Pre-nups and financial stuff

[beadchick]

Okay, so, I am going to go ahead and bring up what I think will likely be an unpopular topic (and will probably post this in the Newlyweds area too): Prenuptual agreements. Does anyone have one? Is anyone considering doing one? Most of my friends seem to feel that either a) it makes it too easy to get out of a marriage or b) if you are really in love, you wouldn''t have one.

I am a product of divorce, thank GOD my mom worked and was able to take care of us, but you hear so many horror stories, you know? I love my fiance, I think we are fairly well-suited to each other, but when most people get married (even those with pre-nups), I am pretty sure they weren''t planning they would be getting divorced one day. I work in a field where one day, I will do very well financially; he is in the same situation. Plus, I will be marrying the oldest son and inheriting family jewelry. I would want HIM to know that he will get family belongings back, and I want to know, for the both of us, that we will be bound to do the best we can for our children if something horrible were to happen. If there are legal documents mutually agreed to, then there is no point in arguing over things.

I am also wondering how people manage finances. We tend to keep things separate, just works better that way. I''m a saver, he''s a spender. So, he''ll do the mortgage and I''ll be responsible for the retirement funds. We just thought it would be easier to go towards "type" and work with it.

So, thinking on the marriage, what kind of long-term financial preparations are you all making?

 

[cara]

I thought that prenups were for people that come into marriage with something to protect, ie. a business or wealth or something. Not (a) or (b) but more like, you are brittany spears marrying some backup singer and even though you are totally ***inlove*** all these people tell you to protect yourself just in case, KWIM? Or you or your spouse owns a business, and they want to keep that separate from the marital property so that it doesn''t have to be sold off in case of divorce. Or one of you has mountains of school debt. Obviously speak to a lawyer if you or he is concerned about the family jewels, but do you really want to use a prenup to divy up wealth you will both earn during the marriage?

 

[beadchick]

I have NO idea! I don''t know how this works. I get the whole, "what''s mine is mine and what''s yours is yours" thing. And no, we aren''t loaded. He has a big house and a little house, but with mortgages. I''ve got a condo (which I will eventually rent out or sell), but we live in it right now. After professional school, I do have the grad debt. How do prenups work? Can we make it so that we can specify who gets theoretical assets or do they have to be existing? My head says it is the smart thing to do, my heart says, whatever...I waited a while and picked a good one, so I don''t think its going to be an issue anyway.

 

[NovemberBride]

Prenuptial agreements protect assets that exist when entering the marriage, not theoretical assets that may be earned during the marriage. Those are marital assets. In my opinion, a pre-nup is therefore only useful when one or both parties are entering the marriage with substantial assets or certain property that they wish to keep in their family. For example, you could have a pre-nup that says that in the event of divorce he gets the family jewelry back. But you could not have one that said he can''t get any of the money you may make in the future.

 

[yssie]

Date: 3/4/2010 7:36:29 PM
Author: NovemberBride
Prenuptial agreements protect assets that exist when entering the marriage, not theoretical assets that may be earned during the marriage. Those are marital assets. In my opinion, a pre-nup is therefore only useful when one or both parties are entering the marriage with substantial assets or certain property that they wish to keep in their family. For example, you could have a pre-nup that says that in the event of divorce he gets the family jewelry back. But you could not have one that said he can''t get any of the money you may make in the future.

This.


We won''t have one because neither of us have anything worth protecting right now

If one of us did, though, we''d certainly put it in writing.


"If you really love each other, you shouldn''t need it" is really a very childish, naive, and judgmental way of looking at it, IMHO.

 

[megumic]

We will not have a pre-nup. Despite the fact that FI has more savings and less debt than me, we have not even entertained the idea of a pre-nup. At a time when we're talking about joining our lives and hearts, finances are just not at the forefront and we don't feel the need to protect ourselves from each other.

I think pre-nups are a very personal choice but are generally better suited for second and third marriages, when people have children from previous relationships to protect from the new spouse in their absence.

