Inheritance Money and sharing with Spouse

[Chesleygirl]

I will be receiving the remainder of my inheritance money within a few weeks from the sale of a house. This was from my mother who passed away.  My husband has said he wants to put some of that money into his IRA.  At first, I thought okay. But the problem is that he has far, far more money in his IRA than I do, plus money in a 401K from his previous job. I've been taking care of the kids & home for several years while he worked.   I'd like to create a new investment fund for myself with mostly index funds. Should I tell him to forget about taking my inheritance money for himself?

[ixtap]

It depends on you and your husband.

Has he been funding your IRA all these years?

Is it important to you as a couple to put the money in the most advantageous place? Or is it more important to build up your portfolios to a similar size?

Did your mother like the man?

Is this inheritance large enough to fund both IRAs and build a taxable account?

In our case, we generally choose tax advantaged over taxable, rather than his vs. hers. It all ends up on the same spreadsheet, so we economize whenever possible.

[Chesleygirl]

It depends on you and your husband.

Has he been funding your IRA all these years?

A small amount was funded by him, a few grand initially.  Then I rolled my simple IRA money into it. Then it grew substantially with index funds, over the years.

[elaine amj]

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.

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[Drole]

Keep it in your name.

You might need to show assets in your name someday for starting a biz, getting a loan, etc.

[MayDay]

Keep it in your name, but generally try to make decisions about it together (I don't treat it like it is appropriate ypursand he gets zero say).

IMO as a former sahm, you are in a very precarious financial situation. An inheritance is probably the only opportunity you have to shield assets from a spouse- but only if you keep them separate. I'm sure most people say that won't happen to them, but especially considering he already has more in retirement than you,  it makes 100% sense to keep this money as yours.

[Beach_Stache]

I would say the only reason you should put some of the money in his IRA is if his IRA's fees were so much lower than what you would be getting.  For example, maybe he has an account that his funds fees are only 0.05% and you don't have a great IRA to roll it into.  I guess that really shouldn't make a difference as if he has an IRA you could find a similar fund in Vanguard or Fidelity at low fees.  If he has a financial reason to put it in his IRA that would save you money then I would hear him out but that seems strange if he has money money than you. 

My wife and I treat our accounts as a "family account" but I had to press her to start fully funding her account and it took some time for her to do so.  As a result I have about twice as much in my 401k/Roth accounts than she does, but if she received inheritance I wouldn't be pressing to put it in mine unless as a family we decided that I was going to actively invest.  If he actively invests for the family then that is a another reason to put it into his account, but we passively invest in low fee index funds, so in the end the decision for us would be which accounts have a better return and lower fees, but that's really it. 

[LeRainDrop]

His request makes me feel kinda icky.  I lean towards keeping the full inheritance in your own name.

[terran]

Once you "commingle" the inheritance it becomes a marital asset that is as much his as yours. If you never do that by keeping it in your name only, then it would remain yours alone and he wouldn't get it in a divorce. This may vary by state.

On an unrelated note, why haven't you been contributing to your IRA every year? You can count his income and contribute to a spousal IRA despite not having your own earned income. There are some income limits to this if he has a retirement plan at work ($186k AGI off the top of my head, but check on that).

[2Birds1Stone]

In many places, inheritance to one spouse in a marriage is outside of communal property.

If the inheritance was in your name, you have full discretion in the eyes of the law in many many places. I would figure out these facts before deciding what to do on the emotional level.

[Jacana]

Definitely contribute the max this year and next year to your own IRA, whatever you decide.

What percentage would be going in his IRA? I mean, if I inherited 100,000 and we stashed 5500 into his IRA and 5500 into mine, that's a drop in the bucket and financially makes sense to shield as much as possible from taxes. After all, you pay taxes as a unit, and we always fill both IRAs even though we are single income right now. I would actually suggest that to my spouse if it were my inheritance.  It's not exactly him taking it to spend on like a car or something just for himself.

But if you feel weird about it, then don't. Maybe you can tell him you'd rather keep it as one large sum in ____ (savings, taxable investment, etc) because _____ (specific financial goal, that's what mother would have wanted, it's for the kids, etc). If you start dicing it up, a little here, a little there, it does become easier to spend and may disappear quicker than you'd like. Or maybe you can keep it as savings in your name, but tell him you two can now increase his IRA contributions from his regular income this year because you can decrease your savings allocations for a while?

