Trusts and financial planning
My DH and I are both professionals and make decent salaries, and over time I've been the majority breadwinner and supported the home when DH was struggling with child support court cases. DH is 22 years older than me and oldest SS is 10 years younger than me.
We are now earning enough to plan around tax and asset investments and given a never ending saga with the older SS, who firmly believes the world owes him a living and he plans to "inherit" and be "rich" from his father, the topic of wills came up.
DH suggested we put everything into a trust. Including what I make as we have pooled finances, which I am fine with, as long as it's for our life together.
my main concern is the plans around older SS access, control and knowledge of such a mechanism. I do not doubt for a minute that SS will do anything and everything to get as much as he can, with an attitude of "if I can't have it, no one can". I don't want to be nearing retirement and locked out of my lifetimes earning and left penniless and stressed.
I've expressed these concerns and DH says ok we should look into it more, but he also gives constant second chances and always gives the benefit of the doubt to SS even in the face of hard evidence to the contrary, so I'm concerned he will push for something that will leave me in a mess, just because SS will have a tantrum if not.
Has anyone gone down this road and has any advice, areas to look into or consider? Any signposting is helpful.
I will try to seek independent advice but it's a small community and my options are limited.
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Everything depends on the
Everything depends on the rules where you live (UK). You need to see a local solicitor and get some advice based on the laws where you live.
My advice would be to see someone by yourself and learn your options before you go to see someone jointly with DH. Trusts and wills can be complicated. Learn your options and think them through before agreeing to anything.
You are in the UK so I'm not
You are in the UK so I'm not really familiar with the legal and financial issues surrounding trusts..
but in the US there are revokable and irrevokable trusts...
You could have a trust set up that would have you be the beneficiary (you both).. upon the final passing of the latter.. then the trust would release the assets to the final beneficiaries.. in other words.. as long as you or your DH were alive.. you, and only you would have access to the trust.. it would pass to his child(your child?? or other beneficiary you chose).. upon the last person's passing.
Your DH could have separate to that trust other assets he passes directly to his son if he chooses.. upon his death.
I would consult with a UK estate planner.. and as long as you are both on the same page.. it should not end up that difficult.
If he wants his son and you to share in the trust.. and have equal right to draw on it? that could be a disaster.
the best way forward is that the majority of assets are in a trust that have you as primary beneficiary.. when you would pass (assuming it is in that order).. then his son would be next to inherit. if his dad wants him to have something "at his death".. he can do that with a separate trust maybe? or just flat out bequeath some assets that are not held in trust?
This is helpful, thanks
I have a feeling he would want his son to have access at his death, rather than mine, given his son and I are not too far apart in age. Good idea to separate out some assets.
In your situation, it doesn't
In your situation, it doesn't seem advisable to have a joint asset trust. I would suggest you each have your own respective assets in a trust and his trust could be divided between you and his son at his passing. Your trust could go to your DH.. or to his son if you chose that way.. upon your passing. Your home should be titled so that it automatically passes to the surviving spouse 100%.. (his son can inherit that value when the last spouse is finished with it).
This is complex because it sounds like YOU have majorly contributed and built your wealth.. while your DH has not been able to due to his obligations to his child. So.. the thought that his son would have access to YOUR hard earned wealth.. while you are still alive and might need it? no.. that is absolutely not fair.
It could also be that you do have a joint trust that distributes X percent of the value to his son upon his death.. the remainder stays in the trust for your benefit while you are alive. I would not want his son to be able to dip into joint funds.. I would have the funds just distributed to his son.. or broken off into a separate smaller trust for his son's benefit.
But.. let's say you have contributed to 60% of the trust's wealth.. and your DH.. only 40%. he dies.. and the trust gets split 50/50.. you lose 10% of your own hard work to his son.. life is uncertain.. you may well have significant needs in your later years.. and you would hope that at minimum all of your assets personally earned would be at your disposal.
whichever way it goes.. I would definitely ensure that there would be no situation where you and his son are able to draw on the same pot of money.. it is a disaster waiting to happen.. if he wants to give to his son on his passing.. set that up separately. and you can chose who you give what's left of yours to.. it may be your DH.. you never know. really
also.. he has two sons.. and
also.. he has two sons.. and ideally their "pots" should be separate to avoid one raiding the trust and cutting the other off.
