$$$ for the kids if you (or your spouse/partner) die first?

[Mimi]

From the Phillip Seymour Hoffman thread, some MMers posted about protecting some $$ for the kids and not all go to the surviving spouse/partner.  Is this how you have yours setup?

If I die first, everything goes to H.  If he dies first, everything goes to me.  I would be pissed if some would go to the kids.  LOL.  I feel like that would affect when I can retire.

Maybe I don't understand the purpose of protecting some $$ for the kids.  Does one need to be a big dog or have millions in networth?

[nonsenseabound]

Everything goes to my husband. I trust that he will treat our children fairly.

[Deleted]

Jul 23, 2014 8:17:41 GMT -5 Mimi said:

From the Phillip Seymour Hoffman thread, some MMers posted about protecting some $$ for the kids and not all go to the surviving spouse/partner.  Is this how you have yours setup?

If I die first, everything goes to H.  If he dies first, everything goes to me.  I would be pissed if some would go to the kids.  LOL.  I feel like that would affect when I can retire.

Maybe I don't understand the purpose of protecting some $$ for the kids.  Does one need to be a big dog or have millions in networth?

I think the bolded has to do with if the surviving spouse remarries and/or has more children. For instance, if I passed away and all of my $$$ went to my husband, then he married some crazy harpy who hated my kid(s), was a spendthrift, etc. and my spouse passed away, my kids could essentially be left with nothing if my husband didn't change his will, or have $$ set aside for the kids so that the new spouse couldn't access it.

[Mimi]

Jul 23, 2014 8:20:25 GMT -5 @mrsspunky said:

Jul 23, 2014 8:17:41 GMT -5 Mimi said:

From the Phillip Seymour Hoffman thread, some MMers posted about protecting some $$ for the kids and not all go to the surviving spouse/partner.  Is this how you have yours setup?

If I die first, everything goes to H.  If he dies first, everything goes to me.  I would be pissed if some would go to the kids.  LOL.  I feel like that would affect when I can retire.

Maybe I don't understand the purpose of protecting some $$ for the kids.  Does one need to be a big dog or have millions in networth?

I think the bolded has to do with if the surviving spouse remarries and/or has more children. For instance, if I passed away and all of my $$$ went to my husband, then he married some crazy harpy who hated my kid(s), was a spendthrift, etc. and my spouse passed away, my kids could essentially be left with nothing if my husband didn't change his will, or have $$ set aside for the kids so that the new spouse couldn't access it.

So, are you going to set things up to where some/all your $$$ goes to the kids?

[bryantpark]

Our trust doesn't kick in until the "second to die" spouse is gone. Before that everything goes to each other. Once both of us are gone then we have four distributions – one at 21, 25, 30, 40, with equal parts going to each child at those respective ages. The trust monies will be formally administered/spent by the trustee until age 21. The trustee is my cousin. We also included a line item for my brother-in-law, who is the guardian, to purchase a new home if he at that point also has children and they need a bigger place to live. He is currently childless and told us he would happily move into our house which is about 20 minutes from his current place of residence. We just wanted to make sure that he was protected down the road if he felt like they needed more space if we had say three kids and he had two. we didn't want my family squawking if funds were used for him to buy a house that he benefits from. Though any future house purchase that he wanted to make would be owned by the trust so when our children were of age he would either sell or buy it out.

[bryantpark]

Jul 23, 2014 8:25:19 GMT -5 Mimi said:

Jul 23, 2014 8:20:25 GMT -5 @mrsspunky said:

I think the bolded has to do with if the surviving spouse remarries and/or has more children. For instance, if I passed away and all of my $$$ went to my husband, then he married some crazy harpy who hated my kid(s), was a spendthrift, etc. and my spouse passed away, my kids could essentially be left with nothing if my husband didn't change his will, or have $$ set aside for the kids so that the new spouse couldn't access it.

So, are you going to set things up to where some/all your $$$ goes to the kids?

This is not something that has even crossed my mind so I will definitely bring it up to DH. Definitely not I thought I want to have but I agree this is important to make clear.

