Dear Quentin,
I am getting cold feet about a marriage proposal I accepted this summer, and it’s all about money. Wait, it’s never really about money but rather what the handling of money represents. We have been together for more than six years, and bought a home together.
We are both paying towards substantial renovations. Currently, the deed is held as “tenants in common” with my portion of ownership transferring to a special-needs trust for the care of my adult disabled son.
My betrothed has mentioned that upon marriage he believes that the right of survivorship will automatically transfer to him. I don’t think so, and the trust was written with wording precluding all other claims from any subsequent spouse or relatives (there is a nefarious father and sister and two stepsisters who are awesome and cared for separately).
I am bothered that he would want to remove this major asset from the future of my son’s care. Life experience has taught me not to imagine that people will care for non-relatives in perpetuity.
His counterargument is that he has no reasonable heirs (he has a child that he found out about late in life, and they have no real relationship). So if he dies first, I would be his beneficiary. This would mean ultimately everything would go to the care of my disabled son. I’m fine with this. It gives me peace of mind. He isn’t fine because it doesn’t seem “fair.”
“‘I am reconsidering being married’”
If I die first, the trust allows him 10 years of ownership after my death and wills him 10 years of my portion of mortgage payments (cash to do with as he pleases). It’s just that if and when he sells, the trustees will act on behalf of the trust’s interests, and he would only get half of the equity, even if he stayed the whole 10 years and the house appreciates immensely.
He thinks that isn’t fair. I think I paid my fair share when I willed him the 10 years of payments. We have had discussions and he refuses to budge. Upon marriage he wants me to rewrite the trust and retitle the house. I am reconsidering being married. I worry it will greatly detrimentally affect care for my son. Who knows if we will sell this house before either of us dies? That’s likely, but not really the point.
My fiancé is wealthy and doesn’t need to inherit a dime from me to live comfortably after my death. My son will be reliant on the trust (he was recently denied Social Security Insurance so my help is all he has). My love is upset that I don’t trust him to take care of my son if I die.
Understand this: I trust NO ONE! Too much can happen. If the home equity goes to my son, it would be almost impossible for him to outlive his inheritance (if we both die and he gets everything, he would be able to live lavishly without worry). Without it, he should be OK, but the trustees will have to be prudent.
The question is, do I agree to make my future spouse the beneficiary of shared assets, or do I forgo marriage and keep everything in the trust, which may ruin my relationship? Am I potentially throwing away my chance at happiness with my fiancé needlessly, or are my worries well founded?
Cold Feet
Dear Cold Feet,
Your fiancé has enough money to take care of himself should you die before him. Your son may or may not have enough if you were to predecease your fiancé, and your estate went to your partner. Ten year of payments and right of survivorship over that same period of time is, I believe, fair.
But more importantly, your husband has already agreed to it. Whether your relationship survives or fails is up to him — and whether he now wants to change the goal posts after you get married. One could argue, unflatteringly perhaps, that he’s using the wedding ring as leverage.
If you purchased this property as “tenants in common,” you each own 50% and, should one of you die, you can leave your half to a third party. There are no rights of survivorship by the other party on the deed. So you are correct, if that is indeed the arrangement with your fiancé.
“‘He’s using the wedding ring as leverage.’”
On the other hand, if you have “joint tenancy with the rights of survivorship,” you each have an equal or undivided interest in the home, and if you die your share goes to the other person listed on the deed, in this case your partner. This can also be used for bank and brokerage accounts.
Similarly, “tenancy by the entirety” recognized in over two dozen states is a form of common ownership in which each partner, who in most cases must be married, owns an undivided share. If one spouse dies, the surviving spouse becomes the sole owner of the property.
Back to your dilemma: Your fiancé is free to leave his share of your home to his estranged child, or the dogs and cats home, if he chooses. He is wealthy. You are not. It makes sense that you want to make sure that your son will never have to worry about his future. Your current arrangement should stand.
Furthermore, I agree that people are notoriously unpredictable, and it’s never a good idea to leave something to chance, as this stepson discovered upon the death of his father. He has already shown you that he is prone to going back on his word. How can you trust him to do right by your son now?
The less uncertainty surrounding your finances and your future, the better. Ultimately, you are responsible for your adult son, and smart to make sure that everything is in black and white. Stick to your guns. You have both signed a legal contract. He can like it or lump it. It’s his choice.
You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com, and follow Quentin Fottrell on Twitter.
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