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addict and estate plan

Old 09-25-2012, 09:15 AM
  # 21 (permalink)  
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Andrea, I am 53 now as well and I think 50 or 55 is a good time to give it. If they have not found recovery by then I guess the chances are slim that they will.
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Old 09-25-2012, 06:30 PM
  # 22 (permalink)  
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I'm glad other people are finding this discussion as helpful as I am finding it.

It's looking like a popular approach to delay any distributions til age 55 or so--laurie6781's parents, AndreaB, and Sunshine2.

So what exactly happens in this scenario at age 55? Periodic distributions without restrictions from that point until the beneficiary's death and then remaining trust assets to a contingent beneficiary?

Off-topic here--thank you laurie6781 and other long-recovered members for continuing to hang around and post here. You are living proof that real recovery is possible and that maybe my AS will eventually find recovery, too.
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Old 09-25-2012, 11:52 PM
  # 23 (permalink)  
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So what exactly happens in this scenario at age 55?
Since at age 55 I had serious health issue setting, so bad that I was declared
'disabled' by SS for my advanced Diabetes, Neuropathy, and Osteo Arthritis
and told I would spend the rest of my life in a wheel chair (NOT to be, lol),
however I was sober and clean 19 years at that time, and needless
to say I far exceeded the Dr's opinion, roflmao and have come very far,
including, not only walking, but walking at least 2 miles a day with my
fur kids, traveling both 'in country and out of country' etc rofl and
today have a pretty damn good 'active' life! lmao

My own humble opinion would be something like this:

"When AS reaches 55, and if clean and sober, he is to receive $500.00 (insert
whatever amount you choose) a month to help with his monthly living expenses,
HOWEVER, IF AS has not reached a point of at least 1 year (again however
much amount of time you feel is good for you) than no monthly distribution
until he has achieved recovery and then at that time monthly payments to
be $ _________.

Should AS never achieve recovery, then upon his demise his share shall be
distributed among the other beneficiaries or their heirs."

An attorney, of course, can help you with the exact wording and what is
legal in your state.

Once you have decided and your trust is finished, if I were you I would
tell AS in a 'matter of fact, business' tone of voice that this how your
will stands at this time, and the trust would only be changed IF he decides
to do something about HIS PROBLEM.

Who knows, this information could be an impetus for him to seek recovery,
knowing that he would have help for living expenses in recovery, if you were
to pass.

Again, Just My Humble Opinion.

Love and hugs,
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Old 09-26-2012, 06:28 AM
  # 24 (permalink)  
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Laurie's ideas are great. Currently, however, my RAD is 22 and should I die soon and since she won't receive any distributions until she turns 55, her inheritance will be held in trust for 33 years. That's a long time for a trustee to manage a trust. So, for my trustees' sake, I have provided that at 55, my daughter can request that the trust corpus be distributed to her at that time, no drug tests, etc. required. I'm just not crazy about insisting that Trustees require drug testing.

I figure at 55 and after all those years, the decision as to the use of her inheritance is finally up to her. If she wants to blow it all on drugs, then have at it.

Now, the good thing about these provisions being in a will, is that as long as I live, I can change them. So if I live 20 more years, and at 42 she is an active addict, then I change the distribution date to 75 years of age. Or, I could change the distribution date to 70 and require that the Trustee purchase an annuity for her so that she receives a monthly payment and not a lump sum distribution.

Its all fluid.
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Old 09-26-2012, 09:09 AM
  # 25 (permalink)  
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The oldest baby boomers turned 65 in 2011. The final baby boomers will turn 65 in 2029. It took the entire boom to fund the Depression/WW2 generation's retirement benefits substantially beyond their individual contributions.

There is nothing certain about social security, medicare, healthcare in general, stock markets or bonds, regardless of who is in office ( U.S.) now and over the next 40 years.

There is nothing certain about inflation.

Life expectancy continues to increase and it's likely most folk will outlive their savings.
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Old 09-26-2012, 06:38 PM
  # 26 (permalink)  
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Got new info today. My only choice may be to delay distribution til AS is 55.

If I want to put addiction-related restrictions on distributions, I will have to designate a real human being as trustee, not the trust department of the financial services company as I had planned. I talked to their trust department today and they said they wouldn't do it.

AndreaB, about the annuity idea--when the annuitant dies, that's it, right? Whether or not all the money has been distributed? My AS is in his late 20s. If I die in the next few years (hoping not!), 20 years of the magic of compound interest means there would be a LOT of money in that trust by the time he's 55. Almost certainly he would live to get only a fraction.

And a lump sum distribution even at 55 does not seem to me to be a good idea.

Still thinking through the possibilities . . . .
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Old 09-27-2012, 03:45 AM
  # 27 (permalink)  
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NoGround, I will give my son everything he inherits by the time he turn 55. I don't have millions, so I may have felt differently if I had.
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Old 09-27-2012, 06:11 AM
  # 28 (permalink)  
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Sunshine2,

I don't have millions either!! You don't have to start out with millions to end up with serious money--at least, what seems to me like serious money.