[Deleted]

Jul 23, 2014 8:25:19 GMT -5 Mimi said:

Jul 23, 2014 8:20:25 GMT -5 @mrsspunky said:

I think the bolded has to do with if the surviving spouse remarries and/or has more children. For instance, if I passed away and all of my $$$ went to my husband, then he married some crazy harpy who hated my kid(s), was a spendthrift, etc. and my spouse passed away, my kids could essentially be left with nothing if my husband didn't change his will, or have $$ set aside for the kids so that the new spouse couldn't access it.

So, are you going to set things up to where some/all your $$$ goes to the kids?

No, not at this point. I will say, however, that if my mom were to pass away before my dad, there is an account for which I am the beneficiary (I'm an only child) and my dad is the contingent. The account is like 2% of my parents' net worth, so not a whole lot, and my dad gets everything else.

[CloudBee]

Our life insurance policies funnel into a trust even if the other spouse survives, so there is some level of protection. Everything else goes to the surviving spouse. I'm sure our trustee would be willing to release all funds in the trust to the surviving spouse upon request. However, I would hope that some of the funds would remain there, as it's good for anyone to have another party to run large financial decisions/purchases past. Even if we are both financially responsible.

[livinitup]

All money to the surviving spouse.
If either of us squander the money after that, in any way, DD is SOL.


I remember that there was tension/fighting among my father's 5 brothers about his father's estate. The sons disagreed about how she supported the youngest and how the money would be allocated after their mother's death.

Turns out, she lived to 95 and used it all. Personally, I hope that happens for me or my DH - we'd like to support DD along the way, but don't expect to leave a big $$.

[Susie]

We don't have kids yet, so we haven't addressed it yet. But my mom recently said something that seemed odd to me at the time, but gave me some pause.

My parents just had their wills redone. They didn't really change much about what was being left to whom, but they updated the executor named, among other things. My parents are each leaving everything to the other, and after the 2nd to die, everything to my brother and I, 50/50.

My mom is 4 years into a battle with ovarian cancer that she will not win, it's only a matter of how long she can and will fight. Unless something tragic happens, we all acknowledge that my dad will survive her. She commented to me that it makes her sad that he will be the one that gets to do "fun" things with their money and make gifts that will really make peoples' (mostly my brother's and my) lives better. She said that she'd love to gift me the money to pay off my SLs (which totally came out of left field, because that's never been on the table), but that it won't be her choice/place/decision to make that kind of gift because my dad will outlive her. The only things she feels she has the right to "give" are her jewelry, which is why she's giving my brother the one piece I always wanted, because it's a diamond ring that he can give his girlfriend, and she doesn't feel she has anything else to "leave" him herself. I will get the rest of her jewelry.

It's a really imperfect solution to a problem I sympathize with. I doubt it satisfies her. I know it doesn't satisfy me, because the only materially valuable "thing" in the whole estate that I wanted, I'm not getting. My brother, who doesn't particularly want it (but likes the idea of not having to buy an e-ring) will get it.  It seems that reserving some of the estate for the non-surviving spouse to make gifts, or to place in trust for something to be discussed jointly before the earlier-to-pass spouse dies, might be a better solution.

Anyway, /anecdote.

[whitepicketfence]

Jul 23, 2014 8:19:56 GMT -5 nonsenseabound said:

Everything goes to my husband. I trust that he will treat our children fairly.

This is how it will work for us, too. It's pretty much a given that the surviving spouse would use the money to support the kids.

[Deleted]

Our will is set up so everything goes to the surviving spouse--however, it is probably something we should consider changing. My H is horrible with money & while I don't see him blowing thru it within months of my death, I don't think he'd be as diligent about making sure there was a large chunk for DS which is what I'd want. Its a discussion we need to have (and H would agree with me that there needs to be a plan/outline for him).

