Author Topic: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?  (Read 2379 times)

RainyDay

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Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« on: November 03, 2020, 09:50:07 AM »
I HATE that I'm even asking this, but I'm a practical person at heart.  We are planning to get married next year, so I have some time.

I'm 48 and he's 42, so we've both lived a significant portion of our lives unmarried.  We have no children together.  I have relatively significant assets (both retirement and taxable, plus ownership of the house we live in) while he has some savings but is not dedicated to it.  No debt on his side, however.

We live in Virginia, which is an "equitable" distribution" state.  I believe this means that "separate property," which is property owned by one party prior to the marriage, remains the property of that person after a divorce and does not get divided up. In other words, everything I've saved so far prior to the marriage would remain mine if we ever got divorced.

So do I still need a pre-nup?  I absolutely trust my SO, but I'm sure a ton of divorcing people said that when they were engaged. 

RetiredAt63

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #1 on: November 03, 2020, 10:18:13 AM »
Thoughts.

You may move to a different state with different inheritance laws.  Inheritance laws can change.

You don't have children together, but do either of you have children from a previous marriage?  This is the most common reason for a pre-nup or a cohabitation agreement.  Wanting to make a large donation to a charity (church, university, whatever) or a family member in your will that might conflict with inheritance laws is another.

Have you discussed this with a family lawyer who is familiar with issues that could arise?

I am assuming you would do wills and power of attorneys either in anticipation of the marriage or right afterwards, whichever is appropriate in your state.

MrThatsDifferent

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #2 on: November 03, 2020, 10:42:13 AM »
Yes

Imma

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #3 on: November 03, 2020, 10:49:18 AM »
Please discuss this with an expert. Laws are complicated.

I'm not in the US but yes, we made the choice to keep seperate finances. We don't care a lot about the little things (who pays for what this month) but it's important to us that big assets - property, retirement pots, investments - are kept seperate. We are childless and he's my sole heir but if he has a midlife crisis and runs off with his secretary then I don't see how he should be entitled to any money he didn't make himself (and vice versa of course).

Catbert

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #4 on: November 03, 2020, 10:52:30 AM »
I suggest a quick appointment with a local attorney to ensure that you understand how "equitable distribution" and "separate property."  I'm not sure that equitable distribution means what you think it means.

I live in a community property state but even here property owned before marriage remain separate property unless you co-mingle it with community property.  Here co-mingling would include using community property (i.e., money earned during the marriage) to pay a mortgage or repair/upgrade a separately owned house. 

Again, not Virginia and not a equitable distribution state.

thesis

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #5 on: November 03, 2020, 01:00:38 PM »
I learned a lot about this topic several months ago, there are some really great FIRE articles out there about it. Here are some links I still have:

http://www.realworlddivorce.com/
http://www.ivigilante.com/marriage-is-your-biggest-investment/

I think the PhysicianOnFire blog had several guest writers who address the topic, which led to the rabbit trail of these links.

Considering how one party can often screw the other over, I've started looking at the prenup not as a "my assets and yours", trust-lacking exercise but more as a contract of "if we really love each other, we'll craft a prenup that prevents either of us from screwing the other over". It's a change of mindset for many, I'm sure, but I also don't have any immediate need to study the subject in too great a depth, ha!

EDIT: Maybe take that first link in small chunks, it's pretty depressing if you read it all in one go. I think the author is just highlighting some of the worst-of-the-worst cases to drive the point home how important this stuff is.
« Last Edit: November 03, 2020, 01:04:12 PM by thesis »

RainyDay

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #6 on: November 04, 2020, 07:49:00 AM »

You may move to a different state with different inheritance laws.  Inheritance laws can change.

You don't have children together, but do either of you have children from a previous marriage?  This is the most common reason for a pre-nup or a cohabitation agreement.  Wanting to make a large donation to a charity (church, university, whatever) or a family member in your will that might conflict with inheritance laws is another.

Have you discussed this with a family lawyer who is familiar with issues that could arise?

I am assuming you would do wills and power of attorneys either in anticipation of the marriage or right afterwards, whichever is appropriate in your state.

Good point, I hadn't considered moving to a different state with different laws.

My SO has a son, but he is 16, so presumably a theoretical divorce would happen after he's an adult.  Of course, I'd want his son to inherit whatever is his right, and I'm planning to put him in my will anyway. 

I am planning to have a will, but pre-deceasing my future husband is different than divorcing him!

RainyDay

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #7 on: November 04, 2020, 08:07:40 AM »
Considering how one party can often screw the other over, I've started looking at the prenup not as a "my assets and yours", trust-lacking exercise but more as a contract of "if we really love each other, we'll craft a prenup that prevents either of us from screwing the other over".

