A failed business left a family with debts to the IRS, the Small Business Administration and others.
Source link
Dear Quentin,
Per our parents’ will, my brother and I will split their inheritance 50/50. This includes the family house. I would like to keep the house in the family for my children, as I bought my current home nearby to be able to care for my parents as they aged.
I understand the best time to sell a home is soon after inheriting it, to avoid capital-gains tax. The issue is that my brother is single and currently living in the house, and he may not want to sell his portion right away. I would be happy to let him live in the house that we jointly own.
I worry that he may decide to sell his half and I’ll have to take a financial hit, or that he’ll get married and live in the home with his family, which may complicate matters. How do I ensure my interests in the home are protected while making sure I do right by my brother?
Thank you so much.
Complicated Matters
“If due to financial or familial reasons you did flip a coin, agree that the end result is the right result, whether either of you likes it or not: Heads you win. Tails you win.”
MarketWatch illustration
Dear Complicated,
Your last question is both a good one and rhetorical. Your interests are already protected: You are entitled to 50% of this home, not 100%, as you rightly suggest. Inheriting a property with a single sibling who does not have children does not automatically entitle the sibling with children to full ownership, and/or obligate that sibling to sell their share to you. Real-estate inheritances can cause discord among siblings. Not everyone understands this, as you apparently do.
You can do right by your brother by asking him what he wants, too. This appears to be the only home he has known, and one could argue that he has an equal — or even 50.1% — right to buy you out, given that you live elsewhere with your family. If he wishes to continue living there, it would be generous and compassionate of you to allow him to do so. Many siblings would insist on cashing out and filing a quitclaim to turf their sibling out of the family home.
You’re correct in that the house will be passed down to you through a “step-up in basis” valued at the current value, not the purchase price, which reduces your capital gains tax if/when you sell. If the house was sold for $1 million, even though it was originally purchased for $500,000, you and your brother would have to pay capital gains tax on $500,000, if you decided to sell, you would pay long-term capital gains on the appreciation post-inheritance.
Rite-of-passage scenario
There is, however, no definitive right or wrong path on your familial dilemma, except that you both navigate the process with transparency and respect. If he has lived in the house his entire life, and gets married and has kids, it seems reasonable to maintain the status quo — that is, he continues to live there — but with one proviso: He buys you out. You could ask him to do that anyway, but if he can’t afford to, he is relying on your generosity.
In the grand scheme of things, this is a normal rite-of-passage sibling scenario. I have received letters from people whose siblings “borrow” hundreds of thousands of dollars from their parents with no intention of ever repaying them; siblings who hid their father’s will; and parents who were possibly coerced into putting their son’s name on the family home, much to the surprise and consternation of the other family members. The list goes on.
What now? Scenario No. 1: He lives there as a single man, and you don’t ask him to buy you out. That’s pretty decent of you, all things considered — though you are entitled to change your mind, buy him out or ask him to downsize. Scenario No. 2: He starts a family and lives there, and you ask him to buy you out. If he does not have the money, you either sell or you buy him out. That’s fair. Scenario No. 3: You both have families, and the money to buy each other out. You flip a coin.
Oftentimes, leaving our egos and fears and wants aside is the better option. Trying to make a case why we deserve something more than the next person — a bad case of the old “do-re-mi-me-me-me-me” — can lead to more resentment and one-upmanship. It’s not likely to end well. If due to financial or familial reasons you did flip a coin, agree that the end result is the right result, whether either of you likes it or not: Heads you win. Tails you win.
This house should never be more important than your relationship.
You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com, and follow Quentin Fottrell on X, the platform formerly known as Twitter.
Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.
The Moneyist regrets he cannot reply to questions individually.
Previous columns by Quentin Fottrell:
My parents want to pay off my $200,000 mortgage, and move into my rental. They say I’ll owe my sister $100,000. Is this fair?
‘I hate the 9-to-5 grind’: I want more time with my newborn son. Should I give up my job and dip into my six-figure trust fund?
