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Re: Pre-nuptial Agreement to Protect FIRE Nestegg
Old 06-20-2005, 11:33 PM   #41
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg

A good friend of mine, a woman in her mid-30s, told me that she was appalled at the idea of a pre-nup.

It turns out that she is wealthy, like probably a couple of million wealthy. But the vast majority of her assets are in a trust fund inherited from her grandfather and exclusively in her name.

I told her that to be fair and consistent, she should put her husband's name on the trust, if he puts all his assets into the marriage, as he would effectively be doing without a trust. She said no way, she would never do that. I pointed out the contradiction . . .

Kramer
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg
Old 06-20-2005, 11:41 PM   #42
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg

Quote:
wabmester wrote: I'm no lawyer, but I think the law in most states is that you get to keep what you brought into the marriage. So even if you decide not to do a prenup (which I agree is anti-romantic), the least you can do is to not comingle your assets. Just keep separate investment accounts, and create a joint account for paying the bills. Your spouse still gets your assets in the case of your death, but you'll have some protection in case of divorce. And you can discuss this strategy *after* the wedding, around the same time you're both updating your wills.
My understanding is that in a community property state that it is very, very easy to commingle, and that once you do, the entire account becomes community property.

I am not a lawyer, and would be interested in someone with more knowledge commenting on this.

But according to my understanding, using your Schwab ATM card a few times for joint expenses from your non-joint account (or writing a few checks from that account spending the dividends) makes the entire account community property. Same for adding to the account, even in small amounts for, say, rebalancing, from the joint marriage money. Comments appreciated.

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Re: Pre-nuptial Agreement to Protect FIRE Nestegg
Old 06-21-2005, 11:39 AM   #43
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg

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Originally Posted by kramer
My understanding is that in a community property state that it is very, very easy to commingle, and that once you do, the entire account becomes community property.*

I am not a lawyer, and would be interested in someone with more knowledge commenting on this.

But according to my understanding, using your Schwab ATM card a few times for joint expenses from your non-joint account (or writing a few checks from that account spending the dividends) makes the entire account community property.* Same for adding to the account, even in small amounts for, say, rebalancing, from the joint marriage money.* Comments appreciated.

Kramer
I believe you are correct.* Also, any money made by either spouse after you say "I do" is considered community property.* So if you auto-deposit your paycheck into what was formerly a "separate property" account, that money is now community money.* The theory is that the court cannot determine which dollars were earned before the marriage and which were earned after.* Also, if you own real property and allow the spouse to make part of a mortgage payment from his/her funds or use community funds to make the payment, that real property is now community property.* If you get a pension, the spouse is entitled to 50% of the amount of the pension accrued during the marriage (the amount accrued before or after the marriage is separate property). I am not a lawyer, this is just what I have been told by lawyers.* *
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg
Old 06-21-2005, 01:42 PM   #44
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg

Gatsby:

I think being a lawyer has nothing to do with your wanting to set up a pre-nup. IMO, wanting a pre-nup has more to do with the wantee, the SO, and dynamics of relationship.

lawyers in husband's family: dad, grandfather, three uncles, two cousins, brother, sister = 0 prenups.
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg
Old 06-22-2005, 04:08 PM   #45
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg

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Originally Posted by P.S.
Gatsby:

I think being a lawyer has nothing to do with your wanting to set up a pre-nup.* IMO, wanting a pre-nup has more to do with the wantee, the SO, and dynamics of relationship.

lawyers in husband's family: dad, grandfather, three uncles, two cousins, brother, sister = 0 prenups.
I don't think so (obviously).* Rather, I think it has much more to do with the unpredictability of the effect that divorce can have pre-marital assets.* As a previous poster pointed out, and although the law varies state to state, commingling of pre-marital and intra-marital assets is a big no no.

Why leave things to a judge, or even worse, lawyers to decide?*

As a lawyer and a (former) litigator, I can tell you dozens of stories about how nasty we can be when acting as a "zealous advocate" for a client -- (I kid you not, that's the ethical standard).**
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg
Old 06-26-2005, 02:02 PM   #46
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg

I live in TX and that is a community property state. We were planning to do a prenup. I called a couple of lawyers and they only seemed to do custody and divorce cases, barely anybody did prenups. I got quotes as crazy as $10,000 although our assets at that time were less than $150K. I also doubt to what extent a prenup will really hold up in a community property state like TX. If I were to do a postnup now I think I would draft up a document that states what is owned by who without getting to anal and then state that the services of a mediator should be used first in case of a separation. Anyway, have not given it much thought lately.

