Beyond the Grave: The Right Way and the Wrong Way of Leaving Money to Your Children (and Others)

What if you have a hard-earned legacy to pass on, and a son/daughter-in-law that have done nothing but waste money from Day One? That certainly is an uncomfortable position, and the motivation for buying/reading this book. Author Condon, in cooperation with his father, has created thousands of inheritance plans over a combined 70 years of practice; they've also witness the impact of their advice. That's very impressive, and adds additional credibility. The original edition was published in 1995, this is the third.Unfortunately, the reader will soon realize that setting up trusts, etc. is not for the average layman. The good news is that the reader will realize there are solid options and have some ideas with which to discuss more thoroughly with an attorney or potential trustee.Author Condon has seen a long list of inheritance mishaps. A surviving spouse who lost the family money to the last caretaker, a daughter who lost her inheritance to her husband in a divorce, a son who disregarded the inheritance instructions made by his parents in their Living Trust, parents who gave substantial dollars to one child for his medical education but in failing to think through their simple 'divide equally' instructions, created major conflict, a charity that used his client's money to buy Cadillacs for its directors, children who had to give the IRS nearly half their inheritance in death taxes, a daughter who bestowed her entire inheritance to a cult, and a son supposed to handle his disabled sibling's share but instead put it into his own pocket. Having experience those and other problems hopefully provides Condon with the insight to avoid their repetition.Most people only use their Will or Living Trust to say who gets what. Condon, however, recommends programming it to live on after your death. He then posits the 'Big Seven' goals of inheritance planning.1)Program Your Inheritance Plan to Prevent Inheritance Conflicts Among Your Children.2)Protect the Inherited Money from Your Children's Potential Problems - divorce, a bankruptcy trustee, a serious illness, a drug addiction fed by his inheritance, a financially immature daughter, etc.3)Program Your Inheritance Plan to Ensure It Will Be Carried Out. Most clients select one or more of their children - that is not always wise.4)Program Your Inheritance Plan to Protect Your Assets for Your Surviving Spouse. If he/she remarries, half the family wealth may end up with his/her new spouse she may have additional children (or stepchildren) - all of whom might share in your half, your children may pressure your surviving spouse for an 'early inheritance,' he/she may become physically or mentally incapacitated - leaving him/her and the family wealth at the mercy of the 'last caretaker' or 'final friends,' or your surviving spouse may not have the capability to manage the family wealth.5)Eliminate the Death Tax - the IRS may make your children pay a 'death tax.'6)Prevent the IRS from Getting Two Bites of the Same Apple - eg. when your children die, whatever is left of their inheritance will be taxed again.7)Keep Your Children and Property out of Probate Court. Between attorneys' fees, executor fees, court costs, publishing fees, and appraisal fees, this can consume, on average, about 5% of your estate. It is also time-consuming, and can last from 9 months to two years - if there are no problems.Leaving an unequal inheritance because of economic disparity between children can create a bitter rift. Talk with them first. Nine times out of ten the successful child will become angry and incredulous - if this occurs, you should reconsider. Another alternative is to make small lifetime gifts to your needier child, given an insurance policy to your needier child. Condon has found that equalizing after death does not work - eg. appreciation, using an educated guess, or better yet, let each share the risk.Making one of two or more children the Successor Trustee of your Living Trust runs the same risks. Condon's suggestion - make them all successor co-trustees/executors (unless there's a problem with mental disability, financial immaturity, drugs, etc.). Don't let problems with distance dissuade you.Sometimes the children agree that one should be the sole Trustee - usually because that one has more business experience. Condon, however, contends that is not the issue - rather, it is 'Would this agreement eliminate normal human suspicions and conflicts arising when one child has sole power?'Another issue - assume the parents had three children and wanted to leave them equal shares in the apartment building they owned, and wanted to prevent their children from selling the building - preserving it for their future generations. As equal co-owners, each child would have the right to force a sale through court proceedings, even against the wishes of his siblings. A special Trust, however, would preserve the building in the bloodline until the death of the last Greenfield child.On the other hand, if your children have differing economic goals for their inheritances, don't make them co-owners - leave each a separate property and require them to hire a licensed real estate appraiser to calculate the difference in values, then have the child with the higher-valued property even up the difference.Another warning - don't die with your children owing you money. Instead, create a formal Promissory Note for your son (and his wife) to sign, collateralize that loan with a Mortgage or Trust Deed against their home, or forgive the loan and call it a gift. Alternatively, force equalization after death via the use of a real estate appraisal.Another major issue - protecting an inheritance while it's in the hands of your child. Condon estimates one of every five families he's seen has a child with a self-evident need to have the inheritance protected. Mismanagement and squandering, and subsequent divorces/remarriages are significant issues. In your Will or Living Trust, you can include a 'Protection Trust' in which your money and property go to a Trustee of the Protection Trust. That Trustee must carry out any inheritance instructions you provide. Typically these direct him to give your child portions of the inheritance from time to time, and control the inheritance for the rest of your child's life.On the other hand, many parents have a 'Depression-era' perspective - having saved religiously for everything owned. Another alternative to beginning your child's financial education early. A third is to require that Trustee to match every dollar your child earns.Protecting the inheritance from your child's spouse is an important consideration. This could occur by inheritance, by gift (eg. a daughter putting an inheritance in her and her husband's joint names with right of survivorship), or by law (Hawaii declares that when one spouse inherits, the other automatically has rights to a portion). Some suggest a 'Transparent Trust' in which you establish a Living Trust and leave the inheritance to your child 'in Trust;' when your child dies, remaining assets will pass to your grandchildren. But, your child could spend all the Trust assets, amend/revoke the Trust terms, or terminate the Trust.The 'good news' is that the Transparent Trust gives your child the power to say no to his spouse, the 'bad news' is that he or she still may be talked out of total control. Thus, the stronger irrevocable 'Protection Trust.' All the money and property goes to a third-party Trustee who controls them for as long as specified.Author Condon states that 25% of the families he's dealt with have a 'disabled' child - alcoholism, drug addiction, gambling, won't stay on his medication, etc. His recommendation is an 'Irrevocable Protection Trust,' using a corporate Trustee. The downside is that the bank won't hold your disabled child's hand - eg. visiting every day to ensure all his financial needs are met.

