BlsdMama Posted November 2, 2015 Share Posted November 2, 2015 We know it isn't wise to will the trust and $$ to the same person who will have the children. We have an appointment in a week to rewrite our wills. I'll be honest, we have some financially savvy family members, but none I want to leave in charge of our insurance (which will be substantial if we both die) and it's a 20 year commitment since our children are so young. What are our options? Is there a monthly stipend with the rest into a trust with a legal overseer (not family) to approve or disprove major purchases? I utterly trust the person we are leaving the children with however, this would be a lot of money and we want someone knowledgeable managing it and handling it. We have no idea how to be extremely detailed. Help is appreciated. Quote Link to comment Share on other sites More sharing options...
MomatHWTK Posted November 2, 2015 Share Posted November 2, 2015 You can appoint a bank as trustee. 3 Quote Link to comment Share on other sites More sharing options...
Myra Posted November 2, 2015 Share Posted November 2, 2015 I have always believed that if I could trust a people to be guardians for my kids then I can trust them with the money, too. So that is how we have done the wills - Myra 2 Quote Link to comment Share on other sites More sharing options...
marbel Posted November 2, 2015 Share Posted November 2, 2015 Right now, the people in charge of our kids and their money are the same. I've been advised over and over again that that is not a good idea. Now our kids are at an age where they don't need guardians but are not ready to be completely in charge of finances (we also have a lot of insurance). We are planning to talk to a friend who is in the finance field to see if he would be willing to be trustee for them till they are 25 or so. The only thing holding us back right now is trying to decide how much to offer to pay him for his efforts each year. As a pp said, a bank can do it. So can an attorney. There will be a fee, of course. Quote Link to comment Share on other sites More sharing options...
Guest Posted November 2, 2015 Share Posted November 2, 2015 I have always believed that if I could trust a people to be guardians for my kids then I can trust them with the money, too. So that is how we have done the wills - Myra This is us too. My children will go to my mom or my sister and they also get the money. They both love my kids as much as I do so I feel ok with that decision. Eta--neither of them have ever been stupid with money. I do love a few people who I would not trust with a nickel. If they were the guardian, I'd make other financial arrangements. Quote Link to comment Share on other sites More sharing options...
Renthead Mommy Posted November 2, 2015 Share Posted November 2, 2015 I have always believed that if I could trust a people to be guardians for my kids then I can trust them with the money, too. So that is how we have done the wills - Myra Well our kid goes to my best friend, and our money is in trust for him. He can't get it till he's 25, but my step father, who is also our former financial planner (retired now) is the money trustee. I get what Myra is saying here, but what if you give the money and the kids to the same person. Are you just handing them your money hoping they do right by your kids? And what if they get divorced? If there is not a trust, do you have to worry about that money getting caught up in the divorce settlement? Suddenly your future ex bil is getting half your insurance money and all you can do about it is come back and haunt him? 3 Quote Link to comment Share on other sites More sharing options...
BlsdMama Posted November 3, 2015 Author Share Posted November 3, 2015 Well our kid goes to my best friend, and our money is in trust for him. He can't get it till he's 25, but my step father, who is also our former financial planner (retired now) is the money trustee. I get what Myra is saying here, but what if you give the money and the kids to the same person. Are you just handing them your money hoping they do right by your kids? And what if they get divorced? If there is not a trust, do you have to worry about that money getting caught up in the divorce settlement? Suddenly your future ex bil is getting half your insurance money and all you can do about it is come back and haunt him? That's the catch 22 I think.... Generally, one person in a couple is good with money and the other is meh. Now, let's say we're willing a 10 year old child. Okay, the money just has to NOT RUN OUT for ten years. But handling money and expenses for eleven kids is, frankly, something that is a learning curve. My parents are very fiscally responsible and well-to-do, but I'd want my mom running the books. My dad is very generous.... To a fault and if his poor orphaned grandkids wanted money, it would pour forth - the same with my well meaning and incredibly loving mother in law. KWIM? I'd just rather have an emotionally unattached pro doing things with some kind of extended family oversight. Is that even an option? Quote Link to comment Share on other sites More sharing options...
