Author Topic: Inheritance Money and sharing with Spouse  (Read 15207 times)

charis

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Re: Inheritance Money and sharing with Spouse
« Reply #50 on: December 11, 2017, 12:12:54 PM »
Is your husband aware that you suspect him of planning to take an inheritance and hide it from  you?  Has he done something like that before? 

In our house, all funds are mingled.  All the money goes into the same pot from which both our IRAs, etc are funded.  So the idea of who funded whose account is not a thing.  It sounds like you and your husband have not been doing this? 

honeybbq

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Re: Inheritance Money and sharing with Spouse
« Reply #51 on: December 11, 2017, 01:58:58 PM »
Sounds like you should invest the money in marriage counselling. You clearly have lost trust.


yikes. Total agreement.


My spouse is set to inherit a decent amount of money. The discussion is always "what should WE do with it" and then throwing out different options. 

Is your H's sister disabled or otherwise unable to care for herself? That's the only reason I could think of one would cede inheritance money to a sibling.

 

rockstache

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Re: Inheritance Money and sharing with Spouse
« Reply #52 on: December 11, 2017, 02:17:48 PM »
Why are you even married?
Out of line. Please see Forum Rule #1.

This could have been asked with more tact, but the question itself is not necessarily a bad one, albeit not one the OP owes us the answer to. Perhaps something to mull over.

Jrr85

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Re: Inheritance Money and sharing with Spouse
« Reply #53 on: December 11, 2017, 02:56:19 PM »
It's sort of sad to see so many comments about divorce, shielding assets, "her" money, "his" money.  Isn't marriage a team game?
It's "sort of sad" that someone worked hard to leave a legacy to Chesleygirl and that her husband is causing her stress over it. I am sure that was not the giver's intention. Its also pretty clear from the information given that one of them is not acting like a team player. Yes, that's what is "sort of sad". What's sort of wonderful is that a bunch of random strangers are willing to take time out of their real lives to help Chesleygirl work through this chapter in her life.

And for the record, as noted previously, doneby35's comment was rude, inappropriate and not reflective of the rules of this forum. If db35 doesn't change it soon, it will be reported and my comment containing the quote will be deleted so it doesn't inadvertently live on through me.

Somebody is not acting like a team player, but the tone of your email makes it sound like you have it exactly backwards.  If they are not already maxing out their tax advantaged retirement funds, then doing that is very likely the optimal thing to do.  He is working and depending on jurisdiction, she is likely legally entitled to half of what he makes and half of what goes into his retirement.  It sounds like there are lots of trust issues at minimum and maybe some substantive marriage issues (not that a lack of trust isn't a substantive problem in itself), so maybe there is a good reason for her to not be acting like a team player.   

Dicey

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Re: Inheritance Money and sharing with Spouse
« Reply #54 on: December 11, 2017, 05:24:02 PM »
It's sort of sad to see so many comments about divorce, shielding assets, "her" money, "his" money.  Isn't marriage a team game?
It's "sort of sad" that someone worked hard to leave a legacy to Chesleygirl and that her husband is causing her stress over it. I am sure that was not the giver's intention. Its also pretty clear from the information given that one of them is not acting like a team player. Yes, that's what is "sort of sad". What's sort of wonderful is that a bunch of random strangers are willing to take time out of their real lives to help Chesleygirl work through this chapter in her life.

And for the record, as noted previously, doneby35's comment was rude, inappropriate and not reflective of the rules of this forum. If db35 doesn't change it soon, it will be reported and my comment containing the quote will be deleted so it doesn't inadvertently live on through me.