 

[purrfectpear]

The advice here is not entirely accurate. Prenups are useful to discuss assets both prior AND earned during the marriage. In fact assets that both parties bring to the marriage are automatically theirs to keep unless they are comingled or converted into other assets during the marriage. The one thing a prenup CANNOT legally establish is one of the things you mentioned. Children. No court will uphold a prenup that attempts to predetermine custody or child support.

 

[beadchick]

I don''t want to force a custody issue, I do want to ensure that IF something were to happen, we could minimize argumentation and deliberation, smoothing the process in order to prevent traumatizing little people. He is great with kids, I wouldn''t even consider taking that. Is this a stupid topic? I guess that when you have witnessed/been the kid in a divorce when mom got the proverbial shaft, you think a bit differently. We certainly struggled when my parents divorced. Ideally, this ends up being a piece of paper that gets signed, put in the file cabinet and never sees the light of day again.

 

[lilyfoot]

Date: 3/4/2010 9:00:13 PM
Author: beadchick
I don''t want to force a custody issue, I do want to ensure that IF something were to happen, we could minimize argumentation and deliberation, smoothing the process in order to prevent traumatizing little people. He is great with kids, I wouldn''t even consider taking that. Is this a stupid topic? I guess that when you have witnessed/been the kid in a divorce when mom got the proverbial shaft, you think a bit differently. We certainly struggled when my parents divorced. Ideally, this ends up being a piece of paper that gets signed, put in the file cabinet and never sees the light of day again.

I''m really not sure if there''s anything out there that could help you do this.

 

[Octavia]

Date: 3/4/2010 8:09:46 PM
Author: purrfectpear
The advice here is not entirely accurate. Prenups are useful to discuss assets both prior AND earned during the marriage. In fact assets that both parties bring to the marriage are automatically theirs to keep unless they are comingled or converted into other assets during the marriage. The one thing a prenup CANNOT legally establish is one of the things you mentioned. Children. No court will uphold a prenup that attempts to predetermine custody or child support.

I'm pretty sure you're right, PP -- my Family Law professor keeps stressing that prenups are a way to contract around the default divorce laws that the state has established. The state laws will vary a lot, especially between community property and separate property states, but generally parties can use a prenup to specify ownership of property regardless of whether it's acquired before or during the marriage. Custody and child support are up to the courts, though, and they won't consider any waivers or limitations to be valid.

Beadchick, my DH and I considered a prenup for basically the same reasons you're thinking of it. His parents have each had multiple messy divorces and he basically wanted something to make things easier if he was ever in that position. But in the end, we didn't do it...partly because he's lazy and never bothered to look into it more, but also because we really couldn't do what he wanted us to do through a legal document. He also came into the marriage with substantially more assets than I have (he has a good job; I'm a law student so I'm all loans and no savings). But those are his regardless, and we're in favor of sharing equally now that we're married, so we didn't really have anything to contract around and it would have been kind of a waste of money.

 

[jcarlylew]

Date: 3/4/2010 7:44:55 PM
Author: yssie

Date: 3/4/2010 7:36:29 PM
Author: NovemberBride
Prenuptial agreements protect assets that exist when entering the marriage, not theoretical assets that may be earned during the marriage. Those are marital assets. In my opinion, a pre-nup is therefore only useful when one or both parties are entering the marriage with substantial assets or certain property that they wish to keep in their family. For example, you could have a pre-nup that says that in the event of divorce he gets the family jewelry back. But you could not have one that said he can''t get any of the money you may make in the future.

This.


We won''t have one because neither of us have anything worth protecting right now

If one of us did, though, we''d certainly put it in writing.


''If you really love each other, you shouldn''t need it'' is really a very childish, naive, and judgmental way of looking at it, IMHO.

agreed 100%

 

[Iowa Lizzy]

My FI and a I will be having a pre-nup drawn up in a couple months for the reasons you''re already read about. We both have our own assets we''re bringing into the marriage that we want to protect. Nobody gets married thinking they''ll get divorced, but there''s always that risk. If I get on a cruise ship, I REALLY don''t think it would sink, but I go through the lifeboat training wearing a giant orange life vest looking like an idiot because it''s smart and I want to be protected. Weird analogy?