[surfhb]

If your finances are merged then it saves you BOTH money because it reduces BOTH your taxes   ;)

If its a "what his" and "whats mine" situation then keep it

[Chesleygirl]

In many places, inheritance to one spouse in a marriage is outside of communal property.

If the inheritance was in your name, you have full discretion in the eyes of the law in many many places. I would figure out these facts before deciding what to do on the emotional level.

I live in Texas so will need to research if that is my state's law.

[Chesleygirl]

Keep it in your name, but generally try to make decisions about it together (I don't treat it like it is appropriate ypursand he gets zero say).

IMO as a former sahm, you are in a very precarious financial situation. An inheritance is probably the only opportunity you have to shield assets from a spouse- but only if you keep them separate. I'm sure most people say that won't happen to them, but especially considering he already has more in retirement than you,  it makes 100% sense to keep this money as yours.

The problem is, if I broach that topic he'll think I'm planning in the event of a divorce.

We already had to use a small amount of inheritance money to pay our house taxes so the money has already been "co-mingled". Don't know if it's too late to say it's totally separate now.

Now we're getting the remainder of it, which is the majority of the money from the sale of the house.

Also, he's told me when his father passes away, he will let his sister have his share of the inheritance. But I wonder if he's setting me up to hide money from me.  Don't see why I should be sharing a sizable inheritance with  him when he's not going to share any he gets with me. I just turned 50 and becoming employed at this age will only get harder as the years go on. We had problems in our marriage about 10 years ago

[Rocketman]

Don’t combine or co-mingle any more of it.

[ixtap]

Sounds like you should invest the money in marriage counselling. You clearly have lost trust.

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.

[koshtra]

Keep it in your name, but generally try to make decisions about it together (I don't treat it like it is appropriate ypursand he gets zero say).

IMO as a former sahm, you are in a very precarious financial situation. An inheritance is probably the only opportunity you have to shield assets from a spouse- but only if you keep them separate. I'm sure most people say that won't happen to them, but especially considering he already has more in retirement than you,  it makes 100% sense to keep this money as yours.

The problem is, if I broach that topic he'll think I'm planning in the event of a divorce.

We already had to use a small amount of inheritance money to pay our house taxes so the money has already been "co-mingled". Don't know if it's too late to say it's totally separate now.

Now we're getting the remainder of it, which is the majority of the money from the sale of the house.

Also, he's told me when his father passes away, he will let his sister have his share of the inheritance. But I wonder if he's setting me up to hide money from me.  Don't see why I should be sharing a sizable inheritance with  him when he's not going to share any he gets with me. I just turned 50 and becoming employed at this age will only get harder as the years go on. We had problems in our marriage about 10 years ago

If thoughts like that were even crossing my mind, it would go into my own IRA, regardless. Yikes!

[Jacana]

Also, he's told me when his father passes away, he will let his sister have his share of the inheritance.

Uh, why?? That's suspicious. I retract my previous suggestion. Fill up your own IRA this year and next (that's 11,000), and keep the rest in an account in your name. Make up a reason. Mother said to, it's for x, it's for me to fill up my IRA every year until it runs out, whatever.

[terran]

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?

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-qdro-qualified-domestic-relations-order

[Chesleygirl]

Also, he's told me when his father passes away, he will let his sister have his share of the inheritance.

Uh, why?? That's suspicious. I retract my previous suggestion. Fill up your own IRA this year and next (that's 11,000), and keep the rest in an account in your name. Make up a reason. Mother said to, it's for x, it's for me to fill up my IRA every year until it runs out, whatever.

So the max I can put in my IRA is $11,000 per year?

Yeah, it's suspicious he would just let his sister have his 1/3 share of inheritance. I could see him letting her keep some of the money, because she's been taking care of their elderly dad. But seems strange he'd forfeit his entire share to her.

[oldtoyota]

I will be receiving the remainder of my inheritance money within a few weeks from the sale of a house. This was from my mother who passed away.  My husband has said he wants to put some of that money into his IRA.  At first, I thought okay. But the problem is that he has far, far more money in his IRA than I do, plus money in a 401K from his previous job. I've been taking care of the kids & home for several years while he worked.   I'd like to create a new investment fund for myself with mostly index funds. Should I tell him to forget about taking my inheritance money for himself?

