DISTRIBUTION OF ASSETS
Everybody's Uncle,
I have a problem with how much of my assets to leave to my future wife when I die. This will be my second, and her second, marriage. I told my future wife I wanted her to quit her house cleaning business - she works alone and the work is hard and she's exhausted at the end of the day. She will not be able to do that work as she gets older. She makes about $30,000 a year and has no assets - she is about $10,000 in debt.
She wants to go back to college and study to become a psychologist - I said fine - I have no problem paying for this - it will take about 8 years, then she be able to get a job in that field at that time.
I have $600,000 in assets and I have cancer. My doctor says I have 5 to 10 years to live. I am 54, and she is 44. I have no retirement plan and I will have to work to the day I die to support my wife without eroding my assets.
I do have some long-term nursing home insurance to cover some of that expense should it be needed. I have no life insurance. I would like to have my assets left to my two children and my wife. The two children would receive at least 50% of the assets and I told my future wife that I would leave her 5% ($30,000 tax free) of my assets for each year we were married, up to 50% total. So in 10 years she would get the full 50% of the assets I have at my death.
I wanted to do this progressive increase because. I thought it was fair to my children and my future wife. I didn't think my spouse should marry me knowing that in a few years [she will] inherit $300,000. Well she was infuriated. She feels that my proposal is unacceptable. She expects to have enough money to live on and pay for her schooling until she graduates. She also wants to have a nice house to live in that is paid for. She claims she would be better off if she stays unmarried and continues to do her cleaning business.
Do you think I am being fair with my inheritance? If not, how would you recommend I divide up the assets?
Hugh
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Dear Hugh,
Accept my sympathy for your prognosis, but there are medical breakthroughs on the horizon that might make 5-10 years look more like 10-20 years or more. Let's hope for the best.
I applaud your concern for those around you, but I suggest moving self-concern to the front burner.
Getting the best medical treatment tops the priority list. It is difficult, if not ridiculous, for independent children or an independent woman to make demands of you that supercede your personal needs. Your life and your assets are in question. YOU get the highest priority. Expectations of others run a distant second, very distant
A minimum-stress lifestyle benefits most conditions. Good diet, restful sleep, regular exercise and an uncomplicated life underpin general well-being. Minimizing your work and stress while maximizing positives is a life style your physicians will endorse. A healthy YOU, with extended longevity, is hard to argue against.
Leaving emotion aside:
Your intended brings $10,000 debt to your relationship - no assets. She expects to live in a paid-off home, go to school for 8 years, produce no income, enjoy total support and have full marital entitlement to your $600,000. AND she was "infuriated" when you suggested her "benefit package" be phased in.
All this, while you are in a contest for your mortality.
Under the conditions at hand, a loving, devoted woman would be inquiring about the care she could offer in difficult times, not making demands of your assets. Hugh, time to smell "the cleaning fluid."
Quote:
"She claims she would be better off if she stays unmarried and continues to do her cleaning business."
I don't think SHE would be better off with no assets, $10,000 debt (I'll bet there is more), a tough service job and losing a man who loves her.
YOU, on the other hand, will not have to provide a paid off house, cover her $10,000 debt, provide support, finance 8 years of schooling (dead or alive), and work until you die for this demanding woman who is "infuriated" by your inheritance phase in program.
Emotions are blinding, even at 54 years old.
To answer your "fairness" question directly:
You earned your assets. They are yours entirely. Therefore, any distribution you devise is "fair."
Jimism: "Fairness is in the eyes of the recipient."
Could it be that your intended plays the role of recipient?
Quote:
"She feels that my proposal is unacceptable."
That is good news. Your proposal is beyond generous. Wish her well in her cleaning business. Make her a gift of two brooms - one for cleaning and one for transportation.
Hugh, you sound like a nice guy who puts others before himself - even in the worst of times. Your inquiry reflects personal discipline. If you passed this value on to your kids, they have already told you to use your assets for health and pleasure. Leave them anything incidental at the time of your passing, a generation or two from now.
Show this response to your kids. It probably reflects what is on their minds but didn't cross their lips.
Godspeed,
Everybody's Uncle