This is exactly what I have in mind, but that's easy for me to say when I'm the one with the assets and he is not!  In other words, the perception is that a pre-nup automatically benefits the person with assets to protect, so the other party could easily feel hurt or insulted.

Malcat

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #8 on: November 04, 2020, 10:46:54 AM »
I look at it this way: when you sign the marriage contract, it *is* a contract. It comes with an enormous amount of financial consequences that you are agreeing to if that contract is broken. As it stands, the contract is one-size-fits-all and it may or may not fit your particular circumstances.

There is *nothing* wrong with choosing to customize that contract in a way that feels equitable to both of you.

socaso

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #9 on: November 04, 2020, 11:09:56 AM »
Considering how one party can often screw the other over, I've started looking at the prenup not as a "my assets and yours", trust-lacking exercise but more as a contract of "if we really love each other, we'll craft a prenup that prevents either of us from screwing the other over".

This is exactly what I have in mind, but that's easy for me to say when I'm the one with the assets and he is not!  In other words, the perception is that a pre-nup automatically benefits the person with assets to protect, so the other party could easily feel hurt or insulted.

The top quote is very similar to how I have suggested to my spouse that we might consider a post nup agreement. I generally frame it as "we should make these decisions while we have each other's best interest at heart." We've been together 15 years and neither of us had assets to speak of when we got married so everything we have is jointly earned. We haven't done a post nup but I'd be open to it if he wanted to.

Pre nups aren't always "I keep mine and you keep yours" they can have clauses such as after a certain number of years together there is a different method of dividing things or you can have infidelity clauses and things like that. Talk to a lawyer. But talk to your partner first. It would probably feel pretty terrible if you talked to a lawyer before you talked to them.

cool7hand

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #10 on: November 04, 2020, 11:13:35 AM »
You might consider some pre-marriage counselling. Money is the #1 source of marital discord, and you two have vastly different ideas about money.

As for your question, a pre-nup couldn't hurt. The default position in most jurisdictions is that property before marriage is yours and property accumulated during marriage is held as joint tenants. For a mustachian with substantial assets, this means that the growth in value on your assets become part of the marital estate. On that basis alone I would see a skilled family law attorney.

Sun Hat

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #11 on: November 04, 2020, 03:23:37 PM »
Have you had a look at the Financial Infidelity thread? Scary stuff. If you're a saver and you marry a spender, you risk becoming liable for debts that he incurs while you're married, whether or not you have approved or are even aware of his expenditures. Please get a prenump. Don't worry about him not finding it romantic. Caring about you enough to communicate and set expectations for how money will be spent during your marriage is how he can show you that he loves you.

My mom and her husband signed a prenump, and it's a good thing too. He came into the marriage with debts that he has no intention of paying, and based on how much he pesters her about the wastefulness of having savings when my mom could be spending her life savings on his most-wanted indulgence of the moment, I'm certain that if he had any legal means to access her money, be it through divorce or draining her accounts, he would. That prenump is the only thing keeping them both from being wiped out by his spendthrift habits.

WSUCoug1994

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #12 on: November 04, 2020, 05:25:20 PM »
Money is complicated - almost as complicated as people.  I understand why this can be a sensitive subject especially when its usually the person with the money that wants a pre-nup.  I have one - I was married at 45 and was well established financially and my now wife was not.  We also wanted her to stay home with the kids if we were lucky enough to have them - so she was going to compromise her career.  She never questioned it but her family sure did - it got pretty awkward but honestly I didn't care.  So many different things can make money/relationships complicated - I simply wouldn't enter a marriage without one.  We found it was a pretty good exercise to pressure test if we were ready to be married to each other and it really gave us a great foundation for talking about money.  We are 100% aligned on money but things can change.  The downside/upside is that you essentially have to disclose all of your debts/assets on the front end of a marriage - that wasn't an issue for us but I know some people are not always comfortable with that.

For example - if you live in this house for the next 10 years and you are both paying for a portion of the mortgage - how do you calculate who gets what in the appreciation/depreciation of the house?  Since he is now essentially an "owner" of the house does he get his name on the title? It is things like this that can make it complicated.
« Last Edit: November 04, 2020, 05:33:56 PM by WSUCoug1994 »

zoro

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #13 on: November 04, 2020, 06:04:21 PM »
Yes - we have one. It is much better to negotiate all of this stuff while you still love each other than later.
Make sure you both get your own lawyers and have enough time before the wedding to make it valid.

RetiredAt63

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #14 on: November 04, 2020, 06:35:49 PM »
Really open financial talk is essential before the wedding.  I had no idea my fiance had student debt and had never balanced a checkbook (long time ago, and we were 22, just starting grad school). Money was a major issue our whole marriage. 

spartana

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #15 on: November 04, 2020, 09:50:06 PM »
I would also get a pre-nup if I were marrying even if I was the one who had less assets. Things can change over time and the person with the big bucks now could be sued for some reason or incur other debts in the future that could financially wipe you out if you were liable for them after divorce. Although I imagine you'd be liable for those debts even if you had a pre-nup unless the pre-nup also seperated assets and debts that each incurred while married. 