Jimmy Haslam, CEO of Pilot Flying J. and Warren Buffett, Chairman and CEO of Berkshire Hathaway.
Lacy O’Toole | CNBC
Berkshire Hathaway settled a billion-dollar lawsuit with the Haslam family over how Berkshire accounted for the value of Pilot Travel Centers, which would affect the price paid in a forced buyout of the family’s remaining stake in that truck-stop giant, both sides said Sunday night.
The settlement, whose terms were not disclosed, avoided a two-day trial to resolve the dispute that had been scheduled to begin Monday in Delaware Chancery Court.
The trial would have been a rare one involving Berkshire Hathaway.
Greg Abel, who has been designated by Berkshire as the successor to longtime CEO Warren Buffett, was expected to testify at the trial.
The Haslam family and its Pilot Corp. in the suit filed this fall alleged that Berkshire Hathaway improperly adopted a form of accounting of the value of Pilot Travel Centers that would have led to a sharply lower price Berkshire would pay to acquire the family’s remaining 20% stake in PTC.
Berkshire in turn had accused Cleveland Browns owner Jimmy Haslam of offering payments to PTC executives to boost the value of the company so that his family would get a bigger buyout from Berkshire, which controls PTC.
Last month, it was reported that federal prosecutors in New York were investigating Berkshire’s allegations about Jimmy Haslam. The Haslam family and Pilot Corp. strongly denied those claims.
Berkshire and Pilot Corp. in similar press statements Sunday night said that they had reached an agreement to fully settle the Delaware Chancery case. including “the dismissal of all claims and counterclaims.”
A notice on the Chancery Court’s docket for the case, posted Saturday night, said, “The trial scheduled in this matter for January 8 and 9, 2024, is hereby canceled and has been removed from the Court’s calendar.”
That notice did not explain the cancelation, and the reason for the trial being called off was not known until the statements were issued by the litigants on Sunday.
Berkshire owns 80% of PTC after having spent $11 billion in separate purchases in 2017 and then again last January to buy out the majority stake owned by the Haslams.
The Haslams had a “put option” to compel Berkshire to buy out their remaining 20% state within a 60-day window every year thereafter.
Last year, the family sued Berkshire, alleging that the conglomerate had used so-called pushdown accounting that would have the effect of lowering the stated value of PTC, and thus short the Haslams on what would be legally owed to them.
The Haslams said that form of accounting was not authorized by them.
Berkshire in turn had argued that its use of pushdown accounting was not a change in accounting policy that was barred by its purchase agreement with the Haslams.
I’m a longtime reader of your column and I never thought I’d be writing to you, but I guess here we are. I’ve had a hell of a year. I lost my job and found another one, split from my long-term partner and lost half of my social life, moved to a smaller house in order to pay the bills and am facing turning 45 in February with the prospect of maybe never having children.
I am having eight people over for Christmas dinner: my mother, my twin brother, my sister, my best friend and her son and daughter, a neighbor and an aunt who is visiting from Seattle. It will be the highlight of my year. However, between the tree, the decorations, the dinner and wine and spirits over a three-day period, hosting Christmas is now costing upwards of $400, and probably more than that.
For many reasons, it will be the first time we’ve all been together since before COVID: My aunt was sick and my siblings had other plans in previous years, COVID obviously ruined Christmas 2020, and last year I was in the throes of a crumbling marriage.
Hosting is a lot of work, which I don’t mind, but it will be $400 or $500 that I won’t have for bills or even a vacation when I can finally take some time off from my job. People have asked if they can bring anything. If all the adults contributed $50, I would have $300 to put toward the festivities. Is that crass? I don’t want to start on the wrong foot or offend my guests, but it’s a lot of money.
Should I ask the adults to bring cash? I already have enough cheese and crackers to see me through the winter.
Newly Single in Tampa
“You need to weigh the risk versus the reward: Is that $50 from your best friend or neighbor worth a begrudging side-eye over the dinner table?”