[Deleted]

Jul 23, 2014 8:26:34 GMT -5 bryantpark said:

Our trust doesn't kick in until the "second to die" spouse is gone. Before that everything goes to each other. Once both of us are gone then we have four distributions – one at 21, 25, 30, 40, with equal parts going to each child at those respective ages. The trust monies will be formally administered/spent by the trustee until age 21. The trustee is my cousin. We also included a line item for my brother-in-law, who is the guardian, to purchase a new home if he at that point also has children and they need a bigger place to live. He is currently childless and told us he would happily move into our house which is about 20 minutes from his current place of residence. We just wanted to make sure that he was protected down the road if he felt like they needed more space if we had say three kids and he had two. we didn't want my family squawking if funds were used for him to buy a house that he benefits from. Though any future house purchase that he wanted to make would be owned by the trust so when our children were of age he would either sell or buy it out.

I'm sort of judging the last part here. So he can have a bigger house to raise the kids but once they move out he has to sell or buy it out? I would think that after however many years of raising your kids, he would deserve to keep his home as his own.

Keep in mind that your kids will probably be going back to their uncle's for holidays and such for much of their young adult years. And that this would be your niece's or nephew's home that you would be forcing them to sell, after they treated their cousins like siblings and shared their parents with them. It's just sort of yucky. I urge you to reconsider.

[bryantpark]

Jul 23, 2014 8:58:53 GMT -5 spearmintleaf said:

Jul 23, 2014 8:26:34 GMT -5 bryantpark said:

Our trust doesn't kick in until the "second to die" spouse is gone. Before that everything goes to each other. Once both of us are gone then we have four distributions – one at 21, 25, 30, 40, with equal parts going to each child at those respective ages. The trust monies will be formally administered/spent by the trustee until age 21. The trustee is my cousin. We also included a line item for my brother-in-law, who is the guardian, to purchase a new home if he at that point also has children and they need a bigger place to live. He is currently childless and told us he would happily move into our house which is about 20 minutes from his current place of residence. We just wanted to make sure that he was protected down the road if he felt like they needed more space if we had say three kids and he had two. we didn't want my family squawking if funds were used for him to buy a house that he benefits from. Though any future house purchase that he wanted to make would be owned by the trust so when our children were of age he would either sell or buy it out.

I'm sort of judging the last part here. So he can have a bigger house to raise the kids but once they move out he has to sell or buy it out? I would think that after however many years of raising your kids, he would deserve to keep his home as his own.

Keep in mind that your kids will probably be going back to their uncle's for holidays and such for much of their young adult years. And that this would be your niece's or nephew's home that you would be forcing them to sell, after they treated their cousins like siblings and shared their parents with them. It's just sort of yucky. I urge you to reconsider.

Heh. I can see your point. But he would be living all-expenses-paid plus the expenses for children for very long time. If he were to buy it out I don't see why it's unreasonable to say that once our children are grown he has to have a mortgage/and or pay for himself to live. We currently have a very expensive house and it's quite large so the idea that he even possibly has to do this is sort of a nonissue. It is also highly unlikely for a variety of reasons that he will ever have children.

[bryantpark]

Jul 23, 2014 9:20:10 GMT -5 bryantpark said:

Jul 23, 2014 8:58:53 GMT -5 spearmintleaf said:

I'm sort of judging the last part here. So he can have a bigger house to raise the kids but once they move out he has to sell or buy it out? I would think that after however many years of raising your kids, he would deserve to keep his home as his own.

Keep in mind that your kids will probably be going back to their uncle's for holidays and such for much of their young adult years. And that this would be your niece's or nephew's home that you would be forcing them to sell, after they treated their cousins like siblings and shared their parents with them. It's just sort of yucky. I urge you to reconsider.

Heh. I can see your point. But he would be living all-expenses-paid plus the expenses for children for very long time. If he were to buy it out I don't see why it's unreasonable to say that once our children are grown he has to have a mortgage/and or pay for himself to live. We currently have a very expensive house and it's quite large so the idea that he even possibly has to do this is sort of a nonissue. It is also highly unlikely for a variety of reasons that he will ever have children.

Curious as to what others think about that - are you considering paying your guardians expenses forever by raising your kids? Should I be doing that? I feel like That just creates a trust fund uncle instead of trust fund kids.

[CrazyLucky]

If one of us dies, the other gets everything. If both of us die, the kids get everything, in a trust. They can get the money when they turn 25. If all of us die in plane crash or something, it's divided between my parents and his.
MIL's is different. MIL has two kids, and her husband, step-FIL has two kids. If MIL dies before SFIL and leaves him everything, then her kids could be left out when SFIL dies. She doesn't want that. I believe her will leaves some to SFIL, and some to each kid.

