Author: Quentin Fottrell

The Moneyist: My former mother-in-law took out a life-insurance policy on my eldest child. I’m enraged. Is that legal?

Dear Quentin,

My former mother-in-law has a life-insurance policy on my 27-year-old daughter, her oldest granddaughter. Is that valid and legal?

We all live in Georgia and have for years. I divorced my ex-husband 26 years ago. My current husband, of 24 years, took my oldest daughter in and accepted her 100% as his own from the beginning.

My ex-husband is an alcoholic, and has a very controlling and manipulative mother. He is currently on probation and not allowed to drive, after five DUIs. My ex-husband is a momma’s boy. His mother is a dishonest and conniving individual who will beg, borrow, cheat and steal for her “baby boy” or herself, because she feels the world owes her.  

When I remarried, I was in a court battle with my ex — or his mom, because she controlled the purse strings — off and on for about four years. My ex was trying to get out of paying child support. I finally agreed to it, as I was tired of the fight. Besides, my current husband said that if the ex didn’t want to take care of his own child, he would. 

‘We still continued to battle over ridiculous things throughout the years.’

We still continued to battle over ridiculous things throughout the years. Not once did my ex-husband or his parents help with anything financially other than what was required by the court, which was nearly nothing. They didn’t help with anything school-related unless required; they didn’t help with the purchase of the first car, college tuition and fees.

They didn’t even help when my oldest asked to go to alcohol rehab because she needed help. I haven’t communicated with any of them in over 10 years. I despise all of them. Fast-forward to today, when my oldest told me that my former mother-in-law has a life-insurance policy on all her grandkids, plus half a dozen other people.  

They have never given or even offered financial help throughout the years for anything for my daughter, so why does she think it’s OK to have a life-insurance policy on my child? How can I cancel this policy? I can assure you she plans on pocketing the money instead of helping to bury my child if — God forbid — my daughter passes away.

She is a monster-in-law! Any information or advice would be greatly appreciated.

Former Daughter-in-Law

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com, and follow Quentin Fottrell on Twitter.

Dear Former,

Generally, taking out a life-insurance policy on a grandchild makes sense as a gift for that child, rather than as a payout for the person who took out the policy.

In most states, your former mother-in-law would need permission from your daughter, assuming she was an adult at the time, or from her parent or guardian if she was a minor. Presumably, she sought such permission from your daughter’s father. Forging such a signature would be illegal. 

Of course, most grandparents take out policies on their grandchildren to help them build up a nest egg for college — even if a 529 account would be a better alternative — or merely as a way to gift them money at a later date. They may, for instance, sign over the policy to them at the age of 18 or 25.

“As extended caregivers, grandparents are eligible to purchase whole life insurance for their grandchildren,” according to SelectQuote, which helps people shop for insurance policies. “The insurance can be purchased in the child’s name, which means the child becomes the policy owner once they are an adult.”

You outline all of the misdeeds and absences by your former husband and mother-in-law, and it clearly is very emotionally triggering that this policy exists. It appears to bring up all of those bad memories and resentments. I don’t doubt any of the bad behavior or how your daughter’s father failed to show up in her life.

‘Whether you instigate poor behavior or not, you have a choice: You can let them live their lives, or become hostage to their every move.’

However, by obsessing over this policy and agonizing about how it can be undone, you may as well be married to both of them. Whether you instigate poor behavior or not, you have a choice: You can let them live their lives, or become hostage to their every move.

If you choose the latter, ask yourself what you get out of choosing this path — because it is a choice. Perhaps this anger is a familiar place for you, and the resentment allows you to feel righteous and wronged, and reminds you that you have done your best to be a good person.

Whatever the reasons, these short-term surges of hurt and anger — however valid — do not serve your long-term happiness. The whole point of getting divorced and starting a new life is to leave these petty preoccupations behind. It will only create a toxic family atmosphere.

Taking out a life-insurance policy on a grandchild, someone who is young and healthy, can have advantages. “Plans for grandchildren seldom require an exam, rates will never increase, and coverage never expires,” according to Choice Mutual insurance agency.

For the record, there are two main types of life insurance: The first is term life, which exists for a period of time and has no cash-out value. The second is whole life — also known as universal life, variable universal life and indexed universal life — which, as the name suggests, lasts for the person’s entire life. 

