s/o trust: guardian and money

[Globetrotter]

I have been wondering about this. Our chosen guardian lives in a small house, big enough for their family but it would be small if my kids went to live with them (but still doable). We would be happy for them to use part of our estate to move to a larger place, but how to approach this? I don't want to insult them by saying their place is too small, because as long as everyone is happy I don't care about that, but at the same time I want them to know it's an option if THEY want to do it. Does this make sense?

Someone else would be handling the estate, btw.

[Mopey]

I think it is all about clarification in the paperwork. DH and I are dealing with this now and I want to make sure all the insurance (lots) goes to a trust for the baby which with approval/supervision/directives can be used by the guardians.

You can put in a caveat that part of the monetary estate is available for ensuring a comfortable living space for your children with their guardians if necessary, no?

[niccig]

We have this with our friends. Their house is big enough if we have their 2 DDs, but our house is not. We would probably move into their house, but pay something I suppose - seems that living that rent free, wouldn't be right. The house would go to their kids I'm assuming.

Interesting question.

Our friends do have room for DS, can afford to have him. We have said some estate money to be used as needed - I do think we need to spell that out more. These friends are also less likely to use any of DS's money inappropriately. I've had that happen, my parents used trust money from our uncle to finish the house. They did pay my sisters and I back eventually, but it was several years later. So, having someone that won't raid the trust is important to me.

[BayGirl2]

I have in my mind how I want this to work but we haven't put it into writing yet either. :bag

Our intention is that our BIL/SIL who have 2 kids and a small house in our town would be the guardians. Our Life insurance policy is enough that it could pay off our mortgage and then have some $$ left over for basic living expenses, college, etc. So BIL/SIL would have the option to move into our house (much bigger, but other side of town) or sell our house and use the equity + insurance $ to buy something larger. I feel they should be able to make that decision, not us, and I trust they'd do the right thing for their family.

However I don't have a good feel for their investing and money mgt. skills. Not that they have issues, just that managing what would end up being a multi-million dollar estate (we're in a high COL area) would be hard for any average person. My brother is a trader and very financially savvy. (He's a single dad in a different state though so unless things changed we wouldn't chose him as guardian, it would be to much to expect IMO). So I would want to have my brother be the executor of my kids trust.

I believe that is doable legally. I realize there would be some coordination required between BIL/SIL and Brother but I think they are all reasonable enough people to handle it. And I'd prefer to keep both sides of the family involved in major decisions for my kids anyway.
.....and now I am really feeling guilty that this is not all legally in writing yet and we've never spoken with either of them.

ETA: cross posted with Niccig. I see your point about allowing them to live rent-free in our house. I guess with my plan above, legally the house would be in our children's trust and the executor would have say on whether its sold or the kids continue to live in it. In practice our house would be like a gift to BIL/SIL to use if they wanted it. I don't think I have a problem with that though, as they would be taking on a huge emotional responsibility and cost of raising our kids. Given the cost of real estate here I would feel better knowing that the housing issue is one they don't have to worry about.

[AnnieW625]

Right now if BIL+wife agree to be the guardian for our kids I am pretty sure that our girls would end up sharing a room, which wouldn't be the end of the world and I would be happy with that. They are talking about buying a new larger home in a couple of years though that has four bedrooms and an office since they had been talking about having more kids.

Our house is much smaller 1100 sq. feet vs. 2600 sq. feet plus their careers are elsewhere.

I had always thought that BILW would be the executor also, but now that I think about it I might hand that over to DH's uncle (DD1's godfather). He is very trust worthy and a good money manager. Either one of my parents would be a good executor as well.

[karstmama]

yes, baygirl, i've done something similar. my ds & i live with my mother right now. my brother & sil are ds's guardians, but my mama would head my trust. that way there's a loving overseer to both my son & my money, hopefully to all work for the good.

all that might/would change, though, if dbf & i were to get married. everyone say 'can of worms...'

[kellij]

I have been wondering about this. Our chosen guardian lives in a small house, big enough for their family but it would be small if my kids went to live with them (but still doable). We would be happy for them to use part of our estate to move to a larger place, but how to approach this? I don't want to insult them by saying their place is too small, because as long as everyone is happy I don't care about that, but at the same time I want them to know it's an option if THEY want to do it. Does this make sense?

Someone else would be handling the estate, btw.

Have your attorney make sure that it's clear in your trusts. Then I assume by "handling the estate," you mean that you have a trustee who is different from your guardians. So I would also make it clear to your trustee what your wishes are for your guardians in connection with the living space. I also assume that your children will be the beneficiaries of your trusts and that the house is in trust, so it would go to the beneficiaries. So you might just want to talk to the trustee to clarify what you want to happen in terms of your house, them moving to it or buying a new house, etc. Since you've put a different person in control of your money they will have to approve all of the expenses of the guardian, that's why it's most important to clarify your wishes with that person. Then you could either just not worry about telling your guardians at this point, or you could just say, "hey, I just wanted to let you know that if the worst case scenario happens and you are going to raise DC, we want you to be able to have plenty of living space, and since they will be taking up more than if you aren't raising them, you can feel free to move or move into our house, or whatever works best for you guys." Something along those lines.

[nfowife]

We put in our wills that the trustees are a group of people- IIRC, the guardian (BIL) and also 2 others (MIL/FIL and a lawyer maybe? I'm forgetting!). They can yay/nay any major outlays of money. We also have a monthly/yearly stipend for the guardian for everyday expenses- food, camp, school, etc. and figure that if they needed help to buy a large enough house that would be something to discuss with the group trustees and it would be alright.

[Globetrotter]

In our trust, it specifies the sorts of things that the money can be used for but not these sorts of details :(

I think we will let them know that they are welcome to move into our house (which will be paid off) but that involves a cross-country move for them so not expected, or they can use the money to move into a larger place if they see fit (but that's their choice - whatever is comfortable for them). It's just an option. I need to let our successor trustee know this. The good thing is our trustee is well off, and even otherwise I trust that he wouldn't misuse the funds.

But all this leads to another question (I will post it separately).

[MSWR0319]

Our will says that they can move into our house if wanted. But now that I'm thinking aout it, I'm wondering if we shouldn't spell out money a little better. SIL is executor of the trust and my sister/BIL are guardians. I'm not sure SIL would know what we want. She's good with money but can be a spender too. I like the idea of layng out a yearly stipend.

[shawnandangel]

Our will is set up so that all of the money goes to DD but her future guardians can take from that money with court approval. This is what our lawyer suggested.