Dear Pay Dirt,
I have a loving, adoring husband who is 12 years older than me. I make about $100,000 a year and he makes five to six times that amount depending on how his bonus is. He recently started saving more aggressively for retirement with the goal of both of us retiring at the same time in 15 years (he at age 60 and me at age 48). He has worked hard and supports almost all of our daily household expenses—I am with him in this ambitious goal.
However, in all of my husband’s calculations, he bases our retirement needs on his life expectancy and refuses to acknowledge that statistically I will probably live longer than 20 years and need funds to support myself in that additional retirement. Frustrating, but I believe I have a neat solution! I am the sole beneficiary of the trust, from which I took a $1 million dollar distribution to buy our wedding house because even though he worked a lot, he had little saved at the time. We agreed that the rest of my trust would be used to pay for the children’s college and retirement expenses.
When he asked about the present value of the trust to use it in calculating what we are saving now for our retirement, I told him there was $1 million left when in fact, there was $2 million. The trust will be dissolved next year and all remaining funds distributed to me. Can I split the value into two accounts and put $1 million toward our joint retirement and keep $1 million in an account in my name just for my personal retirement fund to use once I’m probably widowed at some point? Does he need to know? My plan is to make our two children the beneficiaries of this personal account to replace my will which states that everything goes to my husband at my death if I pass before him to get away from possible gold- digging, second wife. If it matters, we have a prenup that specifically states that funds from the trust are not considered marital property. I admire his “what is ours is ours” attitude but if he is not willing to accept that I will probably have a life after him, then I have to watch myself! Are there any other considerations I should make?
—Some of Our Own
Dear What is mine,
While I admire the willingness to write in this advice column, someone with a combined household income of $700,000 and a trust of $3 million should. talk to an estate lawyer. I know finding a qualified professional for your complicated legal questions can seem daunting. But you probably know the phone number of a real estate attorney because of you inherited a multi-million dollar trust. I am a licensed investment advisor, but I am not your investment advisor.
The crux of your question is a fear many women have: They won’t be taken care of in their old age if their husbands are ahead of them. Once wealthy widows live in reduced circumstances is a recurring theme in many of Jane Austen’s works because women’s inheritance (“fortune”) becomes the property of their husbands when they marry. The husband is expected to invest his wife’s dowry in the is “four and five” and take only 4 percent and 5 percent annual interest for household income. If the wife is a widow, the dowry will be hers again but her husband’s other property will go to the male heir. Unfortunately, many rich husbands make bad investments, gamble away their wives’ dowries, or die without updating their wills to give their surviving wives a life interest in their property.
Luckily, women now have property rights in their marriage. Since you came into marriage with large assets and a prenuptial agreement to protect them, have equal rights to marital property, and earn your own six-figure salary, you have more opportunities than Mrs. Dashwood was there Taste and Taste. You should use that opportunity and privilege to find a real estate attorney you trust and talk about options. A trust division depends on several factors, such as the type of trust (revocable, complex, irrevocable), your situation, and your prenup.
Do you have to keep lying to your husband about how much you trust him? Maybe not. Hiding $1 million worth of assets can be a breach of trust, affect financial and tax planning, and can hurt you in a divorce, which your estate attorney will tell you. It would make a great subplot on Gossip Girl or Succession, though. But let’s keep hiding the main assets of the husband relegated to television drama.
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