Somebody is not acting like a team player, but the tone of your email makes it sound like you have it exactly backwards.  If they are not already maxing out their tax advantaged retirement funds, then doing that is very likely the optimal thing to do.  He is working and depending on jurisdiction, she is likely legally entitled to half of what he makes and half of what goes into his retirement.  It sounds like there are lots of trust issues at minimum and maybe some substantive marriage issues (not that a lack of trust isn't a substantive problem in itself), so maybe there is a good reason for her to not be acting like a team player.
I was totally talking about him. Did you read both of my comments? I think it's pretty clear that I do not have it backwards. Thanks for your feedback, though.

doneby35

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Re: Inheritance Money and sharing with Spouse
« Reply #55 on: December 11, 2017, 06:46:57 PM »
It's sort of sad to see so many comments about divorce, shielding assets, "her" money, "his" money.  Isn't marriage a team game?
It's "sort of sad" that someone worked hard to leave a legacy to Chesleygirl and that her husband is causing her stress over it. I am sure that was not the giver's intention. Its also pretty clear from the information given that one of them is not acting like a team player. Yes, that's what is "sort of sad". What's sort of wonderful is that a bunch of random strangers are willing to take time out of their real lives to help Chesleygirl work through this chapter in her life.

And for the record, as noted previously, doneby35's comment was rude, inappropriate and not reflective of the rules of this forum. If db35 doesn't change it soon, it will be reported and my comment containing the quote will be deleted so it doesn't inadvertently live on through me.

You're going to report a comment that was a simple question on why someone is married and thinking about shielding assets from the partner? That seems like a reasonable question to ask. I won't be changing anything, as i do not have time to accommodate the feelings of every person who gets offended by every little comment.

c-kat

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Re: Inheritance Money and sharing with Spouse
« Reply #56 on: December 11, 2017, 06:55:39 PM »
Donít combine or co-mingle any more of it.

This. Especially since he has more invested than you do and you've had problems in the past.

Seriously, this is your money and I find it odd he would want to add it to his account. He should be asking you what you want to do with it.

I also find it odd that he's going to let his sister have his inheritance. But he wants to use yours? 


Mini-Mer

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Re: Inheritance Money and sharing with Spouse
« Reply #57 on: December 11, 2017, 07:46:12 PM »
A little bit of anecdata... I know a Texas couple who had a long and amicable marriage and 100% merged finances.  Except their inherited money, which they did leave in separate accounts.  I think they spent a little on things that benefited them both.  But until they decided to spend it, it stayed separate. 

It turns out, separate money gets treated differently in the event of death.  The separate bank accounts did not go into probate - the surviving spouse kept theirs, and inherited the other's immediately as the named beneficiary.  There wasn't any question about the inheritance ultimately, but it was nice for the survivor to have assets that weren't part of that process.

So, my two cents: keeping inherited property separate isn't a sign of marital trouble, and can be useful in circumstances that have nothing to do with divorce.  If you get the opportunity to have separate property, it makes sense to do it.

Jrr85

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Re: Inheritance Money and sharing with Spouse
« Reply #58 on: December 12, 2017, 08:13:55 AM »
It's sort of sad to see so many comments about divorce, shielding assets, "her" money, "his" money.  Isn't marriage a team game?
It's "sort of sad" that someone worked hard to leave a legacy to Chesleygirl and that her husband is causing her stress over it. I am sure that was not the giver's intention. Its also pretty clear from the information given that one of them is not acting like a team player. Yes, that's what is "sort of sad". What's sort of wonderful is that a bunch of random strangers are willing to take time out of their real lives to help Chesleygirl work through this chapter in her life.

And for the record, as noted previously, doneby35's comment was rude, inappropriate and not reflective of the rules of this forum. If db35 doesn't change it soon, it will be reported and my comment containing the quote will be deleted so it doesn't inadvertently live on through me.

Somebody is not acting like a team player, but the tone of your email makes it sound like you have it exactly backwards.  If they are not already maxing out their tax advantaged retirement funds, then doing that is very likely the optimal thing to do.  He is working and depending on jurisdiction, she is likely legally entitled to half of what he makes and half of what goes into his retirement.  It sounds like there are lots of trust issues at minimum and maybe some substantive marriage issues (not that a lack of trust isn't a substantive problem in itself), so maybe there is a good reason for her to not be acting like a team player.
I was totally talking about him. Did you read both of my comments? I think it's pretty clear that I do not have it backwards. Thanks for your feedback, though.