MarketWatch illustration
Dear Newly Single,
You’ve had a big year, and you have given yourself an even bigger job by hosting Christmas in your new home — but the whole point of having your own place is so you can share it with your friends and family and create memories. You’re determined to end this year on a happy note, surrounded by friends and family, and I applaud you for that.
This year, the average Christmas dinner purchased in a supermarket for a family of four will cost around $50.56, up from $47.25 in 2022, according to a recent report from Category Partners, a consumer-research and analytics company, using data from NielsenIQ. I see these surveys every year and, frankly, I tend to add an extra 20% or 30% for a real-life dinner.
Hosts often overbuy. It’s the nature of the beast. Some people drink whiskey, others may prefer red wine over white, and you want to avoid a situation where someone tells you they won’t be having seconds because they’re saving room for dessert and you are forced to say, “There is no dessert!” Or one in which they won’t be having seconds in the first place, because there was barely enough for one helping.
You need to weigh the risk versus the reward: Is that $50 from your best friend or neighbor worth a begrudging side-eye over the dinner table? People talk — mostly about themselves, it’s true, but also they also love to pick apart examples of what they see as poor etiquette. Is the payoff worth it? Would this money prevent you from paying a bill, or would it just put a dent in your plans to vacation in the Florida Keys?
You don’t say whether your immediate family and best friend are local, but you may wish to take into account the cost of traveling from Seattle to Florida at this time of year. Your aunt — and other guests — may also have already bought you presents and other provisions that you could possibly use after Christmas. And asking them to contribute cash after they have already accepted your invitation could be problematic.
I read a story about a woman who charges her family for Christmas dinner — but if that wasn’t something that rattled people’s Christmas baubles, the New York Post probably wouldn’t have published an article about her unusual stance. Of course, charging a 3-year-old grandson to teach him the power of a dollar, as she does, and asking your merry band of friends and family to contribute are two very different prospects.
If asking your friends for cash is the difference between having enough money to pay your electricity bill or not, simply tell your guests that you overextended yourself. Who wouldn’t want to pop $50 into a jar under those circumstances? But if you merely believe that you deserve a cash reward at the end of a hard year, I’m not convinced this last-minute swerve would be worth it.
Playing “the poor mouth” — we call it “an béal bocht” in Gaelic — could set you up for a fall. A photo of you in February or March sitting by a hotel pool with a drink in your hand could set tongues wagging. The terms of your invitation have already been set. Changing the social contract now for anything other than an emergency might leave your guests with more than indigestion.
More from Quentin Fottrell:
My father has dementia and ‘forgave’ my brother’s $200,000 house loan. The nursing-home notary said he was of sound mind. What can we do?
My husband bought our house with an inheritance. I signed a quitclaim. He said I could live there after he dies, but changed his mind. What now?
Low-paying jobs are the economy’s way of saying you should get a better job’: I’ve decided to stop tipping, except at restaurants. Am I wrong?
You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com, and follow Quentin Fottrell on X, the platform formerly known as Twitter. The Moneyist regrets he cannot reply to questions individually.
Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write to me with all sorts of dilemmas. Post your questions, or weigh in on the latest Moneyist columns.
By emailing your questions to the Moneyist or posting your dilemmas on the Moneyist Facebook group, you agree to have them published anonymously on MarketWatch.
By submitting your story to Dow Jones & Co., the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Legendary investor Warren Buffett is known for his modest lifestyle and frugal habits, despite his immense wealth. In 2007, he revealed in an interview something unique he always keeps in his wallet: a McDonald’s gold card that entitles him to free meals in his hometown of Omaha, Nebraska, for the rest of his life.
The card exemplifies his simple living while adding an amusing twist to his persona. “So that’s why the Buffett family has Christmas dinner at McDonald’s,” Buffett said.
