Author Topic: Help with a Prenup  (Read 29975 times)

livetogive

  • Stubble
  • **
  • Posts: 235
Help with a Prenup
« on: October 03, 2013, 09:46:34 AM »
Since reading this thread:
http://www.mrmoneymustache.com/forum/welcome-to-the-forum/progress-and-'lessons-learned'-on-pending-fire/msg114227/?topicseen#msg114227

I'm starting to get nervous about not having a prenup.  I'm planning to be married in April and am entering the marriage with the same amount of savings as my SO has debt (student loans only, but a high rate).  We currently operate with combined finances and make about the same amount of money each.  We're getting married in California.

Should I push for a prenup?  I'm more likely to out earn her if we both stick with slow and steady salary + bonus jobs, but she's in startups and always has the 1:1,000,000 shot of hitting it big.  I don't want any money from her; I just don't want her to initiate a divorce and take my money for the rest of my life.

If yes, which I think is the right answer, how do I approach this bad boy?

Argyle

  • Pencil Stache
  • ****
  • Posts: 909
Re: Help with a Prenup
« Reply #1 on: October 03, 2013, 10:28:51 AM »
I got a pre-nup and it was the best thing I ever did.  There's a book out there about them which is very helpful -- if you google you can probably find it.  I should add that my fiancé was entirely happy and on board about doing it.

The thing is that a good pre-nup protects both parties.  So she will be protected as well as you.  What you want to do is to figure out what it should say that does protect both of you.  Talking out what would be fair can be very helpful.  It can reassure both of you that you are operating with good will, even in the event of a split-up.    And it can certainly make a split-up less acrimonious, unless one of you just goes off the deep end in a spirit of revenge (not recommended). Needless to say, you both need to enter into it now in a spirit of fairness.  Are you worried about paying off her student loans now with "your" money (the savings you bring to the partnership), and not being compensated for it if the marriage fails?  That would be something to be clear about in your own self before you embark on the pre-nup.  Do you believe in giving the marriage your all, or do you believe in continuing to be responsible for one's own debts?  Etc.  Ideally this would be something you have talked over exhaustively already.

In terms of the actual pre-nup, you both need to have your own lawyers looking out for your interests in the thing.  That way there's no cause for contesting it later because either party didn't have professional advice on protecting their interests.

SmackDab

  • 5 O'Clock Shadow
  • *
  • Posts: 54
  • Location: Seattle, WA
Re: Help with a Prenup
« Reply #2 on: October 03, 2013, 10:35:07 AM »
I got married last year, with a prenup, in Washington state, which is a community property state like California. My understanding is that there's really not much you can do to delineate the distribution/ownership of either of your future earnings as a married couple: it all gets split 50/50 pretty much no matter what. In my case, the purpose of the prenup was really just to serve as legal documentation showing, in detail, our separate property going into the marriage. I had significantly more assets and less debt and wanted to make sure that it was all on the record. Unless either of you have kids or own a business (doesn't sound like it), you might be in the same situation. I was willing to pay the (substantial) legal fees to have everything documented, but it's up to you decide if it's worth it for you. Don't forget that your spouse-to-be will also need to retain independent legal counsel in order for the prenup to have any validity at all in any future dispute.

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 28010
  • Age: -999
  • Location: Seattle, WA
Re: Help with a Prenup
« Reply #3 on: October 03, 2013, 10:41:57 AM »
I'm starting to get nervous about not having a prenup.  I'm planning to be married in April and am entering the marriage with the same amount of savings as my SO has debt (student loans only, but a high rate).  We currently operate with combined finances and make about the same amount of money each.  We're getting married in California.

Sounds to me like you have maybe 100k in savings and she has 100k in debt?

Definitely not worth getting a prenup in that situation, IMO, especially since anything earned after that will be communal.  It will only harm the relationship for a fairly small benefit. 

Talk to a lawyer, but I think a prenup is best in an older marriage (typically not the first marriage in those cases) when one partner has significantly more (think: 7 figures).

Your 100k is such a small amount (even if my amounts are off by half, and you double the numbers I posted above, I still don't think it's worth it), think about approaching her asking for a prenup on it.  Are you in this thing, or not?

/shrug

Consult a lawyer.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with two kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

livetogive

  • Stubble
  • **
  • Posts: 235
Re: Help with a Prenup
« Reply #4 on: October 03, 2013, 10:50:56 AM »
I'm 100% in this thing and don't plan on getting a divorce, but I've worked and saved very hard to never be in debt and I don't want to chain myself to a desk for the rest of my life if she decides to leave 10 years from now.  I'm nore religious than her and don't believe in divorce at all.

I was just looking at a way to remove any financial incentive for divorce (i.e. woohoo! free education!).  FWIW I'm the one pushing to pay off her debt.  You are correct that my assets are only $125k but I also have a potential defined benefit pension plan 12 years from now if I stay in the military reserve.

illy5603

  • 5 O'Clock Shadow
  • *
  • Posts: 50
  • Age: 48
  • Location: NorCal
Re: Help with a Prenup
« Reply #5 on: October 03, 2013, 11:08:42 AM »
Sorry to say this, but if you are worried about what is "yours" and what is "hers" you probably don't get what being married is all about. I would recommend just not getting married if your money and your stuff has you this worked up.

Argyle

  • Pencil Stache
  • ****
  • Posts: 909
Re: Help with a Prenup
« Reply #6 on: October 03, 2013, 11:15:43 AM »
Of course emotions run high about pre-nups, but again I think they definitely have a place.  Consult the books and a lawyer with experience in pre-nups and ask, "How would a pre-nup benefit your fiancée?"  Because we shouldn't lose sight of the fact that in divorces, statistically speaking on average men's financial position improves and women's drops.  So it could be that a pre-nup would be of equal or greater benefit for her than to you -- in which case how could someone protest your wanting to do it?

