Pay Dirt

My Late Husband Left Money for His Parents Instead of Our Son

I’m worried my brother-in-law will steal it.

Woman hugging a young boy
Photo illustration by Slate. Photo by Getty Images Plus and Spoon Graphics.

Pay Dirt is Slate’s money advice column. Have a question? Send it to Athena and Elizabeth here. (It’s anonymous!)

Dear Pay Dirt,

When my husband died two years ago, I was surprised to find out that his parents were listed as the beneficiaries on his bank accounts. I think it was an oversight because I was the beneficiary for his 401K and life insurance. There was a substantial amount of money in those accounts. His parents have access to that money and say they want to save it for my son. I agree with that, but I’d like to have the money to put into an account that I control so that nothing can happen to it upon their death. They have another son who would likely be the executor of their estate, and he doesn’t speak to me. I’ve asked them about it, but they won’t discuss the issue. For the time being, I’ve dropped the issue, but I want to bring it up again. What would be the best way to address this?

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—Show Me the Money

Dear Show Me the Money,

I’m so sorry for the loss of your husband. Losing someone is hard enough, let alone adding money conflicts on top of that.

I would ask your husband’s parents if they would set up a guardianship account for your son. When money is placed into a guardianship account, it is understood that the money belongs to the beneficiary—in this case, your son. They can manage the money on your son’s behalf, and once he turns 18, he will be in charge and can remove their access. They can also have you listed on the account to take over in case something should happen to them before your son is of age. This would ensure they feel comfortable the money is being handled as intended and you would feel comfortable knowing the money would not go to their other son. If they still say no, I would do your best to move on and continue to maintain a relationship with them for your son’s sake. Good luck with this sticky situation.

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Dear Pay Dirt,

My fiancé and I plan to get married next year. We both come from divorced parents, and every adult in my family has been divorced at least once. I hadn’t always planned on getting married, in part because of the financial entanglements. But it’s important to my fiancé, and I do like the idea of some of the legal benefits. But I’ve always known if I ever did get married, I would want a prenup, even if my partner-to-be was the loaded one.

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My wonderful, romantic fiancé is on board with the prenup but isn’t thrilled. Prenups are always portrayed negatively in movies, and his sister hinted this meant I wasn’t committed to our marriage. And, frankly, it’s not fun planning for a possible split. I adamantly don’t think that will ever happen, but given the stats within my own family, I’m not willing to float along without a plan (my cousin recently lost a fully paid-off house in her divorce, which she owned before she met her spouse).

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The awkward bit is that I do come from an upper-middle-class family and make almost twice what my fiancé makes. We just jointly bought a used car and hope to buy a house in a couple years, but only I will be able to put money down (he’ll help with the mortgage). Right now, we contribute equally to expenses, but I’m working on convincing him it should be percentage-based, because I make so much more. We plan on having kids in a couple years too, and depending on his work situation, he may be a stay-at-home parent for a bit. His overall attitude toward money is that he wants to contribute and doesn’t ever want to be a burden. It’s all great now, but if we do feel we can’t be together anymore in 10 years, I don’t want to be some jerk who used him for five years of “free” child care and then tries to leave him high and dry because we had a prenup. Is there an equitable and ethical way to plan a prenup like this?

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—A Joining of Hearts (but Not Bank Accounts)

Dear A Joining of Hearts,

Eep! Everyone in your family is divorced and losing their assets? No wonder you don’t want to get married without a prenup! Prenups get a bad rap and can seem superstitious when they make you feel like you’re “planning for a divorce.” That being said, the only people who need to know about a prenup is you and your future spouse (and your lawyers). Families will always have something to say, and at the end of the day, this does not concern them, so stop sharing.

As for being ethical and fair while drawing up a prenup, I would suggest meeting with a divorce attorney, or at least someone who specializes in family law. I know it sounds backward, but stay with me for a second. All day long divorce attorneys deal with prenups and what happens if you don’t have one. They would be best as an outside party to help establish what’s fair and how you both can be taken care of should you decide to part ways in the future. Usually premarital assets are off the table (for example, your cousin’s house), and they can help establish alimony if one of you should earn more than the other or take time off to help with child care. This prenup isn’t just to protect you, it’s to protect him as well, and an outside party can help him see that perhaps better than you. Even if you ultimately decide not to go this route, meeting with an attorney to find out what happens in a worst-case scenario seems like it’d be well worth your money for some peace of mind. And maybe it’ll make it a bit easier to talk money with your soon-to-be hubby, too.

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Dear Pay Dirt,

How do you create a budget and stick to it when you have a job with variable income every month and essentially no savings? We are a family of four with two small-ish children (the older child is in the local public school and the younger is in preschool, which is expensive). We also have significant student loan debt and some credit card debt. I have a job that pays me essentially the same amount at regular intervals each month. My partner works for himself and is paid half up front and half when his project is delivered—this could be two weeks or two months, depending on the client and the project.

