Elle wrote:
- quote -

Elle,
By goofball I mean "fraudulent." They're out there, both as 501(c)(X)'s
and private foundations. Not common of course but you do read stories
about deathbed scams involving them. On one end of the spectrum it's a
small inheritance going to a made-up church or relief organization, on
the other it's a private foundation created to divert an inheritance
towards one offspring's benefit.

-Tad

I am saying that we will discuss this matter actively with them and
come to a conclusion together. The decisions will be made mutually. It
is true that if we die tomorrow, everything will go to them (fairly,
because they have already contributed to my financial success). But
you asked the question about adult children. By the time they are
adults, we'll have reached a consensus which can change (but always
with discussion).

To use what I'd consider a negative, possible but not probable,
scenario: if they managed their finances badly and disrespected our
wishes, and so on, then we'd have a talk about it and the implications
it'd have on their estate (but it'd take into account all their good
behaviour before they became adults). It's conceivable that if their
behaviour is so egregious (I hope this never happens and I'm not sure
what those behaviours would be but if they behave the way they are
currently, I don't forsee problems) that we might do something they
don't want. If we do change our minds, it'll be through a dialogue and
not unilateral.

More generally, and this is my advice and opinion that people are free
to ignore: your children are a (good or bad) partner in your financial
planning. Well-behaved children for example contribute tremendously to
our financial and personal well-being and success--our children already
have tremendously even though they don't know what "financial
planning" means. They *should* have a role in the decision making
process. In general, we have an extremely strong tradition of being in
a close-knit family, and as someone else said, there's no one I'd
trust more than my adult children (while it can be different, it's
unlikely to be the case). We just happen to disagree on how our
children should be raised, that's all.

--Ram

Elle <elle_navorski[at]nospam.earthlink.net> wrote:

- quote -

"Tad Borek" <borekfm[at]pacbell.net> wrote
- quote -

A competent executor who has read and discussed the will and using a good
lawyer to prepare the will prevent against this.

- quote -

I suspect you're talking about very large estates where it might pay to
challenge the will. The ones we see discussed in the media don't appear to
have been easy victories at all.

I'm not so sure referring to any charity that is recognized as
not-for-profit under the law as "goofball" is such a good idea in this type
of discussion... We all have our different interests.

snip
- quote -

I think this is the bottom line.

revheck[at]linuxwaves.com wrote:
- quote -

They should consider buying an annuity at which point they will have a
better idea of how much to leave their children.

- quote -

They might consider on giving their children a gift (up to $11,000 per
giver/recipient taxfree) each year.

- quote -

It would be hard to increase your allocation into stock. Buying LEAPS,
deep in the money calls, would help a little. Why not suggest that your
parents diversify into mutual funds?

--
Ron

Ram Samudrala wrote:
- quote -

Another reason relates to declining competency during aging, which is
becoming more of an issue with increasing longevity and Alz/dementia. If
adult children know the contents of your will it's less likely that
someone will be able to interfere and have the will changed. Relative,
"friend," goofball charity, there are plenty of anecdotal cases of each
and it's surprisingly easy to do.

Another is to simply make sure that the testator's true "will" is
memorialized and updated in a written will. People aren't very good at
updating them and it becomes more so as the years go on - and competency
is a big issue there as well. I'm sure those who have been through this
or worked with people who have will agree. You read the will and 3/4 of
the beneficiaries aren't alive anymore and you're tracking down distant
relatives who were never intended as heirs. Or the will was drafted
before a certain charity or child was even in consideration, and the
money doesn't go to where the testator intended. Or you have serious
concerns about whether a late-in-life codicil could be challenged on
competency grounds.

But these are practical reasons, and part of this gets down to family
attitudes about money...some are very open about it and in others it's
very much a private matter. Some view inheritance as a demotivational
windfall, others as a foundation for a better life, across generations.
Etc etc.

