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My husband, 67, wants to leave his $2 million estate and home to his disabled daughter and his sister’s kids. Can he do that? I could outlive them

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Dear Moneyist,

My husband is 67 years old with an estate worth $2 million. His first wife died. He has a severely handicapped daughter and we signed a prenup when we married three years ago.

He has a sister who is a year older than I am. I am 64 years old with two adult children from a previous marriage that ended in divorce. His sister has a son and daughter, and she has two granddaughters.

My husband wants to leave our house, which he owns and bought before we married, for as long as I live. He does not want my children to inherit it when I die. He wants it to go to his sister’s family.

The Moneyist: I took care of everything after my father died. My aunt, who claims she’s entitled to $27,000 in his bank account, says I only care about his money

Can he prevent my children from inheriting property he wills to me? The bulk of his estate is going to his daughter’s trust and sister anyway. It’s possible I may outlive his sister and daughter.

I know I’m the newbie here, but it just seems a little harsh that I can only have the house to live in and not sell it, if I need the money for future medical expenses.

He’s very controlling of his money. What do you think?

The New Wife With a Prenup

Dear New Wife,

Maintaining control of his money and/or managing his money is distinctly different from being controlling about money. It’s his money and it’s up to your husband to do with it as he sees fit. That includes taking care of his daughter financially, in the event that he predeceases her. Giving you a “life estate” or “right of residence” in his last will and testament is more than generous. You don’t have to worry about never having a place to live.

It’s time to right-size your expectations. You’ve been married to this man for three years. He is retired, I presume, and has lived a long and healthy life. As you said, you were not a couple when he earned most of this money and in a community-property state you are not entitled to any money that was earned before you married, even if you divorced. In a separate property state, I can’t see a judge awarding you his home and 50% of his assets.

You can look into a health savings account (HSA) to help save money for retirement, especially health-care expenses in your retirement. You are eligible if you have a high-deductible insurance plan, but it also allows you to shelter up to $3,550 (for an individual) or $7,100 (for a family) in pretax money, which is withheld by your employer (or set aside by you, especially if you buy your own health insurance) and placed in an HSA each year. An estate planner can help you explore other options.

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In the meantime, by allowing you to live in his house for the remainder of your days does not mean you own the property. That is a win for someone you’ve only been married to for three years, especially given that you are both in your 60s. If you sold the house, where might that leave his severely disabled daughter if she were to need full-time care or future medical assistance? I see no reason why your children should be part of his estate planning.

His daughter is his No. 1 priority, and that is exactly how it should be. One of the biggest post-retirement expenses has been removed from your life, although you may have to pay for maintenance for upkeep and taxes on the property, depending on your husband’s will. That’s a small price to pay for his generosity. You have at least five more years of work ahead of you. You will have to make them count. I certainly hope you enjoy them.

The Moneyist: ‘I’m lucky to get by on $75,000 a year’: The $600 stimulus program doesn’t sound reasonable to me. Why am I left out?

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com

Want to read more?Follow Quentin Fottrell on Twitterand read more of his columns here

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‘I could live on my Social Security and still save money’: This 66-year-old left Chicago for ‘calming’ Costa Rica — where he now plans to live indefinitely

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Editor’s note: This article was first published in September 2019.

A school break changed 66-year-old Martin Farber’s life forever.

In 2007, his daughter — who at the time was attending Illinois State University — decided she wanted to spend a college holiday volunteering in Costa Rica and staying with a local family, he explains. She came home raving about the experience, so, in 2008, Farber — who at the time was living in Evanston, Ill., just outside Chicago, and selling cars — took his first trip there.

“It was a big surprise to me — bumpy roads, dogs barking in the streets,” he says. “I wasn’t enamored at first.”

But as his daughter began traveling there more and eventually moved there for a year, he took additional trips to Costa Rica. It quickly grew on him — in particular, the people. “The Costa Rican people are warm, open and friendly. I felt less invisible in a strange country in a strange town where I didn’t speak the language than I did in Evanston.”

And the more time he spent there, the more it impacted him: “On one of my trips there, I thought: My daughter’s life makes more sense than mine,” he says. “There was nothing wrong with my life, but I felt that my life was out of context with who I’d become. … I would have bills and make money to pay them, but that had ceased to be satisfying,” he recalls. “I knew I needed to change my life — there was no more joy in what I was doing.”