Upon rereading, you are only half wrong. I missed the part about him planning on disclaiming his inheritance with no input from her. So basically they are just not a team. Not enough info to determine who shares what percent of the fault for that, but wanting to use inheritance to maximize tax breaks from tax advantages accounts is very likely the right team play.

Meesh

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Re: Inheritance Money and sharing with Spouse
« Reply #59 on: December 12, 2017, 08:38:42 AM »
A little bit of anecdata... I know a Texas couple who had a long and amicable marriage and 100% merged finances.  Except their inherited money, which they did leave in separate accounts.  I think they spent a little on things that benefited them both.  But until they decided to spend it, it stayed separate. 

It turns out, separate money gets treated differently in the event of death.  The separate bank accounts did not go into probate - the surviving spouse kept theirs, and inherited the other's immediately as the named beneficiary.  There wasn't any question about the inheritance ultimately, but it was nice for the survivor to have assets that weren't part of that process.

So, my two cents: keeping inherited property separate isn't a sign of marital trouble, and can be useful in circumstances that have nothing to do with divorce.  If you get the opportunity to have separate property, it makes sense to do it.
It sounds like both their inherited money were in trusts, which skips probate.

charis

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Re: Inheritance Money and sharing with Spouse
« Reply #60 on: December 12, 2017, 09:45:50 AM »
It's sort of sad to see so many comments about divorce, shielding assets, "her" money, "his" money.  Isn't marriage a team game?
It's "sort of sad" that someone worked hard to leave a legacy to Chesleygirl and that her husband is causing her stress over it. I am sure that was not the giver's intention. Its also pretty clear from the information given that one of them is not acting like a team player. Yes, that's what is "sort of sad". What's sort of wonderful is that a bunch of random strangers are willing to take time out of their real lives to help Chesleygirl work through this chapter in her life.

And for the record, as noted previously, doneby35's comment was rude, inappropriate and not reflective of the rules of this forum. If db35 doesn't change it soon, it will be reported and my comment containing the quote will be deleted so it doesn't inadvertently live on through me.

Somebody is not acting like a team player, but the tone of your email makes it sound like you have it exactly backwards.  If they are not already maxing out their tax advantaged retirement funds, then doing that is very likely the optimal thing to do.  He is working and depending on jurisdiction, she is likely legally entitled to half of what he makes and half of what goes into his retirement.  It sounds like there are lots of trust issues at minimum and maybe some substantive marriage issues (not that a lack of trust isn't a substantive problem in itself), so maybe there is a good reason for her to not be acting like a team player.
I was totally talking about him. Did you read both of my comments? I think it's pretty clear that I do not have it backwards. Thanks for your feedback, though.

Upon rereading, you are only half wrong. I missed the part about him planning on disclaiming his inheritance with no input from her. So basically they are just not a team. Not enough info to determine who shares what percent of the fault for that, but wanting to use inheritance to maximize tax breaks from tax advantages accounts is very likely the right team play.

Agreed - a team decides how the team funds are spent.  Legally, an inheritance can be kept separate, but I don't see why it would unless there are specific circumstances to warrant it, as there appears to be here.  There is nothing wrong with suggesting that extra income, regardless of where it came from, be used to max out IRA space.  IF both spouses are team players.  In that situation, I don't see anything wrong with the working spouse suggesting that the other spouse use some of their income to help fund the working spouse's IRA.

It sounds like something broke down here - where and when?  Does the working spouses have a history of withholding money and being secretive?  Their IRA contributions should be pretty even, at least during the period that they've been married. 

