Pay Dirt is Slate’s money advice column. Have a question? Send it to Lillian, Athena, and Elizabeth here. (It’s anonymous!)
Dear Pay Dirt,
My (40F) husband died by suicide when our son was a baby. Now my son is almost 5, and I’ve been raising him alone all that time. My husband had a substantial life insurance policy, which has allowed me to stay home with my son, and due to the fact that he’s disabled, that has been a blessing. However, the money won’t last forever. My husband also had a substantial amount of money in his bank accounts, but he never changed the beneficiary information nor did he have a will, so it went to his parents. They gave me a portion of it right after he died to pay off my car, but said they were setting aside the rest for my son, as they don’t need it.
I asked about it recently, and I wasn’t given any details other than that it’s “not accessible.” I feel like I am entitled to that money and I should have some access to it, but I don’t know how to tell them, especially since they have said it is theirs to do with as they see fit. It’s also worth pointing out that my husband’s parents are getting older, his mom is in poor health, and I don’t know if they made any provisions for the money in their will, the executor of which will most likely be their other son, who doesn’t keep in contact with me. I don’t want to create any awkwardness, but it’s not a small amount of money. What can I do?
—Show Me the Money
Dear Show Me the Money,
You’re in a tough situation. Without knowing your parents-in-law, my financial brain expects that one of two things has happened to the money set aside for your son:
1) Your parents-in-law have put the money in a trust for your son, and it is not accessible until he reaches the age of majority. In this case, it’s likely invested, and there are legal stipulations on its early withdrawal. You would generally be entitled to information about that money only if you were the trustee. If your son is disabled and might qualify for certain benefits, a trust might be an especially prudent solution (depending on the trust structure).
2) Your parents-in-law have lost/gambled/spent the money, and it’s inaccessible because it doesn’t exist anymore.
Only you know which is a more likely scenario based on their personalities and financial situation. Either way, you’re likely not legally entitled to that money and shouldn’t be expecting to get access to it (especially if you already have been through a probate dispute as the surviving spouse). Instead, it would be a better use of your energy to figure out how to invest and utilize the life insurance proceeds from your late husband (perhaps by talking to a financial adviser about investment options that optimize income from the principal).
It is still worth broaching the topic with your son’s grandparents. It will likely be an awkward conversation, no matter how you approach it. I would emphasize something other than gaining access to the money yourself. Instead, frame it in turns of your son’s needs: wanting to assess his resources while planning his financial future and needing information on his inheritance to get the complete picture. You can mention you are working on getting a better idea of his eligibility for disability benefits. Or ask for details as part of the information you need for your own will after your experience with your late husband dying intestate. Focus on gathering information, not gaining access. That way, you’ll understand what they have planned for the money and if they have made provisions for it in their will.
Dear Pay Dirt,
I’m a 53-year-old married person with $2 million in savings. I dream of exiting the workforce. Is this dream at all feasible? Our family savings are distributed amongst a 401(k), mutual funds, IRAs, CDs, and cash. Our house and cars are paid off. We have one son who will be completing college this spring. Our current annual expenses are roughly $25,000 (not including what health care would cost out of pocket). Besides bringing home the majority of the bacon, I can take no credit for our healthy financial status. My spouse is responsible for both our savings, as well as our frugality and prudent spending. As a trade, I’m a computer programmer and make pretty decent money … so yeah, first-world privileges, to be sure.
So why the wish to exit? I desperately hate my job from both the position duties, to the work-related bureaucracy that goes with it. Been doing it for 25 years, and am burnt to a charred crisp. I’ve also switched enough jobs to know that my attitude toward the job is the norm across all companies, and not the exception to my current company. So, switching jobs and doing the same kind of work wouldn’t alleviate the hate. I have considered a new career in its entirety; however, the only thing I’m qualified to do is code.
I’m also not 100 percent opposed to continuing working and don’t object to hard work, but what can an aging, crusty programmer do if not programming? But I do dream of the freedom not working for the man anymore would bring. Am I just a privileged jerk who needs to suck it up because who doesn’t hate their job, or do I have enough money to turn my back on the man and start enjoying life? If so, any tips on how to do so?
—Crusty Coder Burnt to a Crisp
Dear Burnt to a Crisp,
Based on your financials alone, you are in a pretty solid position to retire early. With $2 million in investments and annual expenses of $25,000 (especially with a paid-off house), most early retirement calculators relying upon a 4 percent safe withdrawal rate would estimate that you have enough to quit working for the man if you want to. I recommend the books Your Money or Your Life and The Simple Path to Wealth to make your own calculations and feel fully confident in the math and philosophy behind early retirement.
As for health insurance, it’s often the most significant unknown for American early retirees. However, if your expenses stay low, you should be able to keep withdrawals from your portfolio low enough to qualify for significant subsidies on the exchange or even Medicaid (if you live in a Medicaid expansion state), as they only look at income (not assets).
