RE: Inheritance story/Divorce and health insurance

[Jackie762]

Hi everyone, just new to this forum, and have read most of the Finance section. Lots of talk on Inheritance, which I found very interesting. Sometimes people inherit and just have no clue what to do but want to be very careful not to waste what they have been given. Also, sometimes, as others have been mentioning, they inherit land or a farm and misc. property in other states too. Makes it really hard to figure it out. I have a new respect for lawyers, although they cost an arm and a leg to have them handle Estate procedures and probate.

So, here's the story....a 53 year old only child, her mother gone at age 13 and so her father a retired farmer, dies of a hard bout with Alzheimers about 3 months ago and leaves her everything he owns and makes her the Executor also. No Trust, just a simple will.....the farm is 630 acres of land, corn and soybeans, that her soon to be ex husband has farmed (half share) for over 25 years now with her father that passed. Anyway....the divorce is not final, and has caused a lot of issues with the farm, but inheritance is not property that has to be divided in divorce, so we know this now....I have lawyer that is working on the estate and probate and all that, and taxes are THROUGH THE ROOF, when you have a farm, there are state an federal and death taxes even, there are gift taxes if you were the Power of attorney before and had joint accounts with your dad even.....soooooo many taxes, it's crazy, no wonder people lose their family farms when a parent dies and has valuable property they want to keep.

I want to keep the land, my ex will still manage the whole farm and I will make income off of his profits....we came up with a pretty good arrangement I hope, but time will tell if that works.........(I didn't add, I was married for 34 years, have three kids, in their 30's and one still in high school, will be 18 though in 3 months, so not an issue really, she's with me and is staying with me....) My ex to be has whined me out of about all personal property (you know, because I inherited so much, I shouldn't be entitled to anything from the 34 year marriage of course, which is CRAZY, but I want my freedom and sometimes you just give in for FREEDOM!!) I hope to get an income of around $40,000 a year, which I can do pretty good on I hope without debt, and I am quite frugal and my kids are okay. I haven't worked outside the home, always been a homemaker and a careful spender always (my ex was not, but we never were in debt either, but never saved gobs either, but did save better than a lot of people do).....I did save all those years, and left with around $60,000 cash and have single accounts with around $30,000....so I was at least set pretty good in my move (from IL to FL). He knew I saved also, and he had his own personal savings he spent mostly because he liked expensive home fix ups, and I saved my extra money I would get and I accumulated all that money over time, and MY RAINY DAY HAS ARRIVED, which was called Divorce. I am doing good renting in a nice area here in FL and I have enough until the estate is all settled and this year's corn/bean profits get sold (springtime we sell), and I will get my $40,000 to live on for the year.....I can get a job after my daughter goes to school (don't bug me about not working because she's older, I prefer to be around for her needs now while she's here, college away from me will be soon enough, I can stay home because I can right now, so I prefer to until she's out of the home and away.) I also, think I found a way to get insurance with this COBRA law, health insurance, because my ex works for a major company along with farming, so we always got insurance for the last 18 years that way....so, I think I was finding that I could get COBRA for 36 months....

My question..... Does anyone know about COBRA for divorcees? any advice?

What are all your opinions, yes I ask, so I take the good with the bad, about my personal choices with letting my ex have everything (this includes a home and second home and cars/trucks and all the farm machinery)....I also gave him most the money in the bank, I did get one $25,000 account (part of that $30,000 I said I got)....He got about $60,000 and I let him keep all his $400,000 pension IRA 401K Vangard $$....Many think I'm stupid, but the minimalist in me says, Freedom is more important than all the money and fight for money....... Does anyone agree?

I enjoy reading everything on the forum, thanks for letting me tell a little of my story and look forward to some responses...

[catherine]

Jackie,

Welcome! And thanks for sharing your story! I am not the financial advice guru here by a long shot. I just wanted to welcome you. I'm sorry you are dealing with a big transition in your life, but it sounds like it's what you want and need at this point, and that you are happy with your decision. I also have no strong opinion on your decision to minimize the hassle of the divorce by not fighting for a lot--that's up to you.

I will say that COBRA, in my experience in general, is no real bargain. If you are only earning $40k/year, can you do Obamacare?

I'm sure people smarter than me are going to weigh in. Thanks for joining the forum!

[razz]

If it was me and I was inheriting, I would simply sell the farm and keep the funds in my name. Leaving an ex in charge who has taken all the cash and no contribution of his pension, is not what I would ever even consider doing. He will decide what is profit and what is not. In farming, one can hide a lot of money. Frankly, I do not believe for one moment that you will get the $40,000 per year if he has taken all the rest. You are building your house on very sandy soil. It is your inheritance! Your future that you are giving away! Now I am getting out this discussion.

[iris lilies]

Hi Jackie and welcome,

I skimmed Google articles about divorce and COBRA and there are indications that you can continue health insurance from your husband's company, so please just call the benefits manager at his company for specific information. Call them before your divorce is finalized because you may have a brief window for getting on COBRA.

