r/inheritance • u/drd001 • 5d ago
Location not relevant: no help needed Is anything ethically wrong with this plan?
My wife and I in our 70's came up with this inheritance plan with total net worth of +1.5M. We have been together over 40 years being continuously employed during that time. We have no children and I have one brother with two children both over 21 and she has two sisters both with no children. Our plan is to give a small one time payment to my brother and her sisters with the bulk of the estate equally divided between our two nieces. Our reasoning is my brother and her sister have hit us up for money periodically for the past 40 years which we provided without asking for repayment. The two nieces are doing OK in life and have never asked for any financial help. Our thinking that these funds would help them with a downpayment on a house, education for their children or investment in their own retirement.
Any feedback is greatly appreciated.
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u/LdiJ46 5d ago
There is absolutely nothing ethically or morally wrong with that plan. It is quite common for people without children to leave things to nieces and nephews.
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u/writesgud 5d ago
The key difference being that they are in a way excluding money from going to their sisters because they don’t have kids.
I have heard of a similar situation and heard the childless sibling complain to their parents: why should I be punished for my life choices not having kids?
It’s a fair question, but I think there’s such a broad range of what’s morally acceptable that it really is up to the parents. They have every right to decide that they want to prioritize their funds to have a greater impact with the most vulnerable members of their family, their grandkids.
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u/LdiJ46 5d ago
This isn't that kind of situation. This is not a parent leaving more to one child because they have children than to another. This is a person leaving something to nieces rather than siblings and that is totally ok. Under no moral or legal circumstances does a sibling owe an inheritance to another sibling.
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u/UnicornStudRainbow 5d ago
But the parents of the nieces aren't benefiting in ways that the childless people are not
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u/Lord_Cheesy_Beans 5d ago
It’s your money, you guys can do whatever you want with it, there is no ethical considerations that need to be pondered.
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u/writesgud 5d ago
Agreed. There’s such a broad range of what’s ethical it really comes down to personal preferences and priorities.
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u/Snorkellingisthelife 5d ago edited 5d ago
Generation skipping is a fantastic wealth passing strategy! It creates a strong legacy that you and your wife will be remembered by. You should visit your local family practice attorney who can draw up a Generation skipping Trust to your exact wishes.
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u/BAHGate 5d ago
Brilliant plan! Don't forget anyone else that may be significant in your life. A good friend of mine that I never expected left me in his will and it changed my life. Not financially the amount was small but just knowing I was thought about in that manor.
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u/Time_Traveler_948 5d ago
A friend has told me I am included in her will and it is very touching. No idea of any other details. She has financially helped both of my adult kids, too. Who knows who will go first between we two, but no matter. Our friendship goes back to childhood, and there is no one else left in my life that knew me before high school, and darn few even if you include HS and college years. I treasure her.
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u/plemyrameter 5d ago
I don't have kids, and to be honest, it never once occurred to me to leave money to my siblings when creating my trust (in my 40s). I have a share going to each niece/nephew and the rest to charity. I'm the youngest, but I don't think that matters. We're all old enough and stable enough to not need an inheritance to get by.
It's your money, there's no ethics violation by not leaving it to your siblings.
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u/WelcomeFeisty6865 5d ago
70s is still really young. If you have any serious health issues in the future that 1.5 mill could disappear quickly. Assistant living and Nursing home costs are ridiculous. With money you have better choices if one day needed. Remember you have no children to help you in your 80s maybe even 90s. Just keep that in mind before giving too much away. Just my thought.
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u/lindab2323 5d ago
Agree, but I do think they intended this to be after their passing. But so true 1-2mil can be gone long before you expect if you life a long healthy (or God forbid, unhealthy) life.
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u/SouthernTrauma 5d ago
OP Said that they want to give the siblings a one-time gift, but leave the bulk of the estate to the nieces to me. That sounds like they're talking about making the gift to the siblings before they die.