Currently, we live paycheck to paycheck if he is paid regularly, which almost never happens. We are trying to pay down our debt, and we know how much we need every month to pay our bills and put a tiny amount away, but all that gets blown out of the water if a client doesn’t pay upon delivery. Then things go on the credit card, and we end up going deeper into debt. Most budget articles I read are for people who get paid a regular amount at regularly scheduled intervals. Is there any advice you can give us to help a less reliable situation?

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—Gig Budgeting

Dear Gig Budgeting,

Half the battle of budgeting is knowing what expenses you have and the amount of money you need to make a dent in your financial situation. It sounds like you have a decent understanding of that part. Now we need to figure out how to increase your cash flow to cover times when your variable income drops.

I think your best bet would be to focus on building up a cash reserve. When you have bills that are due, you can pull from that stash, instead of going into the red every time a client makes a late payment. Then you can replace that money as the payments arrive, aiming to have a relatively consistent amount. (I myself am working to build one of $1,000 to help with my freelancing endeavors.) I realize that’s a bit like telling you to climb Everest when you live at sea level—far easier said than done—but it’s your best bet in this situation. So you’ll want to cut expenses, increase your income, or both—and in small bites.

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Make sure all of your spending is logged into one place so you know exactly where your money goes. Tools such as Mint and Personal Capital are great ways to do this. When cutting expenses, look into cashback apps such as Capital One Rewards (you don’t need to be a Capital One member), Ibotta, Fetch, or Rakuten. These tools allow you collect cash back when spending on items such as groceries or household items. They might not seem like much—10 cents here, a dollar there—but every bit counts. Cut back on subscriptions (yes, even Netflix), and try to just stick to necessities for a while. If making more seems easier, focus on doing small, one-time gigs, or if you have the time, focus on finding a consistent one. This list has over 150 ways to earn additional income outside of your main job. Utilize your network, and let them know you are taking on additional work as well. You never know when someone has a gig you may be a perfect fit for.

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Dear Pay Dirt,

My husband and I purchased a property for next to nothing and upgraded it with intentions to flip it. During our renovations, a friend was in a bad situation with the house she was renting, so we agreed to let her rent our property. Before she moved in, we told her that we do not want to be landlords, and she hinted that she would like to buy the property from us down the road.

Two years later, she says that she needs to file for bankruptcy and cannot buy the house. We are not making any money off of this arrangement. She states she can only pay a certain amount for rent, but we know we should be charging much more. At the end of the day, she is the only one benefiting from this arrangement.

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Now our kids are looking to move out and want to rent the house from us. Since they are family, we should be able to claim owner-occupied for the property taxes and they are able and willing to pay more rent. The problem is our renter is avoiding having a conversation about the next move. We offered her a rent-to-own deal, but she says she is not ready to do that. She just sent a message to us stating how her and her son feel safe there and do not want to leave. What should my next move be?

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—Never Wanted to Be a Landlord

Dear Never Wanted to Be a Landlord,

Mixing friendships with money is hard, and you never know the outcome, but I’m hopeful you can take care of this situation and save the friendship. You have been patient and given her two years of a very accommodating rental situation with her son. She sounds like she is getting her financial situation together, but that doesn’t mean you and your husband need to continue this setup indefinitely. I think you have two options.

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Option 1: If you would like her to stay and she does not have a lease, you need to draw one up. This is to protect you as a landlord and allows you to set the terms for the rental. A lease agreement should include a start date and an ending one, the terms and conditions of payment and other information you think is important, like how a failure to pay will end in eviction. If she cannot agree to the terms of the new arrangement, you’ll likely want to consult an attorney, as tenant law varies greatly between states and renters without leases still have specific rights.

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Option 2: You offer her “cash for keys,” where you give her a set amount of money and a certain number of days to move out. (Make sure you do this in writing.) If she refuses or chooses to not discuss this further, that’s fine, but it’s still your property, and she can only get so far by avoiding this conversation. At that point, you can look into evicting her and letting your children take over the property, but you’ll absolutely want to read up on local laws and consult an an attorney before pursuing this.

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In addition, you mentioned that you do not want to be a landlord, so I would look into selling the house as soon as you’re able to do so. I suspect that being a landlord to your children would be just as hard—if not harder—than having a friend as a tenant, so your best bet is likely to just clear the house from your name when you can.

—Athena

More Advice From Slate

My 16-year-old daughter spent the summer volunteering at a camp for low-income students in our area. She seemed to have a great experience, but she returned home each evening almost like a different person, and her personality has undergone a major shift. She used to be happy and bubbly. Now, she’s jaded and cynical, criticizing us and our privilege constantly. Activities that used to bring our family joy (like going out to dinner together, or spending time at the beach) are now ruined by her sour mood and negative commentary. She says we are frittering away our money while real people out there need it much more than we do.

Here’s the catch: I grew up extremely low-income and worked like a dog to make it into the middle class. I do not want to be lectured by my daughter, who’s never wanted for anything in her life, about wealth and privilege. I didn’t work this hard to provide for someone who constantly throws it in my face. Where do we go from here?

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