Marital estate planning is an important consideration for couples, but what happens when one spouse secretly establishes a trust that includes all of their assets, leaving the other spouse feeling vulnerable and powerless? This is the situation faced by one reader who wrote to financial expert Quentin Fottrell seeking advice.
The reader explains that her husband, without her knowledge or consent, placed all of their assets into trusts controlled solely by him. This included their home and her investment properties. She had given up a job she loved in order to support the stability of their home and help raise his youngest daughter. Despite her efforts and contributions to the household, she now finds herself with no control over the assets and no say in her own financial future.
Fottrell suggests that transparency is crucial in marital estate planning. While a spouse can set up a trust during a marriage, it should be done with separate assets and with open communication between both partners. Setting up a trust with both separate and marital assets in secret is a recipe for legal battles and potential divorce.
In this case, the reader’s husband had placed both separate and marital assets into the trust, including her investment properties. Fottrell advises that she consults with a lawyer and possibly a forensic accountant to examine the contents of the trust and trace their origins. This will help determine if any marital assets were improperly shielded.
The reader also raises concerns about the change of beneficiary on her husband’s retirement account. If her husband forged her consent on the beneficiary designation form, this should be challenged immediately. Fottrell notes that while some retirement plans require spousal consent for changing beneficiaries, others do not. It’s important to understand the specific rules and regulations regarding retirement plans.
Ultimately, Fottrell emphasizes that the damage to the reader’s marriage has already been done by her husband’s actions. If she decides to consult with a lawyer, she would be addressing the fallout from his choices rather than causing the ruin of the marriage. He also advises her to consider waiting until their 10th wedding anniversary before pursuing a divorce, as she would then be entitled to spousal Social Security benefits.
In conclusion, this situation highlights the importance of open communication and transparency in marital estate planning. It serves as a reminder that trust and respect are vital in any relationship, and that financial decisions should be made jointly rather than in secret.