For myself I married young (23) and neither of us had much, and what we had individually was about the same plus no debt. Had the same job and income too. We didn't get a pre-nup and when we divorced approx 17 years later at 40 we did so as friends and split things equitably. Easy with no financial issues for either of us. However I realize that our divorce and financial situation was VERY uncommon and most people have very contentious divorces.

Now as an FIREd person who had FIREd shortly after divorcing and had substantial FIRE assets,  I realize I was fortunate. So now I would not marry unless we had both a pre-nup and seperate finances. Well I personally would not marry at all for both personal and financial reasons,  although I do have a very nice, FIREd SO I live with. We have seperate finances and, unlike Canada or other countries, no need for a document to keep our asserts and obligations seperate legally.
« Last Edit: November 04, 2020, 10:04:19 PM by spartana »

Imma

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #16 on: November 05, 2020, 02:48:40 AM »
We found it was a pretty good exercise to pressure test if we were ready to be married to each other and it really gave us a great foundation for talking about money.  We are 100% aligned on money but things can change.  The downside/upside is that you essentially have to disclose all of your debts/assets on the front end of a marriage - that wasn't an issue for us but I know some people are not always comfortable with that.


I can't imagine at all why someone would not want to disclose all debts and assets before marriage. That would be a major red flag to me. How can you even budget for a wedding or a home if you don't know half of the story? If you don't trust someone completely, why would you even propose/accept a proposal?

When we got together we were broke students so it was easy to discuss money from the start, I understand that if you have some wealth you don't want to disclose that to just anyone. But money should be discussed regularly from the moment a relationship becomes serious and by the time you're ready for marriage or civil partnership everything should be disclosed.

From a legal point of view, I know it doesn't work like that, but any other contract can be dissolved if one party has deceived the other, I don't know why a marriage contract can't be dissolved if one person brings secret debts.

Runrooster

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #17 on: November 05, 2020, 04:22:36 PM »
I like this thread, because I don't know much about pre-nups.  I had been under the istaken impression that you could only dictate how to split pre-marital assets, not the one you accrue during the marriage, which are presumed joint.  wikipedia says pre nups are much broader than that.

What still bothers me, as someone who never married in part due to financial imbalance issues, is how you do anything but joint finances in a logistical sense.  OP for example says she has retirement savings, no kids, other sound habits.  When she marries someone, "in sickness and in health, for richer and for poorer" how do you decide how to split the costs, mortgage esp? How do you even come to a joint decision about how much house you can afford?  And one person with no retirement fund vs someone well funded? Does the saver have to double save to care for both? Does the poor one get to go on medicaid or declare bankruptcy?  Are you going to let the poor one fend tuition bills for the child?

My Dad is frugal to a fault, my Mom is not.  But he shared his income (although she did make a nice salary for about 15 years) with her as the primary homemaker.  He covered her long term care insurance and huge medical costs.  I don't know what recourse she would have had if he hadn't.

Villanelle

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #18 on: November 05, 2020, 05:11:41 PM »
I don't see a reason not to do it, assuming your partner is on board.

But I think you and the partner still need to have some very meaningful conversations about finances.  The pre-nup only solves things in the event of divorce.  But figuring out what happens when your partner wants a new TV and you are fine with the old one, or how you will handle it if you are fine with a 1200sqft home and they want 3200sqft, or even just if they want to spend $120 on a new sweater and you see a perfect good option for them at Old Navy for $19.99--these are the things that you need to sort out.

And maybe you've done that, but if not, I'd absolutely start there. 

Imma

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #19 on: November 06, 2020, 05:21:34 AM »
@Runrooster we're both frugal, which solves a lot of issues. We have a joint bank account for household + mortgage. We own our home 50/50 and we put the same amount of money in the joint account every month. When we bought the house, his income was higher than mine, now mine's higher, we bought the cheapest house we could find so we're still both doing fine.

I save more money for retirement but Mr Imma is still doing better than most "normal" people. In case of emergency of course I'll always help him out and vice versa. If he ends up completely disabled, but for some reason doesn't qualify for disability benefit, of course I'd just pay for both of us.

Recently Mr Imma bought a fancy 400 TV for us from his own money. He wanted to have it for gaming, the old TV was perfectly fine so it didn't even cross his mind to pay it from joint money. I still use it. Same with the KitchenAid that I bought from my Christmas bonus last year. That's about the extent of our spendypants behaviour.   