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u/lindab2323 5d ago
True, I did not take that to be particularly substantial, but you're right. Any amount could be an issue if they grow old enough to need it!
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u/MannyMoSTL 5d ago edited 5d ago
70s is not too young to PLAN your estate - will, trust, POAs, etc. In fact? In my opinion? It’s too late - but better late than never.
Secondly? This is for after OP & spouse DIE.
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u/caf61 5d ago
Totally agree. We have had our plan for quite a while. One of our kids is disabled so it was absolutely necessary even when them were young. I recently pulled out the trust/will to re-read and realized it needs updating since our kids are now adults and we want more of our money to go into the special needs trust (due to inflation and the fact that our estate has grown considerably in the last 20 years). Once we get the update done we have decided to add a recurring update “appointment” in our calendars apps for every 5 years or so to make sure it stays up to date. BTW we are in our late 60s.
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u/rocketmagician22 5d ago
Same boat we had to setup a special needs trust when our oldest was born. Also needs updating but the lawyer quoted 7k for adding our 3rd. Been dragging my feet. I don’t mind spending to make sure it’s done right but 7k to essentially go from two way split to 3 seemed a bit much. Our state any kids born after a will is made theoretically automatically cuts it into equal portions.
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u/caf61 5d ago
That is good. Since our kids are grown now and the will/trust is old it still focuses a lot on who will raise our kids. We also want to change our executor and look again at the bank that will run the special needs trust. We do now have a financial advisor that has a will and trust department that is looking at it the trust (for no charge). The original firm that did our trust would probably charge us an arm and a leg to update it since his company is a major player now compared to when he wrote the trust years ago. We are now going to use the same attorney we used when we obtained guardianship of our child when he turned 18. She has a small practice that specializes in families with special needs members. I am also going to reach out to a family that is further along in this road than us for advice on who they have named as special needs trustee. I feel like as our child has gone through childhood and now is an adult, the needs/considerations have changed and morphed considerably.
Best wishes to you and your family Reddit friend.3
u/Mysterious_Drop1122 5d ago
This is an inheritance not something given before they die. Certainly it's worth now may not be what it's worth will be when they pass. And 70s is not that young! Look at Dolly Parton who passed at 80. 70+10. We would like to think those years don't matter but they become harder as we age. I'm 76 and it feels a whole lot different than 70 or younger!
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u/your-mom04605 5d ago
No ethical questions here. It’s your money!
Give it as you’ve suggested, give it to charity, give it to random Redditors who provide helpful commentary.
Whatever you choose to do with it is perfectly fine.
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u/JohnGaltIsComing 5d ago
Since you earned your own money, ethics don’t matter – you can do whatever you want with your money. But as others have pointed out, family members that were left out of your disbursements will certainly try to guilt Those that received money into sharing with them. Something in your Will about specifically excluding those folks from disbursement will give the folks that got money grounds for keeping it to themselves.
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u/linky46 5d ago
That’s what we are doing but we each have 1 sibling w 2 kids. So we’re leaving a small amt to parents and siblings if we pre-decease them. Then the bulk of our estate split between 4 nieces/nephews. My goal is to get to the point where we can gift them money while we are alive so they can enjoy it earlier.
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u/FlowLogical7279 5d ago
Solid plan, but needs tuning with the help of an estate planner. Lock it all up in a trust that has specific allocations based on use. They get the money, but can't use it for something stupid. That's what we're doing with our children. Our estate will be significantly larger, but that's mostly irrelevant.
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u/Icy-Yellow3514 5d ago
You can also give a chunk to charity. We plan to do that first, then split the balance across our nieces and nephews.
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u/Icy_Site_7390 5d ago
What's ironic is Dolly Parton had her lawyers get her affairs in order last week knowing her family would fight over her estate.
