In his book “Beyond the Grave” the trust attorney Jeffery Condon advises against having a sibling as trustee for another. Does the sibling who agreed to be the trustee really want to deal with 25+ screaming phone calls a day demanding money? This is an example from the book. And also there is the effect on the relationship
Mr. Condon talks about the importance of ensuring the execution of your wishes when it comes inheritance. The Trustee plays a key role here. He shares in his book the three alternatives: a private individual, a banking or other financial institution, or the child himself or herself.
There is no one-size-fits-all answer here, but one lesson resonated with me the most. Mr. Condon counsels against naming one sibling as Trustee of the other. He writes: “There are sensible reasons that make it seem right to appoint a child’s sibling a Trustee. Early in my practice, I invariably agreed with this choice. But since then clients have died, and I have seen what happens when one child holds money for another, inevitably, there will be stress on – or the destruction of – the sibling relationship. Why? Because when one sibling holds money for another, the tie that binds is no longer only blood – it is blood and money.”
I’m watching from afar for the most part, but yes, there are other reasons mom & dad both asked me to watch out for his interests. Fetal alcohol caused issues.
The mind-blowing thing to me is your dad picked the one person the nephew needed to be protected from to be in charge. Can’t undo that choice, but how could he not see this coming?
The sad thing for me about that is he talked with me about it first. Both of us seriously thought she would be better for the job because she knew everything about his finances and where he kept things. She knew about his coin collection and how to sell those (he left her his collection and it should have been equal value to his properties). She has connections in the county. She told him she had no desire to “move back north to live.”
The plan was for her to be in charge and my uncle and I to guide.
It was only after his death that I soon learned guiding was impossible. I’ve apologized to dad more times than I can count.
Would appreciate more advice from those who have traveled this road (if I missed it).
I’m hesitant to divide my estate equally, for a variety of reasons. Love all our children, so that’s not the issue. I appreciated whoever quoted that equitable does not necessarily mean equal. Is there anything special you advise to do in advance to minimize hurt feelings?
If I discuss with children now, I don’t think they’ll fully understand or accept my reasons & it will likely hurt our relationship. If I wait until I’m gone, I’m concerned it will affect their relationships with each other. Yes, I could give it all to charity, but really do prefer they receive most, just potentially unequal portions.
I would split evenly unless there is a special needs child, mental illness, addiction, etc. I don’t feel like you can say , “Well Sue makes a lot more than Sherry, so we’ll leave more to Sherry.” You don’t necessarily know everyone’s circumstances. Sherry may make less, but may have less expenses, she may be a great investor. Sue may spend every dime. And you don’t know what will happen after you are gone - someone could get a catastrophic illness, etc.
And, for me anyway, it is not about the money - it is about the feelings, a parent’s love. After you are gone, you can’t discuss with your kids why you what you did. I would not want to risk my lasting impression be one of pain and perceived unfairness.
This suggests that anything other than an equal division will not be fully understood in any scenario and will cause problems that could be worse than the problem that you are trying to solve with what you consider an equitable-but-not-necessarily-equal division.
My advice- just don’t do it unless there is a child with special needs involved. I still remember my working class parents sitting me down decades ago letting me know they were favoring my only sibling in their will. Their old school reasoning- she was single and I was married to an engineer. We ended up with a couple kids , a mortgage, etc. while older sister never married or moved out of the family home, and had a good job for decades that included company stocks. She is very secure financially. She got the very modest house outright.
Luckily, my sister is a generous person, knew this really wasn’t right , and made it right herself. But you can’t count on that .it wasn’t really about the money but the feelings involved . I can’t even imagine how complicated or hurtful it could get with a large estate.
Both of our kids are financially successful, one more than the other. But they will be treated equally .
The high powered career success is diagnosed with an auto-immune disease in his early 40’s and takes a low stress/no travel job on his doctor’s recommendation- and his income plummets by 80% (we have that in my family). The schoolteacher with the modest income, married to a social worker with a modest income- divorces the social worker, marries a successful business owner with no kids who is happy to put the step kids through college AND provide a wonderful life for the that family. It happens.
Agree with the rest- unless there is the need for a trust to take care of a child who cannot live independently and needs more of the assets- you cannot assume what your kids financial status is going to be 6 months/6 years/20 years after you are gone.
I have seen so much angst which could have been prevented with a very simple “divide it up” type of will. Once you get into a formula which tries to put a finger on the scale based on your (not perfect) prediction of who needs what-- your kids lives can get very messy.
Special needs, supervised housing, a lifetime care arrangement- that the siblings understand. But to compensate the third grade teacher for not picking a higher paying career? That gets icky very quickly…
When I convinced my mom to put my sister in her will, I had her do it with an equal percentage to me. She lowered our percentages to 20% and gave her 4 grandkids 15% each. Sis is miffed that she gave the grandkids anything, but she can’t claim unfairness overall.
