Personal finance and worry

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Originally Posted by catherine

Couldn't DH and I put the house in an irrevocable trust at some point? I do understand that it could get very messy with managing co-ownership. My DIL has a family "camp" (as they call it up here) in the Adirondacks. Her grandfather built it on a lake and It is supposedly a great family vacation home. But as the cousin pool keeps getting larger and larger and the older generation starts to disappear, they are now trying to set up more formal "rules" regarding the co-ownership of the place.

I'm so sorry about the commercial building, Tybee, but why do you feel you're letting the family down?

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I had not thought about an irrevocable trust. I looked it up and it looks like that works but you have to do it before the 5 year lookback period:

How Can a Trust Help You Avoid Nursing Home Costs? | Kiplinger

I have known people where they did not do that, and when the house sold after the person died, they only had to pay back a portion of the money, not the whole amount of the sale. So maybe if the house was not put in a trust, then the kids could get together and get a mortgage to pay off what the estate owed to Medicare. I would talk to a lawyer if you want to leave the kids the house, no matter what you do about a trust, it would be much better to talk to a lawyer now.*


*I would involve the kids in these discussions, and maybe they could as a group start a bank account and start saving for this possibility--each contribute the same amount each year, to have a head start on paying back the Medicare money if they need to. Or if they don't need to, a bank account that they could use to fund expenses to the house.

Cottage law was a big deal where we lived in Michigan because of Lake Michigan and I guess it is in Wisconsin, too--check out this article about family cottages, interesting:
Family Cottage: How to Structure Ownership for Future Generations (schloemerlaw.com)

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Originally Posted by Tybee

Cottage law was a big deal where we lived in Michigan because of Lake Michigan and I guess it is in Wisconsin, too--check out this article about family cottages, interesting:
Family Cottage: How to Structure Ownership for Future Generations (schloemerlaw.com)

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Very interesting! Thanks for providing it.

I don't know that I worry worry. I worry about job loss since it can take a year to get a new job, but that doesn't mean it's an immediate worry (and I have a year in emergency funds, but I don't ever want to be in that situation). I worry about retirement and resolve to put a little more in the 401k (it's not like my contributions were super low before, but it's never enough you know). I worry if my mom will have enough money for the rest of her life but I can not solve that. I'd have to be rich to, and I am not rich. I worry about a sibling who will not work but I can not solve that. I have tried. I sympathize with my boyfriends current job precarity and struggleto find another better job but I can not solve that.

I feel like the future is SO SUPER UNCERTAIN anyway, that finances are just one small part of that. I mean I worry about all the uncertainties like climate change etc. but I can not single handedly solve that! (sure one can do activism but let's be real, one person can't solve this, and if one person could it would be a person far more powerful than me) I genuinely believe much is out of our control. It's out of our control, there is nothing we can do if tragedy really wants to befall us. It it wants to, it will. If we get cancer of the everything and can't pay the medical bills, well that's just this system. Of course I keep health insurance and all that, of course I have an emergency fund, a retirement fund. But I truly believe so much is out of our control anyway.

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Originally Posted by Tybee

Cottage law was a big deal where we lived in Michigan because of Lake Michigan and I guess it is in Wisconsin, too--check out this article about family cottages, interesting:
Faily Cottage: How to Structure Ownership for Future Generations (schloemerlaw.com)

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It’s a big deal, too, in my former neighbor-to-the-North, Minnesota.

On the subject of an irrevocable trust, I can’t imagine giving up control over my chief asset, which in Catherine’s case would be this property.

if Catherine needs care in her old age, how does that happen? If she doesn’t qualify for a nursing home care which would be paid for by Medicaid, but she still needs to live somewhere besides the wintry lake cabin, how does that work? Where does the money come from? How does it work if the spouses of her children decide to leave and those children are named in the irrevocable trust as grantees?

Just seems messy to me, and risky.

I would be talking to my kids to make sure they really wanted the cabin before I jump through all those hoops, and gave up that resource that would fund what I might need in my elder years. For all you know, a couple of your kids would rather you have your own money to pay your own way, rather than them end up with the cabin. Don’t decide for them, they as adults should be deciding for themselves.

Catherine, have you actually talked to your children about this plan? An open and honest conversation can reveal much about how they as a group will operate as co-owners of your lake cabin.