversations about what we both want to do. That said, should I pre-decease him and he remarries no way do I want the new wife's children to get what is effectively my kids inheritance. I'll have to look deeper into how things are set up.
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bethany102399
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Post by bethany102399 on Jul 13, 2020 21:00:28 GMT
I've actually seen it happen as well where a dear friend of mine's father passed suddenly. She and her brother were to inherit property that had been in the family for generations. Of course the paperwork wasn't filed properly, and the second wife took them to court over it. It was a whole long drama that did not end well. That incident really confirmed for me that with stuff like this you make darn sure it's set up the right way.
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