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Getting married and premarital assets
Old 03-23-2017, 12:42 AM   #1
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Getting married and premarital assets

Long story short, my girlfriend and I have been together since 2009 and we need to get married. We are both 30 years old. The thought or process of getting married isn't easy for me because my parents are divorced and I don't have a very positive perspective after seeing what they did to each other. But I do want to be with someone during my life, similar goals, maybe a kid, more family to visit, etc. So being "single" forever isn't something I am interested in. We both are frugal and save our money, we live below our means, healthy, college educated, stable jobs. There is just one thing I cant get a grasp on.

I started maxing my roth IRA every year starting at age 26. As of today its only worth $45,000, but when I retire it is going to account for most of my net worth. What responsibilities do I have to assure such assets cant be taken from me, due to a failed marriage? My girlfriend and I will both be maxing our IRA every year if we were married or not. But she didn't start hers until 2016 at age 29. How can I protect my premarital assets when they continue to grow as you are married, or if you continue to contribute to the same investment during the marriage?

From what I understand a prenuptial agreement only protects what I currently have. But I don't need protection for the $45,000 its worth today, but the $500,000 it will be worth in 30 years.

What would be the best way to settle a situation like this? I'm not worth very much and don't have any likely chances of inherited income. Aside from $30,000 in the bank all I really have is my roth IRA and a 401 (a) defined benefits plan at my work (vested, 8 years of service). I rent an appartment, own my car, no debt.

I know the best thing to do is probably talk to a lawyer. Which I plan to do. But I would like to see what others have experience on, horror situations to avoid, or different perspectives.
Thanks!
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Old 03-23-2017, 04:00 AM   #2
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"From what I understand a prenuptial agreement only protects what I currently have."

You are correct.

Personally, I don't think you need a prenup. I think you need to realize that if it doesn't work then you guys split everything. If you can't get your head around that concept then don't get married.

You've been together for 7+ years already. Is this the person you are committed to spend the rest of your life with? Then realize that you are a team and that it's both of your money going forward.
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Old 03-23-2017, 04:33 AM   #3
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The prenuptial can say what you both want it to say, so long as it is legal.

Case : you make twice what my daughter does. You may become partners in father's accounting business. You want my daughter to give up future rights to wealth? Her parents and her lawyer will advise her to decline, and propose equitable terms of some kind.

Case 2 : I make 50% more than spouse of 34 years. I've been maxing her Roth IRA for 12 years. She has made me rich through two children. There is complete trust between us, and nothing more than a marriage license and 39 total years of experience together to go forward with.
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Old 03-23-2017, 04:36 AM   #4
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My parents were divorced and I was divorced once with someone I didn't know well enough when we got married. We didn't have any assets to speak of since we were young and dumb. The Had that annulled by our church. That said, I still believe in marriage and have been happily married for nearly 18 years.
As far as your assets go, if you keep your Roth separate, add no more money to it, it's probably safe. Open a new Roth when you get married. A simple prenup can probably secure it more if you want.
But in the big picture you should enter this marriage without reservations and not planning for its failure before it begins. When I married for the second time we slowly merged assets, and eventually put everything but our retirement accounts into a family trust so each of our kids would be protected after one of us passes.
Learn from your parents mistakes and your own mistakes in your relationship and don't repeat them. Keep selfishness out of it and your marriage will be fine.
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Old 03-23-2017, 05:00 AM   #5
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Disclaimer: I have been married to the same man for 31 years. It is a second marriage for us both. Primary assets are retirement accounts, and there is plenty of precedent for how these get valued and split up in a divorce, based on each individual situation and perception of needs. Talk to a lawyer to find out more.

What struck me about your list of reasons to get married is how dry and pragmatic it is; no mention of love or commitment. Nothing you have listed requires getting married, so if you fear the risks of marriage, why do it? ::
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Old 03-23-2017, 05:18 AM   #6
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Do you live in a community property state? If not, then my understanding is that assets you acquire during the marriage and keep separate are not considered 'marital property' and would not be split in the event of a divorce. Consult an expert for details.
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Old 03-23-2017, 05:53 AM   #7
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Don't get married.

If you can't risk $22,500 on marrying someone you love, who through your combined efforts will help you to accumulate a rich and fulfilling life beyond what you could accomplish alone, than take the money and adopt a child and pay for hookers.

If you do marry her and it eventually falls apart realize that she helped you get from the point at which you started to the point at which it ends. As such she is entitled to half the winnings or half the losings whichever the case may be.

I have struggled with my own trust issues all my life. When I was deciding to marry my wife, I went down a similar line of questions and reasoning. However, I realize it is through my wife's love and support that helped give me the courage and strength to accumulate our wealth. Even though I far out earned her my entire life.
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Old 03-23-2017, 06:25 AM   #8
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Disclaimer: I have been married to the same man for 31 years. It is a second marriage for us both. Primary assets are retirement accounts, and there is plenty of precedent for how these get valued and split up in a divorce, based on each individual situation and perception of needs. Talk to a lawyer to find out more.

