21 Oct Do I have to leave my investments to my wife?
Q. I have a Fidelity non-retirement account with seven great holdings and it’s growing fast. My marriage is a marriage of convenience: no more, no less. I don’t want her touching this account should I predecease her or my father. I want my father to have the account because he taught me how to invest. Can I name him the sole beneficiary?
A. You have several options.
You may name your father instead of your spouse as the beneficiary of your investment account, but there’s a “but.”
Unless you are living separate and apart from your wife in different homes, or if you don’t live together as husband and wife because of circumstances that could give rise to a cause of action for divorce — assuming you don’t have a prenuptial agreement that addresses such issues — your wife may have a cause of action for an “elective share” of your estate when you die, said Catherine Romania, an estate planning attorney with Witman Stadtmauer in Florham Park.
“An elective share is one-third of a decedent’s augmented estate as defined in the statute to include property owned or controlled by the decedent or in which the decedent retained rights, as well as certain property transferred by the decedent within two years of death less certain debts and expenses,” she said.
Because the elective share is needs based, if the surviving spouse has assets greater than or equal to that amount in his or her own name, then the elective share is deemed satisfied, she said.
“Spouses may also waive the elective share in a writing other than a prenuptial agreement,” Romania said. “Another way to ensure the elective share is satisfied is to name the surviving spouse as beneficiary of a life insurance policy.”
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This story was originally published on Oct. 21, 2020.
NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.