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Ask Team Practical: Prenups


by Liz Moorhead, Ask Team Practical

Ask Team Practical: Prenups | A Practical Wedding

I’ve been feeling really nervous about getting married. A big part of this has to do with the fact that as a child I lived through the multiple bitter divorces of both my parents, and I can’t stop thinking about how statistically rare it is these days for a wedding to be “till death do us part.” So divorce—messy, painful, using-your-children-as-weapons-against-your-hated-ex-divorce—is hard to keep out of my mind even as I’m preparing to get married to a wonderful person who I love dearly and hope to be with until we grow wrinkly and bald. The idea of having a prenuptial agreement has crossed my mind, but I don’t know where to begin. I don’t even know if a prenup would help to mitigate some of the bitter conflict and navigate a more amicable divorce if we ever did need to end our marriage. However, it makes sense to me in theory that it would be easier to negotiate kind, fair, even generous divorce terms while we’re deeply in love, rather than in the middle of a relationship train-wreck. I would love to hear about other people’s experiences with prenup agreements, whether or not they think these kinds of agreements set a good tone for the relationship to come, or if they simply undermine the solid foundation for the couple’s future together.

Sincerely,

Worried About Yucky ‘Orrible Unfortunate Traumas

****

Dear WAY OUT,

Hi! First of all, it’s Meg, not Liz here today. Well, Meg and some help. I have lots of things to say about prenups, so I thought I’d jump in and handle Ask Team Practical today. (Lucky you?) Now, disclaimer up front! None of this is legal advice, and if you’re considering a prenup, call a lawyer. But we can talk about general theory here.

First things first. A prenup is a legal document that you both sign because you have good reason to, NOT because you’re scared of divorce. That is, you’ve looked over the property laws governing marriage in your state or country, and because of your situation you said, “Hold on! We need to make a small change here!” Like say, you own a family castle. Obviously, you’ll be thrilled for your partner to live in that castle with you, but in case in the future you decide that you can’t live together-period-foreverever, you need to get to keep the castle because it’s been in your family since Medieval Times, and it even has your family crest over the moat. FAIR! So in this case, a prenup might be for you (please consult your local castle lawyer). But prenups are not good for a lot of other things.

Prenups are not good for:

  • Dealing with your fears of divorce. Those are very legitimate, but need to be discussed with a therapist (couples or personal), because you can’t work them out through a legal document. (Also, fun fact, it’s totally not true that it’s statistically rare to be married till death, that’s a myth. If you’re in our generation, in your late-20s, college educated, and financially secure when you get hitched, for example, your odds of divorce are very low indeed.)
  • Custody arrangements. If you’re worried about fighting over future kids, your therapist can help. But that’s it. Custody arrangements are decided by the court.
  • Ironing out the exact terms of a divorce in advance. Can’t be done.

So what are prenups good for you ask? Basically this:

  • Protecting debt, assets, or income streams that already exist, so that you won’t share them in the event of a separation.

Long story short: if you don’t have any assets or any debt, you probably don’t have a compelling need for a prenup. But if you do have major assets or debt, you might want one. I know, I know. We’re a wedding blog, and we just suggested the least romantic thing in the world: a prenuptial agreement. But from where I stand, if one of you has major assets (like a castle!), allowing for protection of those assets from something-that-you-hope-will-never-ever-happen is a sign of love and caring for each other.

To discuss this in more detail, I decided to call in the big guns. Elizabeth Clayton of Lowe House Creative has had many a chat about prenups, so I asked her to write a note about why, if you have assets, you might need one. Possibly not romantic, but really good sense. Here is Elizabeth:

****

Ah, the prenup question. The first question that needs to be answered is this: do you have any major assets (homes, businesses, investments) that you’re bringing into the marriage? If the answer is no, then you probably don’t need a prenup. If you have an acrimonious enough divorce that you need to take it to court for division of assets, divorce courts will generally handle that pretty fairly (although, as in any legal situation, you would want a good lawyer). You also need to look at whether or not you live in a community property state, as this vastly changes the way that the courts see finances inside of a marriage (according to my lawyer/history-buff father—in general the states that used to be Spanish or French have community property laws, and others have changed to become community property states over the years, but most still are not). Marriage & Divorce laws vary vastly from state to state, and you need to know what the laws in your state are. But back to prenups and why you might want one.

I was at a bar recently when an about-to-be-married friend from high school asked me how many of my clients signed prenups before they got married. I told her that to my knowledge very few of them did (although I actually didn’t know, as I suspect this is not something most people discuss with their wedding planner) but that I would definitely never get married without one. I’ve never seen a group of jaws drop so fast—because even amongst a group of people who grew up in a relatively wealthy area (aka my friends from high school) “prenup” is still a dirty word.

I like to think of prenups like fire extinguishers—you really, really hope that you never need to use it, and most of us, God-willing, never will, but it’s still a good idea to keep one in the house. (Another, more Californian, simile, would be that they’re like earthquake-bolting the foundation of your house.) I like to think of myself as an eternal optimist who still prepares for the worst. Because for me, preparing for the worst lets me then put it out of my mind. I really don’t think that bad things will happen, but only by preparing for them am I able to actually not worry about them, which lets me live my life with a minimum of lying-in-bed-awake-all-night. If we look at divorce as the worst-case scenario of marriage (debatable, but for the sake of this piece we’re going to go with it) then I argue that preparing for it properly can actually let us not worry about it as much, which hopefully lets one be more fully present in the marriage.