Buffett’s McDonald’s gold card is just one example of his unpretentious approach to wealth. His breakfast routine further illustrates this. According to the HBO documentary “Becoming Warren Buffett,” he spends no more than $3.17 on breakfast each day, usually opting for a drive-thru at a nearby McDonald’s.
Don’t Miss:
-
The average American couple has saved this much money for retirement — How do you compare?
-
The vodka market is set to soar at 5.6% CAGR to $40 billion by 2030. Join Lit Vodka’s journey for a piece of the premium spirits pie.
He chooses among three different breakfast options based on how prosperous he’s feeling. These options range from two sausage patties for $2.61 to a bacon, egg and cheese biscuit for $3.17. Breakfast is now slightly more expensive because of price increases since the documentary was filmed in 2017.
In another instance showcasing his thrifty nature, Buffett once used coupons to treat fellow billionaire Bill Gates to lunch at McDonald’s during a trip to Hong Kong. Recounting the experience, Gates said, “Remember the laugh we had when we traveled together to Hong Kong and decided to get lunch at McDonald’s? You offered to pay, dug into your pocket and pulled out … coupons.” This gesture was notable as Buffett’s McDonald’s card is only valid in Omaha, so he resorted to using coupons elsewhere.
At Allen & Co’s annual “summer camp for billionaires,” Buffett’s wife, Astrid, expressed dissatisfaction over the cost of a cup of coffee at the resort. Despite her husband’s net worth exceeding $115 billion, Astrid Buffett was reportedly frustrated with having to pay $4 for a cup of coffee, remarking that the same amount could buy a pound of coffee at more reasonably priced venues.
Trending: Funders on this alternative asset platform are earning more than 14% annualized consignment profit funding Pro consignment opportunities.
Buffett frowns on the extravagant habits of others, even among his wealthy peers. “I just naturally want to do things that make sense,” he said. “In my personal life, too, I don’t care what other rich people are doing. I don’t want a 405-foot boat just because someone else has a 400-foot boat.”
Saving and investing wisely, as Buffett has done throughout his career, are key to ensuring a comfortable and secure future. Buffett’s choices, from living in a house he bought in 1958 for $31,500 to his practical approach to everyday expenses, reflect a deeper understanding that contentment comes from financial prudence and the peace of mind it brings.
This mindset doesn’t diminish the importance of being financially prepared for the future. Instead, it encourages a balanced approach: enjoying life’s simple pleasures while also making smart financial decisions.
Investing wisely, saving for the future and spending within one’s means are not just paths to financial security but also to a fulfilling life that isn’t dictated by the pursuit of material wealth. Buffett’s life teaches that while money may not buy happiness, being smart with money can contribute to a happier, more stable life.
Read Next:
-
This brokerage offers custom rewards for users to switch – the biggest reward so far for 1 user is $19,977.48. Will yours beat it?
-
Get equity and front row seats to the startups and small businesses you love — for as little as $100.
“ACTIVE INVESTORS’ SECRET WEAPON” Supercharge Your Stock Market Game with the #1 “news & everything else” trading tool: Benzinga Pro – Click here to start Your 14-Day Trial Now!
This article Billionaire Warren Buffett Has A McDonald’s Gold Card That Gives Him Free Meals For Life — Jokes ‘So That’s Why The Buffett Family Has Christmas Dinner At McDonald’s’ originally appeared on Benzinga.com
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
The greatest wealth transfer in American history is looming as baby boomers prepare to shift trillions of dollars to the next generations, but how do you broach that often taboo money topic with mom and dad?
The answer: Carefully, or you may regret it.
Nearly four in five wealthy families have had unplanned discussions about money, with 26% of people later regretting it, according to a new study by the Merrill Center for Family Wealth, a part of Merrill Private Wealth Management.
“When fear is driving it, it can go badly,” said Valerie Galinskaya, head of the Merrill Center for Family Wealth.
From parents’ perspective, the concerns include that sharing financial information can lead to entitlement among heirs or power struggles within the family. Members of younger generations, meanwhile, can be concerned about overstepping their place in the family. They might also feel anxious about what kind of inheritance may or may not be coming to them or worried about equitable sharing among siblings, financial advisers said.