-Tad

"Ram Samudrala" <ram[at]sp1.compbio.washington.edu> wrote
snip
- quote -

I'm going to take this (along with all else you said) to mean you're going
to leave your kids everything unless they ultimately tell you to do
otherwise. So in fact there is nothing that they have to do to get, by
default, your estate upon your and your wife's death. They could even make
bad decisions with their own money, and you'll still offer them their "fair"
share, because to do otherwise would be "surprising" them, and you say you
don't want to do this.

Me, I think it's better for the offspring to be taught to assume nothing
regarding inheritances. Similarly, it should not be something that parents
hold over their kids, like bribery. That way, the offspring's actions as
their parents age will be based in love (or not). I go on the assumption
that family bribery is inherently bad, as a financial planning and emotional
matter. If you don't understand that, discussion will have to wait for
another newsgroup.

Elle <elle_navorski[at]nospam.earthlink.net> wrote:

- quote -

There is nothing for them to do, no specific hurdle to jump. As they
grow, they'll be involved in the decision making process to a point
that it is a mutual decision.

- quote -

It's not like a if-then-else situation. I'm advocating
transparancy. I'm not sure what choices I'd make, or what choices the
kids would make over a long time. What I am suggesting is that those
choices be communicated clearly and discussed so that there're no
surprises.

To give you a concrete example, the gist of my conversation with my
mum (over a long period of time) went something like: "I'm going to
leave everything you and your sister." And I said "I'd rather you give
my share to my sister or to charity." And then she said "I'd rather
give it to you and you can make the decision." And I said "Okay." (To
Mark Freeland: thanks for the advice. I hadn't thought through the tax
consequences yet but I've put it on my todo list to discuss with my
tax advisor.)

It's still an ongoing conversation. But we (my sister and I) know
where the will stands now and we'd definitely be surprised something
other than what we've discussed happened. I'm saying the discussion is
important so things don't happen out of the blue (whether they're good
or bad).

As our kids grow up, we might start the conversation by something like
"what do you think we should do with our estate?" and then go from
there.

--Ram

"Ram Samudrala" <ram[at]sp1.compbio.washington.edu> wrote
Elle wrote
- quote -

What exactly are you going to tell each of your kids he/she has to do to get
your (and your wife's) estate divided by however many kids there are?

I am not getting how doing so is prudent, so maybe the exact words you might
use would be helpful to readers here as they help their own kids with
financial planning and avoiding "surprises."

Elle <elle_navorski[at]nospam.earthlink.net> wrote:

- quote -

It would mostly be up to the kids (though we'll have a strong
influence on the choices they make). For example, I've told my mum to
give my share to my sister (since I've not needed it and if there is a
catastrophe I trust my sister completely to take care of me) or to
charity directly, but she doesn't want to do that. If my kids told me
something like this, I'd probably listen to what they wanted.

- quote -

They'll always be aware of our decisions, yes. Like I said, the
expectation in our families is that wealth stays in the family. I'm
the first one from my side actually to depart from that due to certain
fortunate circumstances, and likewise for my wife. If our kids were in
our positions (and we encourage them now to be that way) then we'd
encourage them to be generous to the world, but these decisions will
be made as a family.

Anyways, more academically/abstractly/generally, in terms of financial
planning, I definitely believe in the family being involved in the
process particularly if you're close-knit. If the goal of our lives is
to help the world to help ourselves and vice versa I an integrated
financial plan that takes into account the uses of the money both by
you and kids is a good thing. Kids (well-behaved ones at least
contribute to one's financial success.

--Ram

"Ram Samudrala" <ram[at]sp1.compbio.washington.edu> wrote
- quote -

Can you give some examples of hypotheticals that would motivate you to leave
most of your estate to charity or motivate you to leave most of it to your
kids?

Since you are interested in not surprising your kids, are you going to tell
them in advance what the criteria is for them to receive the bulk of your
estate when you die?

Of course not, but I won't be surprised in terms of being excluded
from the will, or that my sister and I will split whatever's left
(that might be zero, but that's an unpredictable situation). It's
actually more important the other way, when you don't plan on leaving
some or all assets to your children and there's an expectation
otherwise.

