Protecting your child once meant insisting on a sweater, warm hat, and gloves. In the cold reality of adult life, your adult child may make poor financial choices and endure major slips and falls.
Check out a client’s questions and our response on providing income to an adult child after you’ve skated away permanently:
Dear Weaver Firm,
I am in my 70’s and have two children from a previous marriage of five years. One has a son and the other has two daughters.
My daughter is married and values material things far more important than financial security. She and her husband stay in debt, which has contributed to a rocky relationship for the past 15 years. I don’t know if it will last or not, especially when my granddaughter leaves home in just a few years.
More than likely, there will be some money left when my current husband and I are gone. Is there a way to assure that whatever she might be left would be protected from her wasting it away and instead, possibly contribute to her old age? We have individual wills but wondered if a trust of some sort or other type of document would be better?
What would be the best way to structure this for both of my children and grandchildren and also, my husband’s one family member that he wants to leave something to? My current husband and I have been together for the last 35 years and live in Texas.
Your question has two parts: Do you split your estate equally? And, how do you split your estate?
The first one is easy: Yes. You want to leave your children something, but you don’t want to leave them with resentments and questions. You want to leave this world in a swift, graceful manner that leaves people with a good feeling — the inheritance equivalent of the triple axel from the 2018 Winter Olympics: three equal, generously timed moves, and then you’re off the proverbial ice. Except in your case, for good.
As to your second question. I suggest an irrevocable trust, outlining ways in which your inheritance should be spent. This has two advantages. Your son has a financially responsible life, so he will be glad with any bequest and, I’m sure, will be heartened to know there is money set aside for home improvements or his children’s education. Your daughter, while not so financially responsible or astute, gets the same deal. Only in her case, you are protecting her from herself and protecting the interests of your granddaughter.
You don’t say what relationship your husband’s relative has to him, but if it’s not a sibling, you may consider leaving him/her a smaller amount than the money you leave the rest of your family. You may want to discuss the tax implications of such a trust with a financial adviser when you have decided on your stipulations and the amounts.
You want to appoint someone who has no conflict of interest whether that person is a professional trustee — that is, a bank or trust company — or not. You need to depend on that person to act in a competent and trustworthy manner.
This Trust can be contained in your Will (testamentary trust) or a standalone document.
Planning for blended family is crucial to avoid hard feelings and litigation down the road. We’re glad to visit with you about your options and concern for your adult children. Call 817-638-9016 to schedule an appointment with attorneys, Travis Weaver or Rick Weaver. At Weaver Firm, we understand your concerns. Let us help protect your family and their future.
817.638.9016 or RWeaver@www.weaverlegal.net