[msmerymac]

Surviving spouse. But our life insurance policies are designed to top off college funds and pay off the house. So those are the two places that money would be put very soon after one of us died. The rest of our investments are mostly tax-advantaged retirement accounts.

Once we actually HAVE kids, we'll discuss more about money to support young children in case both of us die. College and our home would be taken care of, but we'd have to figure out some kind of day to day living expenses. Although at that point, they'd inherit our retirement accounts, too. But none of our family lives close enough that they'd want to move here, so our children would need to move to a new state to live with whomever we would designate as guardians. I'm in favor of naming my husband's middle sister. She's the one he (and I) are the least close with, but she is married, has a baby on the way, and has a 5 bedroom house in eastern CT. My brother doesn't want kids and my other SIL probably won't get married or have kids (and lives in OR).

[starlily]

I'm basically going to do whatever farmvillelover tells me to do in order to avoid the spendthrift step-parent scenario.

[rbp]

We should really get on wills. I don't know how we'll set them up, but this thread has given me some food for thought.

I will say that 100% of my dad's assets went to my mom when he passed. I thought this was awkward because he has four children, two of whom are my mom's. My half siblings are much older, but now they are in my mom's (their stepmother's) will because she inherited all of my dad's assets. Their mom is also deceased FWIW. I wasn't in the loop on writing the wills and I don't know much about estate planning, so no one asked for my input...but I thought it would have made more sense to split his assets to half sister, half brother, and mom (say 25%/25%/50% or whatever made sense), then my mom's assets would be split between my sister and me on her passing.

I asked H if he thought this was a weird setup, and he said something about it being more important for my mom to have money to live on since she was 57 and had stayed at home since I was born. Maybe this makes sense. FWIW, half siblings and I are settled down and financially secure. My younger sister (26) is alternatively in school and flitting around the globe (mostly on my mom's money). I hope she figures out her life soon.

[Deleted]

I thought some of the issues brought up were interesting. We have a living trust set up, so it doesn't directly go to either of us, it goes into the trust and we are each trustee. That said, we would each have the power to dissolve the trust (although I don't expect either of us would). The idea about earmarking some $ for kids is interesting. We set up out estate plan for the short term (and long term, but for now with an emphasis on the short term). With out kids so young, frankly I don't think there would be much left over and the surviving spouse is likely to need access to the $ given our expenses and the fact that we are each high earners. But I am thinking about whether we may want to redraft in 5-7 years when we have more net worth and the situation might be less dire financially. Also, we probably need more life insurance.

[mich1]

When my mom died, my dad inherited 100% of her estate. This includes the house (50% of the house was funded by her mother - who lived there until she died), IRAs (which were established with the rest of my grandmother's estate), checking, savings and life insurance. As far as I was concerned, as both of my parents were continually employed the better part of their lives, this was the surviving spouse's money too. I did not at the time, nor do I now, feel like I have any sort of claim on the money.

My parents educated me to the best of their ability and once I graduated from college and got a job, was self supporting. My feeling as to the subject is that if my dad wanted to take the remaining money and set it on fire, that was his choice.

He remarried 10 years ago to a wonderful woman who has taken incredible care of him. Chances are, he's not going to be alive this time next year (just received a diagnosis of pancreatic cancer) and other than a few items from their house, the only asset that will be coming my way (shared between my siblings) is the house. All the accounts that remain will be going to his wife, and that's the way it should be. The house is available to his wife, as long as she wants to live in it. All my sibs agree with me on this.

The only reason why the house is not going to his wife is that on her death she would have the ability to 'will' it to her children from a previous marriage. My dad felt this was wrong, as the house was paid wholly before she came into the picture and did not contribute to the house, or its upkeep.

Of course, his estate is no where near that of Phillip Seymour Hoffman, but IMO it is the same principle.