But as catherine says, paying full cost of your health insurance, which is what COBRA is, is likely very expensive when compared to what you will pay with an Obamacare plan. But there are out of pocket and deductible costs with the Obamacare plans that you may not have now.

But I know how you feel, at least, I felt that in e first year of retirement, I wanted no changes with health insurance. so we bit the bullet and paid COBRA costs after we retired. Next month our COBRA benefits run out, and we will take an OBaMACARE plan at half the monthly cost. I am sure that our out of pocket potential costs are higher than with the COBRA plan but thats fine, we dont use health care services much at all.

I think razz' point about your farm land income is very good, but you have years to figure that out. If the plan doesnt work you can always sell the land. Yay for IL farmland!

[TVRodriguez]

I'm sorry for your loss. That, plus the divorce, equals a very tough year! Congratulations on having a great attitude! You sound energetic and enthusiastic about the future, which is fantastic.

You will not likely get anyone here bugging you about not working if you are able to cover your expenses with the expected income and existing assets. We're all about simple living, not making things complicated with unnecessary jobs! :)

I must echo a bit of razz's comments, though. The federal estate tax exemption amount this year is $5.45million, and last year it was $5.35milllion. So to have a taxable estate, that farmland of your dad's must have been worth more than that at his death (unless there are other assets that contributed to his gross estate). If you were to liquidate and invest that amount, and if you were to live off a conservative 3%, you would receive MUCH MUCH MORE than $40,000 a year. (3% of $5 million is $150,000.) It may be anathema to you to consider selling your family's land, but you posted in Personal Finance, and it is something to consider down the road at least.

As to the COBRA question, I echo iris lilies and suggest that you call your ex's HR dept asap to find out if they can get you answers. That's what they're for!

Welcome to the forum! And best of luck in your transition to a new life!

[Tybee]

I would second TVRodriguez's point about selling the property. If you have moved to Florida, I would sell the property and not have him holding it hostage. I certainly would not trust him as overseer. Who wants to have that much contact with an ex? It does not make sense to me.

I would get on Cobra and then take my time and look for a cheaper alternative once the dust settles and everything is completed.

[iris lilies]

I would second TVRodriguez's point about selling the property. If you have moved to Florida, I would sell the property and not have him holding it hostage. I certainly would not trust him as overseer. Who wants to have that much contact with an ex? It does not make sense to me.

I would get on Cobra and then take my time and look for a cheaper alternative once the dust settles and everything is completed.
While I dont think this is necessarily bad advice, keep in mind that one cannot simply jump onto an ACA (Obamacare) insurance plan at any time. You need a qualifying event or it needs to be during OBamacare open enrollment time.

My COBRA payment is about $650 /month for one person. That will be halfed with Obamacare.

[Tybee]

While I dont think this is necessarily bad advice, keep in mind that one cannot simply jump onto an ACA (Obamacare) insurance plan at any time. You need a qualifying event or it needs to be during OBamacare oen enrollment time.

My COBRA payment is about $650 /month for one person. That will be halfed with Obamacare.

So then divorce is a qualifying event, so you're saying she could only go to Obamacare either at time of divorce or in open enrollment? That does change things, doesn't it.

[iris lilies]

So then divorce is a qualifying event, so you're saying she could only go to Obamacare either at time of divorce or in open enrollment? That does change things, doesn't it.

I THINK so. For somethng so important, The OP should not rely on Internet chatters such as myself! :~)

[razz]

I THINK so. For somethng so important, The OP should not rely on Internet chatters such as myself! :~)

Wanted to add, or myself. I simply reacted to my take on the info provided which was not a great deal in retrospect. So:welcome: Jackie.

[jp1]

https://www.healthcare.gov/glossary/qualifying-life-event/

Getting divorced is a qualifying event, according to the ACA website. As is getting out of prison which, depending on your circumstances, might seem to be pretty much the same thing! :~)

[Jackie762]

I just wanted to say thank you for all the comments, I so appreciate it! I really liked the one where if you sold the farm and took like 3% you would still get about $150,000, which is way more than I need, so like if I sold the farm and took like 1% that's like 100 years of what maybe $50,000? Whomever figured this one, could you explain how you got that amount. What I didn't tell you all, is yes, I don't have to sell the farm, my Dad left enough in CD's in the bank, fortunately a lot were POD too, which made them easier and didn't have to go into the Estate (but Lawyer still says they will be taxed because I didn't contribute to them, perhaps a gift tax? I don't know, but I was trying to get some figures from the lawyer because I'm totally walking blind about all this stuff still, it's only been 3 months..... and I have all this $$ and I am scared to touch most of it because I need to pay taxes, so I don't touch the Inheritance as of yet, I just have it banked in stupid non earning savings, which I'm working on getting in at least a 1% account until the dust settles and the probate and 2016 Taxes are all done.....there is about $800,000 in cash CD's and bonds, which will pay the lawyer and taxes, and if the estate comes in under 4 million (I don't know what that is all about), but it sounded like my taxes were 16% on something, and he talked like it would be $160,000 and his fees will probably be $50,000...which I don't know hopefully I'm way high there...but I know the lawyer will be expensive.