--Ram

Bucky <uw_badgers[at]email.com> wrote:

- quote -

Ram Samudrala wrote:
- quote -

I don't think you can guarantee that there are no surprises. Many
unexpected things can happen: maybe your parents live to be 120 years
old and have to spend all their assets, maybe they lose a chunk of it
to fraudulent investments, who knows?

There is no person on earth that I trust more than my adult offspring.

--
_Bill_

Ram Samudrala wrote:
- quote -

A related reason is for ease of future execution of the will. It can be
difficult to find just what the assets of the estate are, and the will
may help to inventory the estate (though you can't count on it for
that). Obviously, this is not the best way to identify assets, but can
serve as a check or secondary source.

With respect to giving your share to your sister, I suggest looking up
the legal term "renounce". (This is not legal advice, and you should
consult a lawyer, etc.)
http://dictionary.lp.findlaw.com/scr...8f433849c93d2a

This can have tax implications - if you renounce your inheritance, then
depending on the way the will is constructed, your sister may
automatically inherit the assets you renounce. On the other hand, if
you take according to the will and then gift the assets, you may wind up
with an estate tax of your own. Again, not legal advice, just an
observation.

- quote -

We've encouraged our parents to "spend down" to make themselves more
comfortable. Medical expenses, home care, cabs, etc. My hope is to see
little of their assets (meaning a longer, more rewarding life for
them). Realistically, I expect to receive a fair amount, but don't
manage my portfolio with that expectation. When the time comes, we can
rebalance.

--
Mark Freeland
nBeOwXs[at]pacbell.net

Elle <elle_navorski[at]nospam.earthlink.net> wrote:

- quote -

So that there are no surprises? In my case, I know that my sister and
I will get everything owned by my parents and I plan to give my share
to my sister (or charity or a mix, but the choice is up to me). We
ourselves are likely to give most of what we have to charity depending
on how things go with our children, but we'll definitely let them know
when they're old enough. In our families at least it is strongly
expected that accumulated wealth will stay in the family.

To the OP, assuming you do know that you'll inherit most of their
estate, the advice I'd have is to weigh the risk of something
catastrophic happening that could change that (as John pointed out)
and your asset allocation. Presumably you can be somewhat more riskier
than than others.

--Ram

I echo what John said. Also, have you actually read your parents' wills? You
say "it's likely that... " For me, that wouldn't be enough for me to make
any radical changes to my financial planning. Presumably one parent will
die, then the other one will. The survivor could make changes. Or what John
described could happen. Or maybe you're not even in their wills.

Plus, would you really want to know if your parents left you the bulk of
their estate? It seems to me that knowing this can tempt a person to do
things that are insincere or amount to responses based in bribery; jealousy;
greed; etc.

Two cents. If anyone has a good reason for sharing the contents of wills
with one's adult offspring, I'd be interested to read it.

In article <1112466971.868807.64960[at]o13g2000cwo.googlegroups.com> ,
revheck[at]linuxwaves.com wrote:

- quote -

No. Don't count your chickens until the eggs hatch. You
learned that back in grade school. Although you would not
want to see it happen, one of your parents could come down
with cancer and need expensive long-term treatments and
run up huge hospital and nursing home fees. You can wipe
out an estate in a heart-beat if something bad happens.

Wait and see what happens. If you inherit anything, deal
with it at that time. Otherwise, keep your eyes and hands
off of mom & dad's nest egg.

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ====================

My elderly parents are in their mid-80s. They worked hard all their
lives and now have a comfortable estate. They mostly hold tax-free
bonds, which they ladder and hold to maturity. They are still healthy,
but they do have good medical and long-term care insurance.

I hope my parents live long enough to spend it all on themselves. They
deserve it. However, it's likely that my sister and I will
inherit a significant chunk of this conservative bond portfolio.

My question is: should I account for this expected inheritance when
considering asset allocation of my own retirement funds?

My wife and I are in our mid-40s. We our invested in index funds with
fairly standard 70% equities and 30% bonds. But if I took into account
my expected inheritance, it would look more like 10% equities and 90%
bonds.

revheck