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Re: Pre-nuptial Agreement to Protect FIRE Nestegg
Old 06-26-2005, 02:33 PM   #47
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg

In LA - you either hire a hit man (the wife) or buy yourself a judge (hubby). Two high profile cases down here.

Soap Opera! - we don't need no stinking soap opera!!!
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg
Old 07-02-2005, 08:19 PM   #48
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg

I wrote our pre-nup. Rock solid as far as I know. Hopefully
will never be tested. Also, no commingling of any kind.
Separate everything.

JG
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg
Old 07-03-2005, 12:14 PM   #49
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg

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Originally Posted by MRGALT2U
Also, no commingling of any kind.
Not even on Saturday night?
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg
Old 07-03-2005, 12:24 PM   #50
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg

I've always been fond of co-mingling - just not financial assets.
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg
Old 07-03-2005, 03:25 PM   #51
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg

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Originally Posted by vic
I live in TX and that is a community property state. We were planning to do a prenup.
Isn't that the point of a community property state? What you bring in, you take out? Assuming it's not too commingled, of course.

http://en.wikipedia.org/wiki/Community_property

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Re: Pre-nuptial Agreement to Protect FIRE Nestegg
Old 07-04-2005, 02:23 AM   #52
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg

I would never get married without a prenup. They do seem to hold up better in Europe than in the USA after what I have read. Cheers!
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg
Old 07-05-2005, 03:59 PM   #53
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg

Great thread on the pre-nup. My background - divorcee for over ten years with assets of my own and desire to retire early; spouse - recently divorced with two kids and support payments with much fewer assets. We recently married - discussed pre-nup, decided to clearly identify the financial staus of each of us on the day of the wedding and then everything after that was shared. The day of the wedding we downloaded all account values and identified them as such . We then agreed that if anything happened, that would be the baseline for any split.

Now, the most important part - before we ever got married or even thought about any kind of marriage, we had many long, long discussions regarding goals, values and financial temperament. At the same time we spent a lot of time together to assess each other's behaviors' (to determine if behavior follows what one is saying). We trusted each enough that the actions above were OK. We also do things that look at the long term with respect to taxes and possible future actions towards saving money or reaching our goals.

What's very interesting is that we still had many heated discussions this last tax time due to both of us having different preferences regarding how they should be done. After much heated dicussion, we compromised but then realized that perhaps it was time to hand some of these things over to professionals, with us carefully reviewing them.

So long story, short - we did a sort of pre-nup, but were careful to trust first. I personally look at it as I was alone beforehand and may end up alone again, I still need to care for myself in a certain sense and expecting that in full from my spouse is a good way to become disillusioned. One can be inter-dependent not totally dependent or independent.

Good luck with your decision - Bridget
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg
Old 07-06-2005, 02:13 PM   #54
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg

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Originally Posted by deserat
The day of the wedding we downloaded all account values and identified them as such.
OK, I think if I'd tried to do that on my wedding day that I would have needed wedding insurance. And maybe disability insurance too... I'm not even going to start in with the honeymoon jokes.

Quote:
Originally Posted by deserat
Now, the most important part - before we ever got married or even thought about any kind of marriage, we had many long, long discussions regarding goals, values and financial temperament. At the same time we spent a lot of time together to assess each other's behaviors' (to determine if behavior follows what one is saying). We trusted each enough that the actions above were OK. We also do things that look at the long term with respect to taxes and possible future actions towards saving money or reaching our goals.

What's very interesting is that we still had many heated discussions this last tax time due to both of us having different preferences regarding how they should be done. After much heated dicussion, we compromised but then realized that perhaps it was time to hand some of these things over to professionals, with us carefully reviewing them.
Great post, Bridget. A recurring theme in this thread has been "What, me trust? We'll have a prenup!" Yeah, people change, but after years of fighting negotiating financial compromises they're much more likely to remain committed to each other. And that renders the prenup unnecessary. OTOH insisting on a prenup could destroy the foundation of trust and render the wedding unnecessary...