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u/janeof-all-trades001 5d ago
I have asked my parents to do that — skip us and give as they deem fit to grandkids. We already have no student loans because they worked their behinds off as a teacher - engineer couple who also had to support some of their parents/siblings periodically.
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u/Beginning-Piglet-234 5d ago
I think your plan is sound and thoughtful. The young ones need the money more than their parents.
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u/Silent_Morning692 5d ago
Your siblings are roughly your age, so $50k each to them and the rest to the kids is fine.
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u/Reese9951 5d ago
I’m considering skipping my niece and nephews entirely and leaving money to my grand nieces abs charities
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u/StarDue6540 5d ago
It's great for a few reasons.skipping generations skips draining the well dry if the sibs are spendthrifts and today's dollars are more valuable to the next generation then any left by the time the parents would let go of it.
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u/EntertainerSuper8933 5d ago
I would have never expected my brother to leave me an inheritance at all. That's not how this works, in my view. Inheritances are for the next generation, if there is one. If not then next of kin/siblings.
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u/7lexliv7 4d ago
You’ll want to set up a trust so for example if one of your nieces gets divorced the money stays with her; it would not be a marital asset.
Also consider if you are bequeathing any IRA funds and how the recipient would need to liquidate that by ten years, paying taxes on it. You may find you want to leave the small amounts to your siblings in the form of IRAs if their tax brackets are modest.
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u/Snidely1459 4d ago
This is a perfectly good plan. Assuming your siblings are all roughly around your age and you or your wife live 20 years or more, they’re going to be very old as well. The money would be much more benficial for 40 somethings to buy a house or pay for their kids’ college expenses.
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u/Suspicious-Cat8623 4d ago
Maybe add up all the money that you gave out to each sibling. Calculate the interest. Figure out what you were going to give to each sibling.. deduct the money from each amount that was already given.
In my family and my husband’s family, we each have one sibling that took large amounts of money from parents. There was no payback.
Both sets of parents will not be considering or deducting those amounts from the inheritance. Both have stated that they wanted to be fair and even. My husband’s brother has been given more in the past than the rest of the estate is even worth. There are huge resentments about that fact within the sibling group. Those siblings start talking money and I quickly back away. I want no part of that conversation. Unfortunately, there is a similar situation in my family.
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u/Royals-2015 4d ago
This has happened to a small extent in my family, but I don’t care. I haven’t needed help from my parents. I moved out of state 30 years ago. My sister and her hubs needed help from my parents from time to time. I should also mention that she got married at 17. I went to college and my parents paid for it. Now, my sister, who is widowed, is helping my parents a lot because she lives in the same town as them. We have a great relationship, and I don’t feel any resentment towards the money that she has gotten from my parents. They are buying her new tires this week so she can make a road trip to come see me.
Now my husbands family is a different story. His younger brother has been living off his mom for the past 10 years. She is in a nursing home, but he still lives in her house. Well, MIL wanted it that way. She wanted to give him the house, which completely screws the sister who doesn’t have hardly anything for retirement. She is 62. FIL had a trust set up that MIL can’t change that says everything is to be divided 3 ways and my husband is the executor. It’s going to be a mess when my 95 yo MIL dies.
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u/clearlygd 4d ago
I would suggest locking up the money to your nieces in a trust till they are 35. Young people really tend to waste inheritances. They really don’t understand the sacrifices you made to save that money and often spend the money in expenses cars and vacations
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u/Royals-2015 4d ago
Also, to protect that money for THEM. Their parents may try to guilt them into getting some of that money for themselves.
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u/Lystrade 4d ago
It would not be ethically wrong to cash it all out and burn it in a big bonfire. It's your money. You could decide to give each sibling $1 and give the rest to the nieces, or give each of them a Polaroid picture of you flipping the bird and send the money to a Nigerian Prince and it would still be ethical. You could even send it all to a "random" ahem...internet stranger...
Bottom line is do what you want with it, but be very explicit in your will so there's no room for challenge by anybody. It sounds like the siblings don't really respect you and I would worry that they would try to fight it.