[bryantpark]

Jul 23, 2014 8:58:53 GMT -5 spearmintleaf said:

Jul 23, 2014 8:26:34 GMT -5 bryantpark said:

Our trust doesn't kick in until the "second to die" spouse is gone. Before that everything goes to each other. Once both of us are gone then we have four distributions – one at 21, 25, 30, 40, with equal parts going to each child at those respective ages. The trust monies will be formally administered/spent by the trustee until age 21. The trustee is my cousin. We also included a line item for my brother-in-law, who is the guardian, to purchase a new home if he at that point also has children and they need a bigger place to live. He is currently childless and told us he would happily move into our house which is about 20 minutes from his current place of residence. We just wanted to make sure that he was protected down the road if he felt like they needed more space if we had say three kids and he had two. we didn't want my family squawking if funds were used for him to buy a house that he benefits from. Though any future house purchase that he wanted to make would be owned by the trust so when our children were of age he would either sell or buy it out.

I'm sort of judging the last part here. So he can have a bigger house to raise the kids but once they move out he has to sell or buy it out? I would think that after however many years of raising your kids, he would deserve to keep his home as his own.

Keep in mind that your kids will probably be going back to their uncle's for holidays and such for much of their young adult years. And that this would be your niece's or nephew's home that you would be forcing them to sell, after they treated their cousins like siblings and shared their parents with them. It's just sort of yucky. I urge you to reconsider.

A few more thoughts FWIW, our current house is owned by the trust. So any proceeds from the sale would be deposited into the trust anyway. If he buys a new house with the trust money and it is approved by the trustee, a future sale of that house would be deposited into the trust because it is a trust asset. So when I say for him to buy it out, It would actually be a sale of the house to him and perhaps we could say at a fraction of the market value. Taking into account that he wouldn't be building his own equity if he were living in our house rent and expense free until our children decided they did not want to live home anymore. So maybe it's fair to say it's worded that at that time he could buy it out at a quarter of the market value. And the proceeds from his quarter would be deposited back into the trust for the benefit of our children.

I thought that we are being incredibly generous and because we have the ability to pay for him I thought that was more than fair. I don't think most people who name a guardian also have enough money to also pay 100% for their care, college, the other living expenses, etc, my assumption is that is not the norm.

[Marmee]

We just did our wills & trusts last year and now I can't remember the details. I do know I had an issue with how DHs "family" money was set up to pass over me. Mainly because I'm a SAH & gave up my profession (at the urging of him) & I potentially could get screwed & end up having to ask my own daughters for money. It was an unlikely scenario & I "get it" but I was also pretty hurt that it was OK with them that I was vaunerable in that way. I made a big stink about maxing my own retirement accounts. Anyway right now our trusts go to each other, nothing straight to the kids...at least nothing from us (grandparents may be different story).

[lime]

Jul 23, 2014 10:57:20 GMT -5 Marmee said:

We just did our wills & trusts last year and now I can't remember the details. I do know I had an issue with how DHs "family" money was set up to pass over me. Mainly because I'm a SAH & gave up my profession (at the urging of him) & I potentially could get screwed & end up having to ask my own daughters for money. It was an unlikely scenario & I "get it" but I was also pretty hurt that it was OK with them that I was vaunerable in that way. I made a big stink about maxing my own retirement accounts. Anyway right now our trusts go to each other, nothing straight to the kids...at least nothing from us (grandparents may be different story).

Wait - you don't remember the details, but you remember getting screwed and being pissed off about it? What are you doing about this? Doesn't your H want you to be happy in your marriage? 

Rolling over, letting the details get foggy and "hoping" you won't have to ask your kids for money is not really a strategy. 

[Deleted]

I guess we'll have to figure this out soon.

Everything would stay with DH or me if one of us is living.

After that I would likely want to just give money to whoever the caregiver of our child would be (one of our siblings--we have 3 and all would be a good choice. I would trust them to use the money however they want.

Then some money for our child--maybe a smaller amount for school and more at 30 or something like that.

Currently my finances are a mess. Everything would go to DH, but if we both died, I think my insurance would go to my mom and my 401k would go to only one sister. Which is now enough money that it would upset my other sister.