Goldielocks

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Re: Inheritance Money and sharing with Spouse
« Reply #61 on: December 12, 2017, 10:26:52 AM »

Upon rereading, you are only half wrong. I missed the part about him planning on disclaiming his inheritance with no input from her. So basically they are just not a team. Not enough info to determine who shares what percent of the fault for that, but wanting to use inheritance to maximize tax breaks from tax advantages accounts is very likely the right team play.
[/b]
I strongly disagree... but not for the reason many others have posted. (Marriage challenge)

Although I agree that tax planning is the likely the only reason for Chelseygirl's husband to have brought up putting it into an IRA, especially in a marriage where all financial assets are joint, in reality this is quite shortsighted. 

We have everything joint, and I manage finances, and I would initially think of my DH's inheritance as joint.  Heck, he received a $5k gift from his parents about 10 years ago, and it went to buy him medical stuff and a vacation for us.   There was no question at the time about keeping it separate once the medical items were bought.   I was always thinking in terms of the best situation for US. Period.  And yep, like most people married more than 20 years, DH and I have not always had a blissful relationship, and I STILL only think of finances as what is best for US, together.  This is me, not Chelseygirl's DH, I can't speak for him, but I know I can forget to ask for input and still mean well, and change course when it is pointed out to me.

BUT -- why is this shortsighted?  Seems to be logical to max out tax advantages, yes?

IRA's should be maxed out using income.   Likewise property taxes.   That is just good planning and living within your means.  I believe the US has the ability for people to contribute extra in later years*, if they have fallen behind on annual contributions?  If so, not much is lost in terms of lifetime tax advantages by saving and paying IRA contributions out of income...  in fact, there is a benefit to having a little excess IRA contribution room, for those higher paid years in later careers.

Having a non-registered asset class plus a maxed out IRA is the absolute best situation to be in, for long term tax, security, and estate (death of spouse) planning.. plus of course the inheritance rules ONLY apply to inheritance... you can't get that back if you mingle now. 

This is not a final decision... Chelseygirl can always change her mind later and mingle assets if she chooses.  The reverse is not true.

*https://www.trustetc.com/resources/investor-awareness/contribution-limits  Catch up limits IRA / ROTH
« Last Edit: December 12, 2017, 10:31:54 AM by Goldielocks »

NoStacheOhio

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Re: Inheritance Money and sharing with Spouse
« Reply #62 on: December 12, 2017, 10:43:04 AM »
Since the inheritance likely isn't taxable income, wouldn't it make more sense to put it in a taxable or Roth account, rather than an account where you have to pay tax when you withdraw? I mean, I guess if you're trying to reduce taxable income from wages, it's all fungible, but IRA limits are pretty low anyway. That's just an argument for filling up all the available tax-advantaged space first.

I don't know about the yours/mine stuff, and I don't know how I would handle it in this particular situation, but I also know that in my situation it kind of doesn't matter from a tax standpoint whose name is on the account. Sometimes I put money in my wife's IRA, sometimes in mine. It's really pretty arbitrary. Most of our retirement money is in my 403b anyway (no fees, Vanguard institutional plus funds), which would be treated as a joint asset as far as the state is concerned.

I'll probably inherit a medium amount of money from my side of the family, and my wife likely won't inherit anything from her side. I hadn't really thought about it before this, but I'm reasonably confident that we'll use the money the way we see best for our family unit.

boarder42

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Re: Inheritance Money and sharing with Spouse
« Reply #63 on: December 12, 2017, 10:58:41 AM »
Since the inheritance likely isn't taxable income, wouldn't it make more sense to put it in a taxable or Roth account, rather than an account where you have to pay tax when you withdraw? I mean, I guess if you're trying to reduce taxable income from wages, it's all fungible, but IRA limits are pretty low anyway. That's just an argument for filling up all the available tax-advantaged space first.

I don't know about the yours/mine stuff, and I don't know how I would handle it in this particular situation, but I also know that in my situation it kind of doesn't matter from a tax standpoint whose name is on the account. Sometimes I put money in my wife's IRA, sometimes in mine. It's really pretty arbitrary. Most of our retirement money is in my 403b anyway (no fees, Vanguard institutional plus funds), which would be treated as a joint asset as far as the state is concerned.