 

[Dancing Fire]

Date: 3/4/2010 7:36:29 PM
Author: NovemberBride
Prenuptial agreements protect assets that exist when entering the marriage, not theoretical assets that may be earned during the marriage. Those are marital assets. In my opinion, a pre-nup is therefore only useful when one or both parties are entering the marriage with substantial assets or certain property that they wish to keep in their family. For example, you could have a pre-nup that says that in the event of divorce he gets the family jewelry back. But you could not have one that said he can''t get any of the money you may make in the future.

yep, we didn''t need a pre-nup.wife and i both came from a poor family.

 

[Dancing Fire]

Date: 3/4/2010 7:44:55 PM
Author: yssie


'If you really love each other, you shouldn't need it' is really a very childish, naive, and judgmental way of looking at it, IMHO.

yssie
that is the wrong way of thinking !!

if my gf was loaded with $$$.i wouldn't mind signing a pre-nup just to show her that i wasn't marrying her for the money.

 

[FrekeChild]

Date: 3/4/2010 8:07:11 PM
Author: megumic
We will not have a pre-nup. Despite the fact that FI has more savings and less debt than me, we have not even entertained the idea of a pre-nup. At a time when we''re talking about joining our lives and hearts, finances are just not at the forefront and we don''t feel the need to protect ourselves from each other.

I think pre-nups are a very personal choice but are generally better suited for second and third marriages, when people have children from previous relationships to protect from the new spouse in their absence.

Bolded part: This comes off as very naive when the foremost "cause" of divorce is

money

.

Not to mention marriage basically started out (historically) as a business proposition. Love ain''t everything.

Speaking as a divorce attorney''s daughter who will be inheriting substantial assets someday, it was not suggested by my dad, even though it was considered and discussed by all three of us. Maybe it''s because he likes my husband more than he likes me, but probably not.

However, there is a clause in my dad''s will that reads along these lines, "In the event of Freke''s bro #1, Freke''s bro #2 or Freke''s divorce, the aforementioned assets that were shared during marriage are to be ceased immediately." AKA, if you get divorced, not only are they no longer legally able to access the inheritance, but they are banned from receiving any benefits from it at all. Of course, in the event of alimony and child support, it gets gray and cloudy, because an ex-spouse can potentially benefit from it in a roundabout way.

Does that make any sense at all?

Remember, there are those things called "Post Nuptial Agreements" that are kind of taken not-so-seriously because it kind of sounds funny, but it''s still a legal way of protecting yourself.

Anyway, we don''t have one. He has substantial student loan debt and a decent amount of credit card debt, meanwhile I have no credit and stand to have a decent inheritance. It''s all very tricky. But that''s why divorce attorneys exist.

I don''t believe that you can really do anything about child support/custody in a pre-nup beyond very very general guidelines. Life circumstances change along with income by both parties, and the calculations of support depend greatly upon the circumstances at the time(s).

 

[CNOS128]

I recommend this book (Prenups for Lovers) for those interested in marital agreements.

 

[sparklyheart]

It was my understanding that in most states inheritance can be considered separate property at the time of divorce if it''s only used by the person inheriting it. That applies to money at least.. I''m not sure how it works with property such as his family jewels. Just something to consider and ask about if the inheritance is a big reason for drawing up a pre-nup.

 

[lucyandroger]

We won''t have one because we do not believe in divorce. If divorce is a possiblity for you (however remote) and you have substantial assets coming into the marriage, I would definitely urge you to protect yourself.

 

[NewEnglandLady]

A pre-nup is something I brought up with my DH before we were married. I was coming into the marriage with some student loan debt (no other debt) while my husband was the smart one who never took out a loan for school and had created a comfy nest egg. I absolutely did not want my husband to become responsible for my debt when he had made the decision not to go into debt himself. I brought up a pre-nup to him to protect him in case anything were to happen. He did not think that was "marriage minded" and did not agree that we should have a prenup.

After being married a period of time, my mentality started to shift from "individual" to "team" and finally agreed to let him pay the debt so that we could both contribute to our future. While I do understand the mentality of a pre-nup, I also know much more you can accomplish when you really work together instead of thinking about "yours" and "mine".