Your former mother-in-law could either wait and, in the unlikely event that your daughter predeceases her, cash in the policy. Alternatively, she could use it as a de facto savings plan, and borrow from the policy or money early. Speculating on what she may or may not do, however, is not healthy.

Whether her motivations are self-serving or altruistic, your former mother-in-law will have a premium to pay for every life-insurance policy she owns. If she does not keep up on the premiums, the policies will expire. That’s her lifelong responsibility, and her choice. Do yourself a favor and leave her to it.

By emailing your questions, you agree to having them published anonymously on MarketWatch. By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

The Moneyist regrets he cannot reply to questions individually.

More from Quentin Fottrell:

My married sister is helping herself to our parents’ most treasured possessions. How do I stop her from plundering their home?
My mom had my grandfather sign a trust leaving millions of dollars to two grandkids, shunning everyone else
My brother’s soon-to-be ex-wife is embezzling money from their business. How do we find hidden accounts?
‘Grandma recently passed away, leaving behind a 7-figure estate. Needless to say, things are getting messy’

The Moneyist: My sister wants to distribute $50K to each grandchild from our mom’s savings — but some of us siblings don’t have kids

Dear Quentin,

I trust my sister, but think she is sometimes driven by sentiment rather than practicality. I am one of four, and the sister who lives closest to my mom is handling finances for her. Mom is 93, in decent health, and currently in assisted living. 

That is the big picture. There is a buildup of funds in my mom’s checking account, due to regularly replenished income that did not get spent. She has other money in savings too, about $1 million.

My sister wants to make a distribution of the excess checking-account money — not to me and my siblings equally, but to my mom’s grandchildren, giving each grandchild an equal amount. That’s $50,000 to each of the grandchildren. 

My mom is not involved in this decision because she has delegated signing authority for the account to this sister and my brother. We do not want to involve her in this, although my sister has tried to lobby her a bit in favor of the grandchildren.

‘Mom and Dad always wanted their estate to treat all their children equally, and the grandchild distribution would not accomplish that.’

Mom and Dad always wanted their estate to treat all their children equally, and the grandchild distribution would not accomplish that. I do not have children, only stepchildren, and they would not be part of this distribution. 

My brother, who also signs checks, contends that the money should go to the four siblings, who can gift the money to their children if they wish. That is also my position. The remaining sibling is abstaining from the discussion. 

My sister disagrees, and believes that our mom loves her grandchildren and would want the money to go to them. My mom is still considered legally competent, though as a practical matter this is debatable. 

My money-managing sister is doing pretty well, aside from this episode, and I want to stay on good terms with all my siblings. How do we approach and define this for future money distributions?

Unhappy Sibling

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com, and follow Quentin Fottrell on Twitter.

Dear Unhappy,

It’s a deft sleight of hand for a co-signer to authorize withdrawals of $50,000 to their and their other siblings’ children rather than take care of the day-to-day running of your mother’s finances. I understand that estate planning is foremost among your four siblings’ minds, but putting pressure on your mother to agree to this is not within the purview of responsibilities for this role. 

Thankfully, your brother is also a co-signer, and assuming they both have to authorize withdrawals, there is a safeguard in place. If your mother wants to distribute her assets equally among her beneficiaries — grandchildren are not considered beneficiaries if their parents are alive — her wishes should be respected. At best, it’s sharp practice. At worst, it’s opportunistic.

So what now? Some co-signers require permission from the account holder to make withdrawals, others may not. Check the rules on this arrangement with your mother and brother. Hold a family meeting to discuss the parameters of this arrangement, and talk to your mother — and, if necessary, the bank — about these limits and how no one should be put under pressure.

There are other potential potholes down the road. If your siblings are also co-owners of this bank account, the money in that account will automatically become their property when your mother dies. What’s more, the money in that account could be used to pay debts incurred by your siblings if they were involved in a lawsuit and/or if they divorced.

Your sister’s role as co-signer is to help manage your mother’s finances; make sure bills are paid on time, including rent or mortgage payments and other insurance policies the owner of the account may have; and, above all, look out for the welfare of the account owner — not figure out how to self-deal and pass money on to her own children. 

Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

The Moneyist regrets he cannot reply to questions individually.