100%, this is really
100%, this is really important. I brought up my concerns that the older one will make life so hard for the younger one that he will avoid the situation (he's not one for wading into unnecessary disputes and would rather take nothing than fight over inheritance) and that it's important that he gets treated fairly. The separate pots will help that and so thanks for the suggestion. DH is aware and although he thinks the older will 'grow' out of it, will acknowledge the risk.
Not sure where I set location, but I’m not in the uk.
I'm in an offshore tax haven...
Please consult local professionals
Really if you are in Bermuda or something not many are qualified to give you advice, other than just be on the same page is your DH in how the assets would be split on one of your deaths, and both of your deaths.
If you are asking here, then I'm assuming you really aren't on the same page about your steps inheriting joint money. No professional can help you until you are on the same page, so time for frank discussions with your DH.
Def consult a professional
Husband and I do need to get our wills in order. Like you, older SD24 Feral Forger will not get one cent of anything, period.
In CA
Steps get nothing unless otherwise specified. But, you should get your documents in order if you have joint accounts, and especially if the house is in both your names. Please consult a professional.
DH and I set up a trust soon
DH and I set up a trust soon after our marriage. But we're in the US, so you definitely want to consult a legal/financial expert.
Here, at least, it can be simple or detailed, depending on your needs. If your DH is set on SS having access to money upon his passing (assuming he goes first), there may be a way to organize it so that some assets are yours and some are his. But this will require some very serious conversations. Still, very, very necessary to make sure you're taken care of. I wouldn't sign off if this isn't arranged.
In our case, everything goes to each other. After we're gone, it goes to SS. But, he won't be able to start accessing it directly until he's 35 (he gets a percentage then) and won't get the full amount until 50. Until then, he'll have to go through our appointed trustee.
Right now, DH has way more than I do. But I may have family inheritances at some point. When and if I do, I may set it up outside the trust to go to my nephew and nieces. I see no reason for SS to get my family money.
In the US, or at least my
In the US, or at least my state (Maryland) the advice is to NEVER co-mingle individually held assets. If you get an inheritance, your spouse cannot touch it unless you co-mingle it. Don't put it in a joint account or use any of it to buy or add to a jointly held asset or property or you will be giving your spouse half.
Keep it separate and set the beneficiaries as your nieces and nephews. Where I am, the money goes directly to the beneficiaries bypassing the will and probate.
Good advice. Yes, if and when
Good advice. Yes, if and when I inherit, I'll keep it in a separate retirement account. I have an excellent financial advisor who will help.
Consult the equivelant of an estate attorney
Consult the equivelant of an estate attorney where ever it is that you live. Do not put anything in a joint trust - all of your assets should go in at trust that is completely controlled by you. You will need both trusts and wills - make sure they are rock solid. SS does not deserve any of your money and honestly, it doesn't sound like he deserves much of DH's either. Protect yourself.
My dad set up his trust so
My dad set up his trust so that we don't inherit until his wife dies. He is gone, but is fine as she isn't the type to blow it all. We have 5 kids and she had one son, so he is the one who got shafted, going from an only child to one of 6 evenly divided! For our trust, my husband specifically disinherited his daughter as she is a long time drug addict and not competent. He was supposed to set something up for her but hasn't done it. Our boys will get everything once we are both gone. I was very clear that SD was not getting a dime of my money or my inheritance. Even if she was competent I wouldn't let her have anything, no way.
If your SO dieds before you
Can you. Take the majority of the.money out of the trust an do with what you want ? You can't have millions in trust but are eating cat food because you are broke.. once SO is out of the picture,, you are in better shape.
In my dads trust, I think it
In my dads trust, I think it is revocable,I am pretty sure my SM could blow it all if she wanted. We don't get updates as to what is still there and I don't think we could do anything if we did. Ours is the same, our kids don't get anything until we are both gone. I guess at that point the trust is dissolved and they can sell the house and split everything up.