[nessness]

Jul 23, 2014 10:57:20 GMT -5 Marmee said:

We just did our wills & trusts last year and now I can't remember the details. I do know I had an issue with how DHs "family" money was set up to pass over me. Mainly because I'm a SAH & gave up my profession (at the urging of him) & I potentially could get screwed & end up having to ask my own daughters for money. It was an unlikely scenario & I "get it" but I was also pretty hurt that it was OK with them that I was vaunerable in that way. I made a big stink about maxing my own retirement accounts. Anyway right now our trusts go to each other, nothing straight to the kids...at least nothing from us (grandparents may be different story).

Is this money that your DH has already been given? Or is it money that he stands to inherit, but that your kids will inherit if your DH dies before his parents? That would make a huge difference to me.

[Marmee]

Jul 23, 2014 11:02:21 GMT -5 lime said:

Jul 23, 2014 10:57:20 GMT -5 Marmee said:

We just did our wills & trusts last year and now I can't remember the details. I do know I had an issue with how DHs "family" money was set up to pass over me. Mainly because I'm a SAH & gave up my profession (at the urging of him) & I potentially could get screwed & end up having to ask my own daughters for money. It was an unlikely scenario & I "get it" but I was also pretty hurt that it was OK with them that I was vaunerable in that way. I made a big stink about maxing my own retirement accounts. Anyway right now our trusts go to each other, nothing straight to the kids...at least nothing from us (grandparents may be different story).

Wait - you don't remember the details, but you remember getting screwed and being pissed off about it? What are you doing about this? Doesn't your H want you to be happy in your marriage? 

Rolling over, letting the details get foggy and "hoping" you won't have to ask your kids for money is not really a strategy. 

Well it was supposedly changed (DH made the request & she said ok) but it is my MILs decision...even if she did in fact change it she could change it back anytime. Hence why I made it clear maximizing my own personal retirement #1 priority since it's a real chance I won't have his family money to fall back on in retirement. I didn't roll over at all...lol. I just can't remember the exact details regarding the kids. It took months to finish up because I was a total hardass.

[abramos]

Since we do not have kids yet, I have it where everything will go to DH. Of that money, I want him to give 10% to my dad.

[Marmee]

Jul 23, 2014 11:10:18 GMT -5 nessness said:

Jul 23, 2014 10:57:20 GMT -5 Marmee said:

We just did our wills & trusts last year and now I can't remember the details. I do know I had an issue with how DHs "family" money was set up to pass over me. Mainly because I'm a SAH & gave up my profession (at the urging of him) & I potentially could get screwed & end up having to ask my own daughters for money. It was an unlikely scenario & I "get it" but I was also pretty hurt that it was OK with them that I was vaunerable in that way. I made a big stink about maxing my own retirement accounts. Anyway right now our trusts go to each other, nothing straight to the kids...at least nothing from us (grandparents may be different story).

Is this money that your DH has already been given? Or is it money that he stands to inherit, but that your kids will inherit if your DH dies before his parents? That would make a huge difference to me.

It's money (life altering) from his mom who is still alive...Like I say I "get it" nevertheless knowing I do not have the safety net DH will always have brought home that I need to look out for myself & not just trust that "we" will be ok...there is a chance **I** won't be. DH has life insurance plus retirements but I guess it really made me think. I thought of several scenarios where I could get screwed (like H canceling insurance) & realized I need my own retirement that only I control.

[nessness]

Jul 23, 2014 11:22:51 GMT -5 Marmee said:

Jul 23, 2014 11:10:18 GMT -5 nessness said:

Is this money that your DH has already been given? Or is it money that he stands to inherit, but that your kids will inherit if your DH dies before his parents? That would make a huge difference to me.

It's money (life altering) from his mom who is still alive...Like I say I "get it" nevertheless knowing I do not have the safety net DH will always have brought home that I need to look out for myself & not just trust that "we" will be ok...there is a chance **I** won't be. DH has life insurance plus retirements but I guess it really made me think. I thought of several scenarios where I could get screwed (like H canceling insurance) & realized I need my own retirement that only I control.

Got it. Well honestly I don't think ANYONE should factor a planned inheritance into their retirement plans, but maxing your own retirement accounts still sounds like a good idea in this situation.