Reader Mailbag: Trick or Treat

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What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.
1. Will and/or trust
2. Setting monthly savings goals
3. Buying a SUV
4. Geocaching
5. HAMP concerns
6. Credit card to fund Roth?
7. Television as cheap hobby
8. On depressing career track
9. Online personal finance software
10. Splitting IRA and loan payments

Several parents wrote to me and asked how we handle the annual tradition of “trick or treat night” with our children.

Simply put, we allow our children to go trick or treating in our neighborhood. One of us goes with the children, while the other stays at home to hand out candy to the (literally) three hundred children that will stop by our house.

When they get home, we allow them to eat three pieces of candy that night, then we put the rest into a shared “black tub.” If they behave well, they’re allowed to have one piece of candy out of the “black tub” per day. Of course, they have to remember this themselves, and they often don’t.

We usually end up having more candy on hand than they ever eat.

Q1: Will and/or trust
I have 5 children, whose ages are 25, 28, 29, 45 and 48, and I have two grandchildren, 2 and 5. I am close only to tne youngest child. I have a substantial amount of money invested, and am trying to decide how to split it among my children and 2 grandchildren. 4 of my children choose not to include me in their lives, don’t come to visit, or even, in some cases, don’t write or call. When I was in the hospital recently, the youngest took time off his construction job (where he has no benefits) and came to work on my house and help me for a week or so.

One of my daughters told me I should leave my money to all the children and grandkids equally, so there won’t be fighting. I lean toward a small amount to each child, and then dividing a large amount according to the care and concern each has shown me–if they don’t care about me, why should I leave them money?

I am torn but my failing health and advancing age (I am 68) tells me I had better decide or I will die intestate and that isn’t how I want things. It would solve the problem for me though. Another of my kids, when told I might want to leave a scholarship or a charitable trust, told me I shouldn’t be considering spending “her” money that way. My children can be very selfish, but I don’t want to punish them, I just can’t decide how to divide what I have. Can you help
- Mary

Leave your money how you want to leave it. Include a note in your will saying exactly what you said here, that you gave money according to the care and concern they gave for you, that it was your own decision, and that you spoke to none of them about it before or after making it.

If your children are selfish and show you no care or concern, forget about them.

If you’re worried about their relationships after you’ve left, ask yourself how good their relationships are now, and also ask yourself whether or not jealousy and anger will exist no matter what you do. Trust me, equality does not make everyone happy. In your picture, for example, does everyone have the exact same number of children? Does everyone have the exact same economic status? If not, there are going to be people claiming that they deserved a different share or that they got ripped off. I have personally witnessed this happen.

Do what you want to do. Let them do whatever they may, because they’ll do it with or without you.

Q2: Setting monthly savings goals
I am a temporary resident living in Canada. I’m single, 27 years old and graduated this May with Computer Science Degree. I work as a Programmer and make $44,700 basic+$11,000 worth of perks on top. After federal tax and health insurance I end up with around $2,300 per month. I have $3000 in student loan to pay back to my parents and no other debt and no credit card (I want to get one considering it makes online purchases/flight tickets possible). I put 5% to my pension plan and the company matches it. I have no emergency fund yet.

Regarding my spending habits, I am neither frugal nor spendthrift. I like shopping but I do so based on need of the apartment I’m living in (Rent= $750) and if I like something I want and it’s less than $50 I buy it without hesitation. Usually for bigger expenses such as if I want a gadget say laptop worth $1000, I look at my savings or I target for X amount of saving before I buy the prized possession. I love to plan and use excel spreadsheet for everything – from work, home expenditure to my 1-5-3 year goals. My parents will retire soon (dad next year and mom in 2014) and are hoping to come live with me here in Canada, I want to support, provide them with whatever their needs and wishes are openly as they age. I also travel once/twice every year to California(sister) or India (parents).

I don’t have any financial goals yet (Monthly,Quartery or yYearly). I plan and save ONLY when I want something such as some thing(gadgets, shoes, handbags etc). My fixed expense is $950 (Rent $750,Phone Bill $50, Starbucks $ 150) My Boy friend buys all the groceries as he is living with me until May 2012 before moving back to his home in U.S permanently. For snow storm days I take the local transit which is $2, in rain, hail or sunshine I walk to work which is aprox. 25 minutes walk (to and back- keeps me fit). So given those figures, What monthly savings goals should I have?
- Sandra

Your email tells me little about what goals you should have. All it mentions are the things that you’re doing now, not the things you want to achieve.

