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Switching my combined vanguard taxable account to my wife

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  • Switching my combined vanguard taxable account to my wife

    Hi Everyone,
    I know the WCI advocates that the risk of divorce is a bigger threat than above limits lawsuit, but as my vanguard taxable account has grown larger; I've been thinking more about switching my joint vanguard taxable to just having my wife's name on those funds. Does anyone know if this is overly complicated or if there are any downsides to this (tax implications/gift tax/etc)? Would I have to dissolve the account and open a new one in just my wife's name? Has anyone else done this? Thanks in advance; I appreciate any and all advice.

  • #2
    advice #1- dont do it. In case of divorce, you'll lose it or spend more in lawyer fees to attempt to grab it back. Think about it- in the doctors lounge how many people do you hear griping about paying alimony or losing money in a divorce vs. losing personal assets in a malpractice suit?
    2- does your state offer tenants by entirety? vanguard allows that if your state does. If you are doing this for asset protection, do it.

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    • #3
      There may be some estate planning solutions for you that are better than transferring the assets to your wife. We have a spousal living trust, available in many states, that might be a better option. Check with your estate planning attorney.

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      • #4
        Why do people think that having an account in just their spouse’s name is any different in divorce than having it just in your name? I imagine there are differences state by state but by and large it is an asset that will be split evenly regardless of who’s name it is in.

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        • #5
          abds is correct. Look into what is considered marital property in the state you reside in. In some states, anything obtained after marriage would be considered marital property and split accordingly.

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          • #6
            I agree divorce is probably a more common way to have assets you're earning go elsewhere than malpractice suits. Also, revocable living trusts usually don't offer much asset protection. Other types of trusts and LLCs protect assets in various ways, with trusts usually being the go-to. It all depends on a person's state and net worth though.

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            • #7
              Thanks for all the input. That's helpful. When I was a resident, an estate planning attorney met with me and at the time offered to "set me up" for the tune of 10k. I obviously didn't have that sort of money and passed. Any thoughts on what a reasonable expectation should be for when I go out into the community and try to find a good estate attorney?

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              • #8
                did you read this post yet? https://www.whitecoatinvestor.com/asset-protection/

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                • #9
                  I missed that post billy. Thanks for pointing it out. I saw his most recent post where he talked about opening a bank account in Delaware. I'm not sure I'm at that point yet, but I will say that I think I want to look into trying to shelter the taxable account at least in some degree; probably just for peace of mind more than anything else.

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                  • #10
                    What is the advantage of having a joint taxable account versus having the taxable account in just one person's name in your marriage, if you started this account after you were married?

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