From next year, because my income has increased significantly, Mr Imma doesn't qualify for subsidized healthcare anymore. Because my income is 60% higher than his now, I'll put him on my health insurance next year. After 7 years that's going to be the first time we'll mingle any money.

RainyDay

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #20 on: November 06, 2020, 05:52:46 AM »
Lots of good input, and food for thought!  SO and I have never had issues regarding money, primarily because everything is separate.  We've been together 7+ years.  But this is a good point:

What still bothers me, as someone who never married in part due to financial imbalance issues, is how you do anything but joint finances in a logistical sense.  OP for example says she has retirement savings, no kids, other sound habits.  When she marries someone, "in sickness and in health, for richer and for poorer" how do you decide how to split the costs, mortgage esp? How do you even come to a joint decision about how much house you can afford?  And one person with no retirement fund vs someone well funded? Does the saver have to double save to care for both? Does the poor one get to go on medicaid or declare bankruptcy?  Are you going to let the poor one fend tuition bills for the child?

At some point, finances become entangled simply by living together and co-existing.  We don't have a problem with current issues (I bought the house and he became my roommate, which is how we met.  So he's been paying rent all along and I don't see that changing, except that now he'll officially be paying part of the mortgage and will be entitled to a share of the appreciation of the house.).  But we do need to talk about how to handle future issues.  Both sets of our parents are financially stable.  But what happens when his son asks for help on a down payment on a house, or gets into financial trouble, or what have you?

And I'd like for him to retire (hopefully young-ish!) someday, too.  How is he going to do that with no savings?  He has no debt and no expensive hobbies, and he's interested in saving and investing, but I struggle to discuss money issues without sounding preachy or bragging.   

Just tossing thoughts around... I very much want us to have a happy marriage, and I know that money issues top the list of marital problems. 

Malcat

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #21 on: November 06, 2020, 07:28:41 AM »
Lots of good input, and food for thought!  SO and I have never had issues regarding money, primarily because everything is separate.  We've been together 7+ years.  But this is a good point:

What still bothers me, as someone who never married in part due to financial imbalance issues, is how you do anything but joint finances in a logistical sense.  OP for example says she has retirement savings, no kids, other sound habits.  When she marries someone, "in sickness and in health, for richer and for poorer" how do you decide how to split the costs, mortgage esp? How do you even come to a joint decision about how much house you can afford?  And one person with no retirement fund vs someone well funded? Does the saver have to double save to care for both? Does the poor one get to go on medicaid or declare bankruptcy?  Are you going to let the poor one fend tuition bills for the child?

At some point, finances become entangled simply by living together and co-existing.  We don't have a problem with current issues (I bought the house and he became my roommate, which is how we met.  So he's been paying rent all along and I don't see that changing, except that now he'll officially be paying part of the mortgage and will be entitled to a share of the appreciation of the house.).  But we do need to talk about how to handle future issues.  Both sets of our parents are financially stable.  But what happens when his son asks for help on a down payment on a house, or gets into financial trouble, or what have you?

And I'd like for him to retire (hopefully young-ish!) someday, too.  How is he going to do that with no savings?  He has no debt and no expensive hobbies, and he's interested in saving and investing, but I struggle to discuss money issues without sounding preachy or bragging.   

Just tossing thoughts around... I very much want us to have a happy marriage, and I know that money issues top the list of marital problems.

So you two haven't discussed your future plans in the entire 7 years you've been together??

It's not preachy or bragging to ask your partner what their plans are and how they intend to accomplish them. Ostensibly, you've at least somewhat discussed retiring at some point, you just haven't gone over the details because you find it uncomfortable???

This to me is like getting engaged to someone who decides in their 40s that they want to be a doctor, but they've never even attended undergrad. Sure, it's possible, but if I was engaged to them, I would sure as hell need to be heavily involved in the planning of how on earth we're going to pull this off as a couple.

It shouldn't be an awkward conversation, this is basic, basic life planning. If it's awkward it's because one or both of you choose to make it awkward, and that means there's something underneath that that needs to be addressed BEFORE you get married. Talking about money in and of itself is not in any way and awkward subject, it just isn't, because everything you talk about involves indirectly talking about money:

"Hey, should we order a pizza?"
Translation: "I consider ordering pizza a reasonable expense, do you agree?"

"I've always dreamed of slow travel in an RV"
Translation: "My travel goals don't involve a lot of costly air travel or hotels"

"What do you think of this top?" [trying on clothes in a shop]
Translation: "Is this top nice enough to justify the cost of buying it?"

"Our bed is getting lumpy"
Translation: "I'm starting to think it's time to invest in a better quality of sleep, do you agree?"