If you're in a Community Property state, the rules will be very different.  That's where it pays to consult a professional.

jpo

  • Pencil Stache
  • ****
  • Posts: 518
  • Age: 32
  • Location: North Carolina
Re: Help with a Prenup
« Reply #7 on: October 03, 2013, 11:32:55 AM »
Sounds to me like you have maybe 100k in savings and she has 100k in debt?

Definitely not worth getting a prenup in that situation, IMO, especially since anything earned after that will be communal.  It will only harm the relationship for a fairly small benefit. 

Talk to a lawyer, but I think a prenup is best in an older marriage (typically not the first marriage in those cases) when one partner has significantly more (think: 7 figures).

Your 100k is such a small amount (even if my amounts are off by half, and you double the numbers I posted above, I still don't think it's worth it), think about approaching her asking for a prenup on it.  Are you in this thing, or not?

/shrug

Consult a lawyer.
There may be other reasons for a prenup, like opting out of alimony.

CheckEngineLight

  • 5 O'Clock Shadow
  • *
  • Posts: 55
Re: Help with a Prenup
« Reply #8 on: October 03, 2013, 11:44:48 AM »
I will chime in with my situation.  I recently got married to my fiance/gf of 10 years.  I had assets/money and she had some student debt (14k was the outstanding balance at marriage.  Once we tied the knot we paid that off in full, it was "my" money technically, but in reality it's our money.  If she had that debt and was paying it off on her own during our marriage I'd feel it's counter productive to "our" savings and "our" life and "our" goals.  So the fact that  you are somewhat bailing on her by not financially helping her with your joint financial obligations (her student loan) I think you are failing at being a good spouse, but that's just my opinion.  Maybe I am the sucker and my wife married me so I can pay off her loan and that's it, lol.  Whatever the case, it's just money and I put my best foot forward, karma is a bitch anyway :)  Keep in mind, the type of debt at hand plays a big role, since it's student debt (aka good debt) it's reasonable for both of you to work to pay it off together.  If it was consumer debt that she racked up over the years then I wouldn't be getting married in the first place until she proves she can manage it.

Chew on that for a bit.

livetogive

  • Stubble
  • **
  • Posts: 235
Re: Help with a Prenup
« Reply #9 on: October 03, 2013, 11:47:53 AM »
Sorry to say this, but if you are worried about what is "yours" and what is "hers" you probably don't get what being married is all about. I would recommend just not getting married if your money and your stuff has you this worked up.

I disagree with you.  The poster from the referenced link above commented how he had $100/mo in take home after child support and alimony.  This is about preventing that as well as removing any financial incentive to divorce after clearing her debt, which I feel is an approriate topic on a forum dedicated to early retirement through badassity where divorce is so frequently cited as one of the biggest obstacles to the goal.

To give this thread some more substance I've done some research and contacted a lawyer.  In California (and probably most community property states):
1.  Both of you need a lawyer.  Seems like quotes are around $2k flat fee for the agreement per person, plus $1k for a review.  I'm not sure if the review is necessary; we tend to avoid 3rd legal opinions at work.
2.  Language interpreted as a financial incentive for divorce is not allowed in CA.  Under this logic I assume it's equally not allowed to disincentivize divorce, but I don't know for sure.
3.  From reading the prequestionaire it seems like other posters are correct; this is of most value to those who have separate property and liabilities worth keeping separate post marriage (Pension/benefits going to kids, etc.).  The only thing one can do in a CP state seems to be to separate out things as "separate" aka "not common propoerty" prior to the marriage which wlil be exempted from the 50/50 pot split.

Note:  #3 might remove another huge percieved benefit of a prenup - avoiding a costly divorce.  Sure, with a prenup one already has the previous assets split out so avoid that fight, but everything you earned together is still on the table which in our case should represent most of our wealth.


It looks like the whole shebang will be about $4,000 which seems like it's expensive to insure a little over $50k at risk (~8%). (100k assets / 2 vs. keeping the whole 100k).  In comparison, 5 year Greek CDS during the crisis peaked around 10%.
« Last Edit: October 03, 2013, 12:02:31 PM by TurboLT »

CheckEngineLight

  • 5 O'Clock Shadow
  • *
  • Posts: 55
Re: Help with a Prenup
« Reply #10 on: October 03, 2013, 11:51:58 AM »
Sorry to say this, but if you are worried about what is "yours" and what is "hers" you probably don't get what being married is all about. I would recommend just not getting married if your money and your stuff has you this worked up.

I disagree with you.  The poster from the referenced link above commented how he had $100/mo in take home after child support and alimony.  This is about preventing that as well as removing any financial incentive to divorce after clearing her debt, which I feel is an approriate topic on a forum dedicated to early retirement through badassity where divorce is so frequently cited as one of the biggest obstacles to the goal.

To give this thread some more substance I've done some research and contacted a lawyer.  In California (and probably most cpommunity property places):
1.  Both of you need a lawyer.  Seems like quotes are around $2k flat fee for the agreement per person, plus $1k for a review.  I'm not sure if the review is necessary; we tend to avoid 3rd legal opinions at work.
2.  Language interpreted as a financial incentive for divorce is not allowed in CA.  Under this logic I assume it's equally not allowed to disincentivize divorce, but I don't know for sure.
3.  From reading the prequestionaire it seems like other posters are correct; this is of most value to those who have separate property and liabilities worth keeping separate post marriage (Pension/benefits going to kids, etc.).  The only thing one can do in a CP state seems to be to separate out things as "separate" aka "not common propoerty" prior to the marriage which wlil be exempted from the 50/50 pot split.

