Talking about money is hard. Talking about money and death is even harder. Worse yet, if you are in a long-term relationship with someone, is avoiding the conversation until it is to late. Take a deep breath and start the conversation, as it will protect you both. Here are some discussion starters, pick one to break the ice and the rest will follow.
- No matter how high or low, you both have a standard of living to which you are accustomed. If your partner should die, will you be able to maintain that lifestyle? Are you willing or able to live with less?
- Is your partner leaving you money and if so, how much and are there strings attached?
- Inheritances might come outright or in a protective trust. Either have advantages and disadvantages. Is there an advantage to you if the money you receive is sheltered from future creditors?
- Are you leaving a 401k, which means you will pay income tax when taking the money out later in life, or is it a tax-free inheritance, like life insurance? The total amount in a 401k might sound adequate to care for your partner, but will it still be enough after you calculate the income taxes due as you take the money out?
- Can you afford to maintain the house on your own income and the inheritance, or will the house have to be sold? The same calculation must be done for that shore house in Atlantic County, the Pike County Pocono cabin or that time share in Mexico.
- Will you still have health insurance, or does that benefit die with your partner?
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