What things do you want to achieve in the future? When? What money is going to be needed to achieve them? That, right there, is your list of financial goals.

Your savings goals should exist solely to meet your highest priority financial goals. I can’t tell you what those goals are. That’s something that comes from your own life. Financial goals are intertwined with the life you want to live, not someone else.

Sandra then followed up with a goal-oriented question.

Q3: Buying a SUV
I want to purchase an SUV next year and then eventually a two bedroom house. Also I want to save some amount for my wedding (not until i get citizenship i.e roughly 3 years). How much do I must need to save?

- Sandra

Let’s look at each one, then.

Let’s say you want to buy a SUV in one year. If you’re buying a used one, let’s say it will set you back $10,000. You’ll need to start saving about $850 a month to make that goal.

If you want to have a wedding in three years and want to start saving now, you’re going to need an estimate of how much you’re going to budget for that wedding. If we say it’s going to be around $10,000, you’ll need to start saving about $300 a month to make that goal.

All told, you’re going to need to sock away $1,150 a month for these goals starting today, dropping back to $300 a month when you get the SUV.

Alternately, you could focus entirely on the SUV saving first. Save $850 a month for the SUV now, then save about $425 a month for the wedding starting when you get the SUV paid off. This is probably a more financially reasonable plan.

Q4: Geocaching
Several families have told me recently that they participate in geocaching as a cheap and fun hobby. What is your take on geocaching?

- Randall

It’s fun, inexpensive, and family friendly. All you really need is a GPS unit, a functional mode of transportation, and some spare time to enjoy it.

We’ve used GeoCaching.com to find some caches in the past, and have also been given coordinates by friends.

The thing to keep in mind with geocaching is that you’re not expecting to find an awesome treasure. Instead, you’re mostly trying to enjoy the experience of finding the cache, and when you do find it, you get to see something (usually) interesting inside and perhaps swap it for something you bring with you that someone else might find interesting. For example, I did some geocaching where I left behind signed copies of my book in a waterproof bag.

It’s mostly just an excuse to get outside with the family and explore with some semblance of purpose.

Q5: HAMP concerns
I owe approx. $121,000 on a house that is worth $90,000 now. I have an FHA loan. Two months ago I contacted my mortgage company, Bank of America, about the HAMP program to see if I qualify. One month ago they sold my mortgage to another company, Greentree, that does not participate in this program. I heard on the radio that all of these programs are ending Dec 31st this year. Can I do anything about my underwater mortgage without actually selling my house and moving. I still have 20 yrs until I retire so I really do not want to move. I can pay my house payments but really do not want to pay more for a house that its worth. Any suggestions?

- Paula

If your lender is not participating in HAMP, you can’t benefit from it. HAMP only works if the lender is cooperative to the process.

If you’d like to try anyway, you can always call the HAMP Hope hotline at 888-995-HOPE and see if they have a suggestion for you.

However, I wouldn’t expect a loan modification. Banks that took federal bailout money were somewhat pushed into the HAMP program, and banks that didn’t take such money don’t have the motivation to participate in loan modifications unless they’ve determined it is in their financial best interests.

Q6: Credit card to fund Roth?
My husband and I are both 28. We are in the 15% federal tax bracket. This year we have put a lot of money into our house and we are unable to fully fund our Roth IRA’s for 2011.

I received some checks from one of my credit cards with 0% interest for 1 year and a 3% balance transfer fee.

Assuming we can pay off the credit card before the 0% interest ends, would you recommend we use the CC offer to fund our Roths this year?
- Charlene

This is an extremely poor idea. You are far better off just skipping the Roth contribution for this year rather than borrowing money to make the contribution.

There are a multitude of things that can go wrong in your life in the future that can cause you to regret this move, from personal crises to simply forgetting to cover a bill. By having a large amount of debt on a credit card, even a 0% one, you’re simply giving yourself a helping of financial risk.

Let’s say you do this and the stock market takes a dive, which it very well might after the strong run it’s had recently. One of you loses a job, then you find yourself needing that money. Not only have you lost your Roth contribution for the year, you’ve also taken a healthy loss on that money, which means you can’t pay back the bill at a time when money is tight.

Recognize that you did invest that money this year – into your house – and plan so that you can contribute next year.

Q7: Television as cheap hobby
I don’t understand why you deride television so much. It’s an incredibly inexpensive hobby. For the hours of enjoyment I get out of it, I pay pennies.