Note:  #3 might remove another huge percieved benefit of a prenup - avoiding a costly divorce.  Sure, with a prenup one already has the previous assets split out so avoid that fight, but everything you earned together is still on the table which in our case should represent most of our wealth.


It looks like the whole shebang will be about $4,000 which seems like it's expensive to insure a little over $50k at risk (~8%). (100k assets / 2 vs. keeping the whole 100k).  In comparison, 5 year Greek CDS during the crisis peaked around 10%.

Why are you even getting married?  Why not just be common law partners and avoid all the hassles and just treat it as partnership where your finances (which appear to matter to you more than marriage) are *safe*.

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 28010
  • Age: -999
  • Location: Seattle, WA
Re: Help with a Prenup
« Reply #11 on: October 03, 2013, 11:52:47 AM »
It looks like the whole shebang will be about $4,000 which seems like it's expensive to insure a little over $50k at risk (~8%). (100k assets / 2 vs. keeping the whole 100k).  In comparison, 5 year Greek CDS during the crisis peaked around 10%.

And to figure out the Expected Value (EV), you need the probability of divorce - 1/3 is about the national average. 

As I said, there are times for a prenup.  This doesn't really sound like one to me.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with two kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

Mr.Macinstache

  • Pencil Stache
  • ****
  • Posts: 923
Re: Help with a Prenup
« Reply #12 on: October 03, 2013, 11:57:48 AM »
Sorry to say this, but if you are worried about what is "yours" and what is "hers" you probably don't get what being married is all about. I would recommend just not getting married if your money and your stuff has you this worked up.

I disagree with you.  The poster from the referenced link above commented how he had $100/mo in take home after child support and alimony.  This is about preventing that as well as removing any financial incentive to divorce after clearing her debt, which I feel is an approriate topic on a forum dedicated to early retirement through badassity where divorce is so frequently cited as one of the biggest obstacles to the goal.

To give this thread some more substance I've done some research and contacted a lawyer.  In California (and probably most cpommunity property places):
1.  Both of you need a lawyer.  Seems like quotes are around $2k flat fee for the agreement per person, plus $1k for a review.  I'm not sure if the review is necessary; we tend to avoid 3rd legal opinions at work.
2.  Language interpreted as a financial incentive for divorce is not allowed in CA.  Under this logic I assume it's equally not allowed to disincentivize divorce, but I don't know for sure.
3.  From reading the prequestionaire it seems like other posters are correct; this is of most value to those who have separate property and liabilities worth keeping separate post marriage (Pension/benefits going to kids, etc.).  The only thing one can do in a CP state seems to be to separate out things as "separate" aka "not common propoerty" prior to the marriage which wlil be exempted from the 50/50 pot split.

Note:  #3 might remove another huge percieved benefit of a prenup - avoiding a costly divorce.  Sure, with a prenup one already has the previous assets split out so avoid that fight, but everything you earned together is still on the table which in our case should represent most of our wealth.


It looks like the whole shebang will be about $4,000 which seems like it's expensive to insure a little over $50k at risk (~8%). (100k assets / 2 vs. keeping the whole 100k).  In comparison, 5 year Greek CDS during the crisis peaked around 10%.

Why are you even getting married?  Why not just be common law partners and avoid all the hassles and just treat it as partnership where your finances (which appear to matter to you more than marriage) are *safe*.

This. Why not just have a ceremony and live married and forgo the contract recognized by the state? I realize there may be tax deduction benefits, but maybe those aren't worth worrying about assets.

livetogive

  • Stubble
  • **
  • Posts: 235
Re: Help with a Prenup
« Reply #13 on: October 03, 2013, 12:06:41 PM »
It looks like the whole shebang will be about $4,000 which seems like it's expensive to insure a little over $50k at risk (~8%). (100k assets / 2 vs. keeping the whole 100k).  In comparison, 5 year Greek CDS during the crisis peaked around 10%.

And to figure out the Expected Value (EV), you need the probability of divorce - 1/3 is about the national average. 

As I said, there are times for a prenup.  This doesn't really sound like one to me.


Fantastic point - as dark a topic as this is I'm really enjoying putting a number to it. 
4k / (1/3 * 60k (to make the math easy)) = 20% aka DOUBLE greek CDS prices. 
I could re-save 60k in my current job after about 1 year vs. an entity that likely will never be able to repay it's debts.  Case closed IMO; math wins again.

GuitarStv

  • Senior Mustachian
  • ********
  • Posts: 14029
  • Age: 38
  • Location: Toronto, Ontario, Canada
Re: Help with a Prenup
« Reply #14 on: October 03, 2013, 12:11:37 PM »
If you don't trust your partner for life with your money, maybe you shouldn't be getting married yet.

CommonCents

  • Handlebar Stache
  • *****
  • Posts: 2386
Re: Help with a Prenup
« Reply #15 on: October 03, 2013, 01:05:42 PM »
Why are you even getting married?  Why not just be common law partners and avoid all the hassles and just treat it as partnership where your finances (which appear to matter to you more than marriage) are *safe*.

This. Why not just have a ceremony and live married and forgo the contract recognized by the state? I realize there may be tax deduction benefits, but maybe those aren't worth worrying about assets.

I agree that this does not seem to be a case where a prenup is particularly needed.  While you have more money, you don't have wildly more assets or debts.  You don't have a business, particularly one with other partners.  You don't have kids separate of the other.  You haven't talked about family inheritances (or expectations of one).  Thus, it runs for me into the "not worth it" category.  If you don't trust her, don't get married.  After all, if she quits her job (as woman do more often than men) to raise kids, she's trusting that you won't screw her over and leave her with no career to support herself at 55 in a divorce because you find your secretary's long legs sexy... 