You talk about personal finance all the time indirectly, and it actually takes effort to avoid the elephant in the room of how money plays into all of these conversations. If you're not talking about money directly, then you're both subconsciously engaging in a weird dance where you constantly pivot to avoid it. It may not seem that way, but I personally marvel at the psychological gymnastics people have to do to avoid talking about money in their day to day lives.

Also, if you think that talking about retirement finances will fundamentally make you braggy or preachy, you do realize that that means that you feel superior to your partner? Right? That's an issue. This is supposed to be your equal partner and you don't seem to have much respect for his ability make basic responsible decisions about his future, his child's future, your collective future, etc.
I'm not saying this to criticize you, I'm saying this to draw your attention to the issue that underpins why you aren't comfortable having basic, basic conversations about planning your future with your soon to be husband.

None of these issues are solved by a prenup. A prenup is not a solution for communication problems, particularly because drafting a prenup requires and ENORMOUS amount of communication. If you get into drafting a prenup before you've actually aligned on your financial futures, then you're going to end up paying a fortune for lawyers to act as shitty marriage counsellors.

DH and I knew *exactly* what our goals were, what our philosophies were, and what we collectively felt was equitable before we even sat down with a lawyer. My main concern was that DH never be liable for my student debt that I accrued before our marriage. I was planning on refinancing it as a business loan, so he would have been responsible for half of hundreds of thousands just because I wanted a better rate. The law as it stood in that case wasn't fair due to a technicality, it protected him from previous debt, but if I changed the nature of the debt, it was considered new debt accrued within the marriage.

Had we gone in blind, we would have had to pay the lawyer to explain all of these possible scenarios to us as we figured out how we felt about each of them. Our first discussion about what each of us thinks about the fairness of my debt would have been done in a lawyer's office while they're billing by the minute. It would have been stressful and awkward. Instead, I just said "I don't ever want him liable for my debt" and the lawyer was like "okee dokee, here's how we do that".

We, in fact, make financial conversations a romantic thing. We always go for long walks and frame it in terms of dreaming about our future and how best to strategically make that happen. Since all dreams have a huge financial component, we just don't neglect that part, we incorporate it as a natural part of the bigger picture.

If I were you, I wouldn't possibly marry someone until we were able to have honest, vulnerable, and mature conversations about our collective future. It's kind of the cornerstone of marriage.

the_hobbitish

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #22 on: November 06, 2020, 12:12:39 PM »
I think a prenup is worth it. I am going through a divorce in Virginia. We have no children and I'm buying him out of the house.

We decided not to touch the retirement accounts, but technically he would have been entitled to a portion of the money I put in my 401k each year and the appreciation. I am the bigger saver and maxed mine out, while he put in significantly less. So far things are really cordial, but he could force a full year waiting period before the divorce, force the sale of the home, and go after the money I've saved since the marriage.

The more these things are decided in advance the less you have to involve lawyers. Any time a lawyer so much as reads an email it's expensive.

Prenups are a great opportunity to see how you work through communication and to learn your relative emotions toward money. It's a great chance for you to discuss a topic where you both have different opinions on what's "right" and to figure out a communication method that allows both of you to feel heard and validated. I agree with what others have said that you should talk through all these future "what happens if" money topics before marriage. If you're uncomfortable with that and can't work through it with your partner, that's not a good sign. Figuring out how to work through uncomfortable topics is one of the best skills you can have...

spartana

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #23 on: November 06, 2020, 04:26:51 PM »
I like this thread, because I don't know much about pre-nups.  I had been under the istaken impression that you could only dictate how to split pre-marital assets, not the one you accrue during the marriage, which are presumed joint.  wikipedia says pre nups are much broader than that.

What still bothers me, as someone who never married in part due to financial imbalance issues, is how you do anything but joint finances in a logistical sense.  OP for example says she has retirement savings, no kids, other sound habits.  When she marries someone, "in sickness and in health, for richer and for poorer" how do you decide how to split the costs, mortgage esp? How do you even come to a joint decision about how much house you can afford?  And one person with no retirement fund vs someone well funded? Does the saver have to double save to care for both? Does the poor one get to go on medicaid or declare bankruptcy?  Are you going to let the poor one fend tuition bills for the child?

My Dad is frugal to a fault, my Mom is not.  But he shared his income (although she did make a nice salary for about 15 years) with her as the primary homemaker.  He covered her long term care insurance and huge medical costs.  I don't know what recourse she would have had if he hadn't.
It can be very easy to have seperate finances. Most couples (including myself when I was married) have a some sort of yours, mine and ours accounts for both large joint purchases (say a house) as well as seperate accounts for indiviual investments (401Ks IRAs etc) and personal purchases (buying my own stuff like clothes or cars or gifts).  Usually you each put the same amount into joint accounts where you pool money to purchase and pay for day-to-day expenses, rent or mortgage, utilities, kids stuff, or other joint finances. The remained of each persons paid can be used how they wish - saved, spent, given away to charity... If you are financially equal in terms of earning and spending, as well as lifestyle goals,  then there is little discord. For people in the OPs situation it is likely different and I see the possibility of it being difficult if not addressed before hand. I would personally chose not to marry but just live together if in the OPs situation.