- Monica

Television is an incredibly passive and addictive form of entertainment. Your brainwaves actually slow (from beta waves, which indicate active thought, to alpha waves, which are almost sleep-like) when you watch it for more than a moment.

It’s embedded with a constant stream of advertisements and even product placements within the programs with the sole purpose of either convincing you to buy or altering your viewpoints on public policy.

The vast majority of viewing is done in a physically sedentary state as well.

It requires electricity to run and requires a paid programming service for most of what you see beyond the four or five broadcast networks.

I just don’t find it to be an effective use of my leisure time or leisure dollars, given the vast world that’s available in the outdoors, with friends, or at my local library.

Q8: On depressing career track
I live in Eastern Europe, and i am remotely working for a French Company. I do get great salary (would be considered good even in US – about 40k after taxes), mainly because taxes here are very low. I can work whenever i want, as long as my job is done and i can do it from any location in the world. So far sounds great ? well it is not, i lack any motivation in what i do. There are no companies that can pay me better in my own country, nor can give me same freedom. I am not willing to relocate to other country , as i do have a family here. Basically i can not get promotion as i am outsourced employee. So i am kind of stuck here. Don’t like much what i do, but i can’t say i hate it. The way economy is going i see myself being in the same situation for many years. This is utterly depressing. I can’t leave it and it is not easy to live with it too. Any recommendations how to deal with all this?

- Alan

If you don’t have the kind of work available to you where you live, your options are limited. You either can move to find work (which you seem to have ruled out), you can try to find work in a different field where you live, or you can telecommute if you have the right kind of career.

You seem to be unhappy with the choice you’ve made – telecommuting – and you’ve ruled out moving to find work, too.

My suggestion, then, would be to try to find work in a different field where you live. This may involve re-education or training, of course, but at least you’ll be in a career path that you have more control over in the area where you choose to live.

The key to fighting depression with your career is to take action and seek a different path than the one you’re on.

Q9: Online personal finance software
Our family dynamics are changing and I am having a difficult time adjusting what I do to monitor the family finances.

Once upon a time I was a Microsoft Money Junkie. Our computer with that software died many moons ago, but we had a plan in place so I was able to handle/monitor things through Excel. Now my husband wants to start a side business, and our children are approaching moving out/college age, so I think it is time to adjust or create a new budget/plan.

The computer that I currently use, is for teleworking. The company I work for does not have an issue with me using it for personal use (though there are the standard exceptions); however, I cannot load software on it (company owning the licensing on whatever is on the computer). I have looked at many of the online software available and find them lacking. The feature I am missing is some sort of cash flow statement. One that looks at the end of the month/quarter/year with reoccurring bills/ income and states what the balances will be. To me this is key.

In your exposure to this subject, do you know of a software that has this function?
- Jennifer

The software that immediately comes to mind here is Mint, which does most of what you describe in the convenience of a web window.

The software they have is very impressive and I have no complaints about how it works.

However, my concern with using Mint has stood since it first became popular. I am uncomfortable aggregating that much personal information about myself into one place. It has nothing to do with the quality of their information security. It has to do with human security. All it takes is one person to do something unethical and all of my personal finance information is in someone else’s hands.

To me, there is almost no software that’s worth that. I don’t even keep my personal information on my internet-accessible computers at home. It’s just not worth the risk.

Q10: Splitting IRA and loan payments
My two main sources of debt are a car loan (~$18K @ 3.75%, $336/month minimum) and students loans from 8 years of college (~$26K @ 4.25%, $174/month minimum). I also have a mortgage on my home (~$105K @ 4.25%, $825/mo including property taxes and insurance), but I’ve left that out of this scenario as I’m more concerned about paying off the car and student loans right now. I have no credit card debt. I currently have enough money in my emergency fund to last about four months, which is an amount I’m comfortable with.

I make $46K/yr, and have about $850 each month left over after all my necessary expenses (the minimums on the loans above are included in the necessary expenses, so everything that follows is on top of the minimums). Out of that $850, I put aside $100/mo for “goals” (road trips, hobbies, etc) and $100/mo for renovations I’m doing on my home. This leaves $650/mo to split between my IRA contributions (my employer doesn’t currently offer a 401(k)) and paying down the loans. In addition, I have the 25th and 26th biweekly salary payments of roughly $1471 each that I don’t factor into my monthly budget at all.

