I have 2.3 million dollars. My girlfriend wants to get married. How do I protect myself?

I am 54 years old. I have two older teenage sons and have been divorced twice before. I own five properties in Washington State worth about $2 million. My 401(k) is worth $350,000. I make $150,000 a year in sales and rent from my properties. Eventually, I will inherit two more properties in Washington state and about $1 million worth of stock. I have been paying Social Security for 38 years and will receive close to the maximum payment amount.

My 52-year-old girlfriend owns her own home worth $500,000 and wants me to move in with her and get married. I don’t like this idea. Because it puts me at risk financially. But I also don’t like the idea of ​​dying alone. She owns about $100,000 worth of stocks. Her jewelry company has liabilities of $150,000 and inventory of $20,000. It barely lasts and it makes $20,000 per year. She only paid her Social Security taxes for 11 years.

She has never been married and has no children. She comes from a wealthy family and she will inherit a large inheritance in 20 years or so. If I marry her, how can I protect her assets and Social Security benefits in the event of a divorce? Revocable Trust? Irreversible trust? Ready for a prenup? I’ve heard horror stories of people (mainly men) losing half their Social Security through divorce. I plan to work until I am 70. I plan to leave most of my wealth to my sons.

I don’t want to die broke and alone in Washington state.

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Do not,

You cannot lose your Social Security benefits due to divorce. You paid for them and they are yours. The divorce court may consider your benefits when dividing assets, but you have been paying for this program for the past 38 years and those benefits are yours alone. If you divorce, your spouse may receive his or her own benefits based on your Social Security contributions. However, this is only possible if you have been married for 10 years, your spouse has not remarried, and you are over 62 years of age.

Washington is a community property state, so anything brought into the marriage is separate property, and any income earned during the marriage is considered marital property. In a divorce, those assets will likely be split 50/50. Gifts and inheritances are exceptions to this rule. For example, if your wife inherited $1 million during her marriage, that money belongs to her. However, the person receiving the inheritance must prove that the gift was given solely to him or her.

You also live in a state of “close intimate relationships.” According to Dellino Family Law Group, which has offices in Bellevue and Seattle, “These relationships occur when an unmarried couple lives together for a significant period of time and lives in a state that can be considered a marriage-like relationship. ” “In Washington State, these relationships have property and other rights similar to those that married couples have.”

“It is important to know and understand what it means to live with an intimate partner in Washington. That way, you can plan accordingly or know what rights you have when a relationship like this ends,” the law firm added. “Cohabitation laws apply to all couples, including heterosexual and same-sex couples, who meet the legal requirements for a committed intimate relationship.”

Assuming you live together and are not married, a cohabitation agreement would accomplish most of the goals of a prenuptial agreement for a married couple. “It can specify how your property will be divided and protect your partners from sharing your property in the event of a strike,” Dellino added. “A cohabitation agreement protects both parties and serves as insurance.”

Prenuptial Agreement vs. Trust

You can place rental property into a revocable trust to bypass probate. It requires paperwork and costs. If you are married, do not use your wedding funds to make major upgrades to the property. However, unlike rental properties, 401(k)s cannot be included in a revocable trust. This means you will need to change the title of your account, which can have significant tax consequences. Registering your son as a beneficiary does the same thing.

Neil V. Carbone, trusts and estates partner at Farrell Fritz PC, says a prenup may be better than a trust in this case because it allows spouses to settle debts they bring with them from the marriage. “Another advantage of a prenuptial agreement over a trust is that it requires open discussion and a final agreement, which in most states requires the assistance of a separate attorney, so there are no surprises in the future.”

Irrevocable trusts are appropriate for individuals who have accumulated significant wealth. The 2024 federal estate tax threshold is $13.61 million for individuals and $27.22 million for couples, so you do not have to pay federal estate tax on amounts below that. Since you likely won’t have access to Medicaid, an irrevocable trust won’t help you there, and if you set one up, you’ll lose control of your assets, as the name “irrevocable” suggests.

“A properly drafted irrevocable trust established and funded before marriage should protect assets from creditors of both spouses, not just the spouse,” Carbone adds. “However, an important consideration is that ownership of assets must be effectively and irrevocably transferred to the trust for protection. The grantor must transfer control of the trust property to the trustee, who will then decide if and when to distribute it.”

“Also, not all states allow so-called ‘self-established’ asset protection trusts, i.e. trusts that allow the grantor to be a beneficiary of the trust while also providing protection from the grantor’s creditors,” Carbone adds. “It is possible to set up an asset protection trust overseas, but doing so generally increases costs so that important assets are covered if they are at risk.”

Reasons for getting married

So what is the answer when you get married? Financially, a revocable trust, will, and prenuptial agreement should protect the largest portion of your assets and can provide guidelines regarding alimony and debt. However, a prenuptial agreement must be fair and equitable and transparent about the assets and liabilities held by both parties. It must also be entered without coercion. There is no guarantee that the marriage registration will be executed, but it may be helpful to prepare it under the guidance of a lawyer.

Speaking of compulsion, getting married because one person wants to get married is not a reason to get married. Getting married because you don’t want to die alone is not a reason to get married. I’ve been married twice before, this is my third lucky one, and if I’m dating someone, getting married because it seems like the right thing to do is also not the reason for getting married. There is no reason to get married a third time if it is not something you want to do.

Love is a good reason for most people to get married, and there are tax benefits as well. But you can love someone outside of marriage too. Although it is a financial advice column, it is often a relationship column disguised as a financial advice column because it covers marriage, divorce, death, taxes, inheritance, and family.

Signing a marriage contract is a big step, and as you’ve discovered, it’s one of the most important contracts you’ll ever sign in your life. Financially, it may simply not help. And like I said, you should also be aware of your state’s laws regarding unmarried cohabiting couples. Do you love her her? That was not a word that appeared in your letter. And is love enough to navigate this relationship?

If you’re not marrying for love, which can develop over time, as you’ve discovered in previous marriages, or for financial security, whether many people want to admit it or not, do you marry for companionship? Do you want someone to wake you up in the morning and come home at night? You have been married twice before. Let this guide you as you make your decisions.

Before you take that step, make sure you’re getting married for the right reasons.

If you have any financial or ethical questions, you can email The Moneyist at qfottrell@marketwatch.com and you can follow Quentin Fottrell on X, a platform previously known as Twitter.

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