Estate tax article

AprilZ81

DH and I still haven't set up wills (it is on our to-do list this year) and other legal documents but we have discussed how we want our estate handled if we have kids and die while they are minors.

We would have the kids raised by either my sister and brother-in-law or a set of close friends.  All financial and physical assets would be handled by another set of friends.  While we trust the people we would choose as guardians I think it is helpful if the money and the kids are separated to avoid temptation.

Between what we are likely to inherit (hopefully not for a very long time) from our parents and what we already have in investments/retirement we want to make sure that the money is there for college funds and wedding dresses and down payments on houses instead of "necessary" vacations to Disney World and France. 

hoffse

AprilZ81 said:

DH and I still haven't set up wills (it is on our to-do list this year) and other legal documents but we have discussed how we want our estate handled if we have kids and die while they are minors.

We would have the kids raised by either my sister and brother-in-law or a set of close friends.  All financial and physical assets would be handled by another set of friends.  While we trust the people we would choose as guardians I think it is helpful if the money and the kids are separated to avoid temptation.

Between what we are likely to inherit (hopefully not for a very long time) from our parents and what we already have in investments/retirement we want to make sure that the money is there for college funds and wedding dresses and down payments on houses instead of "necessary" vacations to Disney World and France. 

I agree with all of this.

I think it's fine for guardians to establish a basic monthly stipend that they receive for the care of the child - and that amount will change as the child ages and cost of education, etc. changes.  But one-offs like school trips, cars, etc. need to be approved by the person in charge of the money.  Personally, I would not mind our money being used to pay my kid's way for a school trip or vacation because H and I find value in those things. But I would ask the trustee to make sure the expenses appear reasonable for ONE person (my kid), vs. an amount that's paying for the whole extended family to go too.

I would also probably place limits like one car, one wedding, a limited number of vacations, etc. that are being paid for out of the trust, at least until the kid is old enough to manage the money on their own.

AprilZ81

hoffse said:

AprilZ81 said:

DH and I still haven't set up wills (it is on our to-do list this year) and other legal documents but we have discussed how we want our estate handled if we have kids and die while they are minors.

We would have the kids raised by either my sister and brother-in-law or a set of close friends.  All financial and physical assets would be handled by another set of friends.  While we trust the people we would choose as guardians I think it is helpful if the money and the kids are separated to avoid temptation.

Between what we are likely to inherit (hopefully not for a very long time) from our parents and what we already have in investments/retirement we want to make sure that the money is there for college funds and wedding dresses and down payments on houses instead of "necessary" vacations to Disney World and France. 

I agree with all of this.

I think it's fine for guardians to establish a basic monthly stipend that they receive for the care of the child - and that amount will change as the child ages and cost of education, etc. changes.  But one-offs like school trips, cars, etc. need to be approved by the person in charge of the money.  Personally, I would not mind our money being used to pay my kid's way for a school trip or vacation because H and I find value in those things. But I would ask the trustee to make sure the expenses appear reasonable for ONE person (my kid), vs. an amount that's paying for the whole extended family to go too.

I would also probably place limits like one car, one wedding, a limited number of vacations, etc. that are being paid for out of the trust, at least until the kid is old enough to manage the money on their own.

Yeah, I don't know how strict we would be but a reliable (but used) car at 16 or 18, tuition, room and board for college/training (they would have to work for spending money), a stipend for a study abroad program, etc.  I would think that after age 25 we would probably start doling out larger amounts every few years.  For large expenditures (wedding, buying a house, grad school, etc.) then it would have to be approved.

Since DH and I are pretty level headed I would hope that our kids would be too, but who knows.