My question is this: is there an ideal way of splitting the money between the IRA and loan paydowns? I could do something like this:
IRA – $171.50/mo plus $2942 (both extra salary payments)
Loans – $478.50/mo

or

IRA – $294.09/mo plus $1471 (one extra salary payment)
Loans – $355.91/mo plus $1471 (one extra salary payment)

or

IRA – $416.67/mo
Loans – $233.33/mo plus $2942 (both extra salary payments)

In all three, my IRA is maxed out each year and the same amount goes into the loan paydowns, but I’m wondering if one method is better than the others. For example, to minimize the interest accruing on the loans, would I get better results with two bigger and ten smaller payments each year or twelve equal payments that are somewhere in between?
- Jeff

Generally, with debt payments, the earlier the extra payment is, the better. The reason is that an early payment locks you in to lower interest over the lifetime of the loan. An early payment in January will cause you to have a lower loan balance all through the year (accruing less interest) than an early payment in December.

With an IRA, it’s impossible to tell which is better because investment markets are very unpredictable. You can’t know for certain what they’re going to do in the future. The common tactic is to just invest the same amount every week or month and hope to ride both the ups and downs to a good conclusion.

If I were you, I’d pay the IRA as steady as possible. If you have any “bursts” of money available, I’d apply them to your loans the first moment you can. That would point me toward your third plan.

Got any questions? Email them to me or leave them in the comments and I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive hundreds of questions per week, so I may not necessarily be able to answer yours.

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35 thoughts on “Reader Mailbag: Trick or Treat

  1. Q1) I don’t think I would feel obligated to leave money to my own children who choose not to have a relationship with me… I think my responsibility is fulfilled when I raise them to adulthood. However, the grandchildren from those children don’t have a choice–this occurred in our own family where now, as an adult, the “grandchild” wishes to have a relationship with various aunts/uncles/cousins she was deprived from knowing.

    But, the child who took time off work to help–that’s a real relationship, not to mention that it sounds like he could use some backup, since he doesn’t have benefits.

  2. Q1–You can structure a will so that your grandchildren–who, as Kerry above notes, are blameless, are left money in trust that cannot be accessed until they reach a certain age (21, 25, and 30 are all common.). You can also leave money to only one child, but please be specific as to your reasons so as to avoid a fight amongst your other children. One excellent way to do this is to back up your paper document with a videotaped version.

    More to the point, if you are 68, you are not all that old, declining health or no. Please take some of that carefully saved money and do exciting, fun, and unexpected things FOR YOURSELF!!! You have earned it!

  3. Q1) This makes me so sad. This money is yours. If you want to give your youngest who spends the most time with you the most, then do it. As for: “Another of my kids, when told I might want to leave a scholarship or a charitable trust, told me I shouldn’t be considering spending ‘her’ money that way”… it’s your money and in general, no one should expect to get anything from another person when that person passes on. Especially when you are not really a part of their lives, as sad as it is to say.

  4. We’re having a similar situation happen with my MIL and her eldest daugther and three grandchildren. The daughter could never be bothered to do anything to help her aging mother, who is now 88yrs old. She lives with me and my husband, her youngest son. Her 3 other grandchildren NEVER came to visit her, never sent a card let alone a gift for birthdays, Christmas, Mother’s Day,etc. NEVER!

    They are all wondering why they’ve been left out of MIL’s will. The daughter no longer speaks to any of us because she felt that the miniscule amt that was left to inherit, less than 20K was HER money and she had plans to divy it up amongst her children so they could take a big family vacation(that would not have included myself, my husband and son and my brother in law)!!

    Guess who isn’t getting a penny! Maybe if you thought you were gonna inherit some of grandmas money, you should’ve treated her as such and spent some time with her or heck even acknowledged her presence. One grandchild lives two blocks AWAY and could never be bothered with his grandmother. The only granddaughter also lives in the same town. They CHOSE to have nothing to do with her. And she is now CHOOSING not to include ANY of them in her will. WE(my DH and I and brother in law) are the ones supporting their elderly grandmother, taking care of her, being sure she eats, etc.

    That Money(20K) has been put aside for my son’s college education in a fund that none of them can touch or try to gain access to and really, they have no one but themselves to blame.

  5. Ditto Andrew @ Comment 2: enjoy as much of your money now as you want to; leave the rest to whoever you want to.

  6. Q2 : You should build an emergency fund for starters. I’d also increase your retirement savings by 5% if you can. Past that you may just want to save 10-20% of your income in a general fund to be used for future goals that may come up like wedding, home purchase, car purchase, etc.

