Being Fair With Inheritance

Summary

Podcast Summary: Being Fair With Inheritance

Podcast Information

• Title: Jill on Money with Jill Schlesinger
• Host: Jill Schlesinger, CFP®
• Episode: Being Fair With Inheritance
• Release Date: July 10, 2025
• Description: Host Jill Schlesinger tackles sometimes uncomfortable and even controversial money and investing issues, providing actionable insights to help listeners make informed financial decisions.

---

Introduction

In the episode titled "Being Fair With Inheritance," Jill Schlesinger delves into the sensitive topic of distributing inheritance among adult children. Throughout the show, Jill addresses listener questions, offers practical advice, and engages in insightful discussions to help her audience navigate complex financial and familial matters.

---

Listener Questions and Discussions

1. Virginia's Inheritance Dilemma

Timestamp: [03:31]

Virginia, a listener from Virginia, shares her predicament involving her three adult children. She has savings and has designated that upon her passing, any available funds should be split equally—one-third to each child. However, one child, who recently purchased a condo with an $80,000 down payment provided by Virginia, was later informed that this amount is considered part of her inheritance. This revelation upset her daughter, who was unaware of this stipulation, while the other two children found the arrangement fair.

Jill's Response: Jill empathizes with Virginia and emphasizes the importance of equitable versus equal distribution. She suggests that Virginia explain to her daughter that the $80,000 is an advance on her inheritance, similar to deducting from the total estate before equal division. Jill advises maintaining fairness by perhaps clarifying, "I think that if you had a million dollars when you died, the 80 grand would come off the top to each of those kids, and the rest would be split one third each" ([06:15]).

Co-Host Mark's Input: Mark supports Jill's perspective, highlighting the importance of transparency and fairness in inheritance planning. He reassures that Virginia's approach aligns with equitable distribution principles, stating, "The other two kids will get 80 each, and then whatever's left will be divided a third. A third, a third" ([07:25]).

2. Matt's Retirement Planning

Timestamp: [07:35]

Matt, another listener, discusses his financial situation and seeks advice on planning for early retirement. At 39, with a combined investment portfolio of $850,000 at Vanguard and a $600,000 home with a $275,000 mortgage, Matt and his wife are considering retiring between ages 50 and 55. They earn a combined income of $245,000, with significant contributions from Matt's parents towards their expenses and investments.

Matt's Concerns:

• High net worth of parents and their contributions
• Desire to achieve financial independence without relying solely on inheritance
• Managing taxable and retirement accounts for flexibility

Jill's Guidance: Jill affirms Matt's solid financial standing and recommends continuing with Roth accounts to maximize tax-advantaged growth. She advises building non-retirement assets to maintain flexibility, stating, "I don't think you have too much tied up in retirement accounts now," and suggests, "If there's a Roth version of the 457 plan, go crazy and put a bunch of money in there. If not, build up your taxable brokerage account" ([09:10]).

Mark's Agreement: Mark concurs with Jill, reinforcing the strategy to diversify investment vehicles and maintain financial flexibility ([08:45]).

3. Ty's Investment Choices: T-Bills vs. CDs

Timestamp: [10:50]

Ty from California poses a question about his retirement investments, specifically comparing Treasury bills (T-bills) to Certificates of Deposit (CDs). He mentions that his T-bills are yielding returns close to what CDs offer and seeks advice, considering California's taxation on these instruments.

Jill's Advice: Jill explains the importance of assessing the tax implications, especially in high-tax states like California. She recommends conducting a "tax equivalent rate of return" calculation to determine which investment offers better after-tax returns. Additionally, Jill suggests considering California municipal bonds as an alternative, highlighting their tax advantages despite being slightly riskier than federal securities ([11:20]).

4. Ernie's FIRE Abroad Strategy

Timestamp: [14:15]

Ernie, part of the "Fire Fine" movement, shares his and his partner's plan to retire early by relocating abroad. With a combined investment portfolio of $740,000 and $212,000 in retirement accounts, they aim to live on approximately $36,000 annually in South America. They are uncertain about their Social Security eligibility and plan to supplement their income through freelance work.