Is it in a trust? I'm not a lawyer but I THINK it can only pass straight to you--without your husband involved--if it's in a trust. BUT check me on this.

I think you should make sure you have your own money and retirement savings in your name. If you've been home and taking care of kids, you might not be in such a good financial position if you divorce one day. Sorry to bring up these nasty topics. I have seen some things in life, and I decided I would always have my own money.

[oldtoyota]

IMO as a former sahm, you are in a very precarious financial situation. An inheritance is probably the only opportunity you have to shield assets from a spouse- but only if you keep them separate. I'm sure most people say that won't happen to them, but especially considering he already has more in retirement than you,  it makes 100% sense to keep this money as yours.

Yes. This.

And I see red flags all over the place. My husband would never require my inheritance to go into his accounts.

[ixtap]

Also, he's told me when his father passes away, he will let his sister have his share of the inheritance.

Uh, why?? That's suspicious. I retract my previous suggestion. Fill up your own IRA this year and next (that's 11,000), and keep the rest in an account in your name. Make up a reason. Mother said to, it's for x, it's for me to fill up my IRA every year until it runs out, whatever.

So the max I can put in my IRA is $11,000 per year?

Yeah, it's suspicious he would just let his sister have his 1/3 share of inheritance. I could see him letting her keep some of the money, because she's been taking care of their elderly dad. But seems strange he'd forfeit his entire share to her.

You can put $5500 per year, so 2017 + 2018 = $11k. You can put this money in because your spouse has earned income, even if you do not.

Has your sister in law forfeited income to take care of her father? Other life opportunities?

I do not find this suspicious at all. We have discussed doing similar for our less fortunate siblings, even though we are likely to be the ones caring for elderly parents. The difference being: we have discussed it. Nothing you have written sounds like the two of you having a discussion.

[cchrissyy]

Chelseygirl, not 11k per year in your IRA but rather 5500 now, December 2017, and another 5500 in January for 2018

and YES keep it separate. that means the account stays only in your name.  Stay firm that it's what your mother would have wanted, or that you think she'd be happiest knowing you were saving/investing it, and that's what you're doing, end of discussion.

I'd say that to anyone but in your case I also see the red flags, and if he pressures you on this I hope you see that as another bigger red flag.

[terran]

Also, he's told me when his father passes away, he will let his sister have his share of the inheritance.

Uh, why?? That's suspicious. I retract my previous suggestion. Fill up your own IRA this year and next (that's 11,000), and keep the rest in an account in your name. Make up a reason. Mother said to, it's for x, it's for me to fill up my IRA every year until it runs out, whatever.

So the max I can put in my IRA is $11,000 per year?

Not quite. You can contribute $5500/year as long as your family income after all other deductions (including retirement account contributions) is more than that (doesn't matter if it's your earnings or your husbands though). Jacana is saying that you can contribute $11000 for this year and next because you can contribute for 2017 until April 15, 2018 (or whatever the tax filing deadline is) and you can contribute for 2018 as of January 1, 2018, so as of January you can contribute for the current year and the previous year.

That said, if divorce is a real concern I'm not sure I would do that. I don't know, but I suspect that contributing to an IRA would commingle that money because arguably it would be considered that you contributed your husbands income (since that's what allows you to contribute at all) and spent some of your inheritance. So I imagine that $11000 would then be considered among the whole retirement account "pot" (including your husband's retirement accounts) meaning you would get $5500 less of his accounts.

If you're seriously considering divorce (or think your husband is and is just waiting for this inheritance to "hit") then you may want to consult an attorney about how various options would be treated.

I suspect your best chances of ending up with as much as possible in a divorce would be to have this money transferred directly into a bank account in your name only, then directly from there into a brokerage account in your name only. Never put the money (even temporarily) in an account that has his name on it, and never put it in an account that could be argued as having been funded by his income (like an IRA).

You could probably put him as a beneficiary of the money, but it might be better to skip that and make your kids beneficiaries.
 

