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Likely retiring by years end - 44 yrs old
Old 08-12-2015, 11:36 AM   #1
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Likely retiring by years end - 44 yrs old

Hi,

I am new here and been searching around for info as I contemplate some life choices. I have seen some good advice on the these boards. I am 44 yrs old, have two young sons, and am currently going through divorce from a women I have been with for over 25 years. Here is my situation and some questions / thoughts I have.

The divorce hurts, but without getting into great detail here, I have a strong chance to get custody of my sons (if my wife does not negotiate nicely / fairly) who are the only things that really matter to me right now. Although I could never think of retiring early previously, with the bad news of divorce, I have since found out I will be blessed with a substancial windfall (8 figure gift, taxes paid by giftor (my brother)) in the next 2-3 months. This has opened a new world. I have a very good paying job but really don't like it and the stress is thru the roof, yet now I can (and am) strongly considering FIRE and the ability it will provide me to take care of my sons full time (assuming I have them at least 50% of time), while also pursuing different life opportunities I could not pursue before.

My questions:

1. I know once divorce is settled I would easily live off investment income. House would be paid off and will have no debt, and could likely burn through 200-250/year after taxes on average and still have investment income left over to reinvest. But where / how could I safely "park" said gift so that it earns very little income until I properly invest after divorce. (I know that sounds odd, but although spouse cannot touch any of the gift's principle as it is seperate property, interest, captital gains, dividends, etc. can be considered as income and applied towards support awards to spouse, who makes very little money of her own).

2. Best places to shop health insurance in NY?

3. People have told me I should purchase umbrella insurance to protect against lawsuits / gold diggers, any advice there?

4. Longer term investing strategies....my goal is lower risk, protect principle. Shooting for 5-6% returns on average a year (is that reasonable?). Curious as to thoughts here. Ultimately, I will be securing a fee only financial advisor when the time is right though.

5. What am I missing when once considers FIRE?

Thank you in advance for thoughts you share. Its great that boards like this exist.
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Old 08-12-2015, 11:44 AM   #2
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First thought is be careful about receiving the gift before the divorce is final. I am not a lawyer, but I have seen several clients in the Family Office I w*rked in get inheritances and then spouse's attorney goes to the judge to get a piece of the inheritance (even though it was in trust).

Just my 2 cents.

BTW, congrats on the gift.
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Old 08-12-2015, 11:59 AM   #3
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My advice to you is to delete your opening post and not come back here again before your divorce is final, I have no idea of your circumstances but I'd 1. keep this private..and remember..2.this partner of 25 years is the Mother of your children and your kids will be watching the way you treat her. You say you'll be free to spend 200-250K and still have money left over and you soon to be ex has very little income. I have no idea of your circumstances, but this is not the road to a comfortable feeling for your children.
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Old 08-12-2015, 12:15 PM   #4
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Thanks for responses guys. My kids will always be well taken care of. My wife will also be ok as she will still be getting child support and maintenance from me. I would never let my children go without even for those portions of time they are with their mother. She may have been a bad wife, but she is a good mom.
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Old 08-12-2015, 02:31 PM   #5
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Definitely arrange for this gift to occur AFTER you are divorced. SInce yo are in NY, my understanding is your income will be considered in her support payment so your selection of an investment for your windfall should be guide by expert advise, not us. That advice likely would include receiving your living expenses for the period of support from the principle of the gift and selecting investments that don't spin off income or capital gains in the during the period you are paying support.

Divorce is a difficult time and even those that start out amicable many times become contentious. The only winners are the lawyers. Try and negotiate a reasonable settlement ASAP.
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Old 08-12-2015, 04:38 PM   #6
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You are in a situation I've never seen--a 8 figure gift? Are you talking $10,000,000-99,000,000 8 figures?

My first thought is to keep your mouth shut. An estranged wife finding out about your upcoming fortune would automatically contest the divorce and do everything in their power to get a large part of the "gift." It would be a case of blackmail--simply said. Keep on working that miserable job until the divorce is final, as she could keep you tied up in court for years and years. And she'll be looking for you to pay for legal fees--that could make a big dent in your "gift."

My second thought is that you need to go to a tax attorney to see if the "gift" can be structured in a more tax efficient manner. Can the "gift" actually go into some kind of trust that can be drawn upon as time goes on?

And my third thought is having large amounts of cash in the State of New York. It's simply not the place to live due to excessive taxation of all kinds. New Jersey and Connecticut are about as bad in different ways.