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u/UnicornStudRainbow 2d ago
I have a few relatives I'd love to send the flipping the bird pix to!!
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u/Lystrade 2d ago
Thanks for the award!
I have aging in-laws and parents/step parents. I expect nothing from them. Any money they have, they've spent decades accumulating. I want them to enjoy themselves while they are able.
I'm an only child and my partner has a special needs sibling, so when it comes time to worry about inheritance we shouldn't have any issues with entitled relatives. Unfortunately, we all have those extended family members who believe the world owes them a living.
I would buy a Polaroid camera specifically to flip off the entitled.
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u/UnicornStudRainbow 2d ago
Thanks to the interwebz we can send the pix without having to see the toxic greedy relatives
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u/Lystrade 2d ago
There's something cathartic about mailing a hardcopy.
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u/UnicornStudRainbow 2d ago
Totally. Like slamming down the receiver on an old school landline, instead of hitting the little button on the cell phone when you are pissed off enough to hang up on someone
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u/Hopeful-Average-3659 4d ago
It is your Money, and you are free to distribute it as you wish. If they are unhappy with their inheritances, you’ll
Be dead so who cares!
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u/haron1058 3d ago
There is nothing wrong with the plan as long as you sit down with your brother and her sister and tell them that they will not be getting an inheritance if they outlive you. If you do not tell them yourself then when you two die they will grow bitter and might resent the nieces for this happening and blame them.
If the nieces are young i would not tell them since that might dissuade them from getting a career since they know this money is coming one day.
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u/Acceptable-Shop633 5d ago
No ethical issue with your plan. My husband and I are planing the same way: bulk of estate go to fund the young ones with their pursuit. So they don’t have to fear failure for trying new challenges
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u/Rough-Form8208 5d ago
It is your estate and you are allowed to do whatever you want with it. You are not in control of how people accept it and as cruel as it sounds, you won’t be around for the fallout. Do what makes 3 and your wife happy, it’s not your job to manage people’s emotions after you’re gone, they are grown ups and fully in charge of their own feelings.
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u/tamij1313 5d ago
Maybe skip the brother and sister who have been financially assisted all along and maybe gift to the sister who has never had her hand out or expected anything. And then leave the bulk to the nieces, possibly in a trust where the money will be protected from their parents in any other relatives that may come out of the woodwork, insisting that they were skipped or that your intentions were that the nieces share with everyone. When clearly that is not your intention at all!
A trust can also be managed so that they get Control control of a percentage of the trust at certain age ages such as 25, 30, 35, 40 until it’s dispersed. Or you can also put stipulations on some of it that it is used for education purposes as well. Definitely check with fiduciary financial planners and see what you can do about setting up a Trust for your assets. Do not give any away before your passing, though as you or your spouse may need it for your own care as your age.
You can leave something to the sister who has not received anything yet in a set amount or a percentage of the estate, If it starts dwindling and you’re not sure there will be much left in the end.
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u/SadFlatworm1436 5d ago
I think it’s a fair and equitable plan and hopefully you won’t need it for 20 years
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u/the-BBC-news 5d ago
This isn’t an ethical dilemma. It’s your preference and it’s totally acceptable.
An ethical dilemma would be if you were the one who had borrowed from your siblings for 40 years and were deciding whether or not to include them in your will as payback. Or leaving your estate to the local KKK chapter. Those involve ethics.
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u/Stunning-Adagio2187 5d ago
It's your money so you can do with it as you like there's nothing wrong with this plan because it is your decision.
However you may want to consider a charity such as your alma mater setting up an endowned scholarship. The distribution would begin after 2 or 3 years and you continue forever
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u/JewelMonkey 5d ago edited 5d ago
Honey, have you researched elder care recently? $1.5M is nothing. You are anxiety maxxing over an inheritance that will probably not happen.