Speaking of heated tax discussions, in our house whoever has the most heated (and least compromising) position gets to do the taxes. This has worked out great for me-- not only do I win all the tax discussions, but I also get to do all the taxes!! Spouse seems to be taking it pretty well...
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg
Old 07-06-2005, 03:24 PM   #55
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg

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I'm not even going to start in with the honeymoon jokes.
But I will!

Whats a honeymoon salad?

Lettuce alone.
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg
Old 01-23-2006, 12:12 AM   #56
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg

I'm going to revive this thread since the subject has been on my mind. I am unmarried with a nest egg big enough to support no-frills FIRE for myself right now, but probably not big enough to support FIRE for two. Ideally I'd find a fiance who is in the same FI position and we would live happily ever after, but I suspect my soulmate will not be FI, so I need to cover my behind so that worry over what would happen in divorce court doesn't stop me from marrying my soulmate.

There seems to be a perception here that prenups always are tools for the more financially powerful party to force the other into submission. It seems to me that this does not have to be the case. The prenup I'm envisioning would say something to the effect of "If the marriage ends within a year, my assets from before the marriage are mine only. For each year after that, X% of my original assets become property of my spouse, until 50% is reached".

That accumulation of X% per year is a right that I'm giving to the spouse that wouldn't have existed otherwise, and in exchange I'm getting the security of knowing that I'm not on the hook for any more than that.

I know that many of the anti-prenup crowd feel it spoils the sublime abandon of romance and I'm sure those people will not be interested in this kind of thing. But for the people who opposed prenups on other grounds, how does this kind of compromise strike you?

And, perhaps the most titillating question... what value of X would you use if you were to use this type of prenup?
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg
Old 01-23-2006, 01:03 AM   #57
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg

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Originally Posted by fireme
The prenup I'm envisioning would say something to the effect of "If the marriage ends within a year, my assets from before the marriage are mine only.* For each year after that, X% of my original assets become property of my spouse, until 50% is reached".

I know that many of the anti-prenup crowd feel it spoils the sublime abandon of romance and I'm sure those people will not be interested in this kind of thing.* But for the people who opposed prenups on other grounds, how does this kind of compromise strike you?
That sounds more like a term contract than a life of marriage.

If two companies want to do business together, they draw up a contract to protect their own interests. Maybe the CEOs get along with each other pretty well, but neither one would be so foolish as to presume that either would put the other company's priorities ahead of their own company's priorities. Each company's CEO wants to protect their own company from being exploited by the other, and that generates a lot of fine print & legal fees.

But more than romance & hormones, I feel that marriage is about trust and about putting someone else's priorities on par with or even ahead of yours. Both parties benefit by pulling together in harness instead of guarding their asse(t)s. One example of subsuming personal priorities to a higher calling would be raising kids.

If you're trying to quantify "x" in a situation that calls for compromise & perhaps even a little sacrifice, then you're in the wrong situation. Go for a contract, not a marriage.
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg
Old 01-23-2006, 03:59 AM   #58
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg

prenups are a tricky lot.first of all they arent worth the expense of doing them more ofton than not in fact many lawyers wont get involved drawing them up for fear of being dragged into silly court battles later on....they are not airtite as you might think and end up in court more ofton than not.
the problem is when pre-nups are agreed to certain issues are assumed about each person...its assumed that if you divorce then the poorer partner can work and earn a living...but what if they are ill or incapacitated....what if the husband just runs off leaving you with the kids and no assets ...issues like these in courts tend to destroy pre-nups......
the point is a prenup can be a safety net but dont for 1 minute think your leaving a marriage with what you came into the marriage with because you wrote it on paper....yes my 2nd wife and i did a post nup...kind of a safety net in case of divorce although we are leaving each other everything at death..but we know and understand its basically a gentlemans agreement since we both have our own assets although she may be ahead of me...
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg
Old 01-23-2006, 07:59 AM   #59
 
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg

My father, 86, moved in with his girlfriend, about 10 years younger, both have sizeable assets.

Family Trusts were set up by both, each had their assets placed in this Trust , on their demise the trust Asssets will go where they directed.
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg
Old 01-23-2006, 08:17 AM   #60
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Re: Pre-nuptial Agreement to Protect FIRE Nestegg

Lets put it this way, if you can get away with it, nice job!


I think the pre-nup pro/cons are a lot like the menage a twa request.....only for the brave.
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