Financial Question.......
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| Wed, 08-02-2006 - 3:40pm |
DH and I were recently married. I moved into his home. It's a different situation because the home belongs to a very good lifelong friend of his. DH is in the will to live there long as DH lives, and then the home will return to the friends family, as it's been in that family for many years. So, in the event of DH's death, I would basically be homeless. It is a wonderful farm though where we live and a great house. I wouldn't want to move.
Also DH left his ex with everything. Of course she gets half the retirement, 401K etc. He also left her the house and everything in it. He moved with nothing. In their divorce decree it states that she gets half of everything, and that the other half goes to his 2 kids. (both are of legal age)
I have an inexpensive house that I moved from when I came to his town. I currently rent it out. I took a cut in pay to move here, and the rent makes up the difference so it's really not extra money. We live pretty much pay check to pay check like most people, although we do have extra from time to time for weekend getaways and such. We bought a new motorcycle and we each pay 1/2 the payment. I pay for my own car, insurance, credit card, etc and we split the groc about 50/50.
I had a good friends husband pass away suddenly. If that should happen, I don't want to be selfish but the ex and kids are set. I'm not greedy in any way but don't want to be homeless, and get nothing from him. The kids and ex would be set and I would owe all the funeral expenses and bills. I feel he should decide exactly what to leave his kids, and then put the rest in my name. I also feel that if it's not a very large amount to me that he should pay for a life insurance policy to me on him. Is this fair? My retirement is in his name already, as is a very small policy from my job. I will also put his name on the house deed so that he will get that in the event of my death. Of course he'd get all my possessions. He gave the ex all their furniture and possessions except for a bedroom set.
It's not really anything we've discussed as we were both self sufficient when we met and pretty much have always split things and kept our own bills to ourselves. How do I tactfully bring up the subject of putting things in my name rather than the kids without sounding greedy or as if I don't want his kids to get anything. Since they are in the divorce decree to get the 2nd half of his things, can he even now change it over to me?
I pride myself on being self sufficient and at this time if he should die, as long as I had enough to pay funeral expenses, I could support myself otherwise. If he should die when I am 60 though I wouln't be in as good a position of packing up, moving, and starting over.
Any suggestions on bringing up this topic, or what to do financially in this situation?
I know that a policy on a 47 year old man who chews tobacco isn't going to be cheap at all. Thanks for your suggestions!!!

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You know, I had this conversation with my mum a while ago. She knows that if anything ever happened to her, my dad would re marry. (She's not bitter or anything, she just knows that he hates to be alone). Anyway, she told me that (heaven forbid) if this should ever happen, my sister and I are to make sure we get the inheritance. So, from this angle, I can understand his assets being left to his kids.
I am a little confused about his ex wife though - surely she should get nothing after he dies. (Perhaps divorce laws are different for us in Oz) But if that's what was agreed to in the divorce decree....cest la vie
Anyway, I'd be looking at getting him life insurance if I were you. No, it won't be cheap, but you could look at getting the absolute mimimum you would need. This way, his children still get their fair share - and you won't be left high and dry. And you could always move back into your own house after he dies.
ldack1,
I don't know how or when you would even bring up the subject, it is a touchy one.
Defleppardgal
Idack1, I don't think it's changeable if it's in the divorce decree, but you'd have to talk to an attorney to know for sure. At any rate, it wouldn't be changeable without another court date, and agreement from both parties (he and the ex). I understand you feeling a little frustrated that the ex reaps the benefits, but don't forget that he's the one who decided to walk away with nothing. I also think he would have a problem taking assets away from his kids. I don't think that's a suggestion you want to broach. I also don't think you're at all out of line to be concerned and to be wanting some security should you find yourself alone. At the same time, I'd think you wouldn't want him to be left with nothing should he be the one to be left alone; in reality, he'll have nothing more than you would. That's why I think the best way to deal with this is for both of you to take out policies for each other. You don't look greedy and he's taken care of too, just like you.