Now, to each their own, but I’m actually a strong proponent of shared finances in marriage. BUT, I own a small business that I have built from scratch and a lot of hard work, very much on my own, and I hope to buy a house in the near-ish future, so will likely own one before I get married (current status: very much single). My personal theoretical planned prenup goes something like this—keeping in mind that I live in a community property state, and I believe in the community property concept:

    • all income from my business (or other sources) becomes community property
    • the ownership and goodwill of my business stays solely mine
    • all equity in a house built after the marriage is community property
    • existing equity in a house at the time of the marriage stays solely mine, unless theoretical-spouse buys into it
    • if theoretical-spouse owns a business or a house (or other similarly large assets), the same arrangements go into place for those assets
    • wills are put into place to leave the other partner the aforementioned assets in the case of unexpected death

The key difference for me is assets that one brings into the marriage, as opposed to assets built during the marriage. If you get married without any major assets (which I suspect is the case for the majority of people) then a prenup isn’t necessary. My mother was actually fairly horrified when I casually mentioned that I wouldn’t get married without a prenup, so this belief in prenups is not an idea I was raised with. My parents have always shared all assets equally, and they remain happily married after forty years (they also got married as teenagers without any money, let alone any major assets).

But despite the personal example I have of my parents long-and-happy marriage, I have witnessed too many marriages fall apart after decades, and in many cases (often because women have chosen to work less in order to raise children) the women get, for lack of a better term, screwed in a divorce. I also happen to have a father who’s a lawyer, and so the importance of a well-written contract has been impressed upon me from a very young age. Not because it’s likely that you’re going to have to enforce a contract, but because well-written contracts protect you in those worst-case scenarios. A marriage is many, many things, and one of those things is a financial partnership. So it’s logical to me that you would have a contract in place to protect you in the worst-case scenario of that financial partnership coming to an end.

I know that many people see prenups as an admission that “you’re not sure about the marriage” or “you don’t really trust/love your future spouse.” To me, they’re an admission that we’re human. That we are entering into a situation with the best possible intentions, but we acknowledge that even the very best of intentions do not protect us from curveballs—the occurrences of extreme mid-life crises, onset of severe mental illness, or even just plain old development of irreconcilable differences. I suspect that we’ve all known people who stayed in truly terrible marriages for purely financial reasons—and I seriously doubt that many of them ever anticipated being in that situation. So for me, being prepared for the worst leaves you able to focus on being your best. It actually lets you focus on your marriage without the added stress running through the back of your mind that you might be screwed financially if it doesn’t work out. Or, to go back to my original simile, because you know that the fire extinguisher is safely tucked away in the cupboard, you can focus on cooking dinner, and perhaps occasionally evaluating your electrical system, while continuing to hope that you’ll never have to use it.

A note: None of the above should be construed as legal advice of any sort. As with any contract or legal situation, it is really, really best to have it reviewed by separate legal counsel for each party. Marriage & Divorce law is full of precedent, and it varies greatly from state to state. That said, most prenups aren’t particularly complicated contracts and it shouldn’t cost very much to have one written or reviewed by a reputable lawyer.

****

So, Team Practical, what are your thoughts on prenuptial agreements? If you had one, do you have advice? For the JD’s in the house, what do you have to add?

Photo by APW sponsor Katie Jane Photography.

If you would like to ask Team Practical a question please don’t be shy! You can email Liz at: askteampractical [at] apracticalwedding [dot] com or use the submission form here. If you would prefer to not be named, anonymous questions are also accepted. Though we love a good sign-off, like WAY OUT up there.

Liz Moorhead

Liz is an illustrator and writer who paints custom stationery and types up impassioned opinions about weddings, etiquette, feminism and motherhood (usually while shaking a fist and mumbling expletives around mouthfuls of cheese fries). Her spare time is spent sipping bourbon with her husband and playing Don’t Throw That in the Toilet with her son.

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  • Katie in DC

    Not to start things off barely on topic, but I cannot hear/see anyone talk about community property without thinking of the ’61 “Parent Trap” movie. “Just smile, Pet. Think of California and that wonderful community property law… and just smile.” Pretty sure I was 8 or 10 when I first saw that learned what community property was. Young me thought it was fantastic (old me does too, at that).
    Anyay: Pro Pre-Nup, if you have assets that need protection. Just remember, at least this is what my Family Law Professor taught, both sides need to be represented by independent counsel, or the pre-nup has a greater chance of getting struck down.

    • http://landlockedlove.blogspot.com Kelly

      Parent Trap reference!

  • http://cantabridgette.blogspot.com Cait

    I’ve been thinking about this since yesterday when Jezebel had a post about prenups. Elizabeth’s take was by far the best I’ve ever come across on the internet (which could sound like shallow praise but shouldn’t be!). Neither I nor my boyfriend has any real assets right now but I like to think about prenups and their social context. I’m so glad to see a reasoned discussion about prenups that doesn’t assert either a) that they only exist to screw over women (because of course the man has more assets) or b) that you’re an unrealistic idiot if you don’t get one. I’m in a committed partnership contemplating marriage and financial stuff is much on my mind these days.

    Also, I was interested in this line from the question: “I can’t stop thinking about how statistically rare it is these days for a wedding to be ’till death do us part.'” It would be awesome to have more APW discussion about the actual statistics available about divorce (I know it has been mentioned here and there but an in-depth post on it would be great). I have the impression from research in the past few years that even for children of divorce the chance they will get divorced themselves is much lower than the oft-quoted 50%. This is of course dependent a whole lot on privilege factors–the race, age, ethnicity, and socioeconomic background of the partners. It bugs me a bit because I don’t want anyone to sell themselves and their relationship short by assuming there’s only a 50-50 chance that their marriage will make it based on a hazy statistic from decades ago.