Jill's Perspective: Jill encourages Ernie and his partner to pursue their adventurous plan, considering their lack of dependents and the feasibility of their strategy. She remarks, "I don't think there's a huge downside... what's so bad?" suggesting that even if their investments dip, they have the flexibility to return without significant consequences ([14:24]).

Mark's Support: Mark echoes Jill's sentiment, emphasizing that their lack of obligations makes this a suitable experiment ([15:00]).

Further Recommendations: Jill advises maintaining a balance between investments and freelance income to ensure their living expenses are covered without depleting their investment accounts. She recommends aiming to earn $50,000 annually through freelance work to comfortably live on their $36,000 budget ([16:00]).

---

Conclusion

In this episode of "Jill on Money," Jill Schlesinger adeptly navigates complex inheritance issues, retirement planning, investment choices, and the pursuit of financial independence through early retirement. Through thoughtful responses and practical advice, Jill provides valuable insights that empower listeners to make informed and fair financial decisions within their families and personal lives.

---

Notable Quotes:

• "If you had a million dollars when you died, the 80 grand would come off the top to each of those kids, and the rest would be split one third each." — Jill Schlesinger [06:15]
• "I think there's a huge downside... what’s so bad?" — Jill Schlesinger [14:24]

---

Resources Mentioned:

• Website: jillonmoney.com
• Podcasts: Money Watch on the Odyssey app
• Financial Tools: Roth accounts, taxable brokerage accounts, California municipal bonds

---

Connect with Jill: For more personalized advice or to join the conversation, visit jillonmoney.com and click the "Contact Us" button.

Transcript

[Jill Schlesinger]

Hey gang. You know, I've often talked about how important it is to build your financial foundation and part of that is making sure that you have the right type and amount of life insurance. There's a really easy way to make this happen. Policygenius makes finding and buying life insurance simple, ensuring that your loved ones have a financial safety net that they can use in case something bad happens to you. With Policygenius you can find life insurance policies starting at just $276 a year for 1 million dol in coverage. It's an easy way to protect the people you love and feel good about the future. When you go to policygenius.com, you'll talk to a team of licensed agents who will walk you through the process step by step. They'll answer questions, handle the paperwork, and advocate for you throughout the process. So secure your family's future with Policygenius. Head to Policygenius.com to compare free life insurance quotes from top companies and and see how much you could save. That's policygenius.com need contract help for those workload peaks and backlog projects? You're not alone. Robert half found that 67% of companies surveyed said they will increase their use of contract talent. That's why their recruiters leverage their experience and use award winning AI to quickly find the skilled candidates you want. Learn about their specialized talent in finance, accounting, technology, marketing, legal and administrative support at Robert Half. They know talent. Visit roberthalf.com talent today. Welcome to the Jill on Money show. It's Thursday, July 10th and we are here trying to help you make better, sometimes just less bad financial decisions. And you know it's not your fault. It is very daunting to juggle everything in your life and also everything that comes with the money aspects of your life. So if you're seeking an extra set of eyes and ears on a situation on maybe not even a big problem, just an idea that you have. Why don't you get in touch with us? Go to jillonmoney.com, click the contact us button, write us a note and if you'd like to join us on the air live, check the box. Thanks to every single one of you who has not only donated to my Ride for the Cause, which is that little streaming thing across the top, but also who has provided some very interesting musical additions to my training playlist. So it really runs the gamut. And if you've got an idea for a big pump up song or something you think is going to be helpful for me as I train to ride 275 miles over three days in the beginning of September. Send those suggestions along. The playlist is insane already. It just has a zillion songs, which I love. And you know, when you're riding for that long, the trick is that you have to have a lot of different kinds of music. So right now, mark, I have eight hours and five minutes worth of songs that are on the playlist, 113 songs. So if you get more ideas, everybody just send them along again, just do it through the website jillonmoney.com and if you have a financial question, do that also. And if you'd like to donate to the cycle for the cause, I appreciate it if you would. What was that?

[Mark]

That's me knocking. Can I ask you a question? Are you always cycling with music at any point? Do you just like to have a little bit of your own time and a little silence?

