Put inheritance money in separate account (paying, lawyer, convert, live)
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Do you know of anyone who received an inheritance and put the money in an account in their name only (not spouse) and this caused marital problems?
No.
All the people who I am close enough to discuss things like this put their inheritance money (most about $100,000 but some less and some a little more) into separate accounts or some type of long term investment or their retirement account. Their spouses were not angry or upset because when their parents died they did the same thing (no co-mingling of inherited funds for those couples).
The only person that did not do that was me. It seemed like a good idea at the time to pay off some joint bills, pay off some of the mortgage, etc. etc. However, in the long run it was a HUGE, HUGE financial mistake on my part.
non issue imo, if I remarry and the guy has assets he'd like to keep for his children or something like that, I've got no problem with it. I definitely have accounts left to me by my late husband that I would not combine into the marital pot, as they would go to my son's
Remarrying a person who has children from a prior marriage is one situation in which I would agree that separate accounts are a good idea, especially if one of the spouses has substantially more assets than the other. Settling the estate can get really ugly, really fast, when there are a number of people fighting for their share.
Do you know of anyone who received an inheritance and put the money in an account in their name only (not spouse) and this caused marital problems?
Yes. With sizable estates, the money often goes into a trust for the child/children. The reasons can be as follows:
1) Some are not able to handle sizeable amounts of money when they have not had the experience in managing that level of resources.
2) Large sums of money can change the dynamics in family relationships. With a sudden “windfall”, there can be pressure amongst the relatives to “share the wealth”. The person managing the trust can help provide a buffer/safety valve. I have seen how friends and relatives have come out of the woodwork, targeting heirs after a family death. It is similar to what you see when someone wins the lottery.
3) if the money is in a trust, it is separate (most times) from marital assets and provides some level of protection if you child experiences a divorce. While I personally believe that through marriage we should be committed with everything we own, I understand that others have a different opinion and that there are concerns that a divorce can impact an estate. Further, changes in money dynamics can actually lead to a divorce when there are differing opinions as to handle a “windfall”.
4) Protection from lawsuits/litigation. In my opinion, this is one of the largest benefits and is the primary reason I have set up trusts for my children as part of my estate planning. When someone has money, they are a target for lawsuits. Having the money in a trust can provide a barrier towards someone trying to get money from your heirs via a lawsuit.
5) Concerns as to wasting the money and/or contributing to addictions, gambling, etc. Parents may have concerns that a large sum of money might be used in ways not helpful to their children. They can structure a trust that provides funds for living expenses, yet has protections in place to keep a child blowing it all in Vegas or other circumstances.
Part of estate planning is sitting down with your family (when the children are mature enough) and letting them know your intentions. You should feel comfortable that they will be good stewards of what you leave behind and that your estate plans are subject to change in the event that you feel they would not handle things properly. This also helps to head off those nasty disputes that can sometimes happen after people pass away. Lastly, if you decide to put the money in a trust and your child/children marry, it might be wise to let the spouse(s) know why you are putting money in a trust so that you don’t create a problem in their marriage. Point #4 alone is good enough reason.
Only if the other spouse is a greedy, insecure jerk. Inheritance legally and morally belongs to the spouse who inherited it. My 2 cents.
I happen to think that anybody who says that their way of handling finances is the ONLY legit way to do things is close minded. Every couple should do what works for them. One big pot of money is no longer the only way to operate a marriage.
An inheritance is a gift to the person receiving it - that person can do whatever they wish with it. Share...keep it. I'd put it in a separate account and then share as much of it as I wanted. Then YOU have control over it depending on what happens.
Only if the other spouse is a greedy, insecure jerk. Inheritance legally and morally belongs to the spouse who inherited it. My 2 cents.
I happen to think that anybody who says that their way of handling finances is the ONLY legit way to do things is close minded. Every couple should do what works for them. One big pot of money is no longer the only way to operate a marriage.
I didn't say one big pot is the only way.
But I know of msny marriages that split because of "Yours and mine" and only combined is expenses...usually split 50-50 that ended in divorce. Especially when one make a far more and or inherits far more than the other.