    • Katie in DC

      I’d also like to see an in-depth discussion about this. Especially (selfishly) about the children of divorced parent’s statistic. Does the age you were when your parents divorced matter? My parents split at 22, I was grown and out of the house, but does that mean I’m still more statistically like to split?

      • http://againstthegrain2013.blogspot.com/ Skittle

        Based solely off of my personal experience – my parents got divorced right before my fourth birthday and do not maintain a civil relationship – I think that if there is statistical evidence for likelihood based on age, it generally must be very low. I know through high school and college I was a bit gun-shy in terms of thinking about the long-term future, but I loved being in relationships.

        I also had some pretty heavy commitment phobia at the beginning stages of my current relationship, but the divorce didn’t so much play into that as did my previous relationship and how it ended.

        There are so many other factors to consider, such as how your parents handled the divorce, how they treated each other and you during the divorce and after, not to mention what you inadvertantly observed with your friends and their parents.

    • http://workoflove.wordpress.com Shaelyn

      One of the APW Book Club books, For Better by Tara Parker-Pope, had a very detailed analysis of the statistics around divorce based on a lot of factors. Some discussion here: http://apracticalwedding.com/2011/06/apw-book-club%E2%80%94for-better-the-discussion/

      But I’m sure you could dig up a lot of info by Googling her.

      • Sara C.

        I was just looking at my copy on the shelf – let me know if you need a loan :-)

      • http://cantabridgette.blogspot.com/ Cait

        That was the post I was thinking about, thanks! I always feel like I want to be an advocate for marriage whenever someone tries to prove a point using “half of all marriages end in divorce” but I couldn’t remember where I had seen those numbers!

      • suzanna

        Shaelyn, thank you for the reminder about that book! Gonna pick it up at my library!

    • http://workoflove.wordpress.com Shaelyn

      Also see Rachel’s comment below ;)

    • Granola

      What really screws up divorce statistics is the way they’re calculated. It’s the given number of divorces in a year divided by the number of marriages in that year. So if there were 500,000 divorces in 2011 and 1,000,000 marriages that same year, the divorce rate would be 50%.

      The problem is that probably very few of the people who got divorced in 2011 got married in 2011. So perhaps, a huge chunk of those people getting divorced in 2011 got married in 1990. In that case, the 2011 divorce statistic may really tell you more about marriages that started in 1990. Perhaps different things were going on then that aren’t applicable now. Or maybe there was pent-up divorce demand over the years that started to ease (maybe women were feeling more financially secure and confident to divorce) and made the divorce rate higher, but actually had no bearing on the marriages that were starting at that time. If a bunch of people got married in the late 1960s, and then the divorce rate spiked in the mid-80s, that doesn’t mean that the 80s marriages are doomed, it’s reflecting past circumstances that maybe aren’t true anymore.

      But Meg’s right, being college educated, financially secure and in your mid to late twenties is about the best statistical start you can get.

      • Lindsay

        I’ve always wondered how they came up with that magic 50% number. Interesting. By the same token though, it’s very hard to claim, like Meg did (and I’ve read it other places as well) that, “If you’re in our generation, […] your odds of divorce are very low indeed.”

        Because how can there possibly be any statistics on something like whether people in their 20’s-30’s now will be married for 50 years?

        Statistics MESS WITH MY HEAD, people! :)

    • KAT

      I had a statistics professor once point something interesting out about this “50%” divorce rate (keep in mind I have no verified this). He said the 50% reflects the fact that X marriages happen in one year, and 1/2(X) divorces happen in one year. For instance, if in 2011, there were 100 marriages, there were 50 divorces. That DOESN’T mean, however, that 50% of marriages end in divorce, because half of those getting married that year were not the same ones getting divorced. You have to remember how many marriages happened prior to 2011.

      Also, even as a lawyer, I’m going to refrain from commenting on the legal aspect of prenups. As someone who has a prenup herself, I will say that I always recommend them to friends. The prenup was a good way to kick start serious conversation about financial issues prior to marriage. Sure, we were open about our financial situations prior to the prenup, and agreed on what to do with property after the marriage, but the discussion was much more detailed than any we had ever had before. The fact is that money is inextricably linked to some things we respect about ourselves and one another (i.e., career accomplishments and assets willed to us by parents) and having a serious conversation about how these things are important to us, and why it wasn’t just about a dollar amount, added another level of trust to our relationship.

  • Rachel

    Great advice Meg. As soon as I read the part of the question that mentioned that it’s statistically unlikely for marriages to make it til death do us part, I was going to chime in on the fact that that’s not actually true for our generation, but you beat me to it! The “50% of marriages end in divorce” stat was actually never true, the closest it came to being true was in the 80s, when the divorce rate hit around 43%, since then it’s been continually dropping. The overall divorce rate is heavily skewed by ‘high risk’ marriages – ie. marriages of VERY young couples (we’re talking too young to drink at their own wedding, and possibly too young to get married without parental permission), and second/third/fourth/etc marriages – both of which have disproportionately high divorce rates. Like Meg mentioned, the divorce rate for couples who are both over 25 and college educated is quite low, around 18%, meaning 82% make it til death do us part. Better still, when surveyed, most of those marriages are rated as happy. And among couples who are under 25 and/or not college educated, the divorce rate is still much lower than 50 or even 40%.

  • Lizzie

    For the lawyers among you: are the applicable laws those for the state in which you have residency? Does it matter what state you married in, or – if physical property is at stake – what state the property is in?