 

[meresal]

Prenups, like everyone else has stated, only protect the assets you bring INTO a marriage, not what you make WHILE married. Those are joint assets and you are not allowed to keep them separate from your husband.

My sister and her husband both became VERY successful in her first marriage, so when preparing for her second, and realizing she herself had over $1 mill in assets, it was obvious that a pre-nup was necessary. Unless you have some kind of family heirlooms or an excess of funds that you want to protect in the event of a divorce, then a pre-nup is not needed.

ETA: My sister's new husband also has an ex wife and 2 girls from that marriage (wonderful girls... not so wonderful ex-wife)... If anything were to happen to her current marriage, my sister did not want the ex coming after her assets in order to get more money.

 

[february2003bride]

Date: 3/5/2010 9:19:46 AM
Author: lucyandroger
We won''t have one because we do not believe in divorce. If divorce is a possiblity for you (however remote) and you have substantial assets coming into the marriage, I would definitely urge you to protect yourself.

That''s exactly what my aunt used to say, that she and her DH didn''t believe in divorce for religious reasons and they loved each other. Until 30 years later when he walked out to live with another woman. People change and assets and debts change over a course of marriage.

Beadchick- DH had way more assets than I did going into our marriage but we didn''t do a prenup. However if he wanted to, I would have been fine with it. He worked hard in his career to get where he was financially and had been through a messy divorce before that ended up costing him a large sum. I wouldn''t have been offended if he had asked but he didn''t so we don''t. Prenups are a good way to protect everyone in involved, not just the person with the highest checking account amount. It doesn''t mean you love each other any less than a couple who wouldn''t dream of getting a prenup. In this day and age with more women getting higher education degrees and earning more than their SO''s, I''m surprised more women don''t push the prenup issue!

 

[purselover]

Date: 3/4/2010 9:40:46 PM
Author: Octavia

Date: 3/4/2010 8:09:46 PM
Author: purrfectpear
The advice here is not entirely accurate. Prenups are useful to discuss assets both prior AND earned during the marriage. In fact assets that both parties bring to the marriage are automatically theirs to keep unless they are comingled or converted into other assets during the marriage. The one thing a prenup CANNOT legally establish is one of the things you mentioned. Children. No court will uphold a prenup that attempts to predetermine custody or child support.

I''m pretty sure you''re right, PP -- my Family Law professor keeps stressing that prenups are a way to contract around the default divorce laws that the state has established. The state laws will vary a lot, especially between community property and separate property states, but generally parties can use a prenup to specify ownership of property regardless of whether it''s acquired before or during the marriage. Custody and child support are up to the courts, though, and they won''t consider any waivers or limitations to be valid.

Beadchick, my DH and I considered a prenup for basically the same reasons you''re thinking of it. His parents have each had multiple messy divorces and he basically wanted something to make things easier if he was ever in that position. But in the end, we didn''t do it...partly because he''s lazy and never bothered to look into it more, but also because we really couldn''t do what he wanted us to do through a legal document. He also came into the marriage with substantially more assets than I have (he has a good job; I''m a law student so I''m all loans and no savings). But those are his regardless, and we''re in favor of sharing equally now that we''re married, so we didn''t really have anything to contract around and it would have been kind of a waste of money.

This - there are several types of agreements available, if you and your FI are interested in this I would sit down with a lawyer.

In regards to me personally DH and I do not have a prenup - nor would I have signed one.

 

[lucyandroger]

Date: 3/5/2010 9:36:40 AM
Author: february2003bride

Date: 3/5/2010 9:19:46 AM
Author: lucyandroger
We won''t have one because we do not believe in divorce. If divorce is a possiblity for you (however remote) and you have substantial assets coming into the marriage, I would definitely urge you to protect yourself.

That''s exactly what my aunt used to say, that she and her DH didn''t believe in divorce for religious reasons and they loved each other. Until 30 years later when he walked out to live with another woman. People change and assets and debts change over a course of marriage.

I''m so sorry to hear about your aunt and uncle.