[Chesleygirl]

I suspect your best chances of ending up with as much as possible in a divorce would be to have this money transferred directly into a bank account in your name only, then directly from there into a brokerage account in your name only. Never put the money (even temporarily) in an account that has his name on it, and never put it in an account that could be argued as having been funded by his income (like an IRA).

You could probably put him as a beneficiary of the money, but it might be better to skip that and make your kids beneficiaries.

OKay that clears some things up.

My next question is, if i share even a small amount of my inheritance w/ my husband, after putting most of it in an account in my name only, would courts consider that all of it was joint assets in the event of a divorce?

[Jacana]

Whoops, sorry about the confusion. Thank you everyone for clarifying. Yes, I meant that since it is December, you can put in 5500 for 2017 through tax day April 2018 (do it before filing taxes so you can claim the deduction) and starting January 1 you can also put in an additional 5500 for 2018, totalling 11,000 over the next month depending on when the money arrives.

[elaine amj]

Coming from someone who has merged finances, I highly recommend you keep this inheritance separate and for yourself. A good husband would want to set you up in the most secure financial situation possible. Not because divorce is likely - but in the interest of actively desiring that you feel safe and secure.

Tell him you did some research and thinking and plan to set it up as your own investments just as an extra layer of security for yourself especially since you are not currently working. Yes, it may have been making more sense financially for him to have the larger inheritance accounts for the last while. But a lump sum inheritance might as well be used to set you up in a more secure position. Anyway, that's also what my mother would have wanted and I would have honoured that unless it was too impractical.

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[cchrissyy]

I don't think the fact that you once took a portion of the inheritance money and spent it on a joint expense makes the whole thing comingled.  I think it means the bulk of the money is still separate property but the part you spent is now joint.

Definitely research that! Don't take my word for it. use google for reputable legal websites specific to your state and if ANY confusion remains use some of this $ to ask a lawyer. 

[MrThatsDifferent]

I suspect your best chances of ending up with as much as possible in a divorce would be to have this money transferred directly into a bank account in your name only, then directly from there into a brokerage account in your name only. Never put the money (even temporarily) in an account that has his name on it, and never put it in an account that could be argued as having been funded by his income (like an IRA).

You could probably put him as a beneficiary of the money, but it might be better to skip that and make your kids beneficiaries.

OKay that clears some things up.

My next question is, if i share even a small amount of my inheritance w/ my husband, after putting most of it in an account in my name only, would courts consider that all of it was joint assets in the event of a divorce?

We are not the people who can answer this, only a lawyer that you’re paying can answer this. No good lawyer would give you advice on this through this forum. You don’t trust your husband and you are giving yourself a safety net. That’s fine. You can have a safety net and stay married. Your only focus now is how to position what you want to do with your husband with the least amount of stress and drama. It won’t be easy. Talk to a lawyer first and get some ideas about your options. Then maybe see a counselor to talk about your unhappiness and ways to address the situation. In the meantime, keep the money separate from any joint accounts until you decide what to do.

[Chesleygirl]

OK.

I've decided to put the inheritance money in an account that's in my name only.  I will dole out the money as I see fit but it will remain in an account in my name. I'd like some kind of interest bearing account. Any ideas?

[MrThatsDifferent]

Also, update your will so you can decide where you want this money to go if you don’t want it to go to your husband.

[LeRainDrop]

Also, update your will so you can decide where you want this money to go if you don’t 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/

[Money Badger]

@Chelseygirl,  Wow!   This thread strikes home...   For perspective, I'm a husband with a relatively high net worth >$1M who inherited a chunk after being the sole care giver for years.  I was also the executor of the estate and shared the estate 50/50 with my brother who did nothing to care for Dad (who was an estate planning lawyer).   My brother never for a moment thought about handing over "his share" to me.   I also don't begrudge him for it (despite temptations during the tough times as a caregiver I fully admit).   So your husband needs to get over his guilt trip and you take his share of the inheritance for both of your futures.  Charity begins with you both as a couple.   If his reason for giving away his share is sister is in poor financial shape today, it's VERY likely she'll squander any distribution she receives any way.   Don't ask me how I know, but it's hard won experience.   The most generous option I'd support for her is you take the estate distribution principal and only use income from that sum to prop her up financially if she gets into trouble later in life.   But in no way, does she ever get control of "his share".