Talk early and often
“We have seen people think of this as a binary choice — either share or not share. But it’s not a light switch that is either on or off. It should be a dimmer switch, where you share more and more as you’re comfortable,” Galinskaya said.
“Talk about the money, about the purpose of the money, then talk about the actual amount over time,” she said.
“Some people have ‘verbal vomit’ and share too much. It’s not a one-time thing. It’s a process with multiple conversations,” Galinskaya said. “Having a one-on-one conversation or two-on-one talk, rather than over the Thanksgiving table, tends to go more smoothly. It’s a really uncomfortable conversation for a lot of people.”
For higher-net-worth clients, there can be additional complexity. Having an unbiased individual in the room, such as a financial adviser, can be helpful, Galinskaya said.
James Sahagian, managing director of Ramapo Wealth Advisors at Steward Partners, said having a family meeting with an adviser who can act as a facilitator — or a buffer — can be very helpful.
“The formality of it and the formal setting can really help communicate what the older generation wants to convey,” Sahagian said. “No one wants to talk about their own mortality, but they want to address any concerns that the assets will not be managed appropriately or spent wisely.”
Morgan Hill, chief executive and owner of Hill & Hill Financial, cautioned that getting too specific about the dollar figures that may be passed down can be a mistake. Just explain the general division of assets, Hill said.
“Don’t talk about the exact money. Everyone wants their kids to get the same slice of cake. Just say ‘I love everyone equally and my documents reflect that,’” Hill said. “Kids don’t need to know anything about a specific number. There may be nothing left, because the parent isn’t done living yet.”
Hill also said every family should be clear about who is the executor of the will, and there should be clear instructions in the event of an emergency about contact information for lawyers and financial advisers.
“You don’t want everyone fighting with each other in the middle of a crisis,” Hill said.
And not every family has great wealth. Sometimes the conversation reveals financial shortfalls that adult children may need to help their parents with or seek advice about, Galinskaya said.
“It’s not always a rosy situation, but take the steps to have a proactive conversation so you can determine if there are some hard choices that have to be made,” Galinskaya said.
Why it matters
When families aren’t able to talk about and plan effectively for wealth and the transfers of wealth, it has repercussions: 70% of family wealth is lost by the end of the second generation, and 90% is gone by the end of the third generation, according to Merrill.
Most of the dissipation of wealth is due not to the economy or markets but to factors within the family, such as limited communication and heirs who lack the necessary skill sets to manage wealth, Merrill found, according to the survey of more than 270 individuals from families with assets of $50 million or more.
“Wealth remains a taboo topic in most circles. This curtain of silence leaves many wealthy families and individuals feeling isolated and ill-equipped to manage the responsibilities that come with wealth,” according to Merrill.
A separate study by Northwestern Mutual found the average American thinks 17 is the right age for kids to have their first conversations about family finances with their parents or guardians.
“Talking about money with your family used to be taboo in society, but today, young people are changing the conversation,” said Aditi Javeri Gokhale, chief strategy officer, president of retail investments and head of institutional investments at Northwestern Mutual. “Meaningful wealth discussions between generations are now happening earlier in life and more frequently.”
According to the Northwestern Mutual study, 29% of U.S. adults have talked to their parents or guardians about an inheritance, will provisions and other matters related to their estates.
Younger generations said these talks should be happening earlier. Millennials said the big talks should happen at age 45, while baby boomers and members of older generations said they should happen at 55.
“The most successful family situations tend to start at a young age with their children. They want financially aware children who have a general knowledge of the source of wealth and what it took to amass it,” Sahagian said. “The biggest problems are when the kids don’t appreciate what it took to create the wealth.”