    Q5 Paula : HAMP is for people who are having trouble paying their mortgage. You said you can pay your mortgage. So it doesn’t sound like you need the help. Its unfortunate that you’re underwater but if you plan to stay in that home and can afford the payments then being underwater shouldn’t be hurting you. Green Tree Servicing LLC’s website and the HAMP website says Green Tree does participate in HAMP. (assuming its the same Green Tree). HAMP lasts through Dec. 31 of 2012. Still, given what you’ve said about being able to afford the mortgage, it seems unlikely you’d qualify.

    q6 Charlene: You do have until April 15 2012 to fund your 2011 Roth contribution. So don’t fret till then. If you can’t fund the Roth by April ’12 then using a 0% loan short term to fund it won’t hurt IF and only IF you keep that Roth contribution in a cash vehicle and are prepared to bull the money back out to pay off the credit card if necessary. For example say you lose your job and run into major financial distress, in that case you don’t want a $5000 credit card bill hanging. You could then withdraw your $5000 Roth contribution and pay back that credit card. But keep in mind there is risks with any debt and you need to be prepared to pay it down. If you’re hard strapped for cash then taking on extra debt is even riskier.

    Q9 Jeff : Don’t sweat it too much. The difference in interest isn’t huge. You’re either paying off interest sooner or investing in your retirement investments sooner. On one hand you pay a little interest faster on the other hand you buy into your stocks/bonds quicker and get a little more growth. You can’t predict the optimal path here without knowing how well the IRA investments will perform. 4% interest debts are very low interest and not something to be super concerned with paying off as fast as possible. Don’t sweat it. Just pick an average path and go with it.

  7. Q1: we had a similar family situation that involved someone in dire need getting a large “loan” that will realistically never be paid back. My mother wanted to ensure equality so she worked out a plan involving a will, a trust, and a seperate small life insurance policy payable to the person who did not receive the “loan”, so that the dollars even out.

    I’m not going into details here on the fine tuning, but wanted to advise that there are other alternatives, and please don’t flame my response with opinions on life insurance without knowing the policy terms including cashout and payout which I am not disclosing. Just offering other avenues to research.

  8. Q4. I have a sister who enjoys geocaching, but I have been trying to turn her onto a more useful but similar hobby. I am a member of findagrave.com, which is a totally free site of interest to genealogy buffs. I have a Civil War ancestor who was buried thousands of miles from my home, and realistically I will never get to see his grave. I posted a request for a photo of the stone. Someone who lives in that area went to the cemetery and took a picture for me and posted it on findagrave. When I posted a request, emails were sent to members who live in the same county. In most cases members might nor communicate with each other. I sent a nice thank you to the man who took pictures for me, and also told him a brief history of my ancestor. Though optional, I signed up to take photos in my small town. This means every day I get a few emails of people requesting photos in my county. I just delete most, and save only the ones for my town and take pictures when I am driving by anyway. In the case of larger cemeteries one might have to go to the office to learn the location of a grave. So this is a totally free hobby that provides a valuable service for other people.

    Q7. Though I get only a handful of television stations, as I refuse to pay for television, I do often find things of value to watch. I often save productive tasks I can do while I watch TV such as hand sewing or cutting a kids’ hair. Television is just the medium. It is as much more passive than reading. If I read, I can’t do something with my hands at the same time. My husband reads two or three mystery or crime novels a week, which I would say is somewhat addictive.

  9. Q1 – Do not leave just a will. Set up a trust, outline everything you have and who it’s to go to. A will automatically equals probate, which ends up costing tons of extra time and money. I also agree with the other commenter above that I wouldn’t leave anything to people who don’t want a relationship with me.

  10. I don’t think television is inherently passive – I think the key is to think critically about what you’re watching, the same way the key is to think critically about what you’re reading. I know I’ve gotten more food for thought out of something like Mad Men than I have out of 90% of the books I’ve read. There’s no inherent reason television has to be worse than any other content-delivering medium; and the serial format that allows stories and characterization to be developed slowly and over time is uniquely suited to some kinds of stories.

  11. Q7 – one could make many of the same arguments about video gaming or streaming videos off the Internet or renting through Netflix. TV isn’t any more inherently evil or vapid than either of these.