As for your inheritance, a tactful solution would be for you to put your inheritance distribution into an online Vanguard or Fidelity online investment account in your name and then dollar cost average it from a Money Market fund into Vanguard S&P 500 Index fund, International fund and REIT funds in ratios YOU decide.   You can setup both an "after tax" and a Roth IRA accounts in your name this way and put the annual amounts into the Roth to the max each year.     Put the after-tax account in your name with him as 100% beneficiary or joint tenant (if you're not worried about the marriage as JTWROS simplifies any transition of funds to the other spouse in case of God forbids).   The Roth account is only yours (with him as beneficiary) This way you're investing for retirement which is absolutely just as good as "saving for retirement in his IRA".   Don't be in a hurry to put it all in funds in today's historically expensive (high P/E) stock market at once today.   But DO GET STARTED AND STICK TO A STEADY PLAN TO PUT YOUR MONEY TO PUT IT TO WORK ON A SCHEDULE REGARDLESS OF WHAT THE MARKET DOES THAT YOU ARE COMFORTABLE WITH (the caps are so important to long term investing is all).   Check this site or bogleheads.org for "3 fund" or "4 fund" portfolios.   This counters any concern from your husband that the money is not going to "grow" as it would in the IRA which is good for your marriage.   And you keep clear separation and ownership of the legacy your family left you, which levels the playing field in case there's more going on here than you'd care to share on an online forum.   Be strong.   Work as a team with your husband (assuming all is in good faith between you both).   And take care of God's money that his and your family left to you both to look after and grow together.

[Goldielocks]

OK.

I've decided to put the inheritance money in an account that's in my name only.  I will dole out the money as I see fit but it will remain in an account in my name. I'd like some kind of interest bearing account. Any ideas?

Great!   You have a very real "non divorce" reason to do this, too.   This gives you money for ready access in the case he dies and there is a delay in having his accounts released to you quickly (and any joint accounts don't have much money for reasons).  Also - if this is a lot of money, re-evaluate how much term life insurance you still need on your DH.

Try a fixed income (bond or GIC) ladder -- 10% to be set aside for each of 10, 9, 8, 7, 6, 5, 4, 3, 2, 1 years.  Each year as it becomes available, you can spend it or re-invest it in a 10 year fund.  That way you will get the best rates (10 year rates) and over the next 10 years, as interest goes up, you will reinvest up with it.

[TartanTallulah]

Also, update your will so you can decide where you want this money to go if you don’t 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/

This is something that has raised its head for me. My husband and I both have children from our first marriages. My parents have a house and are savers by inclination and from time to time they like to niggle at me about the risk of their painstakingly accumulated wealth ending up in the hands of my husband's children rather than their own grandchildren.

I've told them to leave their money directly to their now adult grandchildren, or give them some financial help while they are still alive, if it bothers them. And told them that after ten years of marriage I have no problem with any money I brought to the marriage (not much; I had four dependent children, a heavily mortgaged house, and the ability to earn a living) being shared with my stepchildren, who are all decent young adults.

As far as the original post is concerned, if the marriage is sound the inheritance could reasonably be managed in the way that is most advantageous to the couple as a unit. "What will work best for us?" is our starting point if we have a financial decision to make. If not, the OP should be taking legal advice about ensuring she can ring fence it for herself. But you've all said that already.

[Chesleygirl]

OK.

I've decided to put the inheritance money in an account that's in my name only.  I will dole out the money as I see fit but it will remain in an account in my name. I'd like some kind of interest bearing account. Any ideas?

Great!   You have a very real "non divorce" reason to do this, too.   This gives you money for ready access in the case he dies and there is a delay in having his accounts released to you quickly (and any joint accounts don't have much money for reasons).  Also - if this is a lot of money, re-evaluate how much term life insurance you still need on your DH.

Try a fixed income (bond or GIC) ladder -- 10% to be set aside for each of 10, 9, 8, 7, 6, 5, 4, 3, 2, 1 years.  Each year as it becomes available, you can spend it or re-invest it in a 10 year fund.  That way you will get the best rates (10 year rates) and over the next 10 years, as interest goes up, you will reinvest up with it.

OK. Im going to do research on the fixed income ladder. Thanks for that tip. I hadn't heard of that before.