My beliefs about divorce have nothing to do with religion but with being the child of divorce and the daughter of a former divorce attorney. I believe that typically couples that get divorced love each other when they get married just as much as couples that do not. In the end, divorce is a choice, not something that just "happens" to a couple.

As far as assets and debts changing, of course they do! There are state family laws that deal with the fair distribution of marital property.

 

[purrfectpear]

Date: 3/5/2010 9:29:41 AM
Author: meresal
Prenups, like everyone else has stated, only protect the assets you bring INTO a marriage, not what you make WHILE married. Those are joint assets and you are not allowed to keep them separate from your husband.

My sister and her husband both became VERY successful in her first marriage, so when preparing for her second, and realizing she herself had over $1 mill in assets, it was obvious that a pre-nup was necessary. Unless you have some kind of family heirlooms or an excess of funds that you want to protect in the event of a divorce, then a pre-nup is not needed.

ETA: My sister''s new husband also has an ex wife and 2 girls from that marriage (wonderful girls... not so wonderful ex-wife)... If anything were to happen to her current marriage, my sister did not want the ex coming after her assets in order to get more money.

Wrong. I did not state that because it is absolutely NOT correct. A prenup can and will override "joint" assets community property law if properly and legally written and affirmed.

Let everyone be clear on that now. It is FACT. What you cannot do is leave someone penniless because that would not be considered a legal contract. You can seek to predetermine what the split would be by various factors. Some people use years in the marriage, etc.

 

[meresal]

Date: 3/5/2010 10:25:55 AM
Author: purrfectpear

Date: 3/5/2010 9:29:41 AM
Author: meresal
Prenups, like everyone else has stated, only protect the assets you bring INTO a marriage, not what you make WHILE married. Those are joint assets and you are not allowed to keep them separate from your husband.

My sister and her husband both became VERY successful in her first marriage, so when preparing for her second, and realizing she herself had over $1 mill in assets, it was obvious that a pre-nup was necessary. Unless you have some kind of family heirlooms or an excess of funds that you want to protect in the event of a divorce, then a pre-nup is not needed.

ETA: My sister's new husband also has an ex wife and 2 girls from that marriage (wonderful girls... not so wonderful ex-wife)... If anything were to happen to her current marriage, my sister did not want the ex coming after her assets in order to get more money.

Wrong. I did not state that because it is absolutely NOT correct. A prenup can and will override 'joint' assets community property law if properly and legally written and affirmed.

Let everyone be clear on that now. It is FACT. What you cannot do is leave someone penniless because that would not be considered a legal contract. You can seek to predetermine what the split would be by various factors. Some people use years in the marriage, etc.

I just read your post and understand that I was mistaken, however, I think it also varies on state to state.

Like I added, my sister was worried about her assets becoming something that the ex could go after as child support... since it would technically be "additional income". There is no way that any of her prior assets will become attainable and I'm pretty sure the ex isn't allowed to go after my sister's salary for extra child support.

My post was in direct relation to salary that neither the OP nor her FI are sure they are going to get. I don't think it would be smart in her situation becuase of the way she put the whole scenario. She stated that SHE would become very successful "eventually", when in fact, if you are treating your marriage correctly, that should be joint money since your SO has been there supporting you the whole time. IMPO, it isn't healthy to have those stigma's of "Mine" and "His" after you are married.

I am asking a legitimate question here, can you really have a pre-nup for things that you can't even predict? Like saying, "I may only make $50k right now, BUT If I ever make more than $300,000 in a year, I am only required to share half?" That seems insane to me... and actually very stupid. It could lead to a VERY childish list of demands, IMO.

 

[laughwithme]

Nope, no prenup here. Our list of "assets" is quite short...coupla cars, a sweet TV, a camera, my bling

 

[smiles]

PP has said it best so far. I think there are two very important things to remember. 1. Most people do not marry with the intention of divorcing later down the line. Noone has ANY way of knowing what could happen in the future and noone can GUARANTEE that they will not get divorced. Even if you fundamentally do not believe in divorce until you have been in the position of being in a horrible marriage for whatever reason and wanting to leave one cannot say what they would do. To this end, people also do not PLAN on getting into car accidents or having their houses burn down in a fire or on dying suddenly and unexpectedly yet be all have car insurance, home insurance and health/life insurance to protect ourselves and our lived ones. 2. While everyone is happy and in love now there are many emotions that go along with divorce and MOST people do not stay level headed and calm throughout the entire divorce proceedings. Just because you feel that if you did get divorced you could work it out fairly does not mean that you will be in the same head space at that time.
At the end of the day it is a very personal decision.

