Dear Penny: Am I Selfish if I Don't Split My Inheritance With My Husband?

Dear Penny,

I inherited a large amount of money and half of a house from a maternal relative. There are several bank accounts, which I intend to draw an income from until I fully retire and collect Social Security and my pensions. Another account will pay for medical insurance for my husband and myself once I leave my job. 

I told my husband that, should I die, the house will go to my brothers and stay in my maternal family. I also told him that the beneficiaries set up on the bank accounts include him, two of my brothers, and my 86-year-old mother. 

He then said that if he were getting an inheritance, he would be sharing that with me and not me and his siblings and mother. But his parents signed over their house to his sister, and he was OK with that, so he is not getting any inheritance from his parents. 

I told him that unless I die in the next five years, he has and will share a major portion of the money. If I don't die, I will be drawing an income from the bank accounts, which will go into other joint accounts, and paying for medical insurance for the two of us. 

I also just paid off the last one-third of our mortgage with a chunk of the inheritance. Mind you, I paid for half of the two-thirds of the house that has already been paid off. I thought that was pretty selfish of him to say. Am I wrong?

-R.

Dear R.,

Two reasonable people can disagree on whether you should split an inheritance with a spouse. So I don't think either of you is necessarily in the wrong here.

Of course, it's easy for your husband to say he'd split his non-existent inheritance with you. But all 50 states recognize inheritances as separate property, which means it belongs solely to the spouse who received the gift.

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It probably makes sense to keep the house you're inheriting in the family, particularly if it has sentimental value. I'm curious about motivation for splitting your inherited bank accounts four ways, as you're planning. Are you trying to balance your husband's needs with the needs of the rest of your family? Or is this in part about keeping score? Would your decision change if your husband was in line to receive an inheritance that you could potentially share?

I get why you're frustrated about your husband's reaction, though, especially since he's already benefited from your inheritance. That said, keep in mind that it's rare for each spouse to contribute exactly 50% to the family finances. It's key to recognize each other as equals, even when one person brings more money to the marriage.

Have a talk with your husband where you agree to disagree. Ask him if there are any specific worries he has with your current plans. He doesn't have to be happy about only getting part of your inheritance if he outlives you. But at the very least, I think each spouse ought to do their best to ensure the other feels financially secure.

Consider things from your husband's perspective: How much hardship would it cause him in the worst-case scenario that you died tomorrow? Would he be able to afford healthcare? Would he have to start taking Social Security earlier than he planned, thus accepting a reduced benefit for life?

If your premature death would leave him struggling, you might want to reconsider how you plan to split the bank accounts, especially if your other family members aren't hurting for money. Another option may be to use some of your inheritance money to buy life insurance for yourself and make your husband the beneficiary.

Even if his feelings are more about the principle than actual needs, you both might benefit from sitting down with a financial planner. They can give you projections to estimate how prepared you are for various scenarios, such as if you died relatively young while your husband lives into old age. Plus, whenever you receive a significant inheritance, it's always a good idea to meet with a financial pro to make sure you're using that money in a way that's appropriate for your goals.

Maybe you won't make any changes as a result. But maybe your husband will be more accepting of your decision if he sees he's in a good financial position, with or without your inheritance.

Once you finally get your finances in order, you want to keep them that way. Here are several moves to make now.

Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected].

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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