Inheritance problem for my daughter

[dancarlo]

Hello, I have a situation where my net worth first time in almost my memory recalls, turned positive since college days including. It has become substantial to 200k$, not much for super-millionaire but I wanted to make a will for my sole daughter who is 7 yrs old. I have separated from her mom and we are not in good terms in regardless of any aspect. For will to make place, she demanded to be involved which I have been refusing. Not for the sake of sour relationship but she has a poor investment decisions and in the past has been through reckless, lavish and extravagant spending which has been a source of problem. It is not much of a concern for now because it is extremely unlike, but in case if I die, all my nets will likely be transferred to her mother since she is currently considered to be a guardianship. But I am mostly saving for her college when she turns on 18 but not only her but her family does not trust me I am saving for that and they consider me a miserly. So here is the case, is it possible to create a will that will only start distributing to my daughter when she turns 18 in a regular small amount. Another possibilities is to create a will that distributes to someone other than her mother who has a poor financial management skills if that is legal possibility.

Thanks.,

 

[xylene]

You need to talk to an lawyer who does estate plans.

Also: You should consider divorcing your estranged wife.

You neglected to mention the name of your state. This is important and laws on estates vary by state.

Some states will not allow you to disinherit your wife - that is why your state is important, and why you should consider divorce.

 

[Zigner]

Sorry - US law only.

 

[dancarlo]

it is in California, we have never been married so matter is simple, we have only been in relationship. Thanks.,

 

[not2cleverRed]

it is in California, we have never been married so matter is simple, we have only been in relationship. Thanks.,

Yes, that does make things simpler, but you should still get a lawyer. (English is not your 1st language, I suspect.)

You can direct in your will that your child's inheritance be put in a trust, and name who you want to manage the inheritance. Clearly this would not be the mother, but it should be someone you believe will honor your wishes. If you want to play things safe, you can list a second or third person in case your initial choice is unavailable?

 

[TrustUser]

or you could create a trust now, and keep it out of the probate system, entirely

since this trust is gonna exist beyond the death of the grantor (you), it would be wise not to do it yourself

 

[dancarlo000]

Thanks, I am OP but lost the original account so re-created similar account, another requirement was to keep using (more precisely, keep investing) while in trust account. So far, the one that comes close most appears to be revocable trust, to which, the fund has to be transferred and locked out which I don't like because it will stay there dormant for years. Now this type of trust does not seem to exist but I will give it a shot on requirement as summary:
- locked her out until 18 or 21.
- start distributing in small amounts from that time.
- i am able to keep investing the fund in stock, options, mutual funds and bonds.
Thanks.,

 

[xylene]

I'm not estranged from my spouse, so probably me.

 

[adjusterjack]

So far, the one that comes close most appears to be revocable trust, to which, the fund has to be transferred and locked out which I don't like because it will stay there dormant for years.

No, it won't stay dormant. A revocable living trust appears to be what you need with your daughter as beneficiary. Revocable just means you can pretty much do what you want with it, use the money for yourself, cancel it, change the terms, etc. The trust can own an investment account. You can invest the money as you see fit. You'll be the trustee and can manage the account as long as you are alive. You can name a successor trustee to take over management of the account when you die. The trust can contain specific instructions as to how funds are invested with no distributions until your daughter goes to college and then you can have specific instructions as to how and when the funds are distributed. If you think your daughter will be under the influence of her mother you can even instruct the trustee to make payments directly to the college of your daughter's choice.

You can put other types of assets into the trust, like your home and cars, and instruct the trustee to sell them upon your death and use the money for your daughter.

There are trust companies and banks with trust departments that can do this for you. The service will generate fees, of course, so you have to look into the fee structure very carefully.

Chances are that you will live for many years after your daughter becomes an adult and strikes out on her own and you can distribute funds to her any way you want.

PS: Nothing wrong with your English or your manners.

 

[dancarlo000]

No, it won't stay dormant. A revocable living trust appears to be what you need with your daughter as beneficiary. Revocable just means you can pretty much do what you want with it, use the money for yourself, cancel it, change the terms, etc. The trust can own an investment account. You can invest the money as you see fit. You'll be the trustee and can manage the account as long as you are alive. You can name a successor trustee to take over management of the account when you die. The trust can contain specific instructions as to how funds are invested with no distributions until your daughter goes to college and then you can have specific instructions as to how and when the funds are distributed. If you think your daughter will be under the influence of her mother you can even instruct the trustee to make payments directly to the college of your daughter's choice.

You can put other types of assets into the trust, like your home and cars, and instruct the trustee to sell them upon your death and use the money for your daughter.

There are trust companies and banks with trust departments that can do this for you. The service will generate fees, of course, so you have to look into the fee structure very carefully.

Chances are that you will live for many years after your daughter becomes an adult and strikes out on her own and you can distribute funds to her any way you want.

PS: Nothing wrong with your English or your manners.

This looks more promising and positive, I am going to pursue this then with specifics, which financial institutions would you recommend? I normally invest on my own do not usually trust financial advisors all decisions made by me. Last years, I sort used chase, etrade and fidelity, perhaps I Can inquire with em. IMO, other institutions like wells fargo, BOA and likes are not good.

 

[TrustUser]

i do not like having financial institutions as trustee. i would suggest finding a financially savvy friend or acquaintance, that you feel is trustworthy.

this is what i would do, if i was in this situation. not that this is right for you, but it may at least give you something to think about

since my trust is ultimately for my beneficiary, i want my beneficiary to have some say-so. so for other than bank accounts, i make the trustee get permission from the beneficiary in what the trustee invests in

right now, you are saving for her college. but if you are still alive when she graduates, you will want to change the terms of the trust

it is also quite possible that you might choose to make your daughter her own trustee

she is still legally required to follow the instructions of the trust