Also big life changes like caring for a parent, disability, unemployment, kids, etc are generally decided how they will be dealt with beforehand. It is really not a big deal with 2 working (or 2 FIREd) people.
« Last Edit: November 06, 2020, 04:32:19 PM by spartana »

Malcat

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #24 on: November 06, 2020, 05:33:24 PM »
I like this thread, because I don't know much about pre-nups.  I had been under the istaken impression that you could only dictate how to split pre-marital assets, not the one you accrue during the marriage, which are presumed joint.  wikipedia says pre nups are much broader than that.

What still bothers me, as someone who never married in part due to financial imbalance issues, is how you do anything but joint finances in a logistical sense.  OP for example says she has retirement savings, no kids, other sound habits.  When she marries someone, "in sickness and in health, for richer and for poorer" how do you decide how to split the costs, mortgage esp? How do you even come to a joint decision about how much house you can afford?  And one person with no retirement fund vs someone well funded? Does the saver have to double save to care for both? Does the poor one get to go on medicaid or declare bankruptcy?  Are you going to let the poor one fend tuition bills for the child?

My Dad is frugal to a fault, my Mom is not.  But he shared his income (although she did make a nice salary for about 15 years) with her as the primary homemaker.  He covered her long term care insurance and huge medical costs.  I don't know what recourse she would have had if he hadn't.
It can be very easy to have seperate finances. Most couples (including myself when I was married) have a some sort of yours, mine and ours accounts for both large joint purchases (say a house) as well as seperate accounts for indiviual investments (401Ks IRAs etc) and personal purchases (buying my own stuff like clothes or cars or gifts).  Usually you each put the same amount into joint accounts where you pool money to purchase and pay for day-to-day expenses, rent or mortgage, utilities, kids stuff, or other joint finances. The remained of each persons paid can be used how they wish - saved, spent, given away to charity... If you are financially equal in terms of earning and spending, as well as lifestyle goals,  then there is little discord. For people in the OPs situation it is likely different and I see the possibility of it being difficult if not addressed before hand. I would personally chose not to marry but just live together if in the OPs situation.

Also big life changes like caring for a parent, disability, unemployment, kids, etc are generally decided how they will be dealt with beforehand. It is really not a big deal with 2 working (or 2 FIREd) people.

Well, if I were in OP's position, I certainly wouldn't get married unless I was prepared to potentially financially supplement this person in retirement.

Runrooster

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #25 on: November 06, 2020, 06:30:39 PM »
If you are financially equal in terms of earning and spending, as well as lifestyle goals,  then there is little discord.

Okay, but this seems like the outlier case.  Even without the issue of childrearing, most people go through ups and downs in their salaries.  Also, I doubt these are the people who feel the need to have separate finances (you excepted).  Most people decide to have separate finances because there are large differences in earning or spending and separate seems more fair or less discord.  Except to me, that doesn't avoid the difficult conversations, it just kicks the can down the road.  Credit ratings, bankruptcy, medical issues, emergencies, retirement, vacations are all joint issues.  You cannot go on medicaid while your spouse that you live with is making 6 figures.  Even with student loans, which only belong to one spouse- money is fungible, so they have that much less to put into household expenses and necessary savings.

FWIW, my older sister has mentioned having separate finances with her husband of 40 years.  I forgot their system, but she was responsible for some expense and he others.  He makes a healthy 6 figures and is the spender; she makes 7 figures and is the saver.  I heard about various money fights, including one where he said he wanted money to replace 10-year-old coffee mugs.  The mugs were not chipped or mismatched, but they weren't very stylish either.  He was going back to school to change careers so I guess his budget was too tight to buy them himself?  But jeez, it's not enough that she supported him and 2 kids through his mid-life two-career changes, he will die without new mugs?  Another time, my sister took me and my Mom with them on vacation, and he kept complaining that the food wasn't fancy enough.  One of those, we took a $50 few hour cruise and he said he wanted something he could brag about with his coworkers, and this didn't cut it.  The guy as the most basic food tastes- I don't even think he likes fancy alcohol - he just wanted the meals to cost more.

Malcat

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #26 on: November 07, 2020, 05:42:19 AM »
If you are financially equal in terms of earning and spending, as well as lifestyle goals,  then there is little discord.