And my fourth thought is of you getting full custody of the kids so you can be free to move elsewhere. How do you like the warm weather in Florida--with no state income taxes? New York businessmen are moving to South Florida by the thousands to get lower taxes.

Good luck to you in your life changes.
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Old 08-12-2015, 05:36 PM   #7
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11,000,000 to start. More after. She is divorcing me, she has already served me papers. I respononded accordingly. In NY, after she served me all income afterwards in non marital. Also, gifts are seperate property regardless of when obtained as long as trackable as a gift an not commingled. My gift comes well after date served divorce papers. And they are not subject to equitable distribution. But the interest, etc. can be considered for child support and maintanence. I dont care about the latter, I want my kids to be whole regardless of the parent they are with.

I am only just just starting out on this divorce journey too, so am learning everyday.
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Old 08-12-2015, 05:57 PM   #8
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Complex situation. I can somewhat empathize.

First... You have 2 big changes on top of each other that both have the potential of creating bad decisions.

I also had a combination divorce/windfall though no kids in first marriage (only 4 years) and smaller windfall (company options/lotto tickets).

Before that I had a fairly well planned out FIRE plan... So it was just accelerated.

So... My advice.
1) finish divorce first. Park the money someplace safe and don't touch it for about 6-12 months while you finish your divorce and let it settle. I'd also avoid doing anything like quitting your job, dating, etc. You need to get to emotionally neutral and you probably won't be for a while. Caveat if your job is dangerous or destroying your health in which case I'd take enough cash to cover a year of expenses and deal with divorce.

2) once the divorce is done and you've settled for a while. Then turn to the money situation. Umbrella policy is a good idea (if you have the money right now might be good to do that sooner). I'd come back here to run any ideas through the wisdom of the group. A few don'ts I follow.

Don't tell friends/family (I guess family knows here ) right away.

Don't buy anything big on impulse (car and house)

Don't hire any financial professionals without a lot of due dilligence.

Don't make any fancy investments (friend starting business, micro cap stocks, forex, etc)

Don't chase yield. I.e. don't think "I want 5-6% and I'll look for something that returns that.

I don't have quite as much as you but I'm quickly moving completely to low cost index/rtf vanguard funds focusing on low fees and tax optimization. Fees, taxes and expenses are much easier to manage and have a huge impact on long term net worth.

Bottom line is... If you don't do anything stupid you are set for life. But when you are set for life (especially from a fast change and under emotionally stressful circumstances) it's easy to do stupid things . And there are huge businesses out there created just for people in your situation that will pretend to help but actually just want a piece of it... Or all of it in extreme cases.

So again... Focus on avoiding stupid and you're set forever .


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Old 08-12-2015, 07:00 PM   #9
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So the rules in your state mean the gift will be separate property. Are you willing to bet everything on that? A vengeful or upset soon to be Ex can file all the motions she wants, and skillful lawyers know very well how to get settlements they aren't entitled to under the law by making a nuisance of themselves until you pay to make them go away or at least stop eroding your assets. Even AFTER the divorce is final, she can reopen it, especially with kids involved. The less the lawyers smell chum in the water, the better.

The advice to delete all these postings is good advice.

Do you have any influence over the timing of the gift? Can you delay until after the divorce (preferably as long after as possible)?
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Old 08-12-2015, 07:04 PM   #10
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Quote:
I have a strong chance to get custody of my sons
This may change quickly if your soon to be Ex, or her lawyer, figures out what kind of a windfall she can get in child support from your soon-to-be large gift. Even if you are happy to share the money, you don't want her contesting child custody just to get her hooks into the cash. Better to not have this anywhere in the picture until after custody is settled.
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Old 08-12-2015, 10:17 PM   #11
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I agree, delete the post and keep this info to yourself at least until divorce is final. Get advice from professionals. Don't tempt fate.

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Old 08-12-2015, 10:32 PM   #12
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Originally Posted by ivinsfan View Post
My advice to you is to delete your opening post and not come back here again before your divorce is final, I have no idea of your circumstances but I'd 1. keep this private..and remember..2.this partner of 25 years is the Mother of your children and your kids will be watching the way you treat her. You say you'll be free to spend 200-250K and still have money left over and you soon to be ex has very little income. I have no idea of your circumstances, but this is not the road to a comfortable feeling for your children.
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