Warren Buffett, the renowned investor and CEO of Berkshire Hathaway, has earned a reputation for his thrifty lifestyle and practical approach to finances. Yet, during the holiday season, Buffett reveals a different side of himself, one marked by generosity and a unique approach to gift-giving. From practical items such as dresses and chocolates to envelopes filled with cash, Buffett’s gifts are a reflection of his values of practicality, gratitude and a hint of humor.
A hallmark of Buffett’s holiday gift-giving is his tradition of gifting cash and stocks. In 2019, Mary Buffett, who was previously married to Warren’s son Peter, disclosed to ThinkAdvisor that Warren used to give each family member $10,000 in hundred-dollar bills. Recognizing the family’s propensity to quickly spend the money, Warren altered his approach. On one memorable Christmas, he gave $10,000 worth of shares in a company he had recently invested in, presenting the recipients with the option to either cash in the shares or retain them as an investment. This gesture was a testament to Warren’s astute investment acumen and his wish to instill a sense of financial prudence in his family.
Don’t Miss:
Opting to gift shares over cash was a strategic decision that not only provided the recipient with a valuable asset but also served as a subtle lesson in the importance of making sound financial choices. By giving shares from a company in which he had recently invested, Buffett demonstrated his confidence in his investment decisions. This approach to gift-giving underscored his desire to pass down his investment knowledge and principles to his family, encouraging them to adopt a long-term perspective and consider the potential growth of their assets, as opposed to the immediate satisfaction derived from spending cash.
Just as receiving shares in a company provides the opportunity to be part of its future success, investing in a startup at the ground level can offer the potential for significant returns if the company takes off. This parallel highlights the importance of considering long-term potential and being strategic with financial decisions.
Trending: Get equity and front row seats to the startups and small businesses you love — for as little as $100.
In addition to giving stocks, Buffett has maintained another Christmas tradition: giving dresses to the women in his life. In the 1960s, he would frequent Topps, a dress shop in Omaha, Nebraska, and provide the store clerk with a list of dress sizes for all the women in his family, showcasing his practical method of holiday shopping.
Buffett also sends boxes of See’s Candies, one of Berkshire Hathaway’s best investments, to dozens of relatives and friends each year. These boxes come with his annual Christmas card, which often features Buffett in humorous or playful scenarios. For example, his 2013 card featured Buffett dressed as Walter White from “Breaking Bad” with the message “Have yourself a Meth-y Little Christmas.” In 2018, the card was a photo of Buffett wearing a t-shirt with the words, “The Next Charlie Munger” and the message “Aiming High In 2019” on the card. Another year, Munger and Buffett were dressed in black suits and cowboy hats with the caption “Butch & Sundance” and the message “You’re right, it’s not Newman and Redford.”
Through these unique and thoughtful gifts, Buffett brings a touch of his personality and values to the holiday season, making Christmas a little brighter for those around him.
Read Next:
Don’t miss real-time alerts on your stocks – join Benzinga Pro for free! Try the tool that will help you invest smarter, faster, and better.
This article Warren Buffett Is Undeniably Frugal, But For Christmas He Gives Each Family Member $10,000 Along With His Favorite Candy And Funny Personalized Christmas Cards originally appeared on Benzinga.com
.
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Family Dollar voluntarily recalled dozens of over-the-counter drugs, products and medical devices sold at its stores because they had been stored at improper temperatures, according to the Food and Drug Administration late Tuesday.
On the FDA’s website, the regulator said products affected by the recall were stored “outside of labeled temperature requirements by Family Dollar and inadvertently shipped to certain stores on or around June 1, 2023 through September 21, 2023.”
Brands affected by the recall include Procter & Gamble’s
PG,
Crest, Vicks and Pepto Bismol; Colgate
CL,
; Johnson & Johnson Inc.’s
JNJ,
Tylenol and Listerine; and Bayer’s
BAYN,
Aleve, according to a list provided by the FDA.