Re the poster above suggesting long-term partnership in general though, I don't know if you are planning kids or not, but I would not choose to have kids (a huge commitment) with someone who wouldn't trust enough to get married (a big commitment, but lesser than kids).  Folks will differ on this perspective, particularly by country, I imagine, but I can say that many (though definitely not all) American women would not choose to indefinitely continue in a common-law like relationship with marriage off the table.

livetogive

  • Stubble
  • **
  • Posts: 235
Re: Help with a Prenup
« Reply #16 on: October 03, 2013, 01:41:15 PM »
Another great point re: inheritances.  I forgot to add that those can be exempted from common property in CA with a prenup per the research with the lawyer.

Also, enough please of the "you're not mature enough to get married" comments.  They aren't adding to the topic which deals with whether prenups are worth it in this situation as well as an attempt to quantify their cost/benefit. 

A very hearty "thank you!" to all the posters who offered advice, pointed out missed categories,  shared personal experience and made corrections to the math, however.  This forum rules!

Insanity

  • Handlebar Stache
  • *****
  • Posts: 1026
Re: Help with a Prenup
« Reply #17 on: October 03, 2013, 02:09:34 PM »
Prenups are like children.  Those that don't want to have them have that right as do those who do want them.

I will tell you that from my personal belief, my religious leader informed my wife and I that we should consider the religious equivalent.  The reason being, that if things do not work out, the only thing that one can gain is to hold the other captive from not being allowed to marry within the religion.  This would protect us from pure spite.

I would say, looking back on it, the same holds true in the civil context.  No one plans on getting divorced, but you and your spouse can change.  Circumstances can change.  Of the significant number of couples that do divorce, I would be bet a large majority of those do not plan on it.  The pre-nup is there to protect both parties.



CommonCents

  • Handlebar Stache
  • *****
  • Posts: 2386
Re: Help with a Prenup
« Reply #18 on: October 03, 2013, 02:19:16 PM »
I will tell you that from my personal belief, my religious leader informed my wife and I that we should consider the religious equivalent.  The reason being, that if things do not work out, the only thing that one can gain is to hold the other captive from not being allowed to marry within the religion.  This would protect us from pure spite.

I'm curious, which religion is this?  The only religion I know that lets one party withhold later consent to remarry is Judiasm - and there it's just the woman that is prevented - the man can remarry no problem.  Grr to inequality. (Which is why a female friend intends to have a prenup, solely to require the man to grant consent if they have a civil divorce decree.  I didn't mention this above because I thought it unlikely a consideration.)

Insanity

  • Handlebar Stache
  • *****
  • Posts: 1026
Re: Help with a Prenup
« Reply #19 on: October 03, 2013, 02:43:31 PM »
I will tell you that from my personal belief, my religious leader informed my wife and I that we should consider the religious equivalent.  The reason being, that if things do not work out, the only thing that one can gain is to hold the other captive from not being allowed to marry within the religion.  This would protect us from pure spite.

I'm curious, which religion is this?  The only religion I know that lets one party withhold later consent to remarry is Judiasm - and there it's just the woman that is prevented - the man can remarry no problem.  Grr to inequality. (Which is why a female friend intends to have a prenup, solely to require the man to grant consent if they have a civil divorce decree.  I didn't mention this above because I thought it unlikely a consideration.)

That would be the one.   But it is not as "one sided" as one might thin.. http://www.jewfaq.org/divorce.htm

sassy1234

  • 5 O'Clock Shadow
  • *
  • Posts: 93
Re: Help with a Prenup
« Reply #20 on: October 03, 2013, 02:46:55 PM »
I would never marry anyone that asked me to sign a prenup...but to each his own.  Proceed with serious caution. 

Mr.Macinstache

  • Pencil Stache
  • ****
  • Posts: 923
Re: Help with a Prenup
« Reply #21 on: October 03, 2013, 03:02:26 PM »
If you don't trust your partner for life with your money, maybe you shouldn't be getting married yet.
How many have people gotten in trouble when they trust their partner too much? I don't see a problem with a prenup. If a woman wont marry because of one, maybe it's not just the person she is in love with, but the financial security instead.

CommonCents

  • Handlebar Stache
  • *****
  • Posts: 2386
Re: Help with a Prenup
« Reply #22 on: October 03, 2013, 03:05:33 PM »
That would be the one.   But it is not as "one sided" as one might thin.. http://www.jewfaq.org/divorce.htm

That squares with my understanding of it.  It's one-sided to me in that the man can refuse to grant the woman the get, for spite, wanting more in civil court, the kids, etc.  It looks like I may have been wrong in my recollection that she said the man could remarry w/o granting it though.  I became fascinated with the topic after my friend talked about it and I learned about the women whose husbands died in the towers, who had no proof of their death (nor a conditional get).  But I digress.

chasesfish

  • Magnum Stache
  • ******
  • Posts: 3179
  • Age: 37
  • Location: Texas
Re: Help with a Prenup
« Reply #23 on: October 03, 2013, 04:28:30 PM »
I'd pass on the prenup.

They're really designed to protect outside business interests and assets that were had prior to marriage.  If I owned a couple of pieces of commercial real estate jointly with family members or third parties prior to marriage, I think a prenup would be reasonable.  It would also be reasonable if there were significant asset differences (say $500,000 to $1,000,000) going in.

Just my two cents, ymmv.


