Dear Moneyist,
My husband is 67 years old with an estate worth $ 2 million. His first wife died. He has a severely handicapped daughter and we signed a prenup when we married three years ago.
He has a sister who is a year older than I am. I am 64 years old with two adult children from a previous marriage that ended in divorce. His sister has a son and daughter, and she has two granddaughters.
My husband wants to leave our house, which he owns and bought before we married, to me for as long as I live. He does not want my children to inherit it when I die. He wants it to go to his sister’s family.
Can he prevent my children from inheriting property he wills to me? The bulk of his estate is going to his daughter’s trust and sister anyway. It’s possible I may outlive his sister and daughter.
I know I’m the newbie here, but it just seems a little harsh that I can only have the house to live in and not sell it, if I need the money for future medical expenses.
He’s very controlling of his money. What do you think?
The New Wife With a Prenup
Dear New Wife,
Maintaining control of his money and/or managing his money is distinctly different from being controlling about money. It’s his money and it’s up to your husband to do with it as he sees fit. That includes taking care of his daughter financially, in the event that he predeceases her. Giving you a “life estate” or “right of residence” in his last will and testament is more than generous. You don’t have to worry about never having a place to live.
It’s time to right-size your expectations. You’ve been married to this man for three years. He is retired, I presume, and has lived a long and healthy life. As you said, you were not a couple when he earned most of this money and in a community-property state you are not entitled to any money that was earned before you married, even if you divorced. In a separate property state, I can’t see a judge awarding you his home and 50% of his assets.
You can look into a health savings account (HSA) to help save money for retirement, especially health-care expenses in your retirement. You are eligible if you have a high-deductible insurance plan, but it also allows you to shelter up to $ 3,550 (for an individual) or $ 7,100 (for a family) in pretax money, which is withheld by your employer (or set aside by you, especially if you buy your own health insurance) and placed in an HSA each year. An estate planner can help you explore other options.
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In the meantime, by allowing you to live in his house for the remainder of your days does not mean you own the property. That is a win for someone you’ve only been married to for three years, especially given that you are both in your 60s. If you sold the house, where might that leave his severely disabled daughter if she were to need full-time care or future medical assistance? I see no reason why your children should be part of his estate planning.
His daughter is his No. 1 priority, and that is exactly how it should be. One of the biggest post-retirement expenses has been removed from your life, although you may have to pay for maintenance for upkeep and taxes on the property, depending on your husband’s will. That’s a small price to pay for his generosity. You have at least five more years of work ahead of you. You will have to make them count. I certainly hope you enjoy them.
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