Got a question on how some members have approached the designing of their will as it relates to there RE portfolio.

I am a 60 yr old divorced man with 16 paid off shf properties and a full time gov gig where I can separate at anytime. I have three children 2 of which I rarely see or have any contact with and a 19 yr old daughter who starting display a really ___ attitude and becoming more distant everyday.

recently most of our contact revolves around her need for financial assistance. Furthermore she really has no interest in what I have built and is under the impression that my estate is going to be willed to her after my passing.

I am starting to stress as I draft this document, also I probably should mention that the will will include some nieces, nephews and of course my children. Again, just curious how others have approached this type of sensitive matter.

Hi Tex,

Kudos to you for thinking to do a will in the first place. Something like 60% of Americans die without one, and even those who think they have nothing can cause uproar in a family over the tiniest things.

Crafting a will is a labor of love, when done well. You can certainly do it that way.

I recommend seeking the advice of an Estate Planning Attorney who specializes in this. They have (literally) seen it all. The good, the bad, the beautiful, the ugly....that person can give you advice you will get no where else. That person will have options you can use to make sure the wealth you've accumulated and not used will be dispersed according to your wishes.

A few thoughts from when we crafted our Estate Plan. Btw, wife and I are mid-40s, but we still have 3 kids in the house so we did a Living Trust. Might ask about that since you have younger nieces and nephews.

1) We are Christians, and so we view the wealth in our possession as being on loan from God, to be used wisely and for his glory. Therefore, we would not turn over even $1 to anyone if we thought it would be wasted or misspent foolishly. Now to be clear: that doesn't mean someone won't waste it or spend it foolishly, but we want to be sure that whoever gets those funds is trained in wise financial management, or as Christians call it "stewardship." All this today: make sure you turn this wealth over to someone who has been trained in using money and wealth wisely. Wealth given to fools harms them. Wealth given to wise people blesses them.

2) In thinking of #1, if you have a Trust you can set up certain stipulations as far as when/how much each person gets. For example, in our Trust the kids receive scheduled payouts in 3 lumps: one at age 25, one at age 30, and the final one at age 35. This way, the wealth endures, so that if for some reason a kid doesn't make the wisest decisions at age 25, perhaps by age 30/35 they will have realized how the first amount was frittered away and will do better with the next 1-2 payouts. We have also put in a requirement that they must take a financial management course such as "Dave Ramsey's Financial Peace University" and be signed off by the facilitator before they receive any of it. The Trustee has discretion to ascertain that this requirement has been met. Again, we are teaching our kids to be wise, but if we get hit by a bus today we have a plan in place to ensure they get the extra training needed. They all have their own ESAs (not the critter kind; the educational kind) for school, which will pass outside of the main estate.

3) We have established that 10% of our estate off the top will go to the 3 charities that we support the most: our local church, and two other non-profits that serve causes dear to us.

Overall, our plan is to create a legacy to pass from one generation to the next. We may not see the long-term effects, but knowing that what we've worked to accumulate will be a blessing to others and not a cause for strife or struggle gives us tremendous peace.

Best wishes!

I too am facing the same type problem. Less kids but no interest at all in real estate , rentals, etc.from them.

The answer I get when I approach the subject is "just sell it all and send me a check".

I've seen the results of this several times and it's often a big disappointment. New "friends" show up to help enjoy the windfall. A new car shows up. A luxury vacation. New motorcycle, boat, etc. In less than 12-18 months All the money is gone, and the new friends too.

So here's what I decided to do.

Put all properties in a trust/s (can be done upon death by directing this in the will or before death). To be managed by a trustee or co-trustees if you have a bunch of properties/businesses. (Subject to audit and checks and balances).

The cash flow from this is to be distributed by the trustee at a rate and timing (quarterly) that I decide (right now that is 10 percent yearly max to the kid/s (for non stupid things-not a new car every year), 5 percent to the animal shelter/charity and the rest to be reinvested to buy more properties and continue the trust indefinitely. The trustee/s will have the power to buy, sell, exchange property anywhere in the world as conditions warrant. (You never know what will happen. Consider current riots and flight from big cities as an example).

Also, have a clause to defeat any attempt to cash it out with those companies that buy the cashflow (like the ones that advertize on tv) (it's my money and I want it NOW!)

The trust needs to be set up by an expert as some states do not allow indefinite length of time for the trust to exist.Find one that does (South Dakota comes to mind).

Find a reliable, honest trustee not one who will drain the money off.

Some cash and other things will pass to the kid/s.