Thank you also everyone for comments on my soon to be divorce, my ex isn't a total ogre or anything, we are having an uncontested divorce, and I did give him most of things acquired during the marriage, yes for my freedom, but also, I do feel like I will be okay financially with what my Dad has left me, and I don't want to totally strip him of what he has acquired either, I'm not a mean person, and I'm not stupid either, so I did get an agreement for $100,000 from my paid for home, over time he will pay me this....I really in the long run have the upper hand about the farm, he farms it, and I do earn income, he will pay me, or I will find a new renter that will pay me much more......We are trying to stay on decent talking terms, sort of have to with the farm, and he's still paying some of the bills that I am having now, like my rent (remember his child is still living with me, and he does have a lot of responsibility for making sure she is safe and well taken care of too), so he does still pay some bills from OUR joint accounts, hasn't taken them or anything.......I got October's rent paid already which is a lot at $1300 a month....it's so weird renting too after owning a home for over 25 years......I didn't want to buy anything just yet until I get settled here in Florida for at least a year or so and see how where we want to live.....I love Florida, though and want to stay here for sure!!

Thank you again everyone for being so nice and commenting!!!

[freshstart]

ITA with getting someone else to run the farm or selling it outright. Did you get some kind of offset for giving him the 400k in pension money? If not, he is in a really good position and he may very well think that he can take advantage of you with the farm. If you do get the 40k a year, are you allowed to invest any of that in retirement for yourself? Even if the divorce was amicable, there was still a reason why you don't want to share your life with this person, I would be wary. I'm sorry you're going through this, a death, a divorce and a move is very stressful.

oh and I would be very hesitant to continue to have joint accts. He can still pay for your DD out of his own accts. I may sound negative about him but I had what started as an amicable divorce end very poorly. I'm big on woman protecting themselves. Just because he hasn't wiped out the accts, doesn't mean he won't. Make a clean split.

[TVRodriguez]

I was the one who mentioned 3% of $5,000,000 being $150,000. This is how I figured it: 0.03 x 5,000,000 = 150,000.

I don't know how much your dad's estate is worth. If it's worth less than $5,000,000, then the 3% amount will drop accordingly. I used $5,000,000 as a number b/c the federal estate tax does not apply to estates smaller than $5,450,000, and you mentioned estate taxes.

I'm not a lawyer in Illinois, but google tells me that Illinois has a state estate tax, so maybe that's what you meant. That seems to apply to estates larger than $2,000,000. Yes, your dad's POD accounts count as part of his gross estate, along with the farm and anything else he owned at his death.

So if the farm and all other assets are worth about $2,000,000, then your 3% would be $60,000 annually. Still more than the $40,000 you mentioned. Not that you have to sell the farm, but it's worth considering.

Btw, you can just enter into google search the calculation, and it will do the math for you.

For example, to get 3% of 2,000,000, enter:
0.03*2,000,000=60,000

[Jackie762]

Yes agreed, I have been getting as much as I can before it's finalized, he did wipe out one account of $16,000 cash, so yes he is capable, but I still have the upper hand with the farm, he needs it to continue living as he does, it's his source of income, been doing it for 25 years.....so, he won't mess too much for me, and he still pays a lot of my bills, so he says he will when divorced for awhile too, so, I have to take what I can get for a little while I think.....I have some money, so I'm not totally without, but he is a baby about everything and cries a lot about not having 1.4K in the bank for his retirement, which, I don't know how he pulled that out of his hat?? If you count the farm, I do have 1.4K even at super low land prices in the bank basically, so I guess that's why he is all worried about money and all....I don't know, I'm a lot more about God taking care of things too, because I know He will!! thanks for opinions and advice, always appreciate and never judge!!

[Jackie762]

about the taxes, TVRod, I thought IL was $4,000,000 for state taxes, this is what I think the lawyer told me, so if it was $5,000,000 then I would own taxes on 1 million $$ and that was like 16% he said, so that would be like $160,000 I would owe.....we think it's gonna all come in under 5 million, maybe even 4, but there was cash and CDs and investments of around $1M I think, I won't touch any of it though, except my daughters college and i got dental work done, very minimal, and I could classify that as my $$ anyway, since I have that put away anyway.....remember, I came to FL with $60,000 which was my tide me over for a year or two, and I have a stock account with $70,000 in it providing we don't lose all that in some crash right???? I hate sometimes, but I hate 1% bank accounts out there too....but better than under the mattress I guess!! So anyway, THANKS EVERYONE, love opinions and advice, and will never be upset if we disagree, that's what makes us all unique and different!! (well, except when it comes to Trump and Hillary....nooooo, I won't go there I promise!!! lol!!