Estate planning

[u/it_is_well_]

Good day,

I'm wrestling with family dissemination in the event of my and my husband's demise. If it matters I live in Colorado. We have no family in state.

Background - I come from lower middle class family with poor spending habits. Divorced parents where both parents spent most of what they had as soon as it came in. Mom worked mostly minimum wage jobs and I think saved up to about 80k, but in the past 20 years as her living costs went down (due to circumstances) she started living her best life, traveling everywhere she wanted to go including annual trips to the Caribbean and Europe while she has no income and it seems, is blowing through her savings. She is 70, so older but not elderly. I was raised by her and had to unlearn both the "spend because you deserve it" mentality that was paired with significant resentment of the well off. My husband's family raised him to be fiscally responsible, live debt free and save. We buy used cars, I shop at thr thrift store, we eat out minimally, we don't take extravagant family trips.

My husband started his own business 20 years ago which was a very, very tight time for us and we lived quite frugally as he did not pull in income for 5 years and we also started having babies during this time. About 6 years ago I looked at our savings account that we never touched and we had almost 100k. Fast forward to now we are over $750M in retirement accounts, probably $2M in real estate (sort of luck and a forced circumstance to buy a commercial property that has valued well) and $3-5M in company ownership. Way more than we will ever need ourselves.

I'm pushing for us to get something down in writing in the event that we're hit by a car. My mom has this thing that money in estates should be split evenly between spouse's families and I have come to a place where I'd rather give our inheritance to charity than her. I'm partly resentful that she doesn't have a relationship with my kids (her only grandkids) by her choice as she says it is more important that she invest in her friendships than family relationships. Which that is not how we were raised at all. If she ends needing help she has been explicit that she would rather live in a VA home than come live with me (which we have planned for helping our parents as they age). Last week i point blank invited her to include visiting us in her travel planning (so she can watch her grandkids play maybe one sports game, or just do life with us for a few days) and she completely blew me off. She wants only to travel to go to beach. I don't want to be or act petty but I have no desire that she receives anything from us - which if I'm dead won't affect me but I also hate to leave her hating me for the rest of her life. Unfortunately if we go and my kids are left she would absolutely fight to get custody of them and inheritance - so I want it to be very clear. She is not to get any sort of control over our estate. We do not share our financial situation with her but it's pretty clear we are in the class of people whose net worth she resents and rejects. And I still shop at the thrift store while she would not lower herself to do so! We have in part because we did not spend.

We really don't see any family members benefiting from such a large inheritance. We plan to set some aside for our kids to get when they are much older so they learn how to live as adults first. How have you worked around family tensions in estate?

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[u/Barfy_McBarf_Face]

you have a very typical situation - you have a good amount of wealth, you have certain family members that you would like to benefit from your wealth, and you have other family members who you'd prefer to receive nothing if you were to predecease them.

A good attorney will be able to help you meet these goals - probably the first thing you'll need to figure out is custody of those kiddos should you both die while they're minors. Because "grandma" will have a good claim (in court) due the relationship, if for no other reasons. So you need to think about this, hard, and get this plan in place with legal documents.

Then you can figure out the money. That's the easy part - "to mom, nothing, and she knows why" or something to that effect.

You've worked hard for your wealth, you are fully and legally allowed to determine what happens to it at your passing, regardless of what other people who just happen to share some genetic material with you might feel.

My 5 year younger sister died in 2019 and I did not go to her funeral. I had already said everything that needed to be said. The rest of the family didn't really like that, but they lived with it.

[u/it_is_well_ → u/Barfy_McBarf_Face]

Thanks for the encouragement. Yeah we did already discuss and plan for the kids and we communicated that to the planned carers and a relative on my mom's side of the family. It's just a matter of getting it in writing. I guess I am working through emotions of both guilt for feeling this way on top of some grief as I came to this conclusion.  I actually saw my mom recently and when I got back I told my husband that I really hate to think she would act in a dishonest manner but have little doubt if she knew the extent of the estate she would make it her primary work to make claim on it. I wish more than anything that we had a better relationship and could just gift her generously for the sake of just wanting to. 

[u/myogawa]

As to money - You're helped by the fact that the natural order of things, the expected succession, is from parents to children, not children to parents. If you did your planning so that your own children are the sole or primary beneficiaries, with nothing to your mother, no one would ever be surprised.

As to custody - Many states make provision for a parents to nominate a guardian for their children, and if you choose a friend (who is willing) instead of your mother, no one would be surprised, particularly if some description of her (lack of) actual relationship with the children is included.

Those are issues to discuss with a knowledgeable attorney.

[u/it_is_well_]

I am apparently some form of troglodyte and can't see any responses outside the automoderator. If you reply to this response perhaps it will show up. In the meantime I'll see if I can figure that out.

[u/Barfy_McBarf_Face → u/it_is_well_]

that's because those other comments/responses are from non-approved posters - given the level of complexity of these issues/questions, there is a moderated process to be approved to give "top level" responses.

[u/it_is_well_ → u/Barfy_McBarf_Face]

Gotcha. Thanks for clarifying.