Plateau Mama Posted November 3, 2015 Share Posted November 3, 2015 There are people you can hire to manage the money/trust fund. Your financial planner should b able to get you some sales of people he trusts. 3 Quote Link to comment Share on other sites More sharing options...
Renthead Mommy Posted November 3, 2015 Share Posted November 3, 2015 That's the catch 22 I think.... Generally, one person in a couple is good with money and the other is meh. Now, let's say we're willing a 10 year old child. Okay, the money just has to NOT RUN OUT for ten years. But handling money and expenses for eleven kids is, frankly, something that is a learning curve. My parents are very fiscally responsible and well-to-do, but I'd want my mom running the books. My dad is very generous.... To a fault and if his poor orphaned grandkids wanted money, it would pour forth - the same with my well meaning and incredibly loving mother in law. KWIM? I'd just rather have an emotionally unattached pro doing things with some kind of extended family oversight. Is that even an option? Of course it is an option. What does your financial planner say? Ours is only my step father because he used to be our finance guy. If he dies tomorrow, while kid still has need for a guardian, it will probably be changed to our actual financial planner or someone he recommends. But then you are paying them to hand out your money. Once my son is 18, and no longer needs a guardian, we will switch the trustee over to my bf, who is his 'godmother' and also a lawyer. That does not mean she wouldn't be the one to take him in as well, but legally it just works better. Plus my step dad felt better knowing we had a backup due to his age. But my biggest suggestion is talk to your finance guy. Quote Link to comment Share on other sites More sharing options...
StephanieZ Posted November 3, 2015 Share Posted November 3, 2015 I am working on this issue now, and I am looking at using a bank/investment house as either a hired money manager or actual trustee. We are naming a (dear) friend as Trustee and will name the investment house (Vanguard) as either co-trustee or secondary trustee (if my friend declines or becomes unable at some point, as the trusts may last for 12 years from now, so you need to plan for contingencies) Banks charge a percentage of the trust to manage it. Vanguard's fees are modest. I think it is around 0.5% per year of the assets (0.7 for the first million, 0.5 for the second. 0.2 for anything over 2). So, you do have to plan on that cost. But, presumably, the bank would do a good job managing the funds, hopefully more than enough to make it worth the cost. https://personal.vanguard.com/us/whatweoffer/advice/trustservices FWIW, I think if your assets are low and you don't have huge insurance policies, then it isn't as huge a deal, but if there may be big dollars to manage and/or they need to support the kids for a good long while, then I think hiring an investment bank to manage or HELP manage is ideal. Not many of us could reasonably be expected to perfectly manage millions of dollars in investments without substantial professional help. Going ahead and naming an investment bank that you like to be the co-manager or sole manager makes sense IMHO and saves the future trustee the stress of choosing one at a time when they will have their hands full. And, yes, you can allot funds to pay the Trustee. In most trusts, the trustee has a lot of leeway to charge for expenses, etc. If you aren't leaving actual real money to the trustee, then allowing for some compensation makes sense. In my case, we will specify travel expenses and per diem for any needed travel for the Trustee to meet with or check on the kids, etc. in addition to various other costs/needs. I don't want it to be a financial burden on my friend. And, yes, we are separating the financial from the guardianship. Guardianship goes to a family member. The money stuff goes to my friend and the bank. 1 Quote Link to comment Share on other sites More sharing options...
LucyStoner Posted November 3, 2015 Share Posted November 3, 2015 Helpful site for people tackling all this: http://getyourshittogether.org/wills/#.Vjgc-dm9Kc0 Quote Link to comment Share on other sites More sharing options...