The items were sold at stores in Alabama, Arkansas, Arizona, California, Colorado, Florida, Georgia, Idaho, Kansas, Louisiana, Mississippi, Montana, North Dakota, Nebraska, New Mexico, Nevada, Oklahoma, Oregon, South Dakota, Texas, Utah, Washington and Wyoming, between June 1 and Oct. 4, the FDA said.
Family Dollar was acquired by Dollar Tree Inc.
DLTR,
in a deal that closed in July 2015.
My grandfather was a successful investor and knew his children very well — he placed all his assets in a trust upon his and my grandmother’s deaths, to be divided evenly among his three children with specific spending restrictions, but unlimited healthcare-related expenses. Any legal actions to challenge or dispute the trust would disqualify that child from being a beneficiary of the trust. Once his three children pass, any remaining assets would be available equally to the four grandchildren (including me).
After my grandfather’s passing but before my grandmother passed, my uncle harassed and pressured my grandmother to change the trust by making him executor, while writing my sister and I out of the trust, and transferring all hard assets solely to him, including my aunt’s house — all unbeknownst to his siblings but with my grandmother’s signature and against the intention of the original trust document.
I wasn’t supposed to know about any of this and, supposedly, I will receive a very small sum of money to “accept” the situation, once all three of my grandfather’s children pass. My aunt (who has no children) and uncle (who has two children) are alive but my father’s health is declining. No legal documents have been shared with me and I wasn’t involved in anyone’s will. To my knowledge, everything went to my uncle, and I am in the dark.
It’s a modern-day Hamlet. What in the “William Shakespeare” am I supposed to do?
Grandchild, Rattling My Chains
Related: ‘We live in purgatory’: My wife has a multimillion-dollar trust fund, but my mother-in-law controls it. We earn $400,000 and spend beyond our means. What’s our next move?
“In an act of Shakespearean chutzpah, your uncle decided to take all the spoils for himself.”
MarketWatch illustration
Dear Grandchild,
Unfortunately, your grandfather did not know one child well enough. You and your father must act quickly, given the gravity of these changes, and the circumstances under which they were made.
I’m not a lawyer or a rocket scientist, but one child putting pressure on an elderly parent to cut everyone else out of a family trust — designed to distribute funds equally and with equanimity — sounds an awful lot like undue influence to me. Any judge worth his salt would look at this case, and wonder how this was allowed to happen. Your grandfather died with the belief that his children and grandchildren would be taken care of, but you’re correct. Did the rules of the trust allow your grandmother to change them? That seems like an oversight on your grandfather’s part. In an act of Shakespearean chutzpah, your uncle decided to take all the spoils for himself.
Cue Hamlet monologue:
O, that this too too solid flesh would melt
Thaw and resolve itself into a dew!
Or that the Everlasting had not fix’d
His canon ‘gainst self-slaughter! O God! God!
How weary, stale, flat and unprofitable,
Seem to me all the uses of this world!
Fie on’t! ah fie! ’tis an unweeded garden,
That grows to seed; things rank and gross in nature
Possess it merely. That it should come to this!
But as Hamlet will attest, you’re better off spending more time investigating and less time procrastinating. You should hire a lawyer, and start the ball rolling. Bad actors are banking on your doing nothing, or taking you sweet time. You may be up against a statute of limitations, which varies from state to state and also may depend on the kind of case you are taking against. It’s complicated and fraught and expensive, but if your trust and estate lawyer believes there is clear and convincing evidence, it could also be worth it. In California, most petitioners have 120 days to contest a trust. In Florida, it can range from six months to four years.
In some states, the judge will say the clock starts ticking when you first discover the fraud. “Imagine that a third party convinced your elderly, vulnerable parent to create a trust that they simply were not in a position to understand,” according to Dan Bubley, a lawyer in Tampa, Fla. “This was done entirely without your knowledge. In general, Florida courts will determine that you still have the right to bring an undue influence claim, even if the trust was formed more than four years ago, assuming that you did not know and could not have reasonably known about its existence or the undue influence.”
