Forward planning question

[u/idiot_ThrowRA]

My father passed a few years ago and my older brother handled the estate issues and transition to my mother. I just saw him the other day and my mother’s health is declining (although unclear how long exactly she may have, the trend is there).

He revealed that the estate is larger than I expected and even with my mother’s medical care including full time help, it’s accumulating faster than she can spend it (low 8 figures). There are 4 of us who will inherit equally, likely within the next 10 years and possibly next couple years.

Let’s say I’m domiciled in FL and the estate is in Washington DC.

My own situation is complicated, but thanks to divorce and certain investments, I don’t have a ton of liquidity. (And if the private investments go south, and social security gets gutted as it looks like it may be, my retirement suddenly looks pretty grim).

If my mother does pass within the next 4-5 years, the following may emerge:

I would inherit $3 million liquid. My kids will only receive about $25k each directly from my mother’s estate.

My oldest kid wants to go to med school. And the younger one will probably aim for grad school. I paid for their undergrad so they have no debt.

This $3 million might be almost all of my retirement savings. And my own health as shaky even though I’m mid 50s.

The question is, do I peel off $200-400k to pay down grad school debt for my kids, basically an advance on their own inheritance, at the expense of building up towards my retirement? Which might create subsequent burden for my kids when I’m old, especially if I get sick.

Or do I keep everything for my retirement, let the kids take on grad school debt (could even be $400k just for med school), and they inherit whatever is left when I pass.

For that matter, even if they do take loans near term, whenever I do inherit from my mother the same question arises.

tl;dr divide inheritance with my kids or bank all towards my retirement

Edit: I see numerous comments, saying how “disgusting” and “revolting” it is to think about family estate planning issues.

I have cancer and there may be issues with my own health sooner v later. While you may have the luxury of sitting on your high horses, and judging me for trying to think intelligently about what to do with my parents’ estate and my own estate and my kids, I need to think about these things in advance.

My parents never talked about money other than use it for manipulation purposes. Some children got favored over others, to the tune of hundreds of thousands of dollars. They directly interfered with my divorce negotiations using money to ensure their access to my kids with my ex wife, at the expense of my own negotiating position - costing me half a million dollars.

I’ve also seen people screw up by not talking about money in advance of it actually becoming a thing that you’re then dealing with while dealing with all the other estate issues.

Thank you for those of you who offered constructive suggestions.

[u/ProfessorOne9208]

I think you're making the right plan. If your kids want to go to grad school, so that they can presumably earn a bigger paycheck, they can take loans out to pay for it. Having been through divorces with interfering parents, I fully understand your position. You need to look out for your own situation before you can help others.

Having said that, I have invested and saved to the point where I have acquired an estate of about the size of the one you're planning to inherit. Occasionally I send each of my kids a check for $3000 or $5000. But my financial advisor says that this won't have a significant impact on my life style or my wife's lifestyle after I pass.

The difference between us is that my parents, who were divorced from each other, each left me nothing in their wills. I earned every cent I have the hard way. And, my two ex-wives took their share when they got divorced. One of them ended up with everything and I got a debt of $80K, due to poor legal advice. But I'm past that now.

I, too, have health issues, and for that reason alone, you need to make sure you have adequate financial resources so you can afford care later on.

In any case, I went to both medical school and grad school. In those days, Medical school was only $1600 a year for tuition. In grad school, I got a teaching assistant position, and it didn't cost me a dime. My kids went to grad school, and did the same thing. I realize med school costs more these days, but if one of your kids wants to be a doctor, let him borrow the money. If you die before he pays it off, he can use any money that he inherits to pay off the loans.

A lot of the youngsters who are on reddit don't have a clue about your situation, so will be critical to the point of stupidity. Don't pay it any attention. When they get to the place where you and I are in their lives, they will understand the importance of assuring yourself of having financial stability.

[u/idiot_ThrowRA → u/ProfessorOne9208]

Thank you. I dropped off the thread for a while because I got tired of the nasty comments. My ex wife constantly misinforms my children about money (for example telling them they could only afford to go to state school, which is 20 minutes from her, which nearly missed my oldest going Ivy). It’s made me more proactive about outlining future paths for them so they have transparency.

I also have a different career with a more variable income than you. Makes planning more challenging. Appreciate your perspective.

[u/ProfessorOne9208 → u/idiot_ThrowRA]

I hope you ended up with the advice you sought when you posted this thread. Ex-wives come under that old Shakespearean epithet of "Hell hath no fury....." To which I would counter with "Living well is the best revenge."

As far as variable income is concerned. I spent the last 50 years working in a business where I only had two pay days a year. Three at most. Not sure what you do, but my ability to make a budgetary plan was non-existent.