Okay, but this seems like the outlier case.  Even without the issue of childrearing, most people go through ups and downs in their salaries.  Also, I doubt these are the people who feel the need to have separate finances (you excepted).  Most people decide to have separate finances because there are large differences in earning or spending and separate seems more fair or less discord.  Except to me, that doesn't avoid the difficult conversations, it just kicks the can down the road.  Credit ratings, bankruptcy, medical issues, emergencies, retirement, vacations are all joint issues.  You cannot go on medicaid while your spouse that you live with is making 6 figures.  Even with student loans, which only belong to one spouse- money is fungible, so they have that much less to put into household expenses and necessary savings.

FWIW, my older sister has mentioned having separate finances with her husband of 40 years.  I forgot their system, but she was responsible for some expense and he others.  He makes a healthy 6 figures and is the spender; she makes 7 figures and is the saver.  I heard about various money fights, including one where he said he wanted money to replace 10-year-old coffee mugs.  The mugs were not chipped or mismatched, but they weren't very stylish either.  He was going back to school to change careers so I guess his budget was too tight to buy them himself?  But jeez, it's not enough that she supported him and 2 kids through his mid-life two-career changes, he will die without new mugs?  Another time, my sister took me and my Mom with them on vacation, and he kept complaining that the food wasn't fancy enough.  One of those, we took a $50 few hour cruise and he said he wanted something he could brag about with his coworkers, and this didn't cut it.  The guy as the most basic food tastes- I don't even think he likes fancy alcohol - he just wanted the meals to cost more.

I also like to clarify the difference between separate accounts and separate finances.

DH and I consider all resources shared, but we have entirely separate accounts and we pay for separate things. Our money has never really commingled and likely never will.

We do this because it actually keeps things simpler for us and much easier to keep track of. We came together as professional adults with established accounts, and just kept them that way. However, we see every cent as shared, there's no need to actually pool accounts because all the accounts belong to the same pool.

The communication involved is exactly the same regardless of whether assets are pooled, separate, whether expenses are handled proportionally, evenly, or as a single combined unit.

People can try and avoid financial discourse by seeing their finances as totally separate, but that only works as long as everything goes smoothly, each person maintains their career, their savings, and their health, and they never get divorced or ever diverge in their larger life priorities. I'm sure this happens, but that's truly a unicorn situation, and definitely not a risk I would be willing to take.

If a couple avoids the hard conversations about money, then they're flying blind and going on faith that none of the extremely common complications of life will ever happen to them.

Not talking about money in a marriage is like never going to the doctor. By the time they find out something is wrong, it's probably going to ruin their life.

So in the end, how couples arrange their accounts should be a product of their in depth conversations, not a strategy to avoid them.

Imma

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #27 on: November 07, 2020, 08:33:57 AM »
If you are financially equal in terms of earning and spending, as well as lifestyle goals,  then there is little discord.

Okay, but this seems like the outlier case.  Even without the issue of childrearing, most people go through ups and downs in their salaries.  Also, I doubt these are the people who feel the need to have separate finances (you excepted).  Most people decide to have separate finances because there are large differences in earning or spending and separate seems more fair or less discord.

I'm not sure that's the case. Of course that happens, but honestly those kind of relationships are doomed without proper communication, whether they have seperate finances or not.

Most people I personally know who choose to have seperate finances (and I mean legally seperate, so a pre-nup, not just personal bank accounts) do this because there's a more fundamental reason for it. It's a reflection of their personal view of marriage, or because one person is a business owner or has large loans they want to protect the other from, or because they have children from a previous marriage (I know people in all 3 situations).

We are in the first category. We don't agree with the old, religious idea that "two become one". We are adults, seperate individuals who are only responsible for ourselves, and who choose to spend a time of our life on earth together. We have been together for quite a few years and faced some difficult situations (serious illness, mental health issues, illness and death of loved ones) together, so it's not that we're only around for the fun times, but "until death do is part" is not a goal in itself for us but one possible result. We talk about money all the time, we know everything about each other's finances, but we're just coming from a different perspective. Our incomes have always gone up and down, I used to make half of what he made and now I earn almost twice his salary, but our attitudes towards money have not changed, so that's of no concern to us.

spartana

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #28 on: November 07, 2020, 11:31:59 AM »
If you are financially equal in terms of earning and spending, as well as lifestyle goals,  then there is little discord.

Okay, but this seems like the outlier case.  Even without the issue of childrearing, most people go through ups and downs in their salaries.  Also, I doubt these are the people who feel the need to have separate finances (you excepted).  Most people decide to have separate finances because there are large differences in earning or spending and separate seems more fair or less discord.  Except to me, that doesn't avoid the difficult conversations, it just kicks the can down the road.  Credit ratings, bankruptcy, medical issues, emergencies, retirement, vacations are all joint issues.  You cannot go on medicaid while your spouse that you live with is making 6 figures.  Even with student loans, which only belong to one spouse- money is fungible, so they have that much less to put into household expenses and necessary savings.

