Pay Dirt is Slate’s money advice column. Have a question? Send it to Athena and Elizabeth here. (It’s anonymous!)
Dear Pay Dirt,
My in-laws have always been generous when it comes to money, but along with the generosity often comes the expectation of secrecy, which can sometimes feel like things are not entirely on the up-and-up. (“We’ll pay for X, just don’t tell anyone” or “I put these accounts in your name, so claim them in your taxes then I’ll reimburse you what you owe.”) They’re now getting on in years and have told us that my partner and his siblings jointly “own” all of their assets, including the fact that their names are on the deed to their home. We have no paperwork to this effect.
They have offered vague instructions at inopportune times (while I’m doing dishes after a party, say) about which “gal at the bank” to talk to when the time comes, and how we are to not tell anyone about their deaths until we’re in possession of these mysterious papers. I come from a family with a much more open attitude about money and arrangements related to end-of-life conversations, so I find this cloak-and-dagger vibe highly disturbing. At the very least, I feel we need to know how to prepare for the financial end of this oddness—I understand the lifelong issues of secrecy are far outside my control! Are practices like this more commonplace than I’m aware of in estate planning? What questions should I ask or what financial impacts could we expect in a situation like this?
—Suspicious Mind
Dear Suspicious Mind,
There is a lot to unpack here, and you have every right to be curious about what exactly is going on. I reached out to Atiya S. Brown, CPA, CA from The Savvy Accountant to help get insight into your situation.
First and foremost, be aware of the implications of letting them open these accounts in your name. “Opening accounts in your name and having you claim the taxes on your return so they don’t are considered sheltering their assets,” Brown said. “This is a red flag and fraudulent to report things on your tax return that are not yours. It’s fraud.”
Every state has different real estate laws, so it’s important to contact someone who practices in your state, but your husband most likely would know if he was truly on the deed to their home already. To add someone to a deed, they would have had to follow the elements of a valid deed transfer. In a deed transfer, a grantor (his parents) would need to have the grantee (your husband and his siblings) have the proper knowledge of being added and then accept the deed. This would typically be done in front of a lawyer with a notary present. “They most likely have not done this and, instead, have written in the will instructions on how to divide the assets upon their death,” Brown said.
Now let’s dig into the financial impacts that could possibly occur when inheriting the estate. If your husband and siblings have been gifted the property before death, this asset has been transferred at a cost basis. This means that the property will be worth whatever his parents paid for it initially and not the value of the property at the time of death, which will come into play if they decide to sell. If your husband inherits the property after their death, it will likely be on a step-up basis, which tends to reduce taxes (known as capital gains tax) owed if the property is sold.
Brown admits that the only way to honestly know what is going on with the estate is to have a direct conversation with them. If they refuse, just be prepared for the possibility of entering probate once they pass. Good luck.
Dear Pay Dirt,
A friend of mine’s house burned down recently. They lost almost everything, save for a few things that were in the garage. They just had a baby a few months ago and it’s been devastating. Luckily, they have a ton of people in their lives who have stepped up to help. Our mutual friends started a thread list to help buy them new things. Everybody has been really active, except me. I am guessing I am her poorest friend. I have been financially unstable for years and have just started getting close to stable. I’ve been able to start saving, but I don’t even have three months of bills saved up for my emergency fund and that is my priority.
My biggest issue is that this friend has a lot of money. Both she and her husband make six figures and they were gifted enough money at their wedding to buy a house outright. They bought a fixer-upper and told me they over-insured it to the amount they hope the house is valued when it’s finished. I know they have the money to buy every single thing they need. I’ve sent them a couple of meals and I don’t mind giving my time, but I’m not going to spend a couple hundred dollars on a chair when I know they have the money to buy it. I’m getting a bit of pressure from my other friends to chip in monetarily. They all know my financial situation, but as one friend put it, “This is what you do for friends.” Meanwhile, none of them had done anything to help me while I was struggling, besides maybe paying for a meal every now and then. I really want to push back on this, but I feel like I don’t know how. I feel like they are just going to keep telling me that this situation isn’t about me and that I just need to start helping. What should I do?
—Friendly Fire
Dear Friendly Fire,
It’s true friends help each other during hard times, but you can help in ways other than purchasing random items off of an Amazon wishlist. I understand the built-up resentment you’re feeling and how this may also be affecting your feelings about the overall situation. While it’s not the time to hash all of that out with the friend group (that can be done later), you can still say no in a firm yet polite way.
Next time they push back, say, “Hey, I can’t help out financially, but I’d be happy to help in other ways, such as helping them unpack when they find a new place. Thanks for understanding.” Hopefully, your friends will understand your financial limits and take you up on your manpower instead. If they keep pushing, don’t engage.
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Dear Pay Dirt,
I’m a woman in my mid-30s who makes a good living with plenty of savings and no debt aside from my very reasonable mortgage. I have a few hobbies like cooking and gardening, but I would say my main hobby is playing video games. I’m not a pro gamer by any means, but it is my primary way to destress and have fun on my own time. I want to buy the latest generation of gaming console, which typically runs about $500. I have credit card points saved up and a couple of gift cards that would bring down the final cost by about half. But for some reason, I can’t pull the trigger!
To be honest, I usually have a hard time spending money on myself for things that are purely deemed “fun.” I have been this way my whole life. I feel like I have to justify every purchase and if the reason isn’t good enough then I can’t spend the money. How can I learn to let go and spend the money that I have on the things that I want?
—Justify My PS5
Dear Justify My PS5,
Money is a tool that is used to make life more life manageable, but it’s also a tool that should bring joy to your life. If splurging on proper equipment will make your hobby more exciting and special to you, then you should do it.
I suggest making it a point to put money aside designated for fun, just like you would do any other savings goal. Take $60 in cash to use for your general hobbies, and then whatever is left, place it in an envelope earmarked for gaming equipment. You could also set up an automatic transfer of $20 (or more!) to a high-yield savings account (HYSA) designated for gaming. Once you’ve saved enough for the purchases you want to make, transfer the money back to your checking account and buy it without guilt!
Gaming can be an expensive hobby, but you don’t always have to pay full price. Along with gift cards and credit card points, shop sales such as Amazon Prime Day and Black Friday. Check out your local Facebook Marketplace OfferUp. I’ve seen a lot of brand-new items on there, including gaming equipment, that people need to sell for fast cash. Try to snag your games when the platform of your choice has a flash sale. This is how I’ve been able to purchase all of the add-on packs for Sims 4 for 50 percent off. Have fun!
—Athena
Classic Prudie
My fiancé is dead set on two women he was formerly in love with attending our wedding—one of whom he confessed he still had feelings for a month before he proposed. He was infatuated with them for a very long time.