KMMK

  • Handlebar Stache
  • *****
  • Posts: 1472
  • Age: 42
  • Location: Edmonton, AB, Canada
    • Meena Kestirke Insurance
Re: Help with a Prenup
« Reply #24 on: October 03, 2013, 05:01:08 PM »
Maybe it's been discussed somewhere in here, but I'm not seeing it: What seems more important than a pre-nup (though I do recommend them) is have you thoroughly and exhaustively discussed how you will handle money when you are married? Will you help with her debt? Does she expect/want this? What if one of you strikes it rich? What if there's children? What if one of you wants to switch to part time work or wants to retire significantly earlier than the other? What if your earnings become less even? Will you split by percentages or dollar amounts?

I think such discussions are just as important as the actual pre-nup, if not more so.

In my case, (which has difference rules, being Canada) we both wanted a pre-nup and it's very simple. All money is separate unless we intentionally combine it. That allows us to work around every potential situation that might come up. I was the one with less assets going into the marriage, but as mentioned, I wanted to protect myself, too. My husband is very reliable with money, but I don't trust 100% that another person will never change. That just doesn't make sense to me. I also wanted to show I wasn't marrying him for his money. And vice versa.

hlca

  • 5 O'Clock Shadow
  • *
  • Posts: 24
Re: Help with a Prenup
« Reply #25 on: October 03, 2013, 06:00:14 PM »
I got married about a year ago in CA.  I'm a lawyer and got a pre-nup.  The default community property laws aren't too bad though so I know many lawyers that go without.  For me, I wanted to define the terms of any alimony in advance.  If we ever get to FIRE, I don't want to get burned with a huge alimony ruling that lasts way too long.  Also, her parents make very poor financial decisions so I wanted to allow for reimbursement of any parental assistance if marriage is dissolved.  There's a bunch of other things we put in there too.  Like retirement acc'ts remain separate, etc. 

PM me if you need more details, referrals, etc.

jawisco

  • Stubble
  • **
  • Posts: 194
Re: Help with a Prenup
« Reply #26 on: October 03, 2013, 07:13:28 PM »
I recently got engaged and we plan to do a pre-nup.  The way I look at it is you are getting married, which is a legal contract and each state has defined how things will happen if there is a breakup.  When you get a marriage license, you are signing that contract.

 Breakups happen, for many reasons unforeseen at engagement that have nothing to do with true love.  All a prenup is doing is defining how things will go down if there is a breakup.  You get to use the rules you agreed upon rather than rules the state set up.  At least to some extent. 

It doesn't have to result in acrimony or be overly complicated.  I think it can lead to some good conversations as well.

pom

  • Bristles
  • ***
  • Posts: 288
  • Location: Paris, France
Re: Help with a Prenup
« Reply #27 on: October 04, 2013, 02:43:47 AM »
Sorry to say this, but if you are worried about what is "yours" and what is "hers" you probably don't get what being married is all about. I would recommend just not getting married if your money and your stuff has you this worked up.

[Mod Edit: Personal attack removed.]

I got a prenup. My wife did not like to discuss our possible future divorce but she is smart and understood it. She also doen't like to discuss my possible death but I still got life insurance. We can't start a lifelong relationship by avoiding the hard questions.

It took two painless meetings with a lawyer and we were done.

More than a year later, neither of us really remember that stuff, marriage is going strong and we are really happy together.
« Last Edit: October 04, 2013, 07:04:31 AM by arebelspy »

Nords

  • Magnum Stache
  • ******
  • Posts: 3198
  • Age: 59
  • Location: Oahu
    • Military Retirement & Financial Independence blog
Re: Help with a Prenup
« Reply #28 on: October 04, 2013, 02:21:51 PM »
Starting from the top:
I'm starting to get nervous about not having a prenup.  I'm planning to be married in April and am entering the marriage with the same amount of savings as my SO has debt (student loans only, but a high rate).  We currently operate with combined finances and make about the same amount of money each.  We're getting married in California.
Should I push for a prenup?  I'm more likely to out earn her if we both stick with slow and steady salary + bonus jobs, but she's in startups and always has the 1:1,000,000 shot of hitting it big.  I don't want any money from her; I just don't want her to initiate a divorce and take my money for the rest of my life.
If yes, which I think is the right answer, how do I approach this bad boy?
What does your fiancée think of this idea?  If you two have already agreed to be married next April, would she regard this as changing the terms of the merger?

I grew up in the camp of "If you do a marriage right then you won't need a prenup", which today seems incredibly naive.  However I also feel that a prenup, if suggested by just one of the prospective pair, can suck a lot of romance and trust out of a perfectly good relationship.  There has to be mutual agreement and benefit or else one side will always be a bit wary of the other.

On the other side of the generation gap, my 21-year-old daughter is full-on for a prenup.  She's been maxing her Roth IRA contributions since she was 14 years old and she's not planning on giving up any financial assets that she brings to the marriage.  It's too early to tell whether this attitude has affected her mating opportunities, but I'm sure she'll let me know when she's ready to discuss the subject...

livetogive

  • Stubble
  • **
  • Posts: 235
Re: Help with a Prenup
« Reply #29 on: October 04, 2013, 05:22:56 PM »
...My wife did not like to discuss our possible future divorce but she is smart and understood it. She also doen't like to discuss my possible death but I still got life insurance. We can't start a lifelong relationship by avoiding the hard questions.

That's a great way to look at it.

livetogive

  • Stubble
  • **
  • Posts: 235
Re: Help with a Prenup
« Reply #30 on: October 04, 2013, 05:25:28 PM »
I got married about a year ago in CA.  I'm a lawyer and got a pre-nup.  The default community property laws aren't too bad though so I know many lawyers that go without.  For me, I wanted to define the terms of any alimony in advance.  If we ever get to FIRE, I don't want to get burned with a huge alimony ruling that lasts way too long.  Also, her parents make very poor financial decisions so I wanted to allow for reimbursement of any parental assistance if marriage is dissolved.  There's a bunch of other things we put in there too.  Like retirement acc'ts remain separate, etc. 