BlsdMama Posted November 3, 2015 Author Share Posted November 3, 2015 I am working on this issue now, and I am looking at using a bank/investment house as either a hired money manager or actual trustee. We are naming a (dear) friend as Trustee and will name the investment house (Vanguard) as either co-trustee or secondary trustee (if my friend declines or becomes unable at some point, as the trusts may last for 12 years from now, so you need to plan for contingencies) Banks charge a percentage of the trust to manage it. Vanguard's fees are modest. I think it is around 0.5% per year of the assets (0.7 for the first million, 0.5 for the second. 0.2 for anything over 2). So, you do have to plan on that cost. But, presumably, the bank would do a good job managing the funds, hopefully more than enough to make it worth the cost. https://personal.vanguard.com/us/whatweoffer/advice/trustservices FWIW, I think if your assets are low and you don't have huge insurance policies, then it isn't as huge a deal, but if there may be big dollars to manage and/or they need to support the kids for a good long while, then I think hiring an investment bank to manage or HELP manage is ideal. Not many of us could reasonably be expected to perfectly manage millions of dollars in investments without substantial professional help. Going ahead and naming an investment bank that you like to be the co-manager or sole manager makes sense IMHO and saves the future trustee the stress of choosing one at a time when they will have their hands full. And, yes, you can allot funds to pay the Trustee. In most trusts, the trustee has a lot of leeway to charge for expenses, etc. If you aren't leaving actual real money to the trustee, then allowing for some compensation makes sense. In my case, we will specify travel expenses and per diem for any needed travel for the Trustee to meet with or check on the kids, etc. in addition to various other costs/needs. I don't want it to be a financial burden on my friend. And, yes, we are separating the financial from the guardianship. Guardianship goes to a family member. The money stuff goes to my friend and the bank. Thank you for this. Our assets are really relatively low, but we have very large insurance policies as it would be very expensive to either A)single parent this family, homeschool, and not work or B) raise this family to adulthood. We really aren't sure how to work this. Seeing a lawyer next week and hopefully he has suggestions as well. THank you for the info and the link - I'll look into it. It *is* very different. Leaving our kids to someone we utterly trust to raise them with our moral and spiritual values and keep them together but to expect them to manage all of this to their benefit is different. We would have enough from insurance policies that essentially the kids would be raised off social security and interest from a well managed account and probably not touch most or all of the principal, leaving an inheritance when the youngest is 25. But that's very different than just handing someone a large sum who never has and say, "Hey, do what you can." 2 Quote Link to comment Share on other sites More sharing options...
BlsdMama Posted November 3, 2015 Author Share Posted November 3, 2015 Helpful site for people tackling all this: http://getyourshittogether.org/wills/#.Vjgc-dm9Kc0 Looking at this now. Thank you! Quote Link to comment Share on other sites More sharing options...
OneStepAtATime Posted November 3, 2015 Share Posted November 3, 2015 No time for a long post but I wanted to agree with others that you may be much better off turning finances over to a non-emotionally involved entity. I have settled several estates and my dad was involved in several. Where custody/finances were concerned and a close friend or relative was in charge of both the money and the kids there were times when unexpected events put both the person taking care of the finances AND the kids in bad positions. Some ended very, very badly. Quote Link to comment Share on other sites More sharing options...
StephanieZ Posted November 3, 2015 Share Posted November 3, 2015 Another thing to consider is housing for the guardians. In our case, our relatives who would be left with our kids (teens) would likely need to add one or two bedrooms to their home, so, realistically, they'd need to move into a larger home (in the very expensive housing market they live in). I think setting aside $X to allow for the guardians to move-up if needed is probably most fair. In our case, that'd be at least $200k, and I would assume that money is "spent", so would not be available for any other costs or returned to the trust. (The guardians would just keep the upgraded house, not move again.) If your named guardian would be in this position, it's definitely something to specify in the trust/will, since you wouldn't want them to feel guilty for spending the kids' money on their home and you wouldn't want the Trustee/financial person to hesitate to spend the money, either. 2 Quote Link to comment Share on other sites More sharing options...
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