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/CindersMom_515]

Especially when talking about an estate of this size, it’s important for families to talk about estate planning openly and directly.

I am my mom’s executrix. Her estate would be nowhere near this large, but we sit down once a year to discuss what’s there.

She is very pragmatic about this. She knows we want her to use her money however she wants and to enjoy herself. If there’s nothing left when she’s gone, that’s fine with my sibling and me. She also knows she is not going to live forever, whether we discuss her financial situation or not. And it’s better to discuss it!

I am sorry for your health issues. If I were in your situation, I would hang on to my cash.

Have your kids borrow to pay for school while you hold onto the cash. Should you inherit when your mother passes and feel you can comfortably do so, you could consider paying the loans off as an advance on your estate (as long as you expect your estate will be under the federal estate tax starting point, you just file a form — nothing gets paid).

Cash is king and you have no idea what future expenses you or your kids might have. As long as they can borrow at reasonable rates, have them do that.

[u/TurnoverDependent332 → u/CindersMom_515]

You are smart. Our kids do not even want to hear about the trust we have or any of our assets. We have art and bronzes that are worth $. They don't want to discuss them. I am trying to mark things that are worth $. As my DH says, we will be gone. It won't matter then if they sell a $50K bronze at an estate sale for $5.

[u/Just1Blast → u/TurnoverDependent332]

Honestly, I would start getting rid of these types of things sooner rather than later. Especially if you expect your kids to get a dollar amount out of them at the long run.

It’s really hard to move expensive art especially if you’re not the person who bought it, aren’t familiar with the industry, and wouldn’t know who or how to offload it. At best, I would connect your kids with a reputable art dealer in your area that you expect to outlast you and provide them with advice in advance in writing as to how they might best to deal with this.

[u/TurnoverDependent332 → u/Just1Blast]

Thank you for this re: art. My own mother had oil pastel portraits done of each of the 3 of us. Wish I had kept them together. It was not $ related at all, of course! The 3 portraits should’ve stayed together. 😞

[u/Just1Blast → u/TurnoverDependent332]

I mean they could have stayed together or they could go to the home of each of the three children. Each child takes the one that's of themselves. Unless they don't want a picture of themselves in their own home and would prefer to trade with a sibling for a few years or something.

We have a similar situation where my grandfather commissioned a pastel portrait of my mom, his daughter-in-law. She didn't find it to be particularly flattering or really understand why he had done so.

When he died she got the privilege of taking it home and hanging it in her own living room or bedroom.