PM me if you need more details, referrals, etc.

I was going to PM you but figured this question would be good for the discussion:  Is there a way to avoid a huge alimony payment with a prenup in California?  I thought those types of agreements didn't hold up and that the divorce judge? just awarded what they saw fit anyway...

hlca

  • 5 O'Clock Shadow
  • *
  • Posts: 24
Re: Help with a Prenup
« Reply #31 on: October 05, 2013, 01:25:59 PM »
I was going to PM you but figured this question would be good for the discussion:  Is there a way to avoid a huge alimony payment with a prenup in California?  I thought those types of agreements didn't hold up and that the divorce judge? just awarded what they saw fit anyway...

I'm not that knowledgeable about family law, but we were told it would be upheld as long as it was not unconscionable. 

Since my income is currently many times that of hers, I agreed that as long as we were married for X years I would supplement her income for half the length of the marriage or until she got remarried, etc.  The supplement assumes she would be making less than she is now and required her to work or look for work.  Also, there's a cap as to how much it would affect me (i.e., no more than Y% of my income).

We both felt that was fair so I think there's a high likelihood it would be upheld.
« Last Edit: October 05, 2013, 01:27:54 PM by hlca »

pachnik

  • Handlebar Stache
  • *****
  • Posts: 1832
  • Age: 55
  • Location: Vancouver, BC
Re: Help with a Prenup
« Reply #32 on: October 05, 2013, 02:44:34 PM »
We have a pre-nup agreement.  But we are an older couple - got together when we were 42 and 49.  My husband has a daughter from his previous marriage and he has to think about her.  Also, there is a substantial difference in our assets. 

According to my lawyer, the family law in my province is the most archaic in Canada.  Our marriage agreement also protects me from his ex-wife should she choose to rear her head and come after him again.   My husband knew I would ask for a marriage contract and he had no problem with it.   

But in my case, in a previous relationship, I didn't take care of myself too well financially or watch out for my legal rights.  I allowed my ex to control my money and I will never go that route again.  I consider having a marriage contract a way to take care of myself. 

MrsPete

  • Magnum Stache
  • ******
  • Posts: 3519
Re: Help with a Prenup
« Reply #33 on: October 06, 2013, 03:31:31 PM »
If you don't trust your partner for life with your money, maybe you shouldn't be getting married yet.
Gotta agree 100%. 

When my husband and I married, we had -- between the two of us -- $200, four college degrees, one car, and a three-day old mortgage. 

Two and a half decades later, one of the reasons we've been successful in our marriage is that we've always worked together financially.  He's earned twice as much as me, but I have (by far) the best retirement.  So he's supported us while I've put away more into my retirement accounts.  He's worked hard at investing well.  I've worked hard at keeping our daily expenses down.  He's put in more hours at work.  I've put in more hours raising the children, which matters very much to us both.    We've done this together, and there's no way we could fairly say, "This is his, and that is mine.". If your lives are genuinely entwined, it just doesn't work that way. 

Divorce is not a random thing that strikes couples.  Be sure you and your future wife are on the same page financially.  Be sure you have similar goals.  Talk about them, set up a schedule to evaluate your progress.  But forget about an escape route.  It's the wrong path, if you want to stay together. 

Insanity

  • Handlebar Stache
  • *****
  • Posts: 1026
Re: Help with a Prenup
« Reply #34 on: October 06, 2013, 06:56:20 PM »
If you don't trust your partner for life with your money, maybe you shouldn't be getting married yet.
Gotta agree 100%. 

When my husband and I married, we had -- between the two of us -- $200, four college degrees, one car, and a three-day old mortgage. 

Two and a half decades later, one of the reasons we've been successful in our marriage is that we've always worked together financially.  He's earned twice as much as me, but I have (by far) the best retirement.  So he's supported us while I've put away more into my retirement accounts.  He's worked hard at investing well.  I've worked hard at keeping our daily expenses down.  He's put in more hours at work.  I've put in more hours raising the children, which matters very much to us both.    We've done this together, and there's no way we could fairly say, "This is his, and that is mine.". If your lives are genuinely entwined, it just doesn't work that way. 

Divorce is not a random thing that strikes couples.  Be sure you and your future wife are on the same page financially.  Be sure you have similar goals.  Talk about them, set up a schedule to evaluate your progress.  But forget about an escape route.  It's the wrong path, if you want to stay together.

Sometimes people change or people aren't as on the same page as they would like to think they were.

I never thought my wife was into spending as much for TV as she apparently has been.  She was always an avid book reader and has all but given that up.  Now she just sits in front of the TV at night.  Half the time watching shows she can't believe she is watching (things that are questionably fake reality TV).  Her parents had cable and movie channels, but she spent the time reading - fiction, non-fiction, biography, trashy, all kinds. 

It's one of the things that are blocking us from dropping cable all together (I need Internet for work and it needs to be a large pipe). 

No matter how much you think you know someone you don't always know them.  Or maybe you just don't want to admit certain things about someone that you might already know.  if that makes sense.

grantmeaname

  • Magnum Stache
  • ******
  • Posts: 4811
  • Age: 27
  • Location: NYC
  • Cast me away from yesterday's things
Re: Help with a Prenup
« Reply #35 on: October 06, 2013, 07:02:22 PM »
(things that are questionably fake reality TV)
The horror! Reality TV so bad you might not even believe it's fake!

