MW Should I tell my stepdaughter that my husband and I own our home 50/50 - and that she will have to wait for her inheritance?

By Quentin Fottrell

'My relationship with his daughter is not good, and I am trying to mend it'

"We do not commingle bank accounts." (Photo subjects are models.)

Dear Quentin,

This is my second marriage. He is 72 and I am 66.

We met when I was 52 and he was 58. He has two children from his previous marriage, and I also have two children. He paid his bills and I paid mine for about 10 years, until we decided to marry in 2020. We do not commingle bank accounts. However, we bought a house outright (no mortgage) for $500,000. I contributed $250,000 and he contributed $250,000.

We are both retired now. He has his own retirement accounts, and I have my own accounts, from which we each pay our bills. Our relationship is financially 50/50. He pays alimony to his previous wife, which I believe is for life. He does not pay my bills, except for some utility bills, dinners when we go out and part of the expenses when we travel.

We created a life estate trust for the house. If one of us dies first, they live in the house or use the proceeds to continue living, and upon their death, whatever is left in the trust should be divided among all four children. I would like to change this so that if I die first, he must sell the house and give 50% of the proceeds to my two children, and vice versa.

Powers of attorney

We also have wills in place where he has power of attorney over all my accounts and I have power of attorney over all his accounts in case either of us cannot make decisions. We also have healthcare surrogate documents in case we become ill. My relationship with his daughter is not good, and I am trying to mend it, especially since we are getting older.

Do I tell his daughter that the house we own was paid for half by him and half by me, and that we have a trust? I believe that my husband does not discuss his finances with his daughter, so she might think he bought the house himself. I want to make sure she knows that I paid for half of the house to avoid any future litigation.

My daughters know that I have a trust set up for my home. My daughters also have powers of attorney on all of my bank accounts, and my husband has his children listed as POD on his accounts as well, so that is fair and square. Please advise on the best way to approach this topic with his daughter. Should I tell her our plans?

The Mother

Don't miss: I'm 65 and retiring next year. Should I buy an annuity to protect against diminished Social Security?

You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com. The Moneyist regrets he cannot reply to questions individually.

If the home is sold at the first spouse's death, only the deceased spouse's 50% typically receives a capital-gains step-up in tax.

Dear Mother,

No, no, no.

If your husband wants to appraise his children of your estate plan, he can do that. It's not your place to tell your stepdaughter what you have planned, and it's not her business to be made aware of who paid for what in your marriage and who will inherit what after one of you dies. Given that your relationship is not on the best terms, breaching this subject could be misinterpreted as tossing red meat at the bear rather than avoiding the bear.

Your intentions are, of course, good. Even if your stepdaughter believed you were trying to ensure that there would be as little friction and/or expectation as possible in the event that your husband predeceases you, it opens the door to your financial lives and gives her the expectation that your business is her business. Your business is not her business, and you should not do anything that would invite comment, coercion or any form of interference.

As you say, 50% of your home is locked as inheritance for your two children and vice versa. Even if your husband owned 100% of the house, he could still leave you a life estate. That would not be an uncommon or unreasonable thing to do, so your stepchildren can wait their sweet time for their share of this family home. It is not an "inheritance" until the money has landed in their account. Risk of litigation thrives in ambiguity - not privacy.

If this is the only property you both own, it seems unnecessarily punitive to force a sale upon the death of one spouse. This is the home that you created together and putting the immediacy of your children's inheritance above the stability of the surviving spouse seems harsh, especially given that your respective children will each receive 50% when the time comes. By then, the house will also, very likely, have increased in value.

Some caveats: If the home is sold at the first spouse's death, only the deceased spouse's 50% typically receives a capital-gains step-up in tax, while the surviving spouse's half keeps its original cost basis. If the sale is delayed until the second death, the entire property usually receives a full step-up, cutting or even eliminating capital gains for all four kids. Forcing an early sale may trigger property-tax reassessment in some states.

Revocable trust vs. forcing a sale

You will need to get two things right (at least) to make sure that your plan is upheld after the death of one spouse: (1) If you want to stop your husband from changing the plan after your death, your share of the trust must become irrevocable at your death. (2) Your house needs to be titled properly - tenancy in common where you each own 50% rather than joint tenancy with the rights of survivorship where you both own 100%.

First option: You each transfer your 50% ownership interest in the home into the trust that grants the surviving spouse a lifetime estate - or not. The trust specifies that he may - or may not - sell, mortgage or alter the designated beneficiaries and any proceeds from its sale must pass to the named beneficiaries. The trust becomes irrevocable/unchangeable at your death, ensuring the instructions cannot be changed.

Alternatively, you could each place your 50% interest in the home into a testamentary trust at your death, giving the surviving spouse the right to live there for life. After one spouse dies, the property must be sold or transferred to your chosen beneficiaries under fixed terms. This allows you both to retain full control over the home during your lifetime, but making sure your wishes are carried out after your death.

In some jurisdictions, a deed can be used to give the surviving spouse a life estate, with your chosen beneficiaries named as remaindermen. While this is effective for keeping property in the family - particularly in blended families such as yours - it carries significant legal, financial and tax-related complexities. The life tenant is usually responsible for property taxes, insurance and other maintenance costs.

Finally, some states have an elective share - a minimum amount that a spouse may inherit, in the absence of prenup or postnup. Certain jurisdictions may give the surviving spouse a right of up to 50% of the value of the marital-property portion of the augmented estate, assuming you have been married for a certain number of years. In theory, the elective share acknowledges the joint efforts that both spouses put into their marriage.

Discuss the merits of a life estate with your husband. Leave your stepdaughter out of it.

Related: 'I got seriously burned': My financial adviser took me for lunch, bought my kids gifts - and had me invest $500,000 in annuities. What should I do?

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-Quentin Fottrell

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February 10, 2026 05:15 ET (10:15 GMT)

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