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,
I am over 60, single with no children, and just retired. I am now considering my will. I have ten nieces and nephews, aged 43 to 23. I have cordial relations with all of them, and close relations with five.
One of them, “Kate,” has both physical and mental problems. She is in her late 20s and has been self-supporting since graduating college, but her parents and siblings are concerned that she may not be able to support herself until retirement. She does everything she possibly can to maintain her health, but periodically she has to be hospitalized for treatment. I would like to make sure to leave enough money for her to be able to live comfortably if she can no longer support herself. I would like to leave the bulk of my estate to charity, with token gifts to all my nieces and nephews, except for Kate, who (probably—or maybe) will really need the money. I don’t want her cousins (or their parents) resenting her for getting more than they received. (All cousins are close.)
My total assets are currently about $2.5 million, from which I am withdrawing $60,000 per year (3 percent of my 401(k).). I receive another $60,000 in a taxable pension. I am waiting until age 70 to file for Social Security. My benefit is estimated to be $3,200/month. I’m wondering if buying a term life insurance policy each year and naming Kate the beneficiary would be a way of providing for her without letting the rest of the family know. Do you have any other suggestions?
—She Needs It More
Dear She Needs It More,
That is certainly a way to leave money for Kate without alerting the rest of the family. However, there are a few factors at play in this situation. I spoke with licensed financial coach Natasha Triplett, for more insight into your situation.
Triplett suggests that instead of opening multiple policies to provide for Kate, you stick to one policy that offers the amount of coverage you need. While you can have multiple life insurance policies, it can get confusing fast. “Some companies limit how many other life insurance policies you can have. They can also offer a lower limit depending on the other coverage you’ve already purchased,” Triplett said. If you want Kate truly taken care of, get a policy that covers everything you’re looking for instead of multiple ones with different limits.
Triplett also advises you to seek an estate lawyer in your state of residence. If Kate has mental health issues that prevent her from taking care of herself, she may have issues taking care of the funds you leave her. An estate attorney can help you figure out what type of trust you can open for Kate to help her manage the money so it can last as long as possible once it’s in her hands. “Plans need to be selected with an estate attorney because laws differ in every state. This way, you can make sure Kate is properly looked after,” Triplett added.
As for the rest of your estate, you can divide the amounts as you see fit. If everyone is as close as you say they are, they might be OK with Kate getting a larger amount. So, I’d consider having a conversation about this, at least with her parents. I completely understand not wanting to cause resentment—but you might be surprised.
Dear Pay Dirt,
I (27F) met my boyfriend, “E” (30M), almost four years ago. He is smart, hardworking, caring, supportive, funny, and very attractive. He owns a house, so when my apartment lease ended in 2021, I moved into “his house,” and we’ve made it “our home.” He gets along with my family and friends, takes care of my car, and makes dinner most nights. He’s the guy I want to spend my life with, except for the tiny voice in the back of my mind wondering if I’m compromising my dreams to fit his.
We had very different upbringings. My upper middle-class parents paid my college tuition and could help me financially if needed, giving me a safety net to dream about #vanlife or joining the Peace Corps. E has been supporting himself entirely since he was 19, working 60-70 hour weeks to buy a house as an investment for the future. While he’s willing to go on vacation with me, he’d prefer to spend his limited time and money working on house projects. E is happy to be my cheerleader if I want to solo-adventure, so why am I doubting whether we should get married and live happily ever after?
—Confused in Connecticut
Dear Confused in Connecticut,
It sounds like you might be bored of domestic bliss, which is leading you to doubt your life right now. It also sounds like you’re trying to use his upbringing against him so you can find an easy way out. Neither of you had a say in who your parents are, so it’s unfair. Especially since it doesn’t sound like he’s exactly crushing your dreams, instead he’s encouraging them. The reality is… a lot of people wouldn’t live in a van with their partner. They also might not want to volunteer in another country for two years and live at the poverty line. I wouldn’t.
Take time to sit with yourself and think about what you really want in a partner and in life. Relationships are about compromise and it sounds like he’s willing to. He’s happy to vacation and cheer you on while you travel around the globe. So, try it out. Buy or rent an airstream and start a travel blog. Find fun ways for you both to meet up on the road and then take time off to come home.
If you find that you don’t want to make this kind of compromise, then you might want to let him go. You might regret that decision down the line, and that’s something you’ll have to make peace with. You deserve to be happy in a way that’s true to you. And so does he. Life is short, and sometimes, you take risks in the hope that the benefits weigh out in the end. I hope that for you, dear reader. Good luck finding your happiness.