I'll probably inherit a medium amount of money from my side of the family, and my wife likely won't inherit anything from her side. I hadn't really thought about it before this, but I'm reasonably confident that we'll use the money the way we see best for our family unit.

if you arent already maxing these accounts you do lower your taxable income by funding them regardless of where the funds come from. money is fungible.

Acastus

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Re: Inheritance Money and sharing with Spouse
« Reply #64 on: December 12, 2017, 11:17:54 AM »
It is good to have individual money in your later years. If one of you suffers catastrophic health costs, you will be allowed to set aside only a portion of your joint assets. The rest is fair game for creditors or Medicaid to take. Your individual IRA will remain yours. There is a 5 year, and sometimes 10 year, look back, so you need to plan ahead.

If your inheritance is sizable, it will take a long time to get it all into a retirement fund at $5500/year. It may be reasonable for both of you to invest so more money is sheltered early. Regardless, you can invest the bulk of it right away. Investing with minimal churn is another way to reduce taxes.

seattlecyclone

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Re: Inheritance Money and sharing with Spouse
« Reply #65 on: December 12, 2017, 11:18:35 AM »
Filling up both of your IRAs is better for your taxes than leaving his unfunded for the year and keeping the remainder of the inheritance in a taxable account. Taxes are far from the only consideration, or even the most important one if you have any doubts about the health of your marriage. I think others have covered the other angles pretty well though.

FiguringItOut

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Re: Inheritance Money and sharing with Spouse
« Reply #66 on: December 12, 2017, 11:45:05 AM »
This is coming from a recently divorced person, take it for what it is.
Based on everything you've said here my suggestion is this.

Keep all of your inheritance money in your own name in a separate account in a different bank.  If you want to invest this money, open new brokerage and/or IRA accounts, preferably in a different brokerage (i.e. if you both have used Vanguard for your IRA's, open separate accounts in Schwab or Fidelity).  Keep this money as separate as you can.  It shouldn't even touch your joint or already open accounts.  I don't mean that you should hide it from him or not tell him about it.  But just to keep it as separate as possible from any of your existing family finances.

Come up with whatever reason you want on why you are doing this, but I wouldn't tell him you are doing it to fund you own IRA for years to come.  I would continue funding your own IRA from family finances as you have in the past in the already existing account, not the new account you will open at new brokerage.  Treat this inheritance like it doesn't exits, invest it, and don't touch it.

Based on what you said, you need time to either figure out if you trust him and staying in the marriage of if there is possible divorce on horizon.  Plus there is that thing about his inheritance that just doesn't sit well with me. 

Regarding of the fact that funding his IRA is better from a tax perspective, don't do it.  It's not such a huge hit on taxes and you need to protect your interests in uncertain times.


In the event of a divorce, it is likely that he would have to sell up some of his retirement accounts for a settlement. Is this not a penalty free withdraw? I am not a lawyer, but it seems to me that sheltering this from him would allow him to make the argument that your finances were separate, and therefore individual assets should not be split.

In the event of divorce, he will not need to sell any of his retirement accounts.  You go through a court to execute "Qualified Domestic Relation Order" (QDRO) and it basically splits his retirement account and you get a piece of it.  It will become your Rollover IRA, so it will still be protected from taxes and penalties, unless you decide to withdraw from it later (I'm speaking from experience here).
Also, sheltering this inheritance from him will NOT allow him to make an argument that your finances were separate and that individual assets should not be split.  You will be able to show that this inheritance came on such and such date and was deposited into your accounts on that date (new account opening date here).  Everything else is joint/marital assets.   Keep all possible documentation related to your inheritance (original will, all house selling paperwork, etc) in a safe place so you have it in case you ever need to prove from where and when this money came from.


