Inheritance

Most parents choose to leave their estates equally to their children. But sometimes, parents intentionally choose to not leave anything to one or more of their children. There may be what the parents consider to be legitimate reasons, such as if one child has been more financially successful than the others, or not wanting a special needs child to lose government benefits, or not wanting to leave an inheritance to an irresponsible or drug-dependent child. And sometimes a parent wants to disinherit a child who is estranged from the family, or to use disinheritance as a way to get even and have the last word.   But regardless of the reason, disinheriting a child is hurtful, permanent, and will undoubtedly affect that child’s relationship with his or her siblings. Courts are full...

My Uncle Bud was one of the sweetest men you could ever hope to meet.  He had a huge heart and a generous spirit.  He died of a stroke at the much-too-young age of 71.    In keeping with Jewish tradition, my family gathered for the unveiling of his headstone a year after he died.  I learned many wonderful new things about my uncle at this event, including that his desk had been littered with half written love notes to his wife of some 50 years at the time of his death.    At the luncheon after the ceremony, my Aunt Lee announced that when they had done their estate plan many years before, Uncle Bud felt it was important to leave a little something to each of his nieces and nephews to symbolize how much they meant to him.  The amount he settled on...

When considering how to leave assets to your adult children, first decide how much you want each one to receive. Most parents want to treat their children fairly, but this doesn’t necessarily mean they should receive equal shares of your estate. For example, you may want to give more to a child who is a teacher than to one who has a successful business. Or you may want to compensate a child who has taken care of you during an illness or your later years. Some parents worry about leaving too much money to their children. They want their children to have enough to do whatever they wish, but not so much that they will be lazy and unproductive. Well, no one said you have to give everything to your children. You may prefer to leave more to your grandchildren and future generations thro...

Not many parents like to talk to their children about their wealth. How much money people have is usually considered a private matter, something it’s not polite to talk about. But not talking to your children about how much they may inherit can leave them unprepared to handle even a modest amount.   This is becoming especially important because children of baby boomers are due to inherit more wealth than ever before. It has been estimated that baby boomers will inherit $12 trillion from their parents, and they will leave an additional $30 trillion to their own children over the next 30 to 40 years.   Many who have substantial wealth are concerned that letting their children know how much they have will take away any motivation for the children to be productive and invol...

Recently I reorganized my kitchen, emptying a series of about 20 bottles filled with corks to make better use of the counter space they occupied. These bottles filled with corks marked every bottle of wine opened in my home since I became a single woman in 2006. Okay, lest you think me a lush, the bottles were, every one of them, opened in the company of friends and family. I collected each one as a remembrance that my life is still abundant, still full of love and laughter and company and joy, despite the fact that I left a very financially secure marriage. Every time I saw the corks, their numbers growing each week because I have a very open door home, I smiled in the remembrance of my chosen, and ever-growing family. They made me feel like a very wealthy woman indeed. Toward the bott...

Most parents want to treat their children fairly in their estate planning, and many assume that means having their children inherit equally. But fair does not necessarily mean equal. There may be special circumstances to consider before you divide the family pie into equal parts. For example: You may want to leave more to your son who struggles to support his family on a modest teacher’s salary than to your daughter who is a successful professional, married well and has chosen not to have children. You may want to compensate a child who has given up part of his/her own life to care for you. You may have a much younger child who will need care longer than your older children. You may have a special needs child who will need care for his/her lifetime. Yo...

If you are concerned that your children’s inheritance is being reduced by the collapse of the housing and investment markets, rising medical costs, a sluggish economy and a longer-than-expected lifetime, you needn’t be. According to a recent study, family values, traditions and history still mean more than money as an inheritance.   These results are from the 2012 Allianz Life American Legacies Pulse Study* which surveyed baby boomers (age 47 to 66) and “elders” (age 72 and older). Allianz Life conducted a similar study in 2005. Interestingly, despite the financial crises that occurred between 2005 and 2012, the results were strikingly similar, with a high percentage of both boomers (86%) and elders (74%) agreeing that family stories, values and life lessons...

“Those who labour in the earth are the chosen people of God, if ever he had a chosen people, whose breasts he has made his peculiar deposit for substantial and genuine virtue.”  - Thomas Jefferson The farmer as virtuous is well-established in our national conscious and reverence for the family farm sets planning for it apart from other types of family owned businesses. Even children who do not plan to actively participate in farming have a deep emotional attachment to the farm. According to the USDA, approximately 96 percent of the 2.2 million farms are classified as “family farms.” The average age of a farm operator is 57 and the fastest growing segment is tho...

When you die, if some or all of your estate bypasses your children and goes directly to a grandchild, your estate could have to pay a tax called the generation skipping transfer (GST) tax. This is a very expensive tax. It is equal to the highest federal estate tax rate in effect at the time, and is in addition to the federal estate tax. "Skipping a generation," and incurring this tax, can happen in three ways. It can happen intentionally, for example if you "skip" the living parent (your child) and leave an inheritance directly to your grandchildren. It can also happen unintentionally. For example, if the inheritance is in a trust for your child, he or she dies after you but before receiving the full amount in the trust and your grandchildren will receive their p...

Taking ballroom dancing lessons helped Claire cope with the recent death of her husband of 40 years. Her instructor provided her with the companionship she was missing. Claire, with a new sense of self-esteem, soon fell head-over-heels in love. Her children were shocked when their mother announced she had married her instructor. But the real shock came a few months later when Claire died: the children learned their mother had placed all her assets in joint ownership with her new husband. Even though Claire's will left everything to her children, they were completely disinherited. How have you planned your estate? Have you followed the traditional approach of leaving everything to your spouse? Have you thought about what could happen if you die first? Even if your spouse does...