What’s more, when he’d return from his Costa Rica trips, people noticed. “I would come back, and my friends and therapist would say: You seem better after you go,” he says with a laugh.

A view from the hot springs near Martin Farber’s home in Costa Rica.


Martin Farber

So in 2014, he packed up and moved to Orosi — a picturesque, lush small town with waterfalls and hot springs a little over an hour’s drive from San Jose — promising himself he’d stay for two years. It’s been five, and he now plans to stay in Costa Rica indefinitely. (Though Farber notes that, to him, “it’s not a retirement; it’s a chance to lead a new and different life.”)

Here’s what his life is like, from costs to health care to residency to everyday life:

The cost: While many expats spend way more living in Costa Rica, Farber says: “I could live on my Social Security and still save money.” He says “a person can live on $1,200 per month, two people on $2,000.” The key, he says, is to live more like he does and as the Costa Ricans do — in a modest home, eating local food and purchasing local goods.

Indeed, Farber himself spends just $300 a month for rent (he rents a home from a friend who moved recently and gave him a good deal), roughly $225 a month on groceries and just $50 a month total on water and electricity (the temperate climate in Orosi means you rarely need heat or air conditioning). The veteran Volkswagen
VOW,
+0.96%

 
VLKAF,
+0.98%

salesman saves money by not owning a car (those over 65 ride municipal buses for free), which can be a significant expense in Costa Rica; for his cellphone, “I pay as I go … roughly $10 may last me a couple weeks or more,” he says, adding that “many people handle there their cellphones this way. You can get them recharged anywhere.”

His major expense is travel: He goes back to the U.S. to visit his mother in Florida several times a year and lately has spent part of the summer in Chicago helping out a friend with a dealership there. He also spends a good amount of money on health care. He says that while flights can be had for as little as $350 roundtrip during offseasons, the cost can be much higher the rest of the year.

In the saddle.


Martin Farber

Health care: Farber, who has permanent resident status in Costa Rica, says he pays about $90 per month to participate in the country’s health-care system — adding that the health care he’s received has been very good. (A 2018 study of health-care quality and access in more than 190 nations ranked Costa Rica No. 62.)

When he developed a detached retina, though, he paid for the procedure out of pocket so that he didn’t have to wait for the required surgery, he says — adding that the entire procedure cost him about $5,000. “I would have had to have waited four days,” he says, if he had not paid to expedite matters. “That might have been fine, but it might not.” And he adds that the quality of care depends on where you get it in the country.

Lifestyle: Though Farber says that he “moved here with no goals and no agenda,” he’s found plenty to do. “I take Spanish lessons two days a week for two hours a day. It’s been great. I never thought I would acquire a usable language in my 60s,” he says. He also rides his bike all around the area, does some writing and belongs to a community group that undertakes projects to improve the area.

And he often simply takes in nature, which he says has been an essential part of why he feels calmer and more relaxed in Costa Rica than in the U.S. “I live at 3,000 feet but in a valley surrounded by coffee fields and lime trees and water. At night, if I open the windows, I can hear the river rushing by,” he says. “It is very calming … hundreds of trees everywhere … you know the Earth is alive.”

The historic Iglesia de San José de Orosi.


iStock

Cons: “I don’t want to overglorify. It’s not without its problems,” Farber says of Costa Rica. “There are social problems and downsides.” He notes that crime and petty theft can be a problem (“I am cautious,” he says of his approach) and seem to have increased since he moved there, and adds that he misses out on some cultural things because of where he lives. And, he says with a laugh, “I can’t order Thai food at 9 at night.” But, he adds: “These are trade-offs — in the afternoon, I get to walk in the coffee fields and see flocks of parrots.”

Residency: To qualify for Costa Rica’s pensionado visa, expats must prove that they have a pension of at least $1,000 coming in each month. (Here are the details of that program.) Once you have lived in Costa Rica for three years, you can apply for permanent residency. Farber used a lawyer to help him figure out the ins and outs of residency options; his entire path to permanent residency took about a year, he says.

The bottom line: “After five years I am still amazed and surprised that I made the decision to lead a life I never thought I would,” he says. And while he may not stay in Orosi forever — “the town doesn’t have an ambulance, [and] I don’t know what it will be like to be 80 there,” he says — he does plan to stay in Costa Rica in no small part because of the people and sense of community. “I have the feeling that life is good here,” he says. “It’s hard sometimes, but we are all in it together.”



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