  12. All the talk about underwater mortgages is starting to irk me. I understand it’s hard to make those payments every month. But “I don’t want to pay more than it’s worth” is what I call whining. You bought a house and agreed to a mortgage based on what it was worth at the time. Based on what it was worth to you. Is that really any different from buying a $1000 tv only to watch the price go down to $800 two weeks later? Is this more backlash from all that “a house is an investment” propaganda from a few years back?

    I know underwater mortgages create a real problem for people trying to move, and any mortgage is a problem for somebody who has lost their job or taken a significant pay cut since they signed the contract. But if you’re not trying to move, and your income hasn’t changed much since you took out the mortgage, suck it up and live your life. Dwelling on the idea that you paid more than the house is worth is a waste of your time and energy.

  13. valleycat1:
    I can’t speak for anyone else but I find tv much more of a time sink than video games or Netflix. The games and Netflix are just easier to turn off.
    Typically I get into this routine where I turn on the tv, can’t find something to watch now but there’s something starting at the start of the next hour. I’ll mindlessly channel surf until that other show starts. Or I’ll find a NCIS marathon. Maybe I haven’t seen the episode that’s on now, but I have seen the next one, and haven’t seen the one that follows. Now they’ve got me hooked for three hours instead of one because I don’t know when that next episode will be aired again.

    I can always turn off Netflix, and know that it will still be there when I come back. Same thing for the video games.

  14. Also (more about tv) a couple years ago I cancelled the cable. Several months later I was at my parents house and saw a commercial for a restaurant that I like. My thoughts (in order):
    1) That looks good, I should go out to dinner tomorrow,
    2) I haven’t been to that restaurant in months, and
    3) I haven’t even WANTED to go to that restaurant in months.

    Don’t underestimate the power of commercials, or the power of turning them off.

  15. I think we should distinguish TV-as-a-medium from commercials. I agree that it makes sense to minimize exposure to commercials (TV, of course, just being one of many mediums for viewing them). However, there’s any number of ways of doing that while still watching TV. The two aren’t synonymous. As with other things, it’s about being conscious and mindful, not just discarding anything that risks exposure.

  16. #12 Julia, when a mortgage is underwater, it’s impossible to refinance at today’s low interest rates. My mortgage is underwater, and, although I can pay the mortgage, I would like to refinance and be able to save a bit more for retirement. Why would that be so wrong? There is a proposed new program starting the middle of November for qualified people who would like to refinance, but cannot because their home wouldn’t appraise out. I intend to take advantage of that program if possible.

  17. Q1: your son is sacrificing now to help you. If your finances permit, consider helping him now. I’m watching my brother and his wife do the lion’s share of caring for our parents because he’s close by. They use up their vacation time and put miles on their old cars to help my very-financially-sound parents. My parents don’t see the struggle that he has *today*, and figure he’ll get his due in the will. I’m not able to help him financially today, but I’m prepared to give him part of my inheritance as a big thank you for all he does.

  18. Q1: Whatever you do, please be sure to go through a competent attorney! Don’t do it yourself, saving money! The ones you choose to omit are going to make a stink, potentially legal, and the ones you include will need all the help you can get them. The attorney can cover those bases for you, if you are open with him/her about what you are doing and why. The law is very clear that it is your money and you can leave it as you please, but you must not be unduly influenced by someone to omit the natural objects of your affection. Doing whatever you like in a legal manner will benefit you (and them) best. The idea of a trust is pretty good, but I would still make a will, with the language about why you’re omitting certain people, as a backup. But then, I’m a belt and suspenders kind of person!

  19. @Sandra (2&3)
    Firstly there are some things you need to sort with regard to your immigration status, you need to figure out how to apply for permanent residency (which system) because you are not going to be able to sponsor your parents until you are a permanent resident, this sponsoring process currently takes between 7 and 13 years so you will need to start it as soon as possible.

    You will also need to prove that you can support your parents, so you need to check the CIC website to ensure that you are earning enough to meet their requirements.

    You will also probably have to put at least 30% down payment on a house if you buy as a temporary resident so again, figuring out your path to permanent residency is essential.

    There is also the cost of the permanent residency application depending on the process you use you may need to take an English test, you will need a medical and there is the application itself, I’d allow $1500 for that, plus another couple of hundred if you need to renew your temporary residency permit while your PR application is processed.

    For your emergency fund I’d recommend starting a TFSA, and aim to fill it ($5000/year), it can also grow to accommodate your down payment savings.

    You should also set up an RRSP which you can also borrow from for your down payment as a first time buyer so put as much in it as you can as well.