    • Hypothetical Sarah

      I was going to ask a similar question. We’re Americans who got married in the US but are currently living (and legally resident, but not permanent residents) abroad. Does that mean the laws of our current country of residency apply instead?

    • Sara C.

      The laws of the state that you file for divorce is the laws that apply — but you can choose a particular state’s laws in a pre-nup. (Slight Disclaimer: I’m a law student, not practicing lawyer, and I know their are considerations into which states you will be able to file for divorce, but that is the general Family Law 101 answer :-D).

    • Irenie

      Every state has a slightly different rule about who is allowed to file for divorce in that state, and it is possible that more than one state could be an acceptable place for you to file for divorce. If you married and live, and have always lived, and all of your property is in one state, you are probably only going to be able to be divorced in that state, though – state courts don’t like to get involved in the business of other states, generally speaking. If you have involvement with other states (property, children, etc), you may be able to file for divorce in those states instead of the state of your residency. But because every state is different, you would have to look it up for every state you think might be applicable. Womenslaw.org has great info on the basics of the divorce law for most states.

      Sara C – that applicable law answer is not quite right. It is usually true, but there could be cases in which a court strikes down a choice-of-law provision in a prenup, or in which the state law allows the divorce, but requires certain parts of another state’s law to be used (good luck if you are taking the NY bar, por ejemplo. Ay.). A lawyer could help you sort out whether these rare situations could apply in your case.

      • Meredith

        I love that you threw in a por ejemplo. Awesome!

      • thursday

        Thanks for that link!

    • ElisabethJoanne

      Another JD here (though 100% NOT a family law attorney): Lizzie’s question is very important, and I was going to comment anyway on Meg’s and Liz’s “I live in a community property state” mantra.

      Sure, you do now, but you very likely won’t always. In general, the laws applicable to a married couple’s assets, debts, and income are those of the state where they reside. A divorce without an applicable pre-nup, therefore, could apply different states’ laws to different periods of the marriage. If you like the laws of your current state, a pre-nup might be advisable just to lock into those laws no matter where you move.

  • Claire

    Fantastic post! I really appreciate the realistic, practical (of course!), marriage positive perspective.

    I was always sure I’d get a pre-nup. No getting screwed for me, thankyouverymuch. But once I met my husband I realized it was totally unnecessary. Not (just) because I totally trust him and fully expect our marriage to go the distance. I do, but the reason we passed on a pre-nup is that it wouldn’t have been much help in our situation. We took a detailed view of our finances, and realized we were both bringing almost exactly the same amount into the marriage so a 50/50 split would accomplish essentially the same outcome. Also, neither one of us had kids or assets we were emotionally attached to.

    Besides, as Meg wisely pointed out, my reasons for wanting a pre-nup were better resolved with a therapist than a lawyer.

    • Brianne

      My husband and I talked about a pre-nup and asked some lawyer friends and relatives if we should look into it more completely. Basically, since we had almost no assets and we make a similar amount each year, there was no point.

      My husband is the one that really brought it up and I soon discovered he was just worried I might take his drum set, TV, and surround sound set-up. I quickly assured him that I didn’t want or need ANY of those things.

  • http://workoflove.wordpress.com Shaelyn

    My husband and I missed the boat on a pre-nup – we talked about it but didn’t get to it before the wedding. So now we’re looking at a post-nuptial agreement, and soon. In New York, the proceeds from any professional degree earned during the marriage that increases a spouse’s earning potential are considered marital property. My husband is graduating from law school in 2 months. He’s not going to be a corporate lawyer (which would have definitely had us more rushed about a pre-nup), but if we ever get divorced (and if it’s anything less than totally amicable), it doesn’t seem like something that would be fun to negotiate, especially since all that student loan debt he incurred during law school would still be his if we got divorced. So, we’re investigating our options to protect each other without shirking our spousal responsibilities.

    • meg

      Oh see, that’s interesting, because that’s something we’d never contract away. We feel strongly that we both have supported each other through career twists and turns (and school) and hence both have equal claim to each others earning power.

      • http://workoflove.wordpress.com Shaelyn

        I just don’t like the idea of it being assumed that I am entitled to half of his future earnings for the rest of his life because he happened to graduate from law school after we got married. I got my MA (which increased my earning potential) before we got married, so I don’t think the same rule applies to me, which is what doesn’t seem fair in our case.

        • meg

          Ah, I think that’s somewhat state by state too. I don’t think the laws are quite the same in California.

        • http://thevoiceofthelobster.wordpress.com Laurel

          Couldn’t you also contract that both of you are entitled to the future earning power of both degrees, or contract that you’re only entitled to the earnings from his degree after a certain time or once the debt is paid off? I would also never contract away earnings from degrees (not that I have the chance to, given that my relationship won’t be legally recognized), but I see how the timing makes it unfair to you.

          • ElisabethJoanne

            I think you can, depending on the state or states involved. An issue to consider, however, is how are you going to calculate earning power from a degree? In an acrimonious divorce, there will be expensive experts fighting over that question, even with a pre-nup. If you can figure out a way to calculate it at the pre-nup stage, that’s good. (Perhaps a fixed percentage of income)

        • http://workoflove.wordpress.com Shaelyn

          To Laurel, since I can’t respond to her:

          Yes! That’s what we’re thinking of doing — some combination like that, to level the playing field. Of course, we have to talk to a lawyer and see what our options are, but hopefully we can do something like that!

    • http://unexpected-moments.blogspot.com/ Sheryl

      I love that you’re framing this as protecting each other. Because really, that’s part of what marriage is … and a pre (or post) nuptial agreement should really be as much about protecting and loving your partner as yourself.