When i get more time, I'm also going to work on reading indentured4now's advice. Thanks for all the great advice, everyone.

[Dicey]

Wow, the words you chose on the post immediately above have all my red flags waving, and Spidey Senses on high alert.

I don't think anyone has answered a key question you asked at least twice. Just because you comingled a previous distribution* does NOT mean you must to do so with this new money.

*WTF? He's the working for a paycheck spouse, but you used your inheritance to pay taxes, which should have been a line item in your joint budget?

I can only go on the information you've provided, but it seems he's a master manipulator and some part of you knows this.

As to what type of "account" to open, please read, study and follow jlcollinsnh's Stock Series. It's exactly what you want to learn about what to do with this money. I know that investment lingo can be confusing, but this series is elegantly straightforward.

One more thing: I'm not an accountant, but I do not think putting inherited funds into 401k's is optimal, tax-wise.

[Hargrove]

OK.

I've decided to put the inheritance money in an account that's in my name only.  I will dole out the money as I see fit but it will remain in an account in my name. I'd like some kind of interest bearing account. Any ideas?

Great!   You have a very real "non divorce" reason to do this, too.   This gives you money for ready access in the case he dies and there is a delay in having his accounts released to you quickly (and any joint accounts don't have much money for reasons).  Also - if this is a lot of money, re-evaluate how much term life insurance you still need on your DH.

Try a fixed income (bond or GIC) ladder -- 10% to be set aside for each of 10, 9, 8, 7, 6, 5, 4, 3, 2, 1 years.  Each year as it becomes available, you can spend it or re-invest it in a 10 year fund.  That way you will get the best rates (10 year rates) and over the next 10 years, as interest goes up, you will reinvest up with it.

Holy cow this.

The non-divorce reason to do this is probate court sucks and money brings out the very worst in people when it's there to be fought over, which would not be good for, say, medical bills if you needed to expect the money to be there that you thought was there.

If your husband can give away his share without consulting you, he sees no obligation here that you have to consider. We don't know if this is as simple as "he wants to tax shelter another 5500" though, so there's no need to assume anything insidious is going on (at least, from what you posted), but there are a lot of concerns others have pointed out that you know the particulars on better than we do. I wouldn't advise holding it in cash, but you could check out one of these prior to investing it:

http://www.mymoneyblog.com/best-interest-rates-cash-november-2017.html
https://www.lmcu.org/banking/checking/checking_max.aspx
https://allamerica.bank/mega-money/

I would just put it in VTSAX myself.

[LeRainDrop]

Wow, the words you chose on the post immediately above have all my red flags waving, and Spidey Senses on high alert.

I don't think anyone has answered a key question you asked at least twice. Just because you comingled a previous distribution* does NOT mean you must to do so with this new money.

*WTF? He's the working for a paycheck spouse, but you used your inheritance to pay taxes, which should have been a line item in your joint budget?

I can only go on the information you've provided, but it seems he's a master manipulator and some part of you knows this.

As to what type of "account" to open, please read, study and follow jlcollinsnh's Stock Series. It's exactly what you want to learn about what to do with this money. I know that investment lingo can be confusing, but this series is elegantly straightforward.

One more thing: I'm not an accountant, but I do not think putting inherited funds into 401k's is optimal, tax-wise.

+1 to everything Dicey wrote, except that I have no clue about the last sentence.  Somehow I glossed over that you'd used some of the inheritance money to pay your house taxes -- I mean, that's fine, but was there a good reason for that?  I would have expected those funds to have already been aside from the joint money.

[marty998]

Wow, the words you chose on the post immediately above have all my red flags waving, and Spidey Senses on high alert.

I don't think anyone has answered a key question you asked at least twice. Just because you comingled a previous distribution* does NOT mean you must to do so with this new money.

*WTF? He's the working for a paycheck spouse, but you used your inheritance to pay taxes, which should have been a line item in your joint budget?

I can only go on the information you've provided, but it seems he's a master manipulator and some part of you knows this.

As to what type of "account" to open, please read, study and follow jlcollinsnh's Stock Series. It's exactly what you want to learn about what to do with this money. I know that investment lingo can be confusing, but this series is elegantly straightforward.