  20. The advice you gave the man with 5 kids who is only close with one of them is some of the worst advice I ever read from you. You advised him to forget his other children in his will because they are not close with him. You are clueless about his family dynamics but there you go giving advice that could blow his family to smithereens. You could just as easily read between the lines that dear old dad is a control freak and is using his money as a weapon against his kids or that the youngest child who probably is not married weasels in because the older kids are married and have more family obligations. The bottom line advice should be this—don’t use your money as a weapon to divide your kids they are your legacy– work to resolve issues if you disinherit some of your kids you leave a house divided and your lifes work (your kids)are left divided and bitter–way to go by taking that well worn path of family destruction– and for what?– to prove a point that your youngest child with less going on paid more attention to you while your eldest kids raising children didn’t come over enough–come on you can resolve this without using your cash right?

  21. I agree with #21 Hogan, though I’ll do so in a less harsh sounding way. I don’t know the writer’s full situation, but it seems like Trent is getting too involved in a situation he doesn’t know everything about.
    I would suggest that the writer have faith in whatever decision they make, and I agree with the commenter who said that they would consult an attorney and make sure that whatever decision they make is clearly reasoned and can’t be contested. No one is entitled to an inheritance, but in the end they are all your children despite their mistakes and deserve at the least to be treated with respect.

  22. Q5 (and comment #16) – if you can afford your payments you don’t qualify for HAMP (which involves a principle write-down, so you actually owe less). You both should be looking at HARP, which allows you to refinance into a lower interest rate even if you’re underwater, but still maintains your principle balance.

  23. Q1 and #21/22. Yes, we don’t know the reason 4 of 5 kids don’t communicate with the parent and I also would suspect there are potential reasons for this on both the parent and the kids side. However, if I chose to stop communication with my parent regardless of the reason, I certainly would not be expecting anything from them upon their death. We got nothing from my FIL, and we certainly expected nothing, because we stopped communicating with him a decade before he passed. Why should an adult have a right to demand their parent provide for them upon their death when they have voluntarily severed the bond? So the advice to leave them out or do with her money as she wills still holds IMHO (note to #21 Hogan, the tagline name was “Mary”).

    Besides, if the situation is such that there is already a “house divided”, how is leaving them money or possessions going to fix or help that in any way? All it’s going to do is make the divided house go to war no matter what choices the parent makes with their money because despite what anyone thinks you don’t “equally” divide anything but the cash and there will always be arguements over the “prized” possesions and the actual value of everything else. The request was for how to divide her assets, not how to repair relationships with estranged kids and fix her divided house.

  24. Q1: Have you talked to the four older children about how it hurts you that you don’t have a better relationship with them? It may be that they think they do have a good relationship with you, because their idea of what constitutes a good relationship is different from yours. (I’m assuming that when you say they “don’t visit, write, or call,” that means that they write or call infrequently, not never, since you must have some sort of open lines of communication with them if you’ve had the discussions about inheritance that you describe.)

    If you wish that they were more involved in your life, tell them so – don’t bite your tongue about it and then punish them for it when it’s too late for them to do anything.

    Don’t tell them flat out that you plan to divide your estate according to who has given you the most time and attention – not unless you want them sucking up to you for the rest of your life solely so that they can get their hands on your money. Just tell them, perhaps, how much you value your relationship with your youngest child, and you wish you could have similarly full relationships with all of them.

  25. Q1: It may also be that your four older children feel that *you’ve* chosen not to be involved in *their* lives. Do you write or call them? Do you invite them to visit (or offer to visit them, if that’s an option)?

  26. Here, here, #12. I agree fully.

    #16–because you agreed to pay a price several years ago, rather than wait for house prices to come down. It’s not “wrong” but “Oh, why, oh, why, can’t *I* get that cheap interest rate?” (designed to encourage people to buy houses now rather than get their current ones cheaper) does, in fact, sound like whining.

  27. #24 “getagrip”
    I believe you missed the point of my message, or maybe you just didn’t get to the end, so I’ll rephrase: “No one is entitled to an inheritance, but in the end they are all your children despite their mistakes and deserve at the least to be treated with respect.”
    We don’t know their full situation and all I suggest is that whatever decision is made is made out of respect for the people involved and not out of spite or to play games. That doesn’t necessarily mean giving them all your money; it does mean clearly and uncontestably spelling out your wishes and your reasons for doing what you did, which since it sounds like there are problems here is probably best done with the help of a lawyer. She doesn’t need to repair her relationships, but everyone ought to be treated with respect regardless. I’m sure you can agree with that.