[Jill Schlesinger]

Who is it? So when I'm on the ride itself, I think that I tend to not listen to music in the first like hour or two of riding. But you're riding for like five to seven hours over the course of a day. So sometimes I want a little something and when I'm training, when I'm outside, I don't usually have as much. But if I'm on my. I put my bicycle on this thing a trainer called a kicker core. So if it's bad weather, you know, and I still want to get a ride in, then I have this long playlist that I love. And you know, I was out riding a couple, couple weeks ago. It was really beautiful. It was like six o' clock in the morning and I was outside of New York City, so not in the city. And I just had no music. And you just listen to the birds and you kind of like in your own head and the, the breathing kind of centers you. So it's very helpful to have a little bit of both. Anyway, thanks again to everybody. Really appreciate it. You guys are generous and delightful and I very much appreciate this community. You can't imagine how amazing it is for me and for Mark to have you guys there for us. So we appreciate that. Okay, let's do some emails from Virginia, who writes that she has three kids and she says I have some savings. All three of my adult children know that when I go, any available funds are to be split. 1/3, 1/3, 1/3 one wanted to buy a condo. She has had many medical problems and chronic diseases, thus she has had limited income. The other two, they own their homes. I gave her $80,000 as a down payment. Later, I told her that that was part of her inheritance. So when the division of my assets occurs in the Future, the other two kids will get that 80 before the rest is divided equally. She was very upset. She didn't know was part of her inheritance. Needless to say, the other two thought it was only fair. How should I proceed? You know, Virginia, I remember that I spoke to a friend of mine who had a few bucks and in the similar kind of a situation, and he had a great way of thinking it through for himself. And I'm sorry that your daughter's upset. And you, you know, whatever. I'm sure she would have been upset, whatever you decided. It sounds like there's one thing to be fair and there's another to say, like, do I have to be equal or equitable? And I think what you are really trying to do is find this. Strike this balance. It seems to me that, you know, if you had. Let's just pretend that you had, you know, I don't know, let's say you had a million dollars when you died, okay? And not you, but the kids are. Had a million dollars, you know, you would say what? The 80 grand would come off the top to each of those kids and the rest of the money split one third each. That seems to me a very fair compromise. And if your daughter can't actually wrap her arms around what that is and her head around it, I think that's really her problem. It's not yours. I think that the way you proceed is you say, I'm very sorry. I hope you enjoy this place. And thank you for your input. I don't know if there's much more to say, and I also don't think it makes sense for you to really wrap yourself around the axle about her issue. You know, she's got her condo, she's good. She'll get some inheritance. Like it's better to have. In some respects. Isn't it better for her to have the money today and enjoy this condo rather than wait until you die? You know, that's just my. So that's how I would proceed. I know that that probably seems a little bit harsh, but I kind of like, geez, I don't know. Mark, you getting. Are you waiting for your inheritance?

[Mark]

No, I mean, I agree is, you know, she got the 80 now the other. The other two kids will get 80 each, and then whatever's left will be divided a third. A third, A third. It's not like this 80, is it?

[Jill Schlesinger]

Yeah. And also by the way, if she doesn't like it, maybe the 80 should be it. That's mean. Okay. This is from Matt who says hi Jill and Mark, thank you for all you do. It's my third time again. Third time's a charm. He's in the three peat category. Mark, your advice has been incredibly helpful. Last fall I asked about switching from a pre tax to a Roth for our retirement accounts, especially given the long term financial picture. My parents are in their 70s. They've got a net worth of $7 million. The grandfather is 93 and worth $4 million. Talk about planning responsibly. This is amazing. So Matt says I want to, I don't want to rely on the future inheritance. Also, I don't want to ignore the likelihood of receiving a of money from my grandfather and a share of my parents estate. In the past few years our financial picture has shifted significantly. My parents now generously gift up to the annual IRS limit, which is actually $19,000. And they cover half of our son's daycare, which is $750 a month. They pay our phone bill. They contribute $500 a month to his the Kids 529 plan. Oh my God.

[Mark]

Phone bill.