But mom also left me and her grandkids more outside of her will via beneficiaries to make up for the difference she wanted and to see that I could help my nephew. My kids know about this and totally understand. Nephew doesn’t (yet) because I don’t want him to get mad and spill the news to sis. I have his in a basic interest bearing account and have told my boys that if something happens to me and H, I’ll haunt them forever if they take his money.
We took more of a tax hit on it this way cashing out IRAs to distribute the extra, but that beats ill will in my mind. If sis ever finds out, so be it, but at this moment I’m sure she doesn’t know or she’d have told me so.
I also had dad try to leave us siblings and each grandkid (of mine) an equal"ish" amount. Sis got the coin collection so she could sell it to get her share. I was supposed to be able to sell “my” house and nephew keep his. My boys are supposed to get cash proceeds. I doubt theirs would have matched their cousin’s, but they understand his situation thoughout his life and are perfectly ok with it.
If anyone wants to leave separate amounts, IMO, beneficiaries are the way to do it if you have the assets in accounts.
I do think, if there is a really good reason to want a different total to each kid, it is better to leave equal portions in the will and do your settling up whilst still alive or, as @Creekland’s Mom did, via TOD/POD designations, with the hope that the person left out, for good reason, never knows.
I have a friend, four siblings, two as co-executors, one is a known greedy person. They will want to buy Mom’s house for the greatest deal ever to keep as a rental, but would expect any sibling to buy it for some number 30-40% higher. It’s just how they are, they want a deal on all things and to make a profit on all things. Another sister is caretaking the failing Mom and the co-executor is trying to get Mom to sign over her carto caretaker sibling now. Greedy sibling would make it all a hassle and a fight. Nice sibling is tired of a lifetime of dealing with greedy/bossy sibling and would prefer to avoid a fight. Mom wants caretaker to get her car. It makes a lot of sense to address it now.
I agree with the other posts, unless you want to present us a situation we have not thought of, don’t leave differing amounts unless it’s extra to a disabled kid, a spendthrift trust for a money waster, etc. But then who has to be that trustee?
I’ve had people leave yearly gifts to a child and the will remains equal. What is gifted over the years can remain private. I also had someone buy a new car months before she died, and put the local daughter on the Title. This daughter managed everything day to day for years.
It has less to do with income differential. None of these are our situation, but some examples: A child gives all their money to questionable organizations, or has a spouse that would spend it all, or has a drug or gambling addiction, etc. What do you do, if you don’t approve of where the money is likely to go?
We never got into or asked about any details about wills with either set of parents. My parents volunteered info many years before they died and then nothing was said by me about it to them afterwards. It was their money(and not even that much) but it was theirs to do with as they wished.
H’s dad was a nice enough guy but every time any of his kids visited in his later years, he made a point of telling anyone who would listen that he was spending it all and not to expect anything. It was sad as he was an engineer and all 3 of his children were self supporting professional people.Nobody was visiting him or waiting for him to die to get his money! He was almost gleeful about trying to leave nothing behind. And the funny thing was with MIL’s extended decline at the end, that’s exactly what happened. Not much left.
I would hope to be able to leave at least something behind to my kids, even if they don’t even need the money . Take a nice trip on mom and dad. Thank you for being such wonderful sons.
@mikemac, that is a good question. There isn’t going to be that much in trust, so it would be hard to get a third party. I think I tried when we were setting it up. The sister who will be the trustee is in some ways perfect for it. She’s older than my brother. She is a neuropsychologist who works with people with brain injuries, so she is a patient explainer, and is used to people who aren’t making complete sense. But, Condon may be right. I will see if she has the option to appoint an independent trustee if it is not working out.
We have designed trusts to both accomplish estate planning and asset protection. Doing so involves have a trustee who is not a member of the family. We asked a friend, who was a lawyer at one of the very top firms but quit when here husband made tons of money. She spends her time on social philanthropy and loves our kids. She is the trustee both for the dynasty trust that we established and the one I set up for my son to hold his shares in his company. We are the trustees of her kids’ trusts (which are much bigger than ours). But, she is our age. We need to think of a non-family trustee as a replacement in case she dies or isn’t capable or interested in doing the work (there is almost no work now).
There are all kinds of ways to set up a trust that can still be equal. You can by-pass your children and leave the $ to your grand children, have the trust pay out small amounts over time, etc…
In the situations you describe, I think it would be impossible to not have hurt feelings.
(Let’s call A the kid who may spend the money on something you consider undesirable, called X for simplicity’s sake.)
What you wrote before (“I don’t think they’ll fully understand or accept my reasons”) suggests that A and A’s siblings may not agree with your viewpoint that X is a particularly undesirable thing for A to spend money (inheritance or otherwise) on. Indeed, they (all of them) could see it as an example of overbearing parenting from the grave, if X is something reasonable in their eyes.
