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Dear Penny: My Husband Squanders Money. Do I Leave Everything to My Kids?

Senior Editor

April 9, 2023

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Dear Penny,

I am 62 years old. For most of my adult life, I lived in poverty and was a single parent. I became a nurse at age 47 and bought a house. I had a fiancé who got me into debt that was $16,000 when we split up, and I paid that off over time.

When my current husband and I got together, “we” bought an expensive motorcycle, four-wheelers, guns, an extra car and other things along those lines until I finally put my foot down. I make three times what he does. My goal is to pay my house off so I can retire in the next few years.

My husband has always been bad with money. He even sold a previous property he owned before we met and made a large sum of money, but quit his job, traveled and bought things for about a year until all the money was gone. He has had a lifetime of fun and extras. I, on the other hand, struggled horribly.

I am getting ready to make a will. I have a pension. If I should pass away first, my husband will have awesome health insurance taken out of the pension and get some money monthly, but not a lot of extra money. I don’t want to leave my/our house to my husband. I believe he will sell it and spend the money traveling or reverse mortgage it and spend the money unwisely. I want to leave it to my children and, possibly, part of it to his.

I want to leave him a life estate in the house so he can live there forever, but he would need to pay for the taxes and insurance and keep the house up. He is very handy, and it would not be a problem for him to do the upkeep on the house. He has many friends who would help him if needed. His mother asked what would happen to the house once. When I told her this, she had a fit. She feels I should just leave everything to him to do as he wishes.

I also have a father who is well off. When he passes, I will probably inherit between $200,000 to $400,000 that I fully intend to keep separate, although I will spend some on my husband, I am sure. I will not leave any of it to him, but only for my children. I don’t want my husband to have hurt feelings, but I want to be able to leave my children in a better place.

He is not worried about leaving anything to his children, and I know he would spend every cent on himself. My husband has put a lot of work into our house, not alone, but alongside me. That is why I want to include his sons in the house inheritance. Do you think this sounds reasonable?

-T.

Dear T.,

Maybe your husband will be hurt by your decision, but I wouldn’t waste too much time feeling sorry for him. He’s reaped the benefits of your success. If you die first, he’ll still be left with a house, health insurance and modest income from your pension.

One person whose opinion is irrelevant: your mother-in-law. If she thinks your husband is entitled to an inheritance, she can do that with her own estate plan.

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Of course, you need to consult with an estate-planning attorney. But your plan to create a life estate sounds solid. With a life estate, even if you died first, your husband could live in your home until he dies. Upon his death, the home would automatically transfer to your heirs — known as the remaindermen — and bypass probate.

It sounds like you’ve successfully navigated financial conflicts in the past if you put a stop to your husband’s habit of buying expensive toys. But you don’t necessarily need to make this about his reckless spending. There’s nothing wrong with your husband wanting to spend any money he has during his lifetime, but your priority is leaving a legacy for your children (and possibly his). Using a life estate for your home and keeping your inheritance separate is the best way to accomplish this.

But if you’re really worried your husband will be hurt, focus on the practical considerations. Even though your husband would be left with great health insurance should you die first, most private health insurers don’t cover long-term care. Neither does Medicare. Someone turning 65 today has about a 70% chance of requiring long-term care, and many will need Medicaid to pay for it. A life estate is a common tool people use to protect their home from Medicaid estate recovery when they die.

You lifted yourself out of poverty through your own grit. You shouldn’t feel guilty about your plan. It’s totally reasonable to leave your hard-earned assets to your children instead of to a husband who would likely squander everything you worked for.

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