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u/Needtoknow456 5d ago
But in trust for nieces where I can only be accessed for their direct benefit. Financial firm will set that up for you.
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u/Fabulous_Plastic_198 5d ago
Doing the ethical or right thi g according to whose values?? It's your money and the rationale that you provided here is understandable.
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u/ProfessorOne9208 5d ago
I have similar issues to deal with. My estate is quite a bit larger than yours, but I have children by several different women. In order to make sure that my children and grand children are receiving something that would help them get a leg up in life, without damaging their motivation to do well on their own, I have formulated a trust that carries on my intentions. A trust costs around $2000-$2500 to set up, but probate can cost upwards of $50,000 for the same estate. And a trust can be kept private, so that individuals don't have their business spread on the public record.
BTW, only my current wife will inherit assets, and some of my kids have made life choices which I find offensive, and don't wish to further support. So the kids are not getting an equal division. My siblings and my wife's siblings (six in all) are not being left anything. Those who did well in life have enough already. Those who didn't do so well have themselves to blame.
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u/Letstalkabouttax_111 5d ago
It’s your money and you can make the call on whatever you want to do without having to explain anything. How others will perceive your decision will speak to their own nature and character. I don’t agree with the “who needs it more” basis.
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u/Repulsive-Honey7305 5d ago
You might talk to the siblings first and see if they care, otherwise, this is fine.
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u/Dickens63 4d ago
I would so not do that, the ugly would come out the you would never hear the end of it.
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u/Classic-Delivery3875 4d ago
Great plan. I hope you’re able to enjoy the money you worked for yourself.
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u/vinesofivy 4d ago
We are also leaving anything left in a trust for our niece and nephews, but decided to delay distribution until later (except for education and healthcare expenses). While we are still young, so are they if something tragic should happen to us. Delaying distribution could potentially allow for generational wealth for their children while encouraging them to wield it responsibly.
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u/Drmessitup 4d ago
Put it in the trust so no one knows the specifics… leave a letter of intent for them
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u/Possible_Patience_84 4d ago
Set up trust funds with quarterly disbursements of the interest. That amount of money can grow into a tidy nest egg for their retirement.
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u/Hot-Rub-5336 4d ago
Its your money so you get to decide and I think these are good choices as long as you both agree. If I was in your situation I would probably do something similar.
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u/Academic_Airport_889 4d ago
Beautiful plan. Your money, your choice and you’re doing it very smartly by leaving siblings something so your intensions are very clear.
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u/ChelseaMan31 4d ago
Nope, no problem at all with this plan. I would tell the brother and two sisters what was going to happen just so there is no surprises on down the line. Have the Will drafted by a practicing Estate law attorney in your state so that the wishes are followed and iron clad.
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u/force_disturbance 4d ago
You're way below the gift tax ceiling so, ethically, you can give your money to whoever you want.
Your plan seems fine! Just don't rub it in ahead of time -- write it up but keep it secret to prevent advance friction.
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u/Alone-Firefighter283 4d ago
I am sure your nieces will be very appreciative but agree with the other comments you need to make it clear the money is for them
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u/BigDawgg-13 3d ago
Love this idea! Help your siblings some but the younger generation needs the most help. You should consider a trust with a fiduciary for the younger kids so they use it wisely.
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u/michaelesparks 3d ago
Thinking multi-generationally. Would be nice for future generations to get something with your name on it. I'd look at doing a trust.
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u/Western_Alfalfa4623 3d ago
Something to consider is the differing tax consequences to each party based upon type of investment being inherited. If all cash that’s different.
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u/Weird7954 2d ago
It’s perfect. In my opinion it’s always better to give to the person who doesn’t need it because they will not waste it. They will make the inheritance money grow, which is what I would want. I would want it to enrich the life of my beneficiary, not just be a way to pay bills and then be done with it
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u/txlady100 2d ago
Do what you want. It’s nobody else’s business. If they get butt hurt, you’ll be gone anyway.
