Jewish World Review Jan. 3, 2005 /22 Teves, 5765
Jan L. Warner & Jan Collins
Rule your money from the grave
Q: I'm an 81-year-old widower with three grown children, all married. Over the years, my wife and I have lent money to two of our three children. I guess that, like many parents, we found ourselves forgiving most of the loans when they were not repaid, which brings me to my predicament:
The two children who have borrowed the money are my daughters, and they asked for the money because their husbands pressured them to do so. In other words, the husbands dominate both of my daughters because my kids stay home to take care of the children and have no independent funds. The more I have made available to my daughters, the less their husbands have provided for them, using the extra money to buy hunting and fishing equipment. I am concerned that if I make gifts or loans, not to mention distributions to my daughters when I die, these guys will make my daughters use the money and won't take care of them as they should. And if either of my daughters dies after I do, their husbands, not their children, will get all or a part of what was meant for my girls and their children.
I have been to a lawyer, who tells me there is no way I can "rule my money from the grave," as he puts it, and keep my hard-earned money away from my sons-in-law. Is there a way to make sure whatever I leave my girls goes to them and my grandchildren?
A: There is. And if you want to "rule your money from the grave," within limits, you can if, (1) you find a creative lawyer who is willing to step from behind the standard "word processor" will and help you figure it out; and (2) you are willing to pay the fee for managing a trust.
Husbands and wives have certain legal obligations to one another. Some of these obligations are "direct," such as when one spouse signs a credit card application to be responsible for the charges incurred by the other. And some of these obligations are "indirect," based upon one spouse acting as agent for the other or upon what is called the "doctrine of necessaries." What is considered "necessary" varies from state to state; however, the basics include food, clothing, shelter and non-elective medical care.
Since your sons-in-law have legal obligations to support your daughters, we suggest that rather than making distributions directly to your daughters, you consider establishing a trust for each daughter in your will. Each trust would receive the share your daughters would otherwise have received directly.
The trustee whom you name could be charged with not making distributions to either of your daughters that would interfere with their husbands' obligations to support them. Or, if you prefer, the trustee could be instructed to pay to your daughters an amount each month that would supplement their spouses' obligations to provide them with certain "necessaries" that you could define in your trust. The document could also include provisions that, should either of your daughters become a widow, all or a portion of the trust would be distributed to her, but if either was divorced, the trustee could not make any distribution that would interfere with her right to receive maximum child support and alimony.
In this way, if either daughter died, her share could be maintained in trust for her surviving children, again supplementing the maximum amount of support due from your son-in-law. And if either of your daughters died without children, that trust would terminate and the balance would be deposited into your surviving daughter's trust, thus keeping your assets away from non-blood-related individuals.
Many alternatives can be built into trusts to carry out your intentions, so don't take "no" for an answer.
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JAN L. WARNER received his A.B. and J.D. degrees from the University of South Carolina and earned a Master of Legal Letters (L.L.M.) in Taxation from the Emory University School of Law in Atlanta, Georgia. He is a frequent lecturer at legal education and public information programs throughout the United States. His articles have been published in national and state legal publications. Jan Collins began co-authoring Flying SoloŽ in 1989. She has more than 27 years of experience as a journalist, writer, and editor. To comment or ask a question, please click here.
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© 2004, Jan Warner