You might find that your early retirement isn’t permanent. A year or two away from the workforce (which you have more than enough financial resources to support) might help you recover from being burnt out “to a crisp.” Even if you can’t permanently retire from the full-time grind, your low expenses buy you a lot of flexibility. I’ve often found that my friends who retire early end up returning to part-time work to have something to fill their days after a sabbatical. With your skills, if you don’t want to deal with the work bureaucracy anymore, contracting out your programming allows you to command a high hourly rate, choose your projects, and avoid the drudgery of meetings and conferences. Your spouse’s savings acumen and the household’s low expenses have bought you a lot of flexibility; in essence, you have “F.U.” money. So, go ahead and take some time—maybe the rest of your working career—off.
Dear Pay Dirt,
My common-law partner is going to get all my money (other than will-specifics) and my inheritance when I die. He is not great with money. He loves our cats as much as I do, but I’m worried about them and how he will fare dealing with all the expenses plus having a flush-load of money if I die before he does, which is probable. How would I set up a payment fund without being insulting to him? I need to know that his rent will be paid and our cats will be taken care of, but I can’t say that to him because it would be insulting to his care capabilities.
Dear Feline Groovy,
I can understand why you are concerned about the financial well-being of both your partner and your beloved cats. But if your partner is a capable adult, you shouldn’t be trying to babysit him from the grave. Instead, encourage him to get some of these financial management skills during your lifetime. Paying rent and buying cat food is a skill of the living— he needs to figure out how to manage it for himself now because you can’t balance his checkbook from your coffin.
If you have enough wealth to make it work and you truly don’t trust his coping skills, you could consider setting up trusts with a professional trustee. While the legal structure is the same for humans and felines, trusts for four-legged friends are colloquially referred to as “pet trusts.” A trust would provide for the care of the cats and ensure that your partner’s rent is paid in the event of your passing, with a professional trustee overseeing it. Professional trustees, however, can be costly and reduce the total amount of your estate available for your partner; it may be out of reach, depending on your inheritance. To establish a trust, discuss your options with an estate lawyer. If your estate isn’t large enough for a trust, it would be easier to make your wishes clear in your will with a pet clause and work to help your partner develop responsibility now.
Dear Pay Dirt,
I’m a doctor who makes good money. I have children in high school and middle school. My marriage has gotten to the point I need to get out for my sanity. Thing is, I’ve never paid a bill in my life. It’s been a joint account handled by my husband. He no longer has an income. But he bought the house and the cars, opened the retirement accounts, and paid the taxes and the bills with the money in the account. He’s not cheating me financially. The properties are in both our names. But I need to learn to operate on my own. In my 50s! Is there an idiot’s guide to this? A checklist would be nice, with step-by-step instructions. This is not about minimizing alimony or anything. I frankly don’t care how much I have to pay. I just need to take responsibility for myself without having to call him.
—Never Paid a Bill in My Life
Dear Never Paid a Bill,
Don’t beat yourself up! You’ve been busy focusing on being a doctor and parent—and you know that you need to learn to be self-sufficient, which is the first step. The good news is that paying bills is significantly easier than completing medical school. You will be fine. Managing money is a thing you learn by doing—it isn’t an innate trait; everyone learns by practice. You also don’t have to know everything at once; you only need to feel confident researching each step when needed. You asked for a checklist, so I’m going to give you one:
—Talk to a divorce lawyer before making any financial moves. You need to know what to do to protect yourself before filing for divorce, and it varies in every state. Even if you’re OK with paying alimony, it’s best to talk to an expert first.
—Check out some resources on financial healing. Financial Recovery is a practical toolkit for digging underneath the panic you feel about managing your money for the first time. It will help you unwind the emotional side of the breakdown of your relationship while building new financial habits. (It is written by Karen McCall, who was born into a top 1 percent wealthy family, ended up broke, then became rich again.)
—Once you have your divorce lawyer’s OK, open your own bank account, direct deposit your paycheck into it, and pay bills out of it. (Autopay is your friend.)
—Start budgeting. There are excellent resources for finding a budget that works for you, but I like Monarch Money and Simplifi for their approachability. You Need a Budget is a potent (but sometimes overwhelming) budgeting tool if you’re a more granular thinker.
—Once you have a better handle on the assets you’ll get in the divorce, you can start tackling the more advanced parts of financial management, like retirement and credit. All Your Worth is an excellent primer for wrapping your head around these goals. At that point, you may want to pay for some time with a certified financial planner to help you plot out your goals post-divorce.
Good luck with the next chapter of your life. You’ve got this!
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My teenage kids (17 and 15) are having a true free week with nothing official to do before high school starts. My husband and I are discussing whether there should be any bedtime. I feel like sometime soon (maybe now) they are almost adults and should make their own bedtime choices.
Update, Feb. 23, 2023: This article has been updated to more accurately characterize Medicaid expansion.