BTW, when I was starting a divorce processes (I initiated it) I was a part owner on my parents' condo.  I had no financial interest in that condo, and my parents added me to the deed just to make any possible future inheritance dealings easier. They bought that condo while I was still married.  I am not even sure if my exH knew that I was part owner on that condo, but he probably would suspect that I was since he knew that I was also part owner on some other properties that my parents owed, but have sold by then.
Anyway, first thing I did was to ask my parents to remove me from the deed on the condo.  It cost them about $500 through a lawyer, but they found out later, they could've done for free if they would've done it themselves. I wanted to protect them and their investment in case my divorce got ugly.  It didn't, but if it did, and the asset search would've been made, that condo would've shown up as my assets, acquired during the marriage and then he would have a legal claim to it.  I didn't want for that to happen. 
For the same reason, when my parents wanted to give me a gift of cash and this was before the divorce was final, I asked them to keep it in separate account until everything was finalized. 

One last thing, a lot of divorce layers offer free consultations.  I would go and talk to one or two of them and ask how to best to protect your inheritance. Tell them you are considering divorce or they won't talk to you.  Some of them would be very evasive during consult and refuse to give any information, even in general terms.  Go to see someone else, until you find someone who will give a general advice that makes sense to you.  I did that until I got the same answer from 2-3 different layers, that told me that the advice makes sense and is universal.  That's what I did regarding my parents' condo.  Got 3 lawyers to confirm the same thing.  Before that I was getting a lot of nonsense from 3 other lawyers. 


Goldielocks

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Re: Inheritance Money and sharing with Spouse
« Reply #67 on: December 12, 2017, 12:04:08 PM »
Since the inheritance likely isn't taxable income, wouldn't it make more sense to put it in a taxable or Roth account, rather than an account where you have to pay tax when you withdraw? I mean, I guess if you're trying to reduce taxable income from wages, it's all fungible, but IRA limits are pretty low anyway. That's just an argument for filling up all the available tax-advantaged space first.

I don't know about the yours/mine stuff, and I don't know how I would handle it in this particular situation, but I also know that in my situation it kind of doesn't matter from a tax standpoint whose name is on the account. Sometimes I put money in my wife's IRA, sometimes in mine. It's really pretty arbitrary. Most of our retirement money is in my 403b anyway (no fees, Vanguard institutional plus funds), which would be treated as a joint asset as far as the state is concerned.

I'll probably inherit a medium amount of money from my side of the family, and my wife likely won't inherit anything from her side. I hadn't really thought about it before this, but I'm reasonably confident that we'll use the money the way we see best for our family unit.

if you arent already maxing these accounts you do lower your taxable income by funding them regardless of where the funds come from. money is fungible.

But it is much better to max out all your accounts, through annual savings on your income, AND leave the inheritance as separate investments.

Chesleygirl

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Re: Inheritance Money and sharing with Spouse
« Reply #68 on: December 23, 2017, 11:01:23 PM »
Does he have a major reason why he is asking for some of the money to go into his IRA? A bit odd considering his is better funded than yours.

Our own finances are completely merged. But his accounts have been better funded simply because he has made more money than I have and it made sense for tax purposes (I was a SAHm for a few years). Lately, we have enough going to savings to provide tax advantages to him and for there still to be more to invest. I chose for the extra to go to my accounts to plump them up a bit. It made sense and also gives me a bit of extra protection.

Sent from my STH100-1 using Tapatalk

I do find it odd, his IRA is better funded than mine.

I've been doing some more reading and there are other reasons to keep an inheritance as separate money, besides protecting oneself in the event of a divorce.  It might be more beneficial to both of us, if I keep the money separate.  I'm willing to share some of the money with him, but want the account in my name only. I think that's only fair, since he won't be sharing his inheritance with me, as he's said he wants to forfeit his inheritance share to his sister. I also have valid concerns that some of my husband's family members would come to him for money, so I need to remain in control of it.

