My son is responsible, my daughter stays in debt — how do I split my estate?

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Dear Moneyist,

I am in my 70s and have two children from a previous marriage of five years. One has a son and the other has two daughters.

My daughter is married and values material things far more important than financial security. She and her husband stay in debt, which has contributed to a horrible relationship for the past 15 years. I don’t know if it will last or not, especially when my granddaughter leaves home in just a few years.

Also see: My father-in-law chose me as heir to his $2 million fortune — leaving his wayward son out in the cold

More than likely, there will be some money left when my current husband and I are gone. Is there a way to assure that whatever she might be left would be protected from her wasting it away and instead, possibly contribute to her old age? We have individual wills but wondered if a trust of some sort or other type of document would be better?

What would be the best way to structure this for both of my children and grandchildren and also, my husband’s one family member that he wants to leave something to? My current husband and I have been together for the last 35 years and live in Texas.

Mary

Dear Mary,

Your question has two parts: Do you split your estate equally? And, how do you split your estate? The first one is easy: Yes. You want to leave your children something, but you don’t want to leave them with resentments and questions. You want to leave this world in a swift, graceful manner that leaves people with a good feeling — the inheritance equivalent of the triple axel from the 2018 Winter Olympics: three equal, generously timed moves, and then you’re off the proverbial ice. Except in your case, for good.

Don’t miss: My sister took care of our mother for 10 years — shouldn’t she be entitled to her house?

As to your second question. I suggest an irrevocable trust, outlining ways in which your inheritance should be spent. This has two advantages. Your son has a financially responsible life, so he will be glad with any bequest and, I’m sure, will be heartened to know there is money set aside for home improvements or his children’s education. Your daughter, while not so fiscally responsible or astute, gets the same deal. Only in her case, you are protecting her from herself and protecting the interests of your granddaughter.

You don’t say what relationship your husband’s relative has to him, but if it’s not a sibling, you may consider leaving him/her a smaller amount than the money you leave the rest of your family. You may want to discuss the tax implications of such a trust with a financial adviser when you have decided on your stipulations and the amounts. You want to appoint someone who has no conflict of interest whether that person is a professional trustee — that is, a bank or trust company — or not. You need to depend on that person to act in a competent and trustworthy manner.

Do you have questions about inheritance, tipping, weddings, family feuds, friends or any tricky issues relating to manners and money? Send them to MarketWatch’s Moneyist and please include the state where you live (no full names will be used).

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