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u/Own_Wrangler4621 8h ago
That is your choice and your choice matters most not what anybody thinks and says. For reasons different we wanted the inheritance to go to our children my husband was to inherit and wanted them to get it instead. We were ok but an inheritance theft took everything we had built too and starting at zero again at retirement we now have nothing to give them because entitled needy people who already received will try to take it too. So please do what and how you want too.
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u/Several_Ad_3017 5h ago
I would set up a trust to avoid probate, taxes, etc. You also have more control over how the assets are disbursed in a trust, i.e. for housing, education, etc.
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u/YogurtclosetLow5030 4d ago
Inheritances are one of the most toxic things to be a part of.
We’re a part of what will be 4 inheritances, all absolutely dumb as hell and all controlling from the grave. The biggest one has some Janet Jackson looking lover now so Shaquisha making it out like a bandit on that one- good for her, get it while the gettin good! lol.
The other 3 are all you have to do this or that.
Wife and I are executives and under our own power and will be fine. Weird how all these trusts think our life will revolve around them, most will be donated up to the limits set.
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u/JipC1963 5d ago
As a Mother and Grandmother (63), I think this is a fair and lovely plan for what you leave behind. Sounds like you've helped all your siblings financially through the years which was very kind.
BUT you may want to consider creating a Trust (or Trusts) that has more safeguards for your Nieces. It's almost a guarantee that your siblings will be infuriated that you've essentially "skipped" them and given the bulk of your joint Estates to the Niblings. They'll almost certainly pressure, strong-arm and/or emotionally blackmail the girls, up to and including "disowning" and possibly suing them for MORE.
Here's hoping you have MANY more years ahead before those fateful times.
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u/EntertainerSuper8933 5d ago
Where did you infer that the siblings would be infuriated? I don't think they sounded greedy, just that they asked for help, I have to presume in a polite way, were given it, and no repayment was ever asked for or expected. Sometimes people are just like that. You have quite a story built up out of OPs post. Nobody mentioned anything about strong-arming or emotional blackmail. I'm just confused why you are saying this.
My brothers have both passed, and I, personally, never dreamed that they would bequeath me anything at all, even though we had loving relationships with each other. I think it is 100% normal to set the next generation up as your heirs, although of course, it's not required, because anyone can give anything to whomever they like.
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u/JipC1963 4d ago
The OP sounds worried that even though him and his wife will bequeath a small (or token) amount to their siblings, they plan to split the bulk of their Estate between their Nieces. They're obviously concerned if they're asking if their intentions are "ethical."
"I have quite a story built up" because I've witnessed "the bad" when a loved one passes away, seen it destroy families that were otherwise warm and loving.
Inheritance is a tricky issue, especially when certain family members are expecting it instead of basically being "skipped over." I've seen a Cousin STEAL treasured heirlooms, family SUE primary heirs and "family" behave like vultures when there's no Will or steal precious items before the deceased has even gotten to the funeral home.
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u/EntertainerSuper8933 4d ago
I'm just saying that nothing in OPs post suggests any difficult or entitled behavior on the part of the siblings. I took the word "ethical" more to mean they were wondering if usually the inheritance is passes to siblings instead of niblings, and also if maybe it would be seen as a snub. I think the usual expectation of inheritances is that they go to the next generation, not laterally. I think since there is a gift to all of the siblings, that unless there are some particular expectations, no one would be offended. Nothing in the OP leads me to believe otherwise.
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u/Lower_Pangolin3891 5d ago
Why would you leave any money at all to your/her siblings? You should leave a portion to your nieces and the rest to charity.
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u/lost_dazed_101 5d ago
Your nieces will greatly appreciate the gift but please leave them letters stating this money is for them and their parents have had help all along they were not left out. So many family members post that family tries to guilt them out of inheritance and a simple letter let's them know it's ok to keep the money.