Recently, we lost my father due to natural causes at the age of 72. He left my mother, age 71, in a very healthy financial position, with $8,000,000 spread between IRA's, an IRA annuity, and taxable accounts. Also, she owns a modest home on the East Coast and one in South Florida, both of which are fully paid for, except for her monthly HOA's and taxes. I would estimate her combined real estate holdings to be about $1,500,000. She lives modestly, on about $130,000/year. Her only indulgence is going out to dinner nightly, but those are casual meals with friends, certainly not steak and lobster. No cooking for her anymore. She earned it. She will soon be required to take RMD's of about $165,000/year.
She really has no idea where she stands financially. My father always made sure she was taken care of but didn't necessarily discuss their retirement investments with her at length. They always used and still use a very trusted asset manager, and I have assured her that she will live very comfortably for the rest of her days, probably 20-25 years.
Anyway, my niece, her youngest granddaughter, was born severely disabled and will require lifelong care, which is expensive and will become increasingly expensive as she grows older. My mother's biggest concern is that when she dies, she will be able to have a sizeable fund set up for her granddaughter's long-term care. Her parents, do everything they can for her, but my mother does help out, due to the significant financial burden it is on them, but they never look for handouts. Truthfully, I think my sister and brother-in-law are heroes for doing what they do for their daughter. Their family was dealt a very bad hand.
So, my question comes down to this. Where do you think her assets will be in 20-25 years? I would assume she will want to sell the house in Florida at some point when she is older, or move there and sell the East Coast house. I would assume those proceeds would be rolled into her other investments in some way or another. With her modest, currently healthy, life do you think she will be able to do what she wants for her granddaughter, while also leaving for her other grandchildren, who she holds very close to her heart as well?
She really has no idea where she stands financially. My father always made sure she was taken care of but didn't necessarily discuss their retirement investments with her at length. They always used and still use a very trusted asset manager, and I have assured her that she will live very comfortably for the rest of her days, probably 20-25 years.
Anyway, my niece, her youngest granddaughter, was born severely disabled and will require lifelong care, which is expensive and will become increasingly expensive as she grows older. My mother's biggest concern is that when she dies, she will be able to have a sizeable fund set up for her granddaughter's long-term care. Her parents, do everything they can for her, but my mother does help out, due to the significant financial burden it is on them, but they never look for handouts. Truthfully, I think my sister and brother-in-law are heroes for doing what they do for their daughter. Their family was dealt a very bad hand.
So, my question comes down to this. Where do you think her assets will be in 20-25 years? I would assume she will want to sell the house in Florida at some point when she is older, or move there and sell the East Coast house. I would assume those proceeds would be rolled into her other investments in some way or another. With her modest, currently healthy, life do you think she will be able to do what she wants for her granddaughter, while also leaving for her other grandchildren, who she holds very close to her heart as well?
. So we’ve started exploring more extensive estate planning and BDITs were presented to us over regular trusts. Seemed aggressive (see my mindset above), but also an intriguing way to protect the estate while maintaining some control. They suggested none of our parents establish the trust so that we could be be beneficiaries and yet also have control. I need to do more research into how effective these are - do they hold up? - and the in and outs of setting them up and using vs a traditional trust.