However, the real estate, which took a lifetime to build, will remain and a steady cashflow to decendants, hopefully indefinitely. They don't want to bother with it---Fine, they won't have to.

Perhaps, in a hundered or five hundered or a thousand or more years, your decendants will still be receiving a distribution.

There are many ways to preserve your estate and avoid the inheritance tax for your beneficiaries. If you are not fond of all of your children, family members and or friends, you can form a charitable family foundation and slowly give you money away. Such as scholarships, funding educational centers, etc. -- after your death.

You will need to think this through and then consult with a Probate and Estate Attorney.

One of my family members had 60M in property and didn't want to give half away in taxes. So they donated 10 million and built a School of Economics at a local State University. Got their family name on it and it helps 100's of students every year.

Another family member gave a property away to the City of Hope, who in turn sold it, put the money in trust and with the income pays annual payments to my family member until they die. Also this family member got to write off the donation (of the property) in 5 years...

In my case I choose whom will get whatever how and when. For those who aren't good with money, they will receive a check in the mail every month instead of a 1 time payment... They can't spend what they didn't get yet!

I want to say in Texas, there's a thing where if you contest a will and you're unsuccessful, you lose your chance to get whatever it was that you were willed in the first place. So the strategy is often to give people enough so that they think twice about losing their chance at x, because the benefit of making enough of a fuss for y isn't great enough incentive.

So--- if I'm a certain kind of person, and I'm left $10k out of a $1M estate, and I make a fuss demanding that my rightful share ought to be more, and I lose, I lose my $10k. Whereas if I'm left a dollar, there's no reason for me not to try for a bigger chunk of the $1M, because all I'm risking is a dollar.

If you want to build generational wealth, there's a saying--- rags to riches to rags in three generations. Generation #1 is the bootstrappy generation that accumulates the fortune. Generation #2 is the generation that preserves it, and saw how hard Generation #1 worked for it, and respects it. But by the time it gets to Generation #3, they squander it-- because they didn't see the effort that it took to accumulate it, and they take it for granted. That's why, with generational wealth, there are people who are employed to preserve it intact from the whims of the heirs, to allow it to survive more than two or three generations. :)

A trust requires a good trustee who writes checks and manages the whole thing. My mother and an attorney were the trustees for my Dad's trust. She was good with it and I was there to help. Attorney was paid yearly and did nothing except a drive by once a year. His assistant was the person we had to interface with and she was a horrible witch. When Mom passed I had almost everything taken out of the trust as I could not work on the buildings in those conditions. That was a legal move, a disbursement.

For your situation, I would just make a regular will. You could say that everything must be sold and each heir gets one share. That would keep any of them from killing you to get it sooner. I think my uncle was going to kill my mother and I until he found out that is how I had her will written and mine. He and his wife were going through some bad financial issues I guess. Another tip is to never have an insurance policy in your name and if anyone tries to get one in your name then you get a lawyer to have it stopped.

So that is what I would suggest for you being that your children are not "friendly" to you and one is downright "unfriendly". People who are not themselves evil have evil friends. For example when my first husband and I were divorcing, his evil "friend" told him that if I tried to get any part of his business he would have me killed. I would never have wanted any part of his weird business.

Sounds like two problems to me. First the estranged family and second the will.

The will is relatively easy, just decide how you want it distributed and have the lawyer draw it up. You are in control not your kids so do as you wish.

Sounds like some good advice on here. Given your particular situation, I like RB's the best. They can't fight over what isn't there and it sounds like they never helped you out any.

AllyM, can you explain in a little more detail what you mean by:

"Another tip is to never have an insurance policy in your name and if anyone tries to get one in your name then you get a lawyer to have it stopped."

Maybe give an example?

I brought my two youngest sons to Mr. Landlord training. Two went to the bootcamp, and one has been to the Convention as well. My oldest is already running an RE business in Mexico.

To avoid family strife when we are gone, we created a trust that will distribute the LLCs at the final death, and the properties that are chosen for each LLC is up to us. We worked with an elder/estate attorney and all in it was about $3500.

Each kid will get an LLC and they can do with the properties as they choose according to their own needs and interests. That's the plan anyway.