So I've pretty much made the decision to put the money in my name, only. Once it comes to me I will start putting it into IRAs, 529 plans and some other investments.

Chesleygirl

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Re: Inheritance Money and sharing with Spouse
« Reply #69 on: December 23, 2017, 11:09:17 PM »
Also, update your will so you can decide where you want this money to go if you donít want it to go to your husband.

Very good point.  The possibility of you pre-deceasing your husband is actually one of the reasons I have heard in support of keeping your inheritance in your own name only, even if you feel there's no possibility of divorce.  The idea is that if you were to die, you could will that inheritance money to your own children, and not have it wrapped into your husband's share.  This might be more important to you if you consider that he could choose to remarry and even have more kids in his new marriage.  Chances are that you'd rather have your inheritance dollars flow to your own children and not to your husband's second wife or their children.  Here's the article I read that raised these issues: http://money.cnn.com/2000/03/01/senior_living/q_retire_inheritance/

Yes, this. I made out a will several years ago with my husband already. Will I need to revise my will to include the fact that I want my inheritance money only to go to my own kids? I may have to talk to the attorney who did my will. There is the real possibility my husband could remarry if I died and his second wife could take the money for her own kids, leaving mine with nothing.  On that note, when my dad remarried, his new wife and her adult kids were expensive for him and he is penniless now. (I don't know exactly what happened, I know some of it, but not all). A fool and his money are soon parted.

Goldielocks

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Re: Inheritance Money and sharing with Spouse
« Reply #70 on: December 24, 2017, 04:01:47 PM »
Yes, you will need an updated will to give the majority to your kids (unless it is already written that way).

Or, you can buy life insurance naming them, especially if you want to keep it secret (or the named person secret) and off your will, which becomes public after death.

IRAs and investments can often have a named beneficiary indicated on the account, so will also pass outside of you will to anyone.

Other ways are to have a joint account with your children, or joint title to property.

Note, if your kids are minors,you need to set this up as a "in trust" for the minor, (they can't get the funds directly until older) and the trust will have admin fees and restrictions on how to invest and distribute the money (that you pre-setup, for a fee,  or that default to the government prescribed trust / conditions).

MrsPete

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Re: Inheritance Money and sharing with Spouse
« Reply #71 on: December 25, 2017, 05:32:00 PM »
What I personally would do: 

My husband and I would look at all our options and would put the money into the one that would yield the best return.  We would consider an inheritance "family money". 

However, you say you had problems 10 years ago or so, and I was thinking, "Is this a stable marriage?" in the very first entry.  Instead of making this an obstacle, use it as a building experience for your marriage.  At a time when neither of you is emotional /touchy about this topic, sit down together and look at your overall finances -- then make a pro-con list for each option -- and your two 401Ks might not be the only options:  you might look at putting the inheritance into other investments, using it to pay off your house, or setting it aside for your children's educations. 

chasesfish

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Re: Inheritance Money and sharing with Spouse
« Reply #72 on: December 25, 2017, 07:20:53 PM »
@Chesleygirl - I just went through the estate planning process in Texas, its pretty favorable to the other spouse in the event of a divorce or death.  I'm going to throw in a couple of completely random thoughts here:

- It doesn't seem like the two of you have money distrust, but you may have different values when it comes to taking care of different family members and if one side's unearned money is always that sides.  Don't get too lost in that, half is half in a marriage and you're both contributing.

- Don't take too many of the comments personally, some people like me have been married for 10+ years and have always viewed our money as joint with the only concern being how do we take care of the important family members upon the event of death.  We decided to name her parents as the beneficiary of one of her IRAs

- Who is the beneficiary on the IRAs?  If you are each others beneficiaries on the IRA and your property is considered joint in Texas, I'd do whatever makes the most sense from a joint tax return.

- IRAs:  Do you and your husband have a stash of just regular investment accounts?  Funding an IRA really shouldn't be an if/then/how question, you should just be moving money from your savings or regular investment account.  I hate that the cross ownership is making this messy.