What struck me about your list of reasons to get married is how dry and pragmatic it is; no mention of love or commitment. Nothing you have listed requires getting married, so if you fear the risks of marriage, why do it? ::
Yes, I tried to keep it simple, for the sake of just the legality of the question. She is a great woman and has stayed by my side through some hard times. She takes care of me when I'm ill, she would clothe me if I was jobless, shes an incredibly hard worker and has done great things for herself. Shes always wanted the best things for me and encourages me to do so much more than I do now. The hardest part about it all is she isn't a US citizen. She consistently sends money to herfamily (who are of dire need), and I've always had a problem with it because she doesn't make sure shes taken care of herself first. I love her very much but the whole situation makes thing even harder. The more time that goes by is more watching her suffer. Not to mention she hasn't seen her family in 10 years.

Thanks for your insight.
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Old 03-23-2017, 06:26 AM   #9
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You are still too young to understand what life is going to throw your way. If you are unsure on the life commitment, wait. If you make the decision, then go for it and stick with it come hell or high water, kid(s), changing life goals, medical issues, etc. if, for some reason, it does not work out, expect to split everything (ah, motivation to stay together!). Later when the accounts have significant value, you can engage lawyer to set up living trust and shield your kid(s) from their spouse if they get divorced (trust assets are not community property in most states).
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Old 03-23-2017, 06:38 AM   #10
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Don't get married.

If you can't risk $22,500 on marrying someone you love, who through your combined efforts will help you to accumulate a rich and fulfilling life beyond what you could accomplish alone, than take the money and adopt a child and pay for hookers.

If you do marry her and it eventually falls apart realize that she helped you get from the point at which you started to the point at which it ends. As such she is entitled to half the winnings or half the losings whichever the case may be.

I have struggled with my own trust issues all my life. When I was deciding to marry my wife, I went down a similar line of questions and reasoning. However, I realize it is through my wife's love and support that helped give me the courage and strength to accumulate our wealth. Even though I far out earned her my entire life.
Yes, I agree that $22,500 is not such a cost to turn down the chance to be happily married. But the cost is not $22,500. Through my lifetime the first 5 years of contributing to the roth ira is much more important than the last 5 years of contributing. If I lose those valuable first 5 years (or half even), that $22,500 will turn into a $100,000-$200,000 loss when you factor in the "value" of what the $22,500 really is. The time value of money, compounding interest, etc.

I do agree with a lot that you say. If I got married soon, I could easily buy a house and not live in my crappy appartment. We would have $100,000+ annual income, rather than my sole $40,000. We wouldn't have to have awquard conversations about whos buying groceries, paying rent, buying the hotel room, etc. I just have so much control of how I save my money, how I invest it, how I have my best interests in mind. I don't enjoy the feeling of thinking it could all be lost, due to a bad decision.

I think I'm in the same boat about having trust issues. Thanks so much for sharing your input.
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Old 03-23-2017, 06:48 AM   #11
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I can only imagine what a hardship that must be. I am sure there must be strong reasons why she does not become a U.S. citizen, as that would possibly make your lives together easier. (Disclaimer: My own Mother was a naturalized U.S. citizen, so I am not saying your wife needs to have been born in the same country as you).

I am still not seeing "It makes my heart leap when she comes in the door" or "She is the most interesting person who ever loved me," which are the things that truly made me agree to get married. But that could just be due to different ways we express ourselves.

It sounds like your real fears stem from the needy family's pressures on your beloved. Others will have more insight into that than I could offer.

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She is a great woman and has stayed by my side through some hard times. She takes care of me when I'm ill, she would clothe me if I was jobless, shes an incredibly hard worker and has done great things for herself. ...The hardest part about it all is she isn't a US citizen. .
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Old 03-23-2017, 06:49 AM   #12
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Yes, I tried to keep it simple, for the sake of just the legality of the question. She is a great woman and has stayed by my side through some hard times. She takes care of me when I'm ill, she would clothe me if I was jobless, shes an incredibly hard worker and has done great things for herself. Shes always wanted the best things for me and encourages me to do so much more than I do now. The hardest part about it all is she isn't a US citizen. She consistently sends money to herfamily (who are of dire need), and I've always had a problem with it because she doesn't make sure shes taken care of herself first. I love her very much but the whole situation makes thing even harder. The more time that goes by is more watching her suffer. Not to mention she hasn't seen her family in 10 years.



Thanks for your insight.


Sounds to me you've found an Angel. Someone who cares more about others than herself. Get your priorities straight. Money is a vehicle for security, but finding a good life partner will bear its own fruit. I'm sure if you have a good talk before tying the knot, you can figure out a way to save for your future and help your families. If you care more about money than family, you'll be unhappy no matter what.
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Old 03-23-2017, 07:04 AM   #13
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Yes, I agree that $22,500 is not such a cost to turn down the chance to be happily married. But the cost is not $22,500. Through my lifetime the first 5 years of contributing to the roth ira is much more important than the last 5 years of contributing. If I lose those valuable first 5 years (or half even), that $22,500 will turn into a $100,000-$200,000 loss when you factor in the "value" of what the $22,500 really is. The time value of money, compounding interest, etc.
I think your focus is wrong. So you've put money away for a handful of years... and yes it will grow. But you may be putting money away for the next 30 years too. And she may do the same. This amount you have put away may be peanuts compared with what you will put away in the future.