  28. I agree with Trent’s advice to Q#1.(I’m #4 above) Children are NOT entitled to be left ANYTHING after their parents die. NOTHING!

    My MIL tried to cultivate a relationship with her daughter and grandchildren and they chose not to reciprocate. After awhile, it gets tiring to ALWAYS be the one to initiate contact and so you give up trying. And she’s hurt that they’ve disowned her now that they all know they won’t be getting a cent from her after her death. Her money isn’t OWED to them just because they are her child/grandchildren.

    My own late grandmother rarely called me in her last few years of life. I did try to call her once a week and she ALWAYS made sure she called me on my birthday and would even sing Happy Birthday to me over the phone. We always received gifts from her on birthdays and at Christmas. I sent her cards in the mail just because and of course for holidays. She saved them ALL! Even the ones I’d made in second grade :)

    I did this because I LOVED my grandmother, not because I was sucking up expecting a large inheritance. In fact, she left nothing to her grandchildren in her will instead divying it up amongnst her three children to do as they please.

    I don’t expect to inherit anything from my own parents ages 61 and 70. And honestly, my husband will not be inheriting much when his mother does pass away.

    I agree with #29 Robyn except the last part of her statement that they are all her(Q1′s) children. Children and grandchildren just do not treat their parent/grandparent in the way my MIL has been treated. In my MIL’s case the attorney has been consulted and the Will is Iron Clad to assure that per MIL’s wishes her only daughter will receive nothing from the estate.

  29. @Kelly: Keep in mind that we only have one side of the story here – and an incomplete one at that, since Mary tells us very little about the details of the strained relationships. I’m sure that some adult children are just terrible people who treat their parents terribly, but for four of Mary’s five children to fall into that category is a bit too much of a coincidence, don’t you think?

    “It’s your money, do what you want” is all well and good, and in principle I don’t disagree, but the decisions you make with your money have consequences, and you have to own those consequences – even if (or especially if) they don’t play out until after you’re gone and it’s too late for you to do anything about them. It sounds like Mary wants to divide her estate in a way that she knows is going to be hurtful (she’s aware that the two daughters she mentions, at least, are under the impression that they’re going to receive an inheritance), and she wants to be absolved of any responsibility for the hurt she might cause. She says she doesn’t want to “punish” her children, but writing a child out of your will in retaliation for a poor relationship with you *is* a punishment. She can either punish her children, or not, but she needs to take responsibility for it either way.

    And again, if what Mary really wants is to have better relationships with her older children, the solution is for her to start rebuilding those bridges now, not to stew on it until it’s too late.

    And if what she wants is to reward her youngest son for the sacrifices he’s made for her (and it does sound like he’s really gone above and beyond), I agree with Karen (#17) that she should look for ways to help him *now*, if she’s able.

  30. @Julia (#13): I have to agree with Valleycat on this one. One can just as easily turn off the tv as one can turn off a movie or netflix. You, personally, might not choose to, but that has more to do with you than the medium itself. (And I can’t figure out how to word this in a way that doesn’t come across as harsh when reading it. Please know that this is meant in a kindly tone, not a harsh one.)

  31. #28 Mary asked : “Where can I find a $10,000 used SUV?”

    Used car lots. Autotrader. Craigslist. Local newspaper classified ads.

    You’ll have to settle for an older car and/or one with high mileage.

  32. Q1) As others have said, be sure you use an attorney, ask about trusts as opposed to wills, tell the attorney you need to safeguard against possible contesting of the will, and divide your money exactly as YOU please – but it might help if you detail your reasons why.
    I also agree you should share some of your money out now to the helpful son, but check with the attorney because there may be tax consequences if the gift is very large. I feel that you should enjoy seeing your son appreciate your gift while you are still alive. What is the point of waiting?
    And do make sure that you are not simply accumulating endlessly without ever doing anything special with your money either for yourself or to endow the scholarship as you mentioned – now, while you are alive and can see that your gifts are appreciated. You can always set up a trust where you are able to access the money for yourself if you have an emergency and where when you pass on the trust is already there to endow the scholarship.

  33. @Barb: “there may be tax consequences if the gift is very large”

    Yes, if she’s giving him more than $13,000 per year and has already made gifts of more than $5 million over the course of her life. Those are some pretty large gifts.

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