[Jill Schlesinger]

I mean that's a little much, but. Okay, good. Good for you if you got it. My grandfather gives us ten grand a year. We're so grateful. None of this was expected. Okay, so that maybe that's the kind of the nice part that they didn't expect. And so he goes on to write, we've always lived below our means and invested the difference, as has the past two generations in my family. I'm 39. My wife is 33. We have a two year old and another one due in the fall. So the question is how do we directionally plan for early retirement? Maybe you know, between age 50 and 55. He goes on to say, I don't hate my job, but I really want to spend more time on what matters. Finances. 850 grand at Vanguard, bunch of different kinds of accounts. 7,525 stock bond, $600,000 home with a $275,000 mortgage. It's a 30 year mortgage with 2.74%. He makes 180 grand a year, she makes 65. They spend about $8,000 a month. Question is too much of our portfolio tied up in retirement accounts? Should we consider funding a 457 if my wife switches schools for access or continue building flexibility in our taxable brokerage? Or both? All right, first of all, definitely do Roth Definitely do Roth. Okay. That's for sure. So we already gave you that advice. I would build up my non retirement assets a bunch because if you did want. Let's just pretend that you know, you are young, your grandfather is you know, probably going to pass away sooner than your parents. Right. And so you're 39. So you'll have a half a million dollars that's added to the overall game plan. But I don't want to load you up on having too much pre tax money because you are going to have a lot of money in your life. So I don't think you have too much tied up in retirement accounts now. But I do think that, that it depends if that 457 plan, if that is a pre tax plan or is it a Roth plan And I have a feeling it's pre tax. I don't know if. Do we see a lot of Roth457? I'm not sure we do as many as like say the 403 base.

[Mark]

Not that common yet.

[Jill Schlesinger]

Yet. Right. But I think you're in great shape. I wouldn't worry about a thing. You're doing great. I would probably do. I would. If she were to switch jobs and she has a 457. If there's a Roth version, sure. Go crazy, put a bunch of money in there. If there's not, then just build up the, the plain old brokerage account. Okay. Next up we have Ty who says I live in California. I'm retired with treasury bills close to what CDs are paying. Would it be better to buy bills since California does tax them. Does not tax them I think is what the question is. I don't know what your tax bracket is. Ty, here's the funny thing. When you're in a high tax state like California or New York, the idea of not paying state income tax is great. You just have to do a quick calculation and you can google this. It's a tax equivalent rate of return. Compare what it would be to get that treasury bill versus the CD interest rate and determine which is a better deal if you're not paying state income tax on it. Or by the way, if you've got a lot of money sloshing around, maybe you think about putting some money into California municipal bonds. They're not as safe as the federal, but pretty safe. I think you'd be okay. Okay, here we go. This is from Ernie and this is awesome. So this is the Fire Fine Semi Retirement Abroad Fire Financial independence Retire Early Fine is our version of that which is Financial independence New or next endeavor? Okay, so we are two expats who are feeling the urge for adventure and exploration again. We recently read your book and started listening to your podcast which have both been very insightful to talking about my book the Great Money Reset. So thank you Ernie. Okay, after moving back to the United States and being in our mid-40s, we feel burnt out and we're considering quitting our jobs to join the fire or fine movement by relocating abroad once more. Amazing. I always think these people are so brave for doing this because I'm such a wimp. I always think I would love to do it but then I haven't done it. So. Okay, so Ernie says after we'd sell our house we would have combined investment portfolio of about $740,000 and $212,000 in retirement accounts. We are uncertain about our eligibility for Social Security. If we are eligible by the time we reach 59 and a half, it would probably be a small amount. Well, it wouldn't be 59 and a half. It would be your full retirement age which is 67. If you've worked in US based organizations for 40 quarters or 10 years total, you will be entitled to some Social Security payment. But I get it, you don't want to count on it. They are going to invest the 740 grand into dividend paying stocks and relocate south. South of the border in South America where we estimate that our annual living expenses will be around. Wait for it, $36,000. Our US generated passive income will not be taxed in South America for 10 years and then it only gets taxed at a 12% rate. Huh. Currently we're earning around 7% on our passive income. We're also planning to supplement it with some freelance work. Do you think this is a viable strategy? Are we taking significant risks with our financial future? We would greatly appreciate your advice. Thanks so much. Mark, I'm going to let you go first because I think you're going to be surprised about my advice.