This book was recommended by my broker. Probably the most informative book that I have ever read in regards to the appropriate way to leave any inheritance that you may have.Written by a long time trust attorney, who relates some incredible personal experiences about what to do and not to do with your trust or will.

Because of various weird family situations with various relatives needing guardians, etc., we've had to do a lot of thinking, and work with lawyers, about estate planning, trustees, trust protectors, etc. In the course of doing so, we've looked at lots of websites and have tried to find comprehensive books about estate planning. This book covers the intersection of pragmatic family issues, as well as technical information about legal devices to handle various estate planning problems. I'm really glad I stumbled on this book, but it would have been so helpful if I had come across it sooner.This is the most comprehensive and best book I've found so far, except for various dry estate planning books targeted to professional financial planners (such as  Principles of Estate Planning ) It covers various advanced estate planning techniques, such as using life insurance to pay estate taxes, or family limited partnerships, for example. What makes it comprehensible is that it explains everything by means of anecdotes of various client situations the author has encountered. It is missing some information, such as dynasty trusts, or Crummey Letters, etc. so that if your estate planning is elaborate, you will still want to work with a professional (as he states himself on pg. 358), but you will be so much better informed after reading this book.What i really like about this book is that it has a pragmatic and functional roll-up-the-sleeves approach, what are the issues, the pitfalls, and the possible solutions. Also, it addresses important underlying questions that others might not get around to asking when they meet with a lawyer to draft a will, such as whether or not you should even leave an inheritance, what conditions you can put on an inheritance, or how much information you should give to your kids about your estate plan, etc. In contrast, various professional books don't explicitly address issues such as family who are addicts or simply jerks, issues arising from multiple marriages, etc.The only flaw I see is that it is a long bunch of text (albeit very informative and useful), but with no reflective overviews. It would be good if there were summaries and/or charts, tables, lists, etc to pull together or organize some of the very useful information presented here.My local library had an earlier edition of this book, but because of 2012 estate tax law changes, as well as numerous additions, I bought this most recent current edition.

I can tell this book is meant for families with a lot of wealth. Even though my family does not have a lot of wealth, I, as a divorced mother of two very grown children do have a cabin that is bringing in a substantial income as a vacation rental. Some very important legal and non-legal questions I’ve had weighing on my mind were essentially answered in this book. I have read several books on how to prepare my inheritance plan in a way that is as fair as possible to my two children and my grandchildren and the price of this book was worth it because of the answers I did receive that I haven’t found in the other books. I was a little disappointed that using a cottage LLC as a solution wasn’t mentioned but perhaps Living Trusts was the popular tool when this book was written.

Mr.Condon updated his 1987 book in 2001 with this newer edition which has a lot of examples of what can go wrong and how those problems could be avoided. However, some of the ideas and advice are repeated several times. Also, since I read this in 2021, I wonder if there have been changes in the last 20 years that need to be addressed. I guess I will need to ask my estate planning attorney about that.