An Inheritance Hits Home

Mary Warner and Her Family Must Handle A Delicate Sharing of Family Assets

Like many 40-year-old couples, Mary Warner and her husband, Carlton, are feeling “the squeeze.” They are engaged in financial battles primarily on three fronts: saving for their own retirement; saving to put their two children, Carla, 19, and Caryn, 10, through college; and saving for possible expenses that may come from caring for aging parents.

The Warners have challenged themselves to learn more about the financial markets because they realize the importance of the tasks ahead. “My ultimate goal is to learn some things about finance so I can teach my 19- and 10-year-olds how to save and invest so that they can get some of the things they really want,” says Mary Warner, 48, who works part-time, processing contracts for print orders at ABC Advisors in Washington, D.C. “Hopefully we can leave a legacy for them, some money and property so that they can have a leg up from where I was when I started out.”

Relatively speaking, the Warners have done a good job stretching their finances. Mary brings in $12,500 from her part-time job, and Carlton, 42, earns $40,000 as a postal worker. Mary inherited their current home when her father died. They moved in in 1975, but she is co-owner of the property with her 45-year-old brother, Benjamin Foster Jr., who lives with their 68-year-old mother. Since inheriting the home, Mary has taken out a $50,000 home improvement loan, which the couple is paying back in $509 monthly installments.

The Warner’s joint assets include a $1,500 savings account, $2,000 credit union account, a $400 checking account, and a $10,000 mutual fund account. Mary owns a $7,900 Roth IRA and has contributed $4,000 into her 401(k) plan. Carlton has a $12,000 thrift savings account with the postal service, and $40,000 in his 403(b) retirement account.

They currently pay a $400 car note on a 1998 Isuzu Rodeo; they owe $13,000. Their other liabilities include $4,300 in credit card expenses; a $1,400 credit account with Marlow Furniture Stores; $400 with Victoria’s Secret; and $5,000 for Carla’s tuition for the spring semester.

Mary says she entered the Financial Fitness contest because, “When it is time to retire, we want to have some money so that we can live comfortably and travel if we want. And, if we need something, or we need to buy something for our parents, we want to have the money to be able to get it.”

In addition to managing the couples’ daily expenses and the debt they’ve accumulated, Mary will also need to find a resolution concerning ownership of the house her father left her. Since she and her brother both own the house, which has been in the family since 1940, she is concerned about being able to pass it on to her children. But, Mary realizes that the house could be a source of revenue for her brother’s retirement in the future.

THE ADVICE
Mary and Carlton have done a good job with the income they’ve generated, but they will have to work harder in order to retire the

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