 

[meresal]

Date: 3/5/2010 2:23:02 PM
Author: smiles
PP has said it best so far. I think there are two very important things to remember. 1. Most people do not marry with the intention of divorcing later down the line. Noone has ANY way of knowing what could happen in the future and noone can GUARANTEE that they will not get divorced. Even if you fundamentally do not believe in divorce until you have been in the position of being in a horrible marriage for whatever reason and wanting to leave one cannot say what they would do. To this end, people also do not PLAN on getting into car accidents or having their houses burn down in a fire or on dying suddenly and unexpectedly yet be all have car insurance, home insurance and health/life insurance to protect ourselves and our lived ones. 2. While everyone is happy and in love now there are many emotions that go along with divorce and MOST people do not stay level headed and calm throughout the entire divorce proceedings. Just because you feel that if you did get divorced you could work it out fairly does not mean that you will be in the same head space at that time.
At the end of the day it is a very personal decision.

Yes, everything you have said is true, but what is there to protect if you come into the marriage with nothing of value?

The OP is referring to potential income that she MIGHT make in the future...

 

[Haven]

beadchick--Why don''t you schedule an appointment with an attorney so you can discuss whether this would be the right choice for you? It sounds like you have valid concerns, and sometimes the simple act of talking them out with an informed professional is all you need to make a decision.

DH and I do not have a pre-nup. It really never entered our discussions before we married. He earns much more than I, and he always will. He also has more assets. For *us*, a pre-nup didn''t enter the equation, but I have many friends who did draw pre-nups before they married and it was the right choice for them.

As for our finances, we combined everything. I manage all of the money and investments because I''m a better bookkeeper. Before we married I was the saver and DH was the spender, but we''ve had many conversations about money and what type of relationship we want to have with it, and I''ve since converted him to saversville. This method works best for us simply because it is easier for me to manage everything now that it is combined. When you marry, will you each take care of a different set of bills? Then maybe you don''t have to combine. I think you''ll find a method that works for you once you try a few different ways of handling things. We don''t really spend much beyond our basic bills, so that makes everything a lot easier, too.

 

[lucyandroger]

Date: 3/5/2010 2:23:02 PM
Author: smiles
PP has said it best so far. I think there are two very important things to remember. 1. Most people do not marry with the intention of divorcing later down the line. Noone has ANY way of knowing what could happen in the future and noone can GUARANTEE that they will not get divorced. Even if you fundamentally do not believe in divorce until you have been in the position of being in a horrible marriage for whatever reason and wanting to leave one cannot say what they would do. To this end, people also do not PLAN on getting into car accidents or having their houses burn down in a fire or on dying suddenly and unexpectedly yet be all have car insurance, home insurance and health/life insurance to protect ourselves and our lived ones. 2. While everyone is happy and in love now there are many emotions that go along with divorce and MOST people do not stay level headed and calm throughout the entire divorce proceedings. Just because you feel that if you did get divorced you could work it out fairly does not mean that you will be in the same head space at that time.
At the end of the day it is a very personal decision.

This is where we fundamentally differ. We can agree to disagree. If somehow I end up in a horrible marriage, we are going to do whatever it takes to turn it into a better marriage - not disolve the marriage. This is just how we feel - not saying everyone has to agree with me.

Divorce is not something that happens to you like a car accident or a house fire. You do not just fall into a divorce. You make a decision and then file for divorce.

I'm not judging anyone - my own parents are divorced. There are many things I can say that I would never do in life no matter the circumstances, and getting a divorce is one of them.

ETA - When I mentioned a fair distribution in my previous post, I was referring to following the family laws of the state - those do not change just because of your "head space at the time."