‘I don’t like the idea of dying alone’: I’m 54, twice divorced and have $2.3 million. My girlfriend wants to get married. How do I protect myself?

I am 54 years old. I have two older teenage boys, and I have been divorced twice previously. I own five properties in Washington state worth approximately $2 million. My 401(k) is worth $350,000. I make $150,000 per year from a sales job and rent from my properties. Eventually, I will inherit two more properties in Washington state and some stocks worth about $1 million. I have paid into Social Security for 38 years and will receive close to the maximum payout. 

My 52-year-old girlfriend owns her own home, valued at $500,000, and wants me to move in with her and marry her. I am not sold on this idea, as it puts me at risk financially. But I don’t like the idea of dying alone, either. She has stocks worth around $100,000. Her jewelry company has $150,000 in debt and inventory assets of $20,000. It’s barely hanging on and makes $20,000 a year profit. She has only paid into Social Security for 11 years.

She has never been married and has no kids. She comes from a wealthy family and will get a large inheritance in 20 years or so. If I do marry her, how do I protect my assets and my Social Security benefits in case of divorce? A revocable trust? An irrevocable trust? A prenup? I have heard horror stories of people, mostly men, losing half of their Social Security in a divorce. I plan on working until I am 70. I plan on leaving the vast majority of my estate to my boys.

Don’t Want to Die Alone and Broke in Washington State

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Dear Don’t,

You can’t lose your Social Security benefits in a divorce. You have paid into them, and they are yours. A divorce court could take your benefits into account when splitting assets, but you have paid into this program for the last 38 years, and those benefits are yours and yours alone. If you divorce, your spouse can receive her own benefits based on your Social Security contributions, but only if you were married for 10 years and she doesn’t remarry and is 62 or older.

Washington is a community-property state, so anything you bring into the marriage is separate property, while earnings during the marriage are considered marital property. Those assets would likely be split 50/50 in the event of a divorce. Gifts and inheritances are an exception to this rule. If your wife inherited $1 million during your marriage, for example, that money belongs to your wife. Whoever inherits, however, would have to prove that the gift was to them alone.

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

“It is critical that you know and understand the implications of living with an intimate partner in Washington so you can either plan accordingly or know what rights you may have when a relationship like this ends,” the law firm adds. “Cohabitation laws apply to all couples meeting legal requirements for committed intimate relationships, including both opposite-sex and same-sex couples.”

Assuming you live together and don’t marry, a cohabitation agreement would fulfill much of the goals of a prenuptial agreement for married couples. “You can set forth how property will be divided and protect yourself from allowing a partner to gain a share of your property in the event of a break-up,” Dellino adds. “Cohabitation agreements protect both parties and serve as insurance.”

Prenuptial agreement versus trust

You could place your rental properties into a revocable trust to bypass probate; it would require paperwork and expense. If you did marry, avoid using marital funds for significant upgrades to those properties. Unlike your rental properties, however, you can’t put your 401(k) into a revocable trust. This would mean the account would need to be retitled, which would lead to significant tax consequences. Listing your sons as beneficiaries would do the job just the same.

A prenup can address the debts a spouse brings into the marriage and, as such, may be preferable to a trust in this instance, says Neil V. Carbone, trusts and estates partner at Farrell Fritz PC.  “Another benefit of a prenuptial agreement over a trust is that it will require an open discussion and an eventual agreement between them — and, in most states, with the benefit of their separate attorneys — so there should be no surprises in the future.”

Irrevocable trusts are suited for individuals who have amassed significant wealth. The federal estate-tax threshold for 2024 is $13.61 million for individuals and $27.22 million for couples, so you would not need to pay federal estate tax on amounts below that. It does not seem like you are going to avail yourself of Medicaid, so an irrevocable trust won’t help you there, and if you set one up, you would lose control of your assets, as the name “irrevocable” suggests.

“A properly drafted irrevocable trust that is created and funded prior to the marriage should protect assets from a spouse as well as the creditors of both spouses,” Carbone adds.  “An important consideration, however, is that ownership of the assets must effectively and irrevocably be transferred to the trust in order to be protected.  The grantor has to give up control of the trust property to the trustee, who will determine whether and when to make distributions.”

“Also, not every state allows for so-called ‘self-settled’ asset-protection trusts, that is, trusts where the grantor can also be a beneficiary of the trust while providing protection against the grantor’s creditors,” Carbone adds. “Asset-protection trusts can also be set up offshore, but doing so usually involves increased costs, which may be warranted when significant assets are at stake.”

Reasons for getting married

So what is the answer if you marry? Financially, a revocable trust, a last will and testament and a prenuptial agreement should protect the lion’s share of your assets, and can set out guidance related to alimony and debts. But a prenuptial agreement should be fair and equitable, and it should be transparent about the assets and liabilities held by both parties. It should also be entered into without duress. There is no guarantee that a prenup will be enforced, but writing it with the guidance of a lawyer will help.

Speaking of duress, getting married because one party wishes 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. Getting married because you got married twice before and this is third time lucky, and because it seems like the right thing to do if you’re dating someone, is also not a reason to get married. There is no reason you should get married for a third time if it’s not something you want to do.

Love is a good reason for most people to get married — and there are also tax advantages — but you can love someone outside of marriage. This is a financial-advice column, but it’s often a relationship column disguised as a financial-advice column, because it deals with marriage, divorce, death, taxes, inheritance and families.

Signing a marriage contract is a big step and, as you have discovered, it is one of the most important contracts you will sign in your life. Financially, it simply may not benefit you. And, as I said, you also need to be aware of the laws in your state related to unmarried cohabiting couples. Do you love her? That was not a word that made an appearance in your letter. And is love enough for you to navigate this relationship?

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

Just be sure you’re marrying for the right reasons before you take that step.

You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com, and follow Quentin Fottrell on X, the platform formerly known as Twitter.

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