Insanity

  • Handlebar Stache
  • *****
  • Posts: 1026
Re: Help with a Prenup
« Reply #36 on: October 06, 2013, 07:24:51 PM »
(things that are questionably fake reality TV)
The horror! Reality TV so bad you might not even believe it's fake!

see: Amish Mafia


LowER

  • Stubble
  • **
  • Posts: 161
Re: Help with a Prenup
« Reply #37 on: October 06, 2013, 08:26:46 PM »
Prenup or no marriage.  $200,000 is your net difference in assets.  Didn't MMM and wife and child retire nicely on just $600,000?  Divorce court is no fun, and often unpredictable.  Protect yourself or walk on eggshells every time you 2 have an argument, knowing you might be paying her $2,500 a month for 40 months, or until the disparity is divided equally.

Have you examined why you want the government in your relationship?  Is it romantic, expected by societal norms, cozy, religiion-promoted, or what?  I just don't understand what the attraction is, unless there's a large disparity in assets and/or income, and you're the one with less.

More than 50% of couples living together in the US now are not married.

Imagine paying someone you hate every month for the rest of your life, not until you retire - until you DIE!!!  Now that's mustachian....

grantmeaname

  • Magnum Stache
  • ******
  • Posts: 4811
  • Age: 27
  • Location: NYC
  • Cast me away from yesterday's things
Re: Help with a Prenup
« Reply #38 on: October 06, 2013, 08:33:12 PM »
More than 50% of couples living together in the US now are not married.
I'm almost completely sure that's false.

Insanity

  • Handlebar Stache
  • *****
  • Posts: 1026
Re: Help with a Prenup
« Reply #39 on: October 06, 2013, 09:45:20 PM »
There are some people here that are pretty anti-marriage.  Apparently OP is not one of them since he is engaged to be married!  Also, people certainly do change after marriage.  Like Insanity, there are things about my husband that are different than before we wed.  A lot of things!  Mostly better, but some are not.  :) 

I would hope the things that are better wouldn't lead to you wanting to divorce him ;-)

LowER

  • Stubble
  • **
  • Posts: 161
Re: Help with a Prenup
« Reply #40 on: October 06, 2013, 10:14:46 PM »
More than 50% of couples living together in the US now are not married.
I'm almost completely sure that's false.

"In 2010, unmarried households were 45% of all U.S. households. – U.S. Census Bureau. “America’s Families and Living Arrangements: 2010″
-Source: unmarried.org. 

The census.gov site is down because of the gov't shutdown.  I'm almost completely sure that the number is higher than 45% in 2013.

My SO and I were sad that we weren't rebels anymore by living in sin when we heard, and read, news reports, about 6 months ago, about more than 50% of couples being unmarried.  It shocked us too!  And still does  a little bit.

New York TImes article can be found here: http://www.nytimes.com/2011/05/26/us/26marry.html?_r=0

"Married Couples Are No Longer a Majority, Census Finds
By SABRINA TAVERNISE
Published: May 26, 2011
 
WASHINGTON — Married couples have dropped below half of all American households for the first time, the Census Bureau says, a milestone in the evolution of the American family toward less traditional forms.

Married couples represented just 48 percent of American households in 2010, according to data being made public Thursday and analyzed by the Brookings Institution. This was slightly less than in 2000, but far below the 78 percent of households occupied by married couples in 1950.

What is more, just a fifth of households were traditional families — married couples with children — down from about a quarter a decade ago, and from 43 percent in 1950, as the iconic image of the American family continues to break apart....."
« Last Edit: October 06, 2013, 11:36:37 PM by LowER »

grantmeaname

  • Magnum Stache
  • ******
  • Posts: 4811
  • Age: 27
  • Location: NYC
  • Cast me away from yesterday's things
Re: Help with a Prenup
« Reply #41 on: October 07, 2013, 05:04:17 AM »
That's all households, though - only once you include widows and divorcees as well as plain old single people you no longer have a married majority. Still, those numbers are way closer than I thought...

Edit: damn you, autocorrect.
« Last Edit: October 07, 2013, 11:35:30 AM by grantmeaname »

sassy1234

  • 5 O'Clock Shadow
  • *
  • Posts: 93
Re: Help with a Prenup
« Reply #42 on: October 07, 2013, 10:24:36 AM »
"Mr.Macinstache
Senior Mustachian
If you don't trust your partner for life with your money, maybe you shouldn't be getting married yet.
How many have people gotten in trouble when they trust their partner too much? I don't see a problem with a prenup. If a woman wont marry because of one, maybe it's not just the person she is in love with, but the financial security instead."

Actually, I am the breadwinner in my family (I am female).  There are a lot of people assuming that men make all the money, but you know what they say about assuming.  If you are going into a marriage with plans for an out to protect you financially, you are already predicting your future.  Perhaps you should not get married? 

CommonCents

  • Handlebar Stache
  • *****
  • Posts: 2386
Re: Help with a Prenup
« Reply #43 on: October 07, 2013, 11:42:43 AM »
Imagine paying someone you hate every month for the rest of your life, not until you retire - until you DIE!!!  Now that's mustachian....

Most states don't do permanent alimony anymore - generally it's rehabilitative, reimbursement and/or limited-duration.  I tried to look  up which are still permanent and couldn't find it easily.

Is it mustachian to go back on a commitment?  Imagine relying on someone's promises to take care of you, so you quit your job and give up your career to take care of the kids, spouse and household.  You homeschool/drive kids to events and classes/cook meals and save money/pay the bills, schedule the dr appts, take care of the broken appliance and other admin details for years.   Then you get divorced in your late 50s when your kids are off at college and your spouse thinks 1-2 years of alimony is enough because after all, s/he made the big bucks not you so it's their money.  Never mind you agreed together way back that you would stay home - it's ok to change the rules now at the end.  Now you're at an age where it's 1) hard to get any job (they think you'll be retiring soon, even if age discrimation is illegal, and won't hire you, plus the economy is not great and you have no work exp), and 2) impossible to ever work your way up the career ladder to the position you would have been.  This is why I always advocate people talking through all of the issues, particularly before making big decision like getting married, or one person staying home with kids.