One more thing: I'm not an accountant, but I do not think putting inherited funds into 401k's is optimal, tax-wise.

+1 to everything Dicey wrote, except that I have no clue about the last sentence.  Somehow I glossed over that you'd used some of the inheritance money to pay your house taxes -- I mean, that's fine, but was there a good reason for that?  I would have expected those funds to have already been aside from the joint money.

Yes because what happens next year? You are not going to get an inheritance every year to pay property taxes...

[Jacana]

I have another question. Over what time frame do you see needing the money? VTSAX or other index funds are a good idea if you want the money for your retirement. But if you want peace of mind knowing it's available for you in the next few years, after everything you've said, maybe a CD ladder or a high yield savings account might be better for the time being. Maybe I'm wrong, but just the vibe I am getting from the discussion (paid property taxes with inheritance, hesitant about joint account, hesitant about marriage, etc).

We also don't know how much $ the inheritance is, or how much you earn/spend as a family, what your effective tax rate is, what other savings you hold jointly... so take all our advice with this caveat: we do not have all the details. You do.

[Dicey]

Why are you even married?

Out of line. Please see Forum Rule #1.

[Meesh]

Coming from someone who has merged finances, I highly recommend you keep this inheritance separate and for yourself. A good husband would want to set you up in the most secure financial situation possible. Not because divorce is likely - but in the interest of actively desiring that you feel safe and secure.

+1^this^

My parents are in good health but I know at some point I will very likely inherit a considerable amount; when I mentioned it to my DH for future planning reasons (it's enough to FIRE him if, heaven forbid, they pass before then), he adamantly told me that is all for me and our son. Which initially surprised me but made me feel much safer and more trusting of him.

I also try to follow his lead on his own family inheritances as well. For the most part he's handed over money for me to invest as communal, but has stronger ideas on property. We have a home in Europe just sitting there and while we've talked about renting it (which I'd prefer), he wants it to sit for family reasons, which I'm totally fine with. But the key is we talked about it. I would be angry and hurt if he flat out told me he was giving money to x because it's technically his to do as he pleases.

The money our families worked hard to give us is separate until the owner decides to share. That being said we are a unit and discuss it all together. Your husband should be respectful of that and if not I agree that's a red flag. And he certainly shouldn't be making unilateral decisions about your inheritance.

It also seems weird to me you guys payed annual expenses with your inheritance even though he is the primary income provider, and should have had that budgeted out, same goes for both IRA's ideally or if you couldn't max them both they should have been split evenly and still budgeted out. I worry he's manipulating you. Either that or your budget needs major work?

[Finallyunderstand]

It's sort of sad to see so many comments about divorce, shielding assets, "her" money, "his" money.  Isn't marriage a team game? 

[terran]

It's sort of sad to see so many comments about divorce, shielding assets, "her" money, "his" money.  Isn't marriage a team game?

Of course it is. Speaking for myself, the advice I posted is not what my wife and I have done and continue to do with inheritance we have both received. But the OP has made it clear that there have been and continue to be marital and trust issues, so in that case it makes a lot of sense to be careful, especially given the income and asset imbalance in her husband's favor.

[Dicey]

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.

[Indio]

Chelseygirl, not 11k per year in your IRA but rather 5500 now, December 2017, and another 5500 in January for 2018

and YES keep it separate. that means the account stays only in your name.  Stay firm that it's what your mother would have wanted, or that you think she'd be happiest knowing you were saving/investing it, and that's what you're doing, end of discussion.

I'd say that to anyone but in your case I also see the red flags, and if he pressures you on this I hope you see that as another bigger red flag.

She's 50 so eligible for catch up contributions. Total amount in a year is $6500.

[robartsd]

My mother ended up regretting comingling her inheritance (to pay off family debts and replace a family vehicle). Years later Dad inherited a paid off house and did not comingle his inheritance.

[boarder42]

the money should be invested per however your joint plan is for the money.  if you have issues in your marriage and want to plan for what if we get divorced then you should be openly having that conversation.  this is a very good opportunity for you and your husband to sitdown and discuss all finances and financial goals.  My wife and i have separate accounts in accumulation but all the money once FIREd essentially comes out of the same pool so all the logistical discussion should be had between you and your spouse.