  • Rachelle

    We did not have a pre-nup because we didn’t have many assets/debts going into the marriage, but we still had several lengthy discussions about our existing debts and assets (with exact amounts – pull out those statements!), how the debts would be paid going forward, what the laws in our state say about divorce and how we wanted to allocate our money in the future (savings, retirement, how our accounts would be set up). I feel very strongly that these discussions are some the most important ones that engaged couples should be having. Even if you already live together, even if you already co-mingle finances – getting married is a legal contract that changes the game and you have to understand it and be ready for it.

    Additionally, for anyone getting married in 2012 who lives in the US, here [ http://www.irs.gov/individuals/article/0,,id=96196,00.html ] is a tax calculator from the IRS. Fill it out with your current information but check “married filing jointly” and make sure that you are withholding enough. Even if you get married on December 31, that makes you married for the whole year in the eyes of the IRS and if you withheld the whole year at the “single” rate, you may not have enough withheld. The calculator will tell you how to adjust this so that you don’t get slammed with a big tax bill next April.

    Another financial thing – it may also be a good idea to set up your spouse as the beneficiary on any accounts or policies you want them to have if you die. Depending on the law, they may get it anyway but listing them as a beneficiary can speed up and ease the process. At most banks, this will not grant them access to the account if you are still alive (just in case it is an account you wish to keep separate).

    Sorry if any of this was already discussed earlier in the week!

    P.S. I think getting down to brass tacks about your finances is super romantic. Being ignorant of the ramifications of the legal contract you’re about to sign is not.

    • meg

      FINANCE ADVICE RIGHT HERE LADIES! READ IT FROM THE SOURCE!

    • kathleen

      yes yes yes- brass tacks are the best! we’re meeting with my cpa this week as we think we’ll be getting married later this year, and want to adjust and withhold everything correctly/smartly in the mean time. as you said, even if we get married in december, we need to be withhold (more or less, depending) now.

    • http://theroadto92912.blogspot.com Molly

      In addition to making your spouse your primary beneficiary, GET A WILL!!! Even if you don’t have kids (which, if you have kids, OMG GET A WILL RIGHT NOW), it’s important so that if something happens, you or your spouse is taken care of.

      • ElisabethJoanne

        Actually, my advice would be to consult an honest attorney about whether you need a will. In my (professional) opinion, people with traditional personal lives and no children don’t need them as often as conventional wisdom suggests.

        Traditional personal lives = singles close to their parents and siblings, married people content to have all assets go to their spouse (or their spouse, parents, and/or siblings, depending on the length of marriage)

        Almost an example: I have a will that bequeaths my religious books to my church, then says all my other assets are left as though I had no will.

        • RJ

          I disagree – having a valid will means you will have appointed an executor who can then wind up your estate.

          It’s not so much about how many assets you have to leave, it’s about making things administratively convenient for those you leave behind.

          A colleague’s has just died unexpectedly, and they’re waiting on the Coroner’s decision as to the causes of death before they get a death certificate.

          As he didn’t have a will, and therefore no administrator of his estate was appointed, they can’t wind up his affairs.

          Where I live, any assets over 10,000 means that an application to the Family Court is required for letters of administration if someone dies intestate.

          I think it’s simple: if you are an adult, you need a will. Happy 21st birthday!

          • ElisabethJoanne

            In California, anyway, having a will sends you into Probate Court, same as not having one. Only a very well-written trust, and diligence in noting beneficiaries on all applicable accounts and policies, keeps you out of Probate Court. All a will does here is nominate an executor, but that executor still needs to go into court to get the court orders that allow him or her to take over the testator’s affairs.

            Another way to stay out of Probate Court is for the survivors to just refuse to do it. Those with negative net worths should consider this course. I have more in student loans than in assets, so my “heirs” take nothing at my death. There’s no reason, therefore, for them to be in a hurry to get control over my accounts, just so they can hand the money over to the Department of Education. Let the DoE find the money and pay the $400 to open Probate.

          • Sarah

            Actually if you are thinking about a pre-marital agreement, one of the advantages is that it can function as a simple will, distributing assets in the case that one of you dies.

      • suzanna

        Same with getting an Advanced Directive for health care decisions. Doing all this “unromantic” stuff is actually telling each other exactly how much you care about each other.

        FYI: some people I know who work in health care do not list their spouse as having Power of Attorney–they list a friend who also works in health care, because they actually know how things work. I love my sweetie, but what he doesn’t know about health care is a LOT. I think it would be overwhelming and unfair to ask him to make those decisions for me.

        • ElisabethJoanne

          Advanced Directives and Powers of Attorney for Healthcare are in many ways even more important than pre-nups, especially in California. Not only is your health more important than money, but, as I posted yesterday, California has 0 official policy on healthcare decision-making for incapacitated adults. The hospital follows the instructions of whichever adult seems to have the patient’s interests at heart.

          Both my and my future husband’s mothers work in healthcare. I have no doubt that, if push came to shove, absent a Power of Attorney for Healthcare, the mother, not the spouse, would take charge of healthcare decision-making. Which may be what we want, but it might not be, either.

          You can order forms for Advanced Directives and Powers of Attorney for Healthcare from the Patients Rights Council for about $20/person. They do not require a lawyer, but may require a notary, and do require witnesses.

      • Kate

        I absolutely agree with Molly’s will recommendation. Estate planning is not something to overlook after marriage, even if you feel like you don’t have enough assets to justify one. Otherwise, you’re stuck with the state’s default, one-size-fit-all intestacy rules — which can have some seriously counter-intuitive results (e.g., married in Massachusetts? No kids? Half of your probate property will go to your spouse…and the other half goes to your parents!). At the very least, check out your state’s intestacy laws before deciding you’re comfortable with doing without a will.