One example: he was a postman, making $75k a year , she was a retail supervisor earning just $25k a year with a high mortgage, she owed him extra money cone winter when retail typically get a cut back. He insisted on a 50-60 split and when HE wanted to go on a cruise, he expected her to cough up an equal $3500 she didnt have. So hs webt ALONE and "hooked up" with a single woman on the cruise. He blamed her for his infidelity and suggested she get a second job. She worked a second job for a while, but he then complained "i never see you".
Eventually because of income disparity, when a child came along, he thought it her to pay the child's bills, whike he gave her $500 /m for his portion of "raising the child", like a court ordered support payment. Eventually they hot divorced, naturally. One big pot would have saved their marriage! I have about 12other examples of such thibgs as financial separation destroying a marriage.
It is my opinion, if you can't commit your all, everything to a marriage. Then you aren't commited to the marriage. The vows even say "for better or worse, for richer or poorer, on sickness and in health "...
I will get an inheritance as will my OH. For us it has always worked to have one big pot. Even when the pot was totally empty. My OH s inheritance will likely come first, as my FIL is now heading for 90 and isn't very healthy. My father is fairly healthy and only 83.
Together my OH and I have retirement plans that will start to see fruition soon, the inheritance s will help. We aren't going to wait till we both get our inheritance to see where we stand. We will evaluate after the first one goes into that big pot, be it mine or my OH s. It will add to our money and well BETTER know what is what. Than phase two will be when the other inheritance comes in.
We are not waiting exclusively for inheritance, we should be ok on our own, but it will certainly make things nicer for us in retirement WITH the inheritances.
For those who have a split financial arrangement and have an equally long marriage great. But I see too many split finances relationships not working out.
For second or third marriages, with yours mine and may be our kids, I can see keeping things separate, but it should be fair and EQUITABLE when it comes to paying the bills necessary to live together. Not just 50-50. That never works well if one is better off financially over the other.
My best friend is a yours and mine marriage and is falling apart. She makes more than he dies, but spends it wildly and then expects him to cough up her $600+ car payment when she falls short. Her income is double his. He never has money and never gets any from her. Bad sitiation.
If it makes sense to keep it separate, fine, but I still don't see the commitment.
And to all you womem out there, used to be what was yours was HIS as woman had few rights. Arent you glad the men, who were the only ones who could vote, decided to vote to change THINGS? Or else your inheritance would be HIS.
All the people who I am close enough to discuss things like this put their inheritance money (most about $100,000 but some less and some a little more) into separate accounts or some type of long term investment or their retirement account. Their spouses were not angry or upset because when their parents died they did the same thing (no co-mingling of inherited funds for those couples).
The only person that did not do that was me. It seemed like a good idea at the time to pay off some joint bills, pay off some of the mortgage, etc. etc. However, in the long run it was a HUGE, HUGE financial mistake on my part.
While all other assets are comingled, we decided not to comingle inherited funds. DH has his accounts and I have mine. This was the advice of our financial planner. If either of us has an expensive health crisis that depletes our comingled funds, the other won’t be going into retirement with nothing. I, for one, don’t feel this means we’re not committed to each other. On the contrary it means we want to insure whoever lives the longest doesn’t do so in poverty.
Not quite the same thing, but I know someone who received an inheritance and did not keep it separate. He used the inheritance to pay off a house that was co-owned with his spouse. The spouse left him the following year, and because the inheritance was now commingled money, he had to give her half. It was a crappy situation.
In my opinion, a spouse should not automatically expect to own half of their spouse's inheritance. It would worry me if they insisted on it.
I think you are right. I don't see any reason to put my inheritance in my husband's name. We've had marital problems in the past (him wanting to walk out). But there is a more immediate danger that if I put the money in both our names: he could take some out and give it to his sister. His sister is a greedy woman who constantly wants money from other people. She recently broke up with a boyfriend because he wouldn't put her in his will, even though he had not even asked her to marry him. She also quit working full time in her early 50s, for no particular reason and lives with her dad. She's not totally broke, as she has a few investments she can dip into, but there is a risk.
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