Well, that's a deeeep subject. I have thought about leaving the property to the one who says he's interested, but who knows if he will be happy with just the income (with cash reserves for maintenance)...and most of the cash/stocks to the other and there will be a significant tax hit with selling. And the "cash" kid has a spouse with a dream of having a restaurant (read that money pit) and couldn't even keep a DJ business going. And now mainly lives on welfare. sigh

So would like a legacy of income to them and it to pass onto their kids, but I really am not seeing how that could happen. I've never seen it happen before-put it that way.

not judging but I cannot even imagine having serious issues with all my children. I'd say that's what you should fix. I disagree w/my kids and we "fight" a lot. But it doesn't affect the overall dynamics ... we get over it as quickly as it happens.

A 19 year old with an attitude ... I'd say that's most of them.

Started selling the properties one per year, putting the money in some ETF index fund, Creating separate joint accounts with each kids.

Have created SCorp to own some of the money, kids are also owner of the the SCorp.

When we are dead they will own it..

Now it's up to them to use it wisely..

I think some people here are fairly delusional about how life will be towards the end. Lots of people wanting to go "I'm going to spend every last penny, leave nothing, and bounce my funeral check."

That sounds GREAT in theory, but it simply rarely works that way. That whole concept is based on you remaining happy, healthy, and partying with your spouse until the day you die. Unless you plan your murder-suicide, it is just really unlikely to work out that way.

Saying that is your "plan" is just ignoring the reality of what is most likely to happen with that attitude. You will either run out money before you die or die with significant funds remaining because of an unexpected incident or health issue. In which case, if you don't plan with a Will or Trust or something, it IS going to go to those people that you just said you didn't want to give anything to.

If you're fine with that, then so be it. But this "I'm going to die with a penny left" attitude doesn't make any real sense. (Again, unless you're taking yourself out of this world on a set date and time.)

- John...

I agree with John. You want enough money to last you. When you get "old" in today's world, the doctors keep you alive artificially with "procedures" and medication. Then you sit and exist, not live. Mentally, you don't care any longer and spending money is something that you no longer care about because you're not going to exert the effort.

In California if you do not have a trust the estate Has to go through probate. Probate fees are set by law based on dollar values. You should check what your states requirements are.

In California if you do not have a trust the estate Has to go through probate. Probate fees are set by law based on dollar values. You should check what your states requirements are.

In California if you do not have a trust the estate Has to go through probate. Probate fees are set by law based on dollar values. You should check what your states requirements are.

See an estate lawyer. Tell them your assets, tell them your desires and they can best tell you how to achieve that. A lawyer that specializes in wills and estates is best to advise you on this, since each state is different and they know the laws to accomplish what you want.

Setting up a trust for home and business is what some family members did. That protects those assets, you still get to use any proceeds. You get any interest/dividends on accounts. If one dies, it is then available to the other since it is a joint trust. After that is goes to heirs. Now that they are old enough and their lifestyles are know etc, it helps with decisions on how that gets divided. While they were young, it was to stay in a trust and be dispersed at different ages.

Many estate lawyers have free consultations in our area or just pay for the half hour. It gets you an idea of what they know, and if you think they are worth your trust.

Our goal echoes that if our parents - we don't ever want to be a financial burden for our kids. We won't spend it all.

Out eldest is spot on with saving and spending. The youngest at 19 was a material girl who was always acting entitled (we were SO mean). Several years later, she is rapidly becoming a saver - and sees our reasoning.

I see your post as someone who is very sharp when it comes to business 16 SFH paid off and a gov contract, but the personal relationships maybe not so good.

Will or a Trust I am sure you have thoroughly studied the pros/cons of each.

The real question is how do you fix your broken relationship with your children, especially the older ones.

As words of encouragement - Don't give up on your children find a way - the 19 year old is probably in the I want everything now phase - you probably can fix that.

For the other two develop a plan - just as you did in acquiring the 16 houses.

If your plan fails at least you know that you gave it your best.

Good Luck

Wow....Thanks for all the responses. Great advice.

PG thank you for your wisdom.

Warren Buffett is leaving a very small percentage of his 77 billion estate, 2 billion to each of his three children.

As Buffett told Fortune in 1986, he wants to leave his kids ”’enough money so that they would feel they could do anything, but not so much that they could do nothing.3

It’s difficult because as you make these decisions it seems you are struggling with your emotions of what you “should” do or what is expected by your children (give them all the assets, which may not sit well) and also what you may want to do (leave them nothing) which, after it’s all said and done, may not sit well either.

Possibly meet yourself somewhere in the middle? Give a them some and the rest to charity?

How about running a test? Give them a decent sized chunk of money maybe for upcoming Christmas and see what they do with it. That may tell you where to go with the future/final payout. And who knows maybe you’ll be surprised and repair your relationship with your kids through doing so. Give it a try.