More from Quentin Fottrell:

My married sister is helping herself to our parents’ most treasured possessions. How do I stop her from plundering their home?
My mom had my grandfather sign a trust leaving millions of dollars to two grandkids, shunning everyone else
My brother’s soon-to-be ex-wife is embezzling money from their business. How do we find hidden accounts?
‘Grandma recently passed away, leaving behind a 7-figure estate. Needless to say, things are getting messy’

The Moneyist: My fiancée makes $90,000 a year. I make $150,000. Should we merge our finances after we get married?

Dear Quentin,

My fiancée and I are getting married in October. She makes $90,000 a year between her primary job and teaching classes as a fitness instructor. I make $150,000 a year (a combination of base salary and commission) from my primary role.

She has roughly $40,000 left in student loans, and we share an investment in a land parcel with a $65,000 loan balance remaining. Both of us actively contribute to retirement and brokerage accounts. We believe we don’t have enough investable assets for financial professionals.

We are both very independent people, so we like having our own spending and investing decisions. We have viewed money so far as “yours and mine” while happily splitting joint expenses and investments like the land. Should we be merging our finances after our wedding?

Soon to be Married

Dear Soon to be Married,

Joint accounts can reduce the hassle of tracking one another’s spending and help you manage your household budget. When couples don’t merge their finances, it’s usually because one partner has a lot of debt and/or has difficulty keeping a handle on their spending.

As we have seen in several recent letters to this column, including $1,500 trips to the mall and spending $11,000 on cosmetics, that’s not so uncommon. These are also not representative of the U.S. population: Men are just as likely to overspend and indulge in financial shenanigans.

Keeping separate accounts is often a choice for very high-income couples who have a complex web of finances, and for those entering their second marriage. There are often more factors to consider with the latter, including inheritance for stepchildren and multiple properties.

Most couples don’t actually keep finances separate, according to this Policygenius poll: 20% said they keep their money management separate, while 30% don’t even know how much their partner earns. What does that tell us? Joint accounts and transparency don’t always go hand in hand.

My recommendation for you and your fiancée is to prioritize your goals, and gradually set up joint savings and investment accounts to achieve those goals. You will, in the first instance, need to cooperate on how much you decide to prioritize luxuries versus necessities and savings.

You will have other decisions to make, such as whether rent or mortgage contributions are based on a portion of your salaries or should be split 50-50 regardless of the disparity in your incomes. Merging your financial goals will naturally lead you to merging your finances.

It does not have to happen overnight or be a zero-sum game.

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

By emailing your questions, you agree to having them published anonymously on MarketWatch. By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

Check out the Moneyist private Facebook FB, +1.52%  group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

Stimulus checks played a major role in nationwide decline in anxiety and depression, new analysis says

A new analysis of the relationship between hardship and the COVID-19 relief bill in December 2020 and the American Rescue Plan Act in March 2021 has yielded some encouraging results. “The delivery of robust, primarily cash-based assistance to U.S. households was followed by major declines in material hardship,” the report, which crunched U.S. Census Bureau data, said.

Researchers analyzed the bureau’s Household Pulse Data. Between December 2020 and late April 2021, rates of food insufficiency fell by over 40%, rates of financial instability declined by 45%, and the share of respondents reporting frequent symptoms of anxiety and depression fell by 20%, they wrote. “The sharpest declines in hardship immediately followed the passage of these two relief bills.”

Co-authors Patrick Cooney, assistant director of economic mobility at the University of Michigan, and Luke Shaefer, a professor of social justice and social policy at the university, wrote, “Our analyses thus far have yielded a fairly simple story: throughout the crisis, the level of hardship faced by U.S. households can be directly linked to the federal government’s response.”

‘Throughout the crisis, the level of hardship faced by U.S. households can be directly linked to the federal government’s response.’

— —Patrick Cooney and Luke Shaefer

“The economy improved some over the early months of 2021 and may have contributed to these trends, yet the unemployment rate remained above 6% in April,” they added. Without the stimulus, many U.S. households would not have managed to escape the hardship they have faced during the coronavirus pandemic, Cooney and Shaefer said.

In the third round of stimulus checks announced earlier this year, individuals making less than $75,000 a year in adjusted gross income were eligible to receive $1,400. The payments decrease for individuals earning $75,000 and up — and they phase out completely for those making $80,000 or more and couples making $160,000 or more in adjusted gross income.