        I know planning for death is quite possibly even more uncomfortable than discussing a prenup, but it is selfless in the same sort of way, as you’re doing your part to make your spouse’s life less complicated in the event of the very worst. For similar reasons I’d also argue for a durable power of attorney so that your spouse (or whomever you name as your attorney in fact) could act on your behalf, financially, should you lose the capacity to do so yourself.

        (Disclaimer: I may have taken an unhealthy amount of estate planning courses, but I am still about two months away from a JD, so take my ramblings in that spirit!)

    • http://dylanandsarah.com Sarah T

      For all the things we did plan, including a pre-nup, one that did not cross my mind was that we would be filing taxes jointly for 2011. One thing is that with our joint income, I’m no longer eligible to contribute to a Roth IRA. Really important to remember that point of married in the year == married all year for tax purposes.

  • Liz

    I am a recent law school graduate living in NY (not admitted yet, so this is not “legal advice”) and considered a pre-nup because of what Shaelyn acknowledges above. However, my family law professor explained last year that creating a pre-nup when a couple has virtually no assets may be more detrimental than beneficial in the long run.

    There is no way you can predict your future situation, so by waiving/limiting statutory maintenance and/or inheritance, you can wind up impoverishing yourself or your spouse years down the road, when one of you may desperately need the ex-spouse’s income. One spouse might become chronically ill, or disabled, for example. It’s not something we like to think about–but you don’t want to limit your income, in case, God forbid, that happens to you.

    As my boss always says, a lawyer’s job is to be a pessimist! Hard for me to get used to as I’m an eternal optimist, myself–but it’s true. So for me, no assets=no pre-nup.

    • meg

      It’s true. Elizabeth’s dad joked with us as he was reviewing this to make sure we didn’t screw up our advice, “If you can’t afford a lawyer to draw up a pre-nup, you probably don’t need one.” This is a pretty good rule of thumb.

      Dividing assets you don’t have is a pretty bad idea, particularly because divorce court is set up to be fair.

  • SelkieKel

    This post = spot on. It sounds like some good old-fashioned pre-nuptial therapy is the first order of business here (particularly if neither of you are bringing major castle-type assets into your marriage).

    However, if you still feel that you could benefit from a document that may act as a type of insurance policy/fire extinguisher as Elizabeth describes, there are other, non-legally binding options. In the early stages of our engagement, my then-fiance and I sat down and hashed out our feelings on pre-nups (we were both of the insurance policy/fire extinguisher mindset) but quickly realized that neither of us was bringing terribly much to our impending union in the way of material assets and that such a document was probably not for us.

    Instead, we drafted a “In Case of Martial Emergency Treaty” which was essentially a piece of notebook paper on which we laid out the terms and procedures that we agreed would be the best course of action in case the worst went down (how and when to seek therapy, how we’d like to divide assets, how we would proceed if we did decide to divorce, how we would address a divorce with our family and friends). It certainly wasn’t a fancy document (despite being a Treaty) but the discussion that unfolded during its composition proved invaluable. We “sealed” the Treaty with a vow to each other that we would abide by these terms as we would to our marital vows.

    I won’t get into the messy details, but, despite our best efforts, the worst DID happen and we did divorce. However, we remained responsible adults; we stuck to our guns and to the provisions of our Treaty (and were grateful that we did so before emotions started running high). Our separation was by no means a pleasant experience, but we were able to navigate those roiling waters with mutual respect and a single mediator.

    Long story short: you don’t necessarily need a document. You DO need to have an uninhibited discussion of the subject with your partner and come to an agreement that works for you both.

    • Karen

      I love the treaty concept! Pretty cool. Also, Nolo has great documents that are useful for this. Like your treaty, they wouldn’t hold up in court but the point is to have conversations about what might happen.

      One of my favorite readings is by Meg Riley, a Unitarian Universalist minister. It’s called “Let us be the adults in the room” which is what these agreements create the possibility for. They say at the outset “We agree to treat each other with respect and consideration at all times, even at the possibility of a dissolution of our union.”

      Thank you for an example of how this can work out. We have to have realistic discussions and be clear that weddings and marriage (even when it’s not legally recognized), comes with a lot of legal and financial implications we need to be aware of.

    • ambi

      I love this idea! My partner and I may end up doing a prenup, but I think we will also definitely be doing this. We actually did this before we moved in together. He owns the house, and I was very afraid of giving up my own apartment. It was like a safety net for me, and I worried that if something went wrong for us, I could suddenly be out with no place to live. (Yes, I know legally this could still happen, but I felt much better after I sat down and put everything in writing and we came to an agreement about how we would handle it if I needed to move out). Having seen so many friends go through marital problems recently, including separation and divorce, I think this kind of agreement could be very helpful. Many of my friends in that situation feel totally lost about what they should be doing (when do we decide to go to counseling? what if one person isn’t even interested in saving the marraige, do we still try? is it okay to vent to your girlfriends about all the terrible stuff your husband is doing? how do you handle the in-laws?) – just having some sort of guidance during that terrible time would help a lot. Thank you for this idea!

    • Irenie

      What a great idea! I agree that the conversation is definitely the important thing. I am not sure that no assets/debt = no prenup idea is really on target, because it assumes that you agree that however your state decides to split property in a divorce is fair, which may not be true once you look into it. I think it makes much more sense to start by figuring out with your partner what you think is fair, and then seeing what the law on the books says. If your state law seems to be in sync with this, there may be no need for a prenup regardless of the state of your assets. Or you may find that you have a fundamental disagreement with some of the assumptions that are made by your state in how to divide property, and want to create a prenup even before you have major assets or debt on the table.