Most of our marriage I have made more than DW. We have always seen the $ as ours, even after we set up trusts and separated everything. I would move $ from my accounts to keep everything approximately equal. I just can't see doing it any other way. But that is me.

I know others who keep $ separated throughout their marriage. Just seems foreign to me. I don't understand how that works.
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Old 03-23-2017, 07:37 AM   #14
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My first marriage was to a spendthrift. I was the saver, so if the roof needed replacing, the water heater died, etc. I had to pull it out of the funds I'd saved. (He had no savings- to him, if his credit cards weren't maxed out he had money to spend.)

So, naturally, when I divorced him at age 44, I was wary. I was in a situation similar to yours- good job, healthy savings, owned a house (with a mortgage) in a nice neighborhood, otherwise debt-free.

Second DH and I married after dating for 6 years. That was long enough for me to see that, although he had little savings, he lived on less than he made, paid his bills and had modest tastes. He did not expect me to subsidize his "wants" and he and my son slowly and cautiously built a wonderful relationship. There was no prenup. He died last year; we'd been together almost 20 years.

Here's my thinking: what we accumulated in our 13 years of marriage, we built together. He had his own checking account but wrote me a check for most of the balance each month just before his next SS check. When we moved and his house in NJ sold, he handed me the $100K and said, "you put it in your account and invest it". He held down the fort at home while I worked FT (he was 65 and I was 50 when we married). If the marriage hadn't worked out, I would have wanted to make sure that he could live decently, no matter whose name was on the assets. I would hope you'd feel the same about your GF. If the marriage broke up after 15 years and 2 kids would you really want to say, "Sorry- I've carefully protected all of my assets in case this happened so I hope you have a good job"? I'd hope you'd want to do what's fair.

It's a leap of faith- I know, but for the right person it's worth it. I'm 64 now and unlikely to take on the legal entanglements of marriage again, but then I'm in a different stage of life, where being held responsible for the long-term care expenses of a spouse in a few years is a very scary scenario.
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Old 03-23-2017, 08:00 AM   #15
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Long story short, my girlfriend and I have been together since 2009 and we need to get married.
Could you fill in this "need to get married"? Last I knew of this was early fifties, when isolated communities might promise violence or ostracism of a man who had impregnated a young woman and was not stepping up top his duty to marrying her.

Ha
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Old 03-23-2017, 08:07 AM   #16
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...If I got married soon, I could easily buy a house and not live in my crappy appartment. We would have $100,000+ annual income, rather than my sole $40,000....
She might want a prenup too, to protect herself--as the higher earner she may contribute more financially to your future marital assets.
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Old 03-23-2017, 08:44 AM   #17
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A good pre-nup attorney, in my area, charges $10-20k so might not be economical.

Having said that a pre nup can say whatever you want and include future assets, spousal support, etc....

Though not as complete as a pre nup maybe you just stop contributing to your IRA and start a new one. At least it would be clear what is your separate property if you got divorced.

Best plan is to just not get divorced of course.

Good luck.
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Old 03-23-2017, 08:44 AM   #18
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I think your focus is wrong. So you've put money away for a handful of years... and yes it will grow. But you may be putting money away for the next 30 years too. And she may do the same. This amount you have put away may be peanuts compared with what you will put away in the future.

Most of our marriage I have made more than DW. We have always seen the $ as ours, even after we set up trusts and separated everything. I would move $ from my accounts to keep everything approximately equal. I just can't see doing it any other way. But that is me.

I know others who keep $ separated throughout their marriage. Just seems foreign to me. I don't understand how that works.
I agree with this. The OP is looking at the potential of "losing" 500K from a 45K investment. But this is 30 years from now. 30 years you spent with the spouse.

Sorry, but should you divorce 30 years hence, she invested in you (and you in her) all this time. You earned those gains together. She should get a share.

It is a perspective issue, but frankly, if you are afraid of losing gains accumulated through marriage for some future event, then don't get married. Period.

If you came to me with this argument, I would consider ending our relationship.
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Old 03-23-2017, 08:53 AM   #19
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This is a very sensitive subject, and there will be strong opinions on both sides.

Many marriages begin without a prenup, and many begin with one. There is no right or wrong answer. But if a prenup allows you to go into the marriage without trepidation, I think it's worth a conversation with your girlfriend about it to see how she feels.
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Old 03-23-2017, 08:59 AM   #20
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"From what I understand a prenuptial agreement only protects what I currently have."

You are correct.

Personally, I don't think you need a prenup. I think you need to realize that if it doesn't work then you guys split everything. If you can't get your head around that concept then don't get married.

You've been together for 7+ years already. Is this the person you are committed to spend the rest of your life with? Then realize that you are a team and that it's both of your money going forward.
+1 - this really captures it all in my opinion.
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