It can go both ways.  Yes, divorce sucks, and I agree that alimony rules can be improved (my state, MA did this in 2011), but it doesn't seem to me that this is the appropriate place to post about swearing off marriage, when the OP isn't asking about that advice.  Instead I suggest you start a new thread.

FrugalZony

  • Handlebar Stache
  • *****
  • Posts: 1463
Re: Help with a Prenup
« Reply #44 on: October 07, 2013, 01:32:26 PM »
This seems to be a more controversial subject in this group than I thought it would be and I am surprised.
Divorce happens, it's a fact, there's statistics on that and just look around you...all of us know people to whom it has happened...they certainly did not plan on it, when they got married...or all had prenups that set them up to fail, as some folks here claim!

That said, I think it is important to have a common plan as a couple. If you want a family and one of the partners has to/wants to stay home with kids then I think it's fair to be protected. But a prenup/postnup can do that too.

Marriage is a contract and a prenup is a contract as well. The way I look at it, is that you put down in writing, the things you agree to be fair for both parties. So either of you is protected from emontional situations that may taint your view about what is fair some time down the road.
Because when divorces get ugly...and we all know some do....a lot of things are about emotions and what is perceived fair by either party....may change drastically.

The thing is to agree on something and if you think you will never need it, because you won't get a divorce, then great!! Then you put it in your files and won't ever have to go back to it. But in case things don't go as planned, BOTH of you will be protected!

The friends that thought we were being so unromantic for having a prenup (and btw seperate finances) are the ones that are now fighting a war of roses over every little last spoon in the house (I kid you not) and the kid suffers in the process!!
Not a pretty sight! And they thought too divorce is for others!!


grantmeaname

  • Magnum Stache
  • ******
  • Posts: 4811
  • Age: 27
  • Location: NYC
  • Cast me away from yesterday's things
Re: Help with a Prenup
« Reply #45 on: October 07, 2013, 01:54:50 PM »
But a prenup is not always a solution to those problems, either. It's not like many aspects of your divorce become non-negotiable when you get the prenup, and it's not like the expense of getting the prenup is insignificant if you're marrying with nothing.

gimp

  • Handlebar Stache
  • *****
  • Posts: 2348
Re: Help with a Prenup
« Reply #46 on: October 07, 2013, 02:02:21 PM »
Man, pre-nups are an emotional, complex topic.

How many of you had an easy agreement with your spouses? How many were already on the same page? And how many of you argued and compromised / caved in?

LDoon

  • 5 O'Clock Shadow
  • *
  • Posts: 70
  • Location: Austin
Re: Help with a Prenup
« Reply #47 on: October 07, 2013, 06:09:56 PM »
Getting a prenup or not also depends on whether you want a forward looking agreement or a backwards looking agreement.  For example, if you are only concerned with your assets vs. her debt (backward looking), then put your assets in separate accounts (cash, investments, property, whatever) and keep it there.  The key is to not co-mingle the funds, otherwise your separate property becomes community property.  Then start your marriage with a clean slate, and work to save up again.  (bonus: free)

Also, if you want to pay off some or all of her loans, then execute a loan from yourself (single) to yourselves (married).  It's a loan that doesn't need to be repaid except in case of a divorce. (bonus: simple enough that can either do yourselves or inexpensive to have a lawyer do it.  Just remember to have it notarized).

If your concern is forward looking (e.g., military pension), then you should consult a lawyer to exclude the pension from your community property (I'm not sure how that works).  Same for alimony, etc.

Nords

  • Magnum Stache
  • ******
  • Posts: 3198
  • Age: 59
  • Location: Oahu
    • Military Retirement & Financial Independence blog
Re: Help with a Prenup
« Reply #48 on: October 07, 2013, 06:38:13 PM »
If your concern is forward looking (e.g., military pension), then you should consult a lawyer to exclude the pension from your community property (I'm not sure how that works).
Federal law tells the states how to assess military pensions in a divorce proceeding.  I'm not sure that there's any way to "exclude" a military pension from divorce proceedings if the spouse meets the federal qualifications to be awarded a portion of it.  However I could be wrong, so if any of you posters know otherwise I'd appreciate a link to include in a post on the subject.

I've learned from many of my readers that ignorance of one's military benefits (servicemember or spousal) does not lead to bliss.

TrulyStashin

  • Handlebar Stache
  • *****
  • Posts: 1030
  • Location: Mid-Sized Southern City
Re: Help with a Prenup
« Reply #49 on: October 07, 2013, 06:48:31 PM »
Imagine paying someone you hate every month for the rest of your life, not until you retire - until you DIE!!!  Now that's mustachian....

Most states don't do permanent alimony anymore - generally it's rehabilitative, reimbursement and/or limited-duration. 

Actually, permanent alimony is not unusual (VA & FL off the top of my head) though they also have rehabilitative etc.  In Virginia, if you sign a property settlement agreement with an alimony stipulation then the court is barred from ever again reviewing the terms of the agreement (unless the PSA gives the court jurisdiction).  Not kidding.  So, 10 years later, the payor might become disabled or the payee won the lottery and makes WAY more than the payor.  Too bad, still gotta pay.  The court doesn't even have jurisdiction to review it and adjust for changed circumstances.

So, if one party to a divorce is an emotional wreck and signs without a careful review by a lawyer, that party is fucked until the other party dies or remarries.   It's not unusual for someone to sign just to end the emotional pain and whammo, they're trapped.

Horrible.