      • kathleen

        Irenie– I think this is really smart advice. A prenup exists to help a couple control their assets and debts, and the states assumptions about what that looks likes varies state to state. We also plan to move, and want to be sure that our plan is more likey to “stick” even if we are in a community property state. Our lawyer said again and again that a prenup doesn’t ensure anything, but that it certainly will help.

    • http://magpietrousseau.wordpress.com Magpie

      This is such a great idea! The husband-elect and I have certainly discussed some of the Marital Emergency possibilities (which really changed my feelings about divorce, in general for the better) but have not laid out specific plans of action.We promised each other that we “won’t be jerks to each other” if it comes to divorce (god forbid). But that’s not very specific.

      I love me some plans of action because I am a constant worrier. Having a plan means I can put it to bed.

      I’m glad to hear that you found your Treaty to be useful and stuck to your terms when you did divorce. Yay for adults! It bolsters my faith in humanity.

      • http://dylanandsarah.com Sarah T

        Husband-elect! I love this term.

    • Diana

      Thank you, SelkieKel! This is a fabulous idea.

      My fiance and I have talked about prenups but don’t really want to do it, mostly for “we’re in this for life” romantic reasons. But something less formal would probably be a good idea.

      My overall issue with prenups is at what point they become more of a hassle than they are worth. For example, I own the condo in which we live (I’m a lawyer and prefer the term “practical” to “pessimistic” and I didn’t want to buy property together unless we were legally married, which was not happening 2 years ago), and we both agree that should this not work out for whatever reason, I keep the condo. Simple enough. But what happens if we sell it in a couple of years, use that profit, plus our combined earnings, to buy a bigger, more expensive place, and then a few years later divorce? Who gets the new house? Will he have to reimburse me for my original condo? I’m sure lawyers that do this type of law have answers to these questions, but I would just rather have an informal “Treaty” that says “I promise not to be a jerk” and other agreed-upon reasonable provisions to handle things in general rather than specific terms that may not be relevant down the road.

      I just think it is hard to contract the unexpected.

  • rys

    There is at least one way a pre-nup can and is used to mitigate nasty divorces (rather than the division of property therein). For observant Jews — or for Jews for whom religious rituals are not just meaningful but necessary within a communal context — civil pre-nups are now being used to assure that in the case of divorce, the man will grant the woman a get, a religious divorce. Sadly, even in this day and age, only a man can grant the get and without it, a women becomes an agunah, a chained woman — not allowed to religiously remarry, which for some, especially those in the Orthodox community, is a real problem. The granting (or not granting) of a get has, unfortunately, become a weapon in divorce proceedings, often used to gain money or custody.

    Among the modern Orthodox, post-denominational yet traditional, and, to a lesser extent, Conservative Jews, the pre-nup has become a very useful tool for avoiding the agunah problem. I don’t know if this has application in other religions, but it’s wise for Jews who care about technical ritual matters to sign a pre-nup that says something to the effect of “in case of civil divorce, a get will automatically be granted” (consult a lawyer and rabbi to get the best wording).

    • Hypothetical Sarah

      That’s the basis for the Lieberman clause, right? I know it’s a common addition to Conservative ketubot. Is that true for modern Orthodox ones as well?

      • Rae

        I am relatively sure that Modern Orthodoxy has kept out the Lieberman clause from their ketubot. Instead they sign a separate document. Though they can be different, a common one can be found at http://theprenup.org/. This pre-nup also protects men. Though only the man can give the get, the woman must accept it to make the divorce official. It’s less of a problem if the man is not divorced since any children he has with a new wife will not be religious bastards (this is different than being born out of wedlock), but it can still cause problems in divorce proceedings.

        • rys

          The Conservative movement created — and often encourages– the Liberman clause, but the Orthodox have not. Hence the pre-nup, which as Rae points out, protects men as well as women, though there’s less of an issue for men in terms of being “chained.” To add to the intricacies of Jewish law, ritual, and tradition, for those who forego a traditional ketubah and choose to use Rachel Adler’s Brit Ahuvim, it can be useful to create a provisional get which can effectively be activated by the (male) witnesses if necessary at some future date. This gets into the complexities of Jewish marriage and divorce law (and emerged in the context of men lost at sea and other such situations), but it’s something to think about.

          • Jo

            Would one of you knowledgeable about Jewish ketubah wording elaborate a little for those of us not quite as well in-the-know? Do you know how the wording works for Reform Jews as far as gender roles (and pre-nup law, as you’re discussing in this context)?

          • rys

            Reform ketubot are almost always egalitarian. (Orthodox and Conservative texts are usually not — the groom acquires the bride — though Gordon Tucker’s Conservative-accepted text is as egalitarian as possible within the constraints of traditional halachah (Jewish law)). There are several different texts that are considered acceptable by the Reform movement, so you have some choice in regard to wording (you can write your own, for any movement, provided a Rabbi deems it legit). There is no mention of a get and no Lieberman clause in most Reform ketubot (though I think the Lieberman clause could be modified to reference a Reform Beit Din (court of law) and included, per a Reform Rabbi’s say-so). In general, the Reform movement doesn’t require a get, under the rabbinic dictum that “the law of the land is the law.” Hence, if one has a civil divorce in the US, that’s fine.