- Do you really plan on wanting/needing any of the inheritance?  We're in a similar position with our respective families.  I can only think of one small inheritance I might get, but it won't be from my parents and I expect to be supporting them vs. inheriting. My wife's parents may leave a little bit, but I think we'll end up giving almost all of that to her brother.  One suggestion, by "giving", I mean taking the 1/2 the money and purchasing of a Life Annuity through Fidelity.  That way he gets a monthly check for the rest of his life, can't blow the cash, and removes the family dynamic of "I'm sending you money monthly", its just a one-time decision of "we don't need it, so we'll do this".  Consider that idea with your sister-in-law.


partgypsy

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Re: Inheritance Money and sharing with Spouse
« Reply #73 on: December 25, 2017, 08:19:27 PM »
There are many benefits to keeping the money separate, not much to merging unless there is a immediate dire financial reason to do so. I remember a few years ago, accidently listening in on a conversation with my then husband and his brother, what they were going to do with some money they were inheriting (a few thousand). His brother said he didn't know. My then husband said he was thinking of giving all of it to his sister (she was going through a rough time, but makes more money than we do). His brother said, what did I think of that? And he said, I'm just not going to tell her.
Another example, my mother inherited about 50k worth of stocks. She worked part time, and dad divorced her after 25 years. Is she didn't have that money, she could not have even afforded a lawyer. You are a stay at home mom. Sounds like he has more input where money goes, and has already told you that he is going to make a unilateral decision about what he's going to do with his inheritance. You also have different philosophies on  helping extended family members. Tell about the inheritance, but keep it separate.  He should be understanding and respectful of your desire to keep inheritance separate.
« Last Edit: December 25, 2017, 08:24:13 PM by partgypsy »

clutchy

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Re: Inheritance Money and sharing with Spouse
« Reply #74 on: December 26, 2017, 10:49:55 AM »
Yeah so you've got a relationship issue here not a money issue. 

You need to solve that immediately.  This is already going badly if you can't tell, from him wanting to wet his beak to him telling you that he's giving his share to his sister...

You've GOT A PROBLEM.

mm1970

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Re: Inheritance Money and sharing with Spouse
« Reply #75 on: December 26, 2017, 11:32:22 AM »
It's sort of sad to see so many comments about divorce, shielding assets, "her" money, "his" money.  Isn't marriage a team game?

Depends.  That's how our marriage is, but it's been 21 years and we've been commingled forever.

But inheritance is different, really.  That money is intended to go to a single person.  I especially feel that she should keep it because she's a SAHM.

I recently inherited a small amount of money, and it went into our joint accounts.  No big deal.  But I've got a full time job.

When my inlaws separated and later divorced (AFTER 43 YEARS), my MIL kept her inheritance from her mother.  FIL was a bit peeved that she didn't split it with him.  So, grandma leaves her daughter about $100k, then within a year you cheat on her and tell her it's over.  You want her to split that with you?  She quit working and took care of the kids and worked as your unpaid secretary for the home business for decades.  Fuck. Off.

Likewise, the money I inherited came from my grandparents.  My grandma died.  Grandpa remarried.  His will and trust left a certain amount of money to his daughters.  However, after grandpa died the trust does not get dispersed until after his 2nd wife dies.  She can live on the interest, principal if necessary.  She lives 18 years longer after he dies.  My mother and my aunt pre-deceased her.

So, my mother's portion goes to her issue, not her husband.  It does not matter that my mother's will left everything to her husband.  What matters is that my grandfather wanted the money to go to my mother or her children.

I would consider this to be the same.  If she keeps the money in her name, and something happens then it's her money.  Or she can leave the money to her children.

I think that most people who leave inheritances, what they really don't want to see happen is to see money go to "someone else", like money goes to my kid, and she commingles with her husband, and he divorces her and takes half, then gives his half to his honey on the side.