Dear Pay Dirt,
I am in my early 60s and was grandfathered into my employer’s pension plan over 20 years ago. After age 65, I am due $1,500 every month until I die, and if I predecease my husband, he will get the same until he dies. My brother told me they may offer a lump sum payment when I retire, and he’s encouraging me to take it. My hesitation, if offered, is that the women in my extended family have all suffered from various forms of dementia by the age of 80. If I take the lump sum, then it will go into my IRA, and I’ve seen those family members use up their IRAs for their care, leaving their husbands without any money except their social security, minimal IRAs, and life insurance. If I end up with this terrible disease, I’d like my husband to have as much money as possible for his late-in-life care. I can’t see the future, but is there any way to weigh this decision to give us the best outcome as a couple? We have always had middle-class incomes, so his IRA isn’t that great either.
—I Wish I Had a Crystal Ball
Dear Crystal Ball,
I would go ahead and keep your monthly pension payout. There are a few benefits to withdrawing the cash as a lump sum, but a few factors stick out to me about your situation.
Medical issues such as dementia require long-term care, and eventually, the time may come when you can no longer live at home. Assisted living is extremely expensive, and for Medicaid to kick in, you must have less than $2,000 in assets for an individual ($3,000 for a couple). This means that if you take out a lump sum and need assisted living care, you’ll drain your assets. If you go this route, your husband will be left with nothing in retirement except his Social Security and whatever he scraped together in his IRA. Since you have a family history of this, you’re wise to be thinking ahead—especially in considering your husband.
There is also always the risk that even if you don’t get a dementia diagnosis, you can outlive the pension amount you’ve cashed out. Even if you didn’t outline the amount before you passed away, your husband might, which leaves him again with less security. While the $1,500 might not seem like a lot, it will be as you both get older and have less income with limited work options. You’ll be grateful to have that regular source of cash. Tell your brother you appreciate him, but for now, you’ll be keeping the monthly pension payout.
Dear Pay Dirt,
For my birthday three months ago, my siblings gifted my partner and me two tickets to see a moderately-popular musical act. The tickets were about $50 each, so not cheap but not crazy expensive. The tickets were for a Wednesday night when both my partner and I had to wake up early for work the next morning. Had we chosen the tickets ourselves, we would not have chosen a weeknight event, but nevertheless, we graciously accepted and planned to attend.
Well, the few days leading up to the concert ended up being pretty rough for us. My partner had a huge work project blow up in their face and I had a series of unpleasant interactions with a co-worker. All we wanted to do was stay home and relax. In the end, my partner stayed home while I went solo, stayed for about six songs, then left. I told my siblings (truthfully) that I liked the concert and was grateful for the tickets.
My siblings found out through a mutual friend that my partner didn’t attend. They are now upset that they wasted their money and that I was untruthful in my portrayal of our attendance (even though I never outright said my partner went). My perspective is that when you gift someone a one-night experience with no flexibility in when that night is, you can’t be offended if that night doesn’t work for the gift recipient—and that a gift isn’t a gift if it has so many emotional strings attached. My siblings are being frosty towards me, and say they’re hurt that we didn’t put their gift to “good use.” My partner just feels guilty for how this all went down. I wonder if I should just pay back the ticket. Who’s in the right here?
Dear Concert Conundrum,
The number one rule for gift-giving is that whenever you give a gift, it’s for the other person, not yourself. You give without expecting something back in return except maybe a thank you. So, yes, your siblings are being petty and are stretching this situation to make you feel worse.
If you haven’t already, a quick explanation of what happened could suffice. It can be brief and straight to the point. Maybe, “Hey, I’m sorry you feel we didn’t enjoy your gift. We ended up having some issues at work come up, so we couldn’t make the most of it. We appreciate your gift and the thought behind it.” This acknowledges their hurt even if you can’t understand or agree with their reasoning.
If they are still being frosty, suggest that in the future, gifts be limited. Explain that the last thing you’d ever want to do is hurt them, and for now, it may be best to give gift-giving a break. They should get over it. If not, there are probably deeper matters to discuss between all of you.
My sister has never had a romantic relationship that ended well. Most recently I objected to her dating my fiancée’s brother, but she told me it was none of my business. A month before my wedding, they broke up spectacularly. I really don’t care who cheated or who got drunk with whom—I am tired of it spilling over into my life.