FWIW, my older sister has mentioned having separate finances with her husband of 40 years.  I forgot their system, but she was responsible for some expense and he others.  He makes a healthy 6 figures and is the spender; she makes 7 figures and is the saver.  I heard about various money fights, including one where he said he wanted money to replace 10-year-old coffee mugs.  The mugs were not chipped or mismatched, but they weren't very stylish either.  He was going back to school to change careers so I guess his budget was too tight to buy them himself?  But jeez, it's not enough that she supported him and 2 kids through his mid-life two-career changes, he will die without new mugs?  Another time, my sister took me and my Mom with them on vacation, and he kept complaining that the food wasn't fancy enough.  One of those, we took a $50 few hour cruise and he said he wanted something he could brag about with his coworkers, and this didn't cut it.  The guy as the most basic food tastes- I don't even think he likes fancy alcohol - he just wanted the meals to cost more.
I think a lot of people with different salaries, debt and spending/saving levels are likely to do some kind of percentage split. The high earner puts a higher percent of their income into the joint pot and the lower income puts in a lower percent. At least that seems common around here but I agree most married people probably combine all their assets and debts and even investment  - especially if younger and just starting out - and just have equal amounts of spending money for fun stuff.

Many probably do some combo though as in seperate investment and retirement accounts, which may have been set up for years prior to marrying,  but joint accounts for everything else. Since ex-DH (not divorced because of money issues) and I earned, invested and spent about the same, and had both been investing separately since 18, we just each put in an agreed upon equal amount into a joint account for everything else and pulled money from that for joint spending. Others do it differently.

But I agree that trying to do a 50/50 split, or even a percentage split based on earnings,  where there is a large difference in assets, debt load and earnings could leave one spouse living poor while the other was living rich. In that case I suppose fairness for a shared life style would rule over earnings unless the wealthier one was willing to live the poorer ones lifestyle.

In the case of the OP who would be marrying at an older age after years of building her stash alone, and who stands the change of losing all or most of it in divorce if not for a pre-nup, she may be unwilling to combine assets right away (or ever) until they are ever on more equal footing. I have some horror stories of friends who married later or on their second marriages who combined assets (or took on big debts) and were divorced a couple of years later and had to split everything and often pay alimony because they were the higher earner.
« Last Edit: November 07, 2020, 11:39:42 AM by spartana »

Runrooster

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #29 on: November 07, 2020, 12:44:47 PM »
In the case of the OP who would be marrying at an older age after years of building her stash alone, and who stands the change of losing all or most of it in divorce if not for a pre-nup, she may be unwilling to combine assets right away (or ever) until they are ever on more equal footing. I have some horror stories of friends who married later or on their second marriages who combined assets (or took on big debts) and were divorced a couple of years later and had to split everything and often pay alimony because they were the higher earner.

Right.  My solution would be: don't get married.  If you don't like how divorce would handle your assets, and I would agree, then don't spend all that money on lawyers trying to navigate a pre-nup.  I doubt you'll cover every scenario and even then courts can throw it out.  An imbalanced marriage will lead, most of the time, to an expensive, drawn-out divorce even if you win.  Color me cynical.

spartana

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Re: Does a Mustachian Need a Pre-Nup (marrying non-Mustachian)?
« Reply #30 on: November 07, 2020, 02:05:37 PM »
In the case of the OP who would be marrying at an older age after years of building her stash alone, and who stands the change of losing all or most of it in divorce if not for a pre-nup, she may be unwilling to combine assets right away (or ever) until they are ever on more equal footing. I have some horror stories of friends who married later or on their second marriages who combined assets (or took on big debts) and were divorced a couple of years later and had to split everything and often pay alimony because they were the higher earner.

Right.  My solution would be: don't get married.  If you don't like how divorce would handle your assets, and I would agree, then don't spend all that money on lawyers trying to navigate a pre-nup.  I doubt you'll cover every scenario and even then courts can throw it out.  An imbalanced marriage will lead, most of the time, to an expensive, drawn-out divorce even if you win.  Color me cynical.
Yeah not getting married seems easiest from a legal/financial standpoint but marriage has a lot of legal benefits too - as well as legal obligations.  Depending on the OPs situation, legal marriage with a pre-nup may far outweigh just co-habitating. And of course there are non-legal reasons people want to be married too.

A good thing is that they have a long relationship and are not wide-eyed 18 year olds so have the life experience to talk about all the things that could arise and how they'd deal with that before marriage. I don't know too many 18 year olds who are talking about how to pay for or care for their parents in 10 years or how they'll leave the step kid an inheritance  ;-). Unfortunately once you're  in your 40s or 50s you have more financial risk for your old age if you are a mustashian or FIREd saver with assets and marry a spendy pants who doesn't save a thing.