I know you've seen those online calculators. Here's one: Advanced Complex Savings Compound Interest Calculator

You've probably already done this, because I can tell from your posts that you are much further along in your thinking than I am. But if you haven't, plug in:
your starting figure,
8% interest (or whatever rate you think is reasonable to assume),
compounding period frequency (ex: monthly), and
total number of compounding periods (ex for monthly: 12 mos x 25 years = 300 compounding periods)

Of course, with inflation over 25 years, maybe that wouldn't seem like so much money after all. And if he gets it all at once and blows it--hey, I'm dead and will never know it.

Thank you, everybody. I know I just need to make the best decision I can with the information I have right now and then let it go. I will reread all your posts, think some more, talk to my lawyer, and then post again when I figure out what I want to do.
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Old 09-27-2012, 10:11 AM
  # 29 (permalink)  
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Hi NoGround, since your AS is in his late 20s and still an active addict and because this is causing you concern, I would move the distribution date to his 65th birthday. Now, 65 is old. That's about ten years older than I am now and my thoughts are that if at that age he isn't sufficiently responsible to manage his money, its his problem and not yours.

Now at 65, there are a couple of options, you could instruct your trustee to purchase a lifetime annuity for him and title the annuity in your son's name and dissolve the trust. The problem with this scenario, is that the commercial trustee will undoubtedly purchase an annuity that pays the trustee a commission and since your son will own the annuity he can just turn around and sell it to an investor (this happens a lot). The next choice is to instruct the trustee to purchase an annuity and keep it in the trust. This protects the annuity because your son can not sell it if its in the trust, but the trust must remain open and continue to pay the trustee a management fee which effectively reduces the annuity payment. The third strategy, is mentioned above, distribute the trust corpus to him at 65 and terminate the trust.

Regarding the magic of compounding, let me warn you, that 8% is the return that all investment advisers use, and it is now debunked. My experience is that 4%-6% gross return is more common. Most commercial trustees invest in financial products (mutual funds) that are managed by their financial institution. On average, the trust will pay a 1-3% fee to the manager of the mutual fund and a 1-2% fee to the trustee to manage the trust. So after paying all fees, I find it rare for a trust to net more than 2-3%. Those are the good results! I have seen some bank trustees wipe out trusts within 10 to 15 years. That is why I always recommend including a provision for a "Trust Proctector". A trust protector is a friend who is given the power to change trustees. You can make that their only duty. I find having that provision in a trust document can do a lot to keep a commercial trustee honest.
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Old 09-28-2012, 07:59 PM
  # 30 (permalink)  
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AndreaB,

Thank you for your generosity in sharing this information. It sounds like you have much more than just personal experience to draw from.

So the good news is I don't have to worry that there will be "too much money" when the time comes for my AS to have it. (I'm embarrassed to think how naive I sounded!) The trust protector is a wonderful idea, too--if only I can figure out who it could be.

I am realizing now there is probably not the perfect solution I had hoped for--one that would not enable my AS, but would remove money as a barrier to longterm residential treatment, if he ever decides he wants recovery.
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Old 09-29-2012, 01:38 AM
  # 31 (permalink)  
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It sounds like you are trying to play God. I was an addict/alcoholic and I got a very big inheritance from my grandfather in 2002. It was a little over 2 million. I have lost about $600,000 of it drinking and drugging it away, and loaning it to others that will not pay me back. It is all part of my karma. I am now 9 months sober, due to the fact that I couldn't take it anymore. I hit my bottom, and woke up. I am now cleaning up my life and my money problems. If it weren't for everything that I have been through, I wouldn't be where I am at today, sober and loving it!
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Old 09-29-2012, 06:16 AM
  # 32 (permalink)  
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SoberBrooke, be that as it may, I feel that it is my money and I can decide what I want to do with it. The same way that I wouldn't give my AS money now, I wouldn't want to give him money after my death, unless he is much older. If he cleans up before, I may change my will. There is a difference between trying to play God and refusing to enable.
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Old 09-29-2012, 07:19 AM
  # 33 (permalink)  
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Sunshine2,

You beat me to it! I was still thinking how to respond to soberbrooke when your post went up.

I am right with you on "refusing to enable" being different from "wanting to control." But what I got from soberbrooke's story is that playing God might also mean believing you know the future.

Anybody watching soberbrooke for the 9 years she was blowing through that money would've said, "Yep, no surprise here." But then look what happened! We really don't know the future.

Here's what my brother suggested last night: Cancel the life insurance policy.
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Old 09-29-2012, 09:26 AM
  # 34 (permalink)  
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Yes, there is no perfect estate solution. I plan to just never die
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Old 09-29-2012, 08:58 PM
  # 35 (permalink)  
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Just read through this entire thread....wealth of information and sharing here! Thank you. I don't have any advice or actions I have taken to share.....just that I have been stewing on this same question and you have all provided me with wonderful information to think on.

Thank you Noground for bringing up this important topic!!
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