Investments and Estate Planning for Kids

[mmoses]

I have a very good friend who is an estate planning attorney in Ft. Worth. Shoot me an IM if you want his contact. I'm sure he will talk to you about your situation and help you determine if you need an attorney or not to accomplish what you want (before he engages in a fee based relationship)

pm sent.

[Man]

I got a really dumb/novice question. Does anyone stash cash on the side in order to also cover all the tax burdens the kids may be faced with?

[GARY]

Just finalized with lawyers this week a trust for my sisters two girls. It was a commitment I made to my brother in law two years on his death bed with my sister in the room. The trust option allows us to set the date they can control their trust, but leaves it in a trust, protects it from marriage (divorce) , sets up dependents, how it passes upon death, allows my sister to incremental fund, etc... NOTE: This included life insurance proceeds, so we aren't talking chump change, so everyone's deal is different.....just worked well for what we are trying to accomplish.

[El Paisano]

I strongly suggest that you reconsider. I suggest that you spend the time and effort to equip your children with the tools needed to make it on their own. That will benefit them far more than leaving easy money to them later.
I am 70 and my youngest is 37. In my years I have seen many people receive "free" money, only for it to be wasted. The best way to see them handle it responsibly if they make it themselves.

[El Paisano]

As far as taxes, My wife and I set up a revocable trust that owns everything except for retirement money. I just finished getting the deeds rewritten to reflect that the trust owns the properties.
When we pass, the properties remain in the trust's name and won't be seen as income to them unless they transfer into their name. Of course, they will have to pay real estate taxes, etc. (but the bank accounts are in the trust's name also).

[mmoses]

I strongly suggest that you reconsider. I suggest that you spend the time and effort to equip your children with the tools needed to make it on their own. That will benefit them far more than leaving easy money to them later.
I am 70 and my youngest is 37. In my years I have seen many people receive "free" money, only for it to be wasted. The best way to see them handle it responsibly if they make it themselves.

100% I plan on doing my best to equip my kids with the tools they need to be hardworking, good, honest, and respectful adults.

However, I do want to give them the best advantage possible. I want them to be able to enjoy their lives. I realize after having kids, that I want to be to spend as much time with them as possible and God willing being able to retire quickly so I can spend as much time with my future grandkids as possible.

I hope I'm wrong but unfortunately I think the American dream is dying.
In the last year, we have seen a giant change in the wealth gap.

When you were born, $100k was equal to about $1.2 million in today's dollars. A Ford F1 would put you back less than $2k. Salaries have not increased enough to cover that 70 years of inflation.

I think my wife and I can raise good men and women and give them a headstart on life financially.

[LivinADream]

I hope my kids don't see this thread. [emoji23]

Sent from my motorola one 5G UW using Tapatalk

[db@100]

Why not open an account in your name and set it up with a "Payable on Death" to your child?
You have all the control while you are alive to use or give to whoever. Why you die, they get it. NO PROBATE

The trustee can get paid something so be sure that is allowed for.

[Texans42]

When my wife and I did ours two things that where big deals to us. Spousal trusts and for the kids we set up basically two trusts. one funds school etc if we die tomorrow with capped withdrawals to 18. Then there is three big payouts 24, 34, 44 years.

[tps7742]

100% I plan on doing my best to equip my kids with the tools they need to be hardworking, good, honest, and respectful adults.

However, I do want to give them the best advantage possible. I want them to be able to enjoy their lives. I realize after having kids, that I want to be to spend as much time with them as possible and God willing being able to retire quickly so I can spend as much time with my future grandkids as possible.

I hope I'm wrong but unfortunately I think the American dream is dying.
In the last year, we have seen a giant change in the wealth gap.

When you were born, $100k was equal to about $1.2 million in today's dollars. A Ford F1 would put you back less than $2k. Salaries have not increased enough to cover that 70 years of inflation.

I think my wife and I can raise good men and women and give them a headstart on life financially.

You and your family are going to be fine. By things you are stating and doing here y’all are on the right track. Now it’s allot of work as you know, but it’s a blessing to see when your kids are an asset to society and can stand on their own.
Lots of good information here already. Good luck on your journey through life.

[txpitdog]

We’re doing the option 2. Post-tax regular investment account in my and my wife’s names strictly to capture the advantage of compounding interest/growth. Each account number is assigned to one child in our will, so we will hang on to it and hand it over to them when they need it, when they’ve earned it, or maybe just surprise them with it when the estate is handled upon our deaths.

[scott123456789]

My understanding is that you are limited to the amount you can give them a year. I think its $15k before they have to pay taxes.

You can go over tax free but you have to fill out a form up to the lifetime tax free gift amount of ~11 million per kid.

[scott123456789]

Pension, 401k, and 457 are set up for my wife and I.

Is the 457 a Roth or pre-tax?

[mmoses]

Is the 457 a Roth or pre-tax?

Roth.

[Tbar]

Good ideas above. Between now and then you should also be teaching them the value of money and how to be wise with generational wealth.