[Mark]

Well, I would just say that yeah, it's earning 7% right now. It's been a good few years, but you know, I don't know what the future holds if they're going all in on stocks.

[Jill Schlesinger]

So the reason why I think you'd be surprised is like I don't think there's a huge downside. You don't have kids, you're not uprooting anyone, no one's relying on you. So do it and see how you feel. Do get a job, get some freelance work, bring some money in and see how it goes. And what's the worst case scenario? You come back, don't buy any real estate there. Have some fun. If you're burnt out and you're in your 40s and, you know, who cares? There's no. I don't see like the hugest downside would be like you blow it, you invest the 740, we go into a massive bear market. Your 740 turns into 400, you come back. What's so bad? Yeah, Mark, aren't you shocked that I'm saying that?

[Mark]

Well, like you said, there's really, you know, they don't have any responsibilities. There's no kids. If you're going to do it, this is the situation to try it out in.

[Jill Schlesinger]

Absolutely. I think that Mark's right, though. Don't count on getting a. Essentially like getting a 10. Or if you're getting. If you're getting 7% return on your passive income. Yeah, great. But, you know, presume that the amount goes to 500. You're going to have a bear market some point in the next 10 years and you have to think about how you'll feel about it. What I'd love is if you guys. The way I think the only way I would do it just personally, you guys can do you. But I would do it as I can make enough money in freelance work to cover the expenses of 36 grand. So can you each get some freelance work? Just get that money and then you don't have to touch your account. That's what I would do. I'd be looking to make like 50 grand a year between the two of you netting yourselves out living on your 36. Boom, done. Then. Then it's like, let the money go. And you don't even have to live off that money. You can just have it invested. I think that's the best way to do it. But again, you do you. I'm always amazed, like how you so burnt out in your 40s. What are you doing? Maybe they're like emergency room doctors. Right. I shouldn't say that. People get burnt out. Another fine show, Mark. Just fantastic. We are so grateful that you join us every day, Monday through Friday, here at our program. If you would like to find more of us, you should subscribe to the Money Watch podcast. We drop those episodes. Episodes on Saturdays and Sundays. A little bit more of a deeper dive into some of the elements that help build your financial foundation, I would say. Yeah. So check that out. You can subscribe to this program. Jill on Money on the Odyssey app. And also the Money Watch show or wherever you find your favorite podcast. Please leave us a rating and review wherever you listen. And of course put your hands metaphorically on someone's back like mine for my ride. Give me some good recommendations for my playlist. I need them. Thank you so much for listening. Change your work, Change your wealth, Change your life. We'll talk to you tomorrow.

[Unknown]

Starting your own business can be intimidating. Suddenly you're wearing all the hats. Designer marketer, customer support, shipping expert. It's a lot. That's where Shopify comes in. Shopify is the global commerce platform powering millions of businesses around the world and 10% of all e commerce in the US Shopify has your back. With hundreds of ready to use templates, you can launch a beautiful professional online store that looks and feels like you need content. Shopify's AI tools can help you write product descriptions, headlines, even enhance your product photos. Want to grow your reach easily? Create email and social media campaigns to meet your audience wherever they're scrolling. And with Shopify's world class support, you'll have expert help for everything. Turn your big business idea into With Shopify on your side, Sign up for your $1 per month trial and start selling today at shopify.com Odyssey podcast. Go to shopify.com Odysseypodcast shopify.com Odysseypodcast.

[Jill Schlesinger]

Hey, I'm Ben Stiller.

[Mark]

And I'm Adam Scott and we host a podcast called the Severance Podcast where we used to break down every episode of the TV show Severance. Severance isn't back just yet, but the podcast is. Each week we'll discuss the movies, TV shows and ideas that influence the making of Severance. We're going to talk to the incredible artists who inspire us to do what we do. The Severance podcast returns Thursday, June, 26. Follow and listen everywhere you get your podcasts.