You can typically contest a will or trust on three grounds: lack of testamentary capacity, undue influence from a family member and improper execution. In New York, a trust contest proceeding must be filed with the court no later than six years after the settler’s death. “In order to make sure that all the assets have not been distributed to the beneficiaries, it is suggested that the trust contest be made sooner than later,” according to Yulia Vangorodska, a New York-based probate and trust attorney. “The court has the jurisdiction to hear and decide a trust contest matter regarding a revocable or non-revocable trust.”
No more delays. “Give every man thy ear, but few thy voice,” Polonius said in one insightful speech in “Hamlet.” Poor Polonius was not generally right about a lot of things, but he was right about that.
You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com, and follow Quentin Fottrell on X, the platform formerly known as Twitter.
Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.
The Moneyist regrets he cannot reply to questions individually.
Previous columns by Quentin Fottrell:
‘They do not trust her, nor do I’: My elderly parents fear my sister will empty their bank accounts and steal their possessions. What can we do?
‘It feels like a nightmare’: My siblings hid our father’s will, which would have left me $135,000. What can I do?
‘I am watching my inheritance evaporate’: My brother and sister constantly hit our parents up for money. What can I do to stop this?
This article is intended for educational purposes only and is not legal advice. For guidance on your personal situation, please contact a lawyer.
If you pass away without leaving clear instructions as to how your assets will be distributed, it can add to the world of hurt for those loved ones left to sort it all out. There are many ways to accomplish that final feat, but for a combination of efficiency and a firm legal foundation, it’s worth considering a last will and testament.
Image source: Getty Images.
Soundly rooted in common law
Wills have a deep history in common law, beginning with the transition from a feudal system in which the average person had very little property or control over what they had. A pivotal moment of that evolution was the Statute of Wills, enacted by the English Parliament in 1540 during the reign of King Henry VIII, to provide a legal framework for the distribution of land, based on its owner’s wishes.
Five centuries later, for many people, wills are still a fairly easy, practical, and sometimes inexpensive way to ensure their real estate and worldly goods, including their money, are dispersed as they intend. Here are three reasons why.
Reason 1: Wills can make your wishes clear
A basic will is a legal document that allows you to clearly state who should receive what. It’s intended to simplify what can be a complicated process and one fraught with the potential for family conflict, especially if you die without one. A will is often the first step to avoiding lengthy legal battles that can cost time, money, and relationships.
A will can also address non-material things, like who you designate as guardians for minor children, helping to ensure their well-being and care in the event of your untimely demise.
Reason 2: Flexibility to change your mind
Wills also provide flexibility. While they often follow a somewhat scripted form, there are ways to be more creative about how to address the specific needs of your heirs. That includes the freedom to designate beneficiaries, specify asset distribution, and include charitable donations.
You can also make changes to your will over the course of your lifetime as you update your estate plan to address your evolving priorities and wishes. You just have to update the latest version and follow whatever advice your lawyer — and do make sure you have one of those — gives you on making sure that’s the version that the critical stakeholders get when the time comes.
Image source: Getty Images.
Reason 3: Wills can be relatively inexpensive
According to recent surveys, a simple, lawyer-drafted will can cost between $300 and $1,000 or so. That’s less than the average associated with other options, such as the multiple types of trusts. That’s in part because wills sometimes involve fewer legal complexities and administrative expenses.
There are do-it-yourself templates available online that can save you even more, but those savings could come at the cost of not effectively ensuring that your wishes are fulfilled. Again, it’s a good idea to consult an attorney to be sure of your footing here.
Where there’s a will, there’s a way
A will typically involves appointing an executor, and the final execution of a will can require a nod from the probate court in many jurisdictions. Some jurisdictions make it simpler than others to expedite the distribution of assets — especially from small estates — thus saving time and money.
But those requirements can vary widely from county to county, state to state, and country to country. Consult with an attorney experienced in estate planning and probate law to ensure you choose the best path for your circumstances and desires. That counselor can review your options, and you just may find that a will is your best way.
Newer Posts