But others say there’s still a long way to go. A recent report by the Pew Research Center, a Washington, D.C.-based think tank, found that about a fifth of U.S. adults still experience high levels of psychological distress. It has fallen slightly from the same time last year when the U.S. was mired in the depths of a public-health crisis and closing businesses — and with no vaccines in sight.

Still, levels of stress remain “elevated” among some groups. “Young people have been a particular group of concern during the pandemic for mental health professionals,” Pew researchers wrote. People aged 18 to 29, and women, who have been hit particularly hard economically over the last year, and those with lower incomes are especially likely to be in that high distress group.

The government continues the rollout of vaccines from Johnson & Johnson JNJ, -0.18%, Pfizer-BioNTech PFE, +0.30%   BNTX, -1.78%  and Moderna MRNA, +2.64%. As of Thursday, 41% of the total U.S. population had been fully vaccinated against COVID-19, and nearly 51% had received at least one dose, and 52% of all adults in the U.S. are now fully vaccinated.

One healthy (and delicious) way to cut your risk of type 2 diabetes, according to a study of 7,000 people

Grab a piece of fruit, not a sugary drink.

That’s the takeaway from a new study, released Wednesday, looking at one aspect of diet and diabetes. People who ate two servings of fruit per day lowered the risk of developing type 2 diabetes by 36% compared to those who ate less than half a serving of fruit, according to research published in the Endocrine Society’s peer-reviewed Journal of Clinical Endocrinology & Metabolism.

The Australian researchers studied data from 7,675 participants who provided information on their fruit and fruit juice intake through a food frequency questionnaire. They found an association between fruit intake and the body’s markers of insulin sensitivity. In other words, those people who regularly ate more fruit needed to produce less insulin to lower their blood glucose levels.

‘We did not see the same patterns for fruit juice.’

— Nicola Bondonno, a post-doctoral research fellow at Edith Cowan University’s Institute for Nutrition Research in Perth, Australia

“We did not see the same patterns for fruit juice,” said Nicola Bondonno, a post-doctoral research fellow at Edith Cowan University’s Institute for Nutrition Research in Perth, Australia. “These findings indicate that a healthy diet and lifestyle, which includes the consumption of whole fruits, is a great strategy to lower your diabetes risk.” Exercise has also been shown to improve type 2 diabetes.

“This is important because high levels of circulating insulin (hyperinsulinemia) can damage blood vessels and are related not only to diabetes, but also to high blood pressure, obesity and heart disease,” said Bondonno, who is a co-author of the study, “Associations Between Fruit Intake and Risk of Diabetes in the AusDiab Cohort.”

Diabetes, a disease where people have too much sugar in their bloodstream, impacts more than 460 million adults worldwide were living. By 2045, this figure is expected to rise to 700 million, the researchers said. What’s more, an estimated 374 million people are at increased risk of developing type 2 diabetes, the most common form of the disease, they added.

People who eat more fruit may be less likely to drink sugary beverages.

Of course, people who are eating more fruit and fiber, as opposed to fruit juice, may also be less likely to drink sugary beverages and other candy. Frequent consumption of sugar-sweetened beverages like regular soda, fruit drinks and energy drinks is linked with obesity, heart disease, type 2 diabetes and gout, according to the Centers for Disease Control and Prevention.

Indeed, applying a “sugar tax” to 100% fruit juice — whose naturally occurring sugars can rival the sugar content in sweetened drinks — leads to the greatest reductions in calories and sugar purchased, this experimental research from 2019 published in the International Journal of Behavioral Nutrition and Physical Activity found.

A separate study in the peer-reviewed journal Circulation last March concluded that higher intakes of fruit and vegetables were associated with lower mortality. “The risk reduction plateaued at 5 servings of fruit and vegetables per day,” it said. “These findings support current dietary recommendations to increase intake of fruits and vegetables, but not fruit juices and potatoes.”

This latest research on diabetes adds to the body of evidence suggesting that people who eat natural food, such as nitrate-rich vegetables, had a 12%-26% lower risk of heart disease, according to data from more than 50,000 people who took part in the 23-year-long diet and health study.  Diabetes also plays a role in cardiovascular disease, the No. 1 cause of death around the world.