~ cl-2nd_life"Experience is what you get
when you don't get what you want."
~ Author unknown
"Ignoring the facts
does not change the facts"
I think a new life insurance policy is the best option - and when you discuss it with him it should be in the context of planning for retirement and making sure each other will be okay financially for the one who lives the longest.
I did want to add that my house is not near here, so it's not something I could move back in to. Also it's only a 30,000 dollar house. (houses are cheap there) My ex pays for it, and at the moment there is very little equity in it, so I wouldn't make anything off it at this time, years from now I could make a little by selling it.
Also, yes I understand it is a law that the ex get 1/2 of the retirement, and 401 K, but half of what he has in it at the time of their divorce. Of course he's been there about 26 years and they were married about 22 of those so that's about half of everything.
Yea, I'd love to be set if he should die but I'd settle for being able to pay for a nice funeral for him, and able to buy a home (even a cheaper one) and not have a mortgage. I just really wanted to know from others that I'm not being unreasonable when I do bring up the subject. After all I could leave my home, etc to my daughter but I feel like he's my husband and should get it as he will handle all my things should I die. For my daughter I'll get a policy on myself. I'll get a term policy though for her because after she's old enough to be out of college and married I think she is able to take care of herself. That's kinda how I feel about his kids too.
Thanks for all the great advice
No, I knew that his ex would get half of what he had in retirement at the time of their divorce which I totally understand and agree with. I didn't know the kids were in the divorce papers to get the rest.
It's no big deal, either way we'll work it out. I know that he'll be receptive to some kind of financial security. In all honesty he probably hasn't given it much thought. His ex worked for an attorney and she's the one that had their divorce decree done. I just have been thinking about how to approach the issue without sounding like I'm a gold digger because thats definitely not the case.
I have 4 different things for you consider as you create your plan.
1 - Make a formal request in writing to the owner of your current home that you are granted a 6 month window to remain in the home to re-settle in the event of his death. Upon agreement, get the document notarized and in safe keeping with both parties. This will act like a contract.
2 - Funeral expenses. The way I understand things is that funeral expenses are paid by the estate before any disbursements of inheritance funds. Please check into this. The net effect is that the funeral costs would be zero for you and fully paid by the estate. You can also amend his will to make this a clear directive.
3 - Given your ages I am not a fan of starting a new life insurance policy. I think you would be better served by investing the equivalent amounts into a retirement plan of some sort. I would also make another legal document that defines this activity and since you are newly married it is excluded from any other prior arrangements.
4 - Inheritance distribution. In these types of situations, I think it is fair and reasonable to get an assessment of his existing net worth. That net worth value is essentially reserved to comply with the existing conditions. Then you write another will amendment that states that any incremental gain on that net worth then gets split between you and his children on some percentage basis. I think a fair percentage split in these types of cases is 50/50 on the net worth gain.
As long as you approach your husband from a financial planning point of view I think you will be OK. The risk would come if you position this as complaining that you will get nothing in the event of his death. The discussions need to be business like and not loaded with emotions.
spice.man
Thank you so much for your suggestions. I especially love the idea about the 6 month extension should he die. I don't feel his lifelong friend would have an issue with that, and that would be a tremendous help in giving me time to find a home, etc. That is an excellent idea and one I had never thought of.
We kind of talked about things the other night. As you said, I don't want to appear to be complaining, and I truly don't but I am a person who likes things organized too, and in the event of his death I know right now how confusing things would be. My best friends husband died suddenly at a young age and I know that to try and do all this, and be grieving as well would be hard. We both agreed where we will be buried and at some point soon are going to go ahead and buy our plots, headstone, etc. I didn't know it but since he's a retired fighfighter he has a funeral benefit which I guess pays for part of his funeral. It's in his kids name and will be put in my name instead. I told him I would absolutely ask for his kids input on the funeral but that I would feel more comfortable having it in my name since I would be the one responsible for the expenses. He was fine with that.
Your advice was very informative and helpful. Thank you so much.
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