The Moneyist: My wife and I have a $5 million estate — and no children. She has four nieces and I have one. Should we split our estate 5 ways?

Dear Quentin,

My wife and I have been happily married for over 30 years. With our savings and two paid-off houses, we are looking at an estate value of over $5 million. We do not have any children. As we structure our wills, we have some churches and other organizations we plan to donate to, but the bulk of our estate will go to our five nieces.

My wife’s side of the family has four nieces, and I have one niece on my side. My wife thinks an even distribution of our remaining assets among our five nieces is fair. I do not believe that is fair, as an even distribution among all five nieces would constitute an 80/20 split between the different sides of our family, with her side getting a significantly larger portion.

My way would be a 65/35 split, with her side still getting the larger share, but with my biological niece getting a larger individual share. My question is, which way is the fairest to split our $5 million? Should we just keep it focused on individual beneficiaries, or is factoring in the family-to-family dynamic reasonable?

The $5 Million Couple

Dear $5 Million Couple,

This is a nice problem to have — particularly for your nieces! I went back and forth on this one and I can see the benefits of both sides — the 65/35 split seemed like a reasonable compromise at first glance — but I ultimately fell into the 20-20-20-20-20 camp. Treat them all equally. They’re all family. You and your wife have been together for 30 years. That counts for a lot: blended finances, blended families.

It’s always good to leave the planet with a clean slate and, hopefully, garnering five-star reviews from those who knew and loved you best. There’s one thing you can leave behind that is more valuable than money — although some readers may disagree with me here — and that is good feelings. Have a lasting and positive impact. Resist any urges that may leave hard feelings after you’re gone.

The good news for your household, and for households like yours: You are well within the lifetime estate-tax exemption, which increased to $12.9 million for individuals in 2023, up from $12.06 million last year, and to $25.84 million for couples, up from $24.12 million last year. The annual gift-tax exclusion increased to $17,000 this year from $16,000 in 2022.

There is also a lot you can do while you are still here. You can give your nieces annual gifts, set up tax-advantaged 529 accounts for their education or their children’s, or make annual gifts to contribute to a down payment on a home. The best part about having so much money to give away is all the creative gift-giving and goodwill you can create.

It says a lot about you and your wife that your disagreement is over how much to give away to your nieces. It’s healthy to have these types of tricky conversations, but make sure that you’re both in agreement. It will make things easier should there be a more personal financial dilemma that hits much closer to home. It’s good practice to exercise open communication. If nothing else, it’s a worthwhile puzzle to solve.

But don’t forget your own future in the process. In addition to leaving money to your church and favorite charities, you may wish to hold onto a larger chunk for your own retirement, making sure you have enough set aside for unforeseen medical expenses, travel — you’ve earned the right not to fly economy — and long-term care. You are fit and mobile today, so make sure you enjoy the next 30 years.

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.

By emailing your questions, you agree to having them published anonymously on MarketWatch. By submitting your story to Dow Jones & Co., 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.