            However, if a civilly-divorced, no-get-received Reform Jewish woman decides to become more observant or wants to remarry a Conservative/Orthodox Jew, or wants the State of Israel to recognize the divorce, there can and most likely will be complications. For some, it’s a risk worth taking b/c they don’t anticipate circumstances sufficiently changing enough to warrant worrying about a get. For others, there’s enough of a chance that it might matter some day in some community, that it’s worth dealing with.

            I hope this helps! But given the complexity of all this, I recommend a discussion with your Rabbi. (Which I would recommend in general — a lot of people don’t know what a ketubah actually states and it is a legal contract, so best discuss with someone in the know!)

          • Rae

            And to complicate things even further, the conservative movement does not view reform marriages as valid and orthodoxy (which is the only movement the state of Israel recognizes) does not view conservative or reform marriages as valid. That means that even if you do receive a get, the marriage might not have existed to begin with (depending on who you talk to). In whichever case, I agree with RYS, you should talk to your rabbi and your lawyer to get a better understanding of your situation.

          • Hypothetical Sarah

            Jo — Rys and Rae have already covered much of what I was going to say. Reform ketubot are generally egalitarian. They come in lots of possible flavors; while Orthodox and some Conservative ketubah texts are often legalistic, Reform texts tend to be more emotional and aspirational. Also, you can pick what text you want in Aramaic/Hebrew and what you want in English… and there’s no reason they need to match (unless your rabbi says otherwise). If you look at sites like ketubah.com and mpartworks.com, you’ll see some options for texts.

        • Jo

          Thank you all (Rys, Rae, Hypothetical Sarah) for your information. Very insightful!

    • Sarah

      While I understand the need for a separate document it it a little ironic since a ketubah is/was a pre-nuptual agreement. A traditional ketubah guarantees the wife will be provided for during the marriage and in the case of divorce.

  • Cynthia

    We chose to get a pre-nup, I insisted actually, not because our assets are so different now- neither one of us owns property, but because we stand to inherit property down the road- and if we end up divorced, I want my parent’s home to stay with me, his with him, regardless of the value. We live in NY, where inherited property is not considered communal (though accrued value of it is), but the prenup allows us to “lock in” the laws of NY, so even if we were to move to a state with very different laws, we’d still be covered by NY state. A pre-nup to me was about protecting not just what I have now, but what I may have in the future, and talking out ahead of time how things would go. Honest upfront discussion, plus a little planning for “what if” can go a long way. No, those conversations weren’t fun, but we got through them, and actually had a little party for all the friends that came out to witness our signing. For us I think it was the smart thing to do, though I’m glad it’s over and done with! Which ever side you’re on pre-nup become a loaded, emotional discussion.

    • kathleen

      Cythia– I love that you made a little party and celebration out of the signing, and I bet you a number of your girlfriends (and guy friends!) have thought more seriously about both prenups because of it. It’s such a weirdly secretive thing I’ve found, and I love that you brought it our into the community.

    • Jo

      Anyone know whether this is something that parents can put into their wills instead of having to leave it to the childrens’ prenups? As in, could your parents write in their wills that their property is tied to you and not your partner? It feels like the relationship politics might be simpler this way.

      • http://www.3upadventures.com Beth

        Jo, I disagree. It’s much better for the decision to be out in the open and agreed up on between the two partners. If that decision is made within a parents will there is the possibility of resentment towards in-laws. Talking through money issues is an important step for the couple.

      • ElisabethJoanne

        Jo, a parent could do that, but I wouldn’t recommend it, though I’m not an estate-planning attorney, either. The reason is it’s hard to leave an asset to a child, and exclude the possibility of the child’s spouse ever gaining control of the asset, while still allowing the child complete freedom with the asset, and escaping extra tax liability (and extra estate administration costs).

        Just why is complicated, but here’s some things to think about:
        What if the child wants to give half the asset to her spouse?
        What if she wants to sell it to pay a (totally fair) divorce settlement?
        What if she wants to sell it for a down payment on a home she’d share with her spouse and children?
        What if the child dies, leaving her spouse and their children? Are the parents content to let the in-law spouse control the asset on behalf of their grandchildren?

        After watching a formerly very nice family file 6 lawsuits over “the family home,” I’m very much against any restrictions on inheritances.

        • RJ

          In some countries there is certainly the ability for parents to leave property to a trust – it depends on where you live.

          In New Zealand, you can leave property or put property into a trust, and state who the beneficiaries are.

          That means that the trust owns the property, and the trustees get to decide how it is used, provided that it is used to benefit one or all of the beneficiaries of the trust.

          So, for example, my parents could leave their house to the Trust, naming their descendants, and spouses for so long as the marriage lasts, as beneficiaries.

          On divorce, it could be set up so that the spouse could cease to be a beneficiary.

          The trust is a separate entity and could potentially loan money (e.g. a down payment on a house) to the couple, and it could be treated as a loan of money that needs to be repaid on sale.

          The trustees won’t necessarily be the same people as the beneficiaries.

          Again – lots of coulds here – it depends on local law, and how things are set up, and behaviour afterwards.

          Local laws also vary – here in New Zealand I think there is consideration being given to looking behind family trust arrangements.

          E.g. I know a couple where his family trust lent them the money to build their house, and the had very little in the way of marital assets once the trust was repaid.

          In divorce the Family Court may be able to look at the real position of assets in the marriage and behave accordingly.

          Key answer: know your own situation, know your laws and behave accordingly

          • ElisabethJoanne

            Exactly, and it was just such a trust, designed to keep “the family home” out of the hands of a distrusted son-in-law that has led to the 6 lawsuits. I fully admit that the sh*t of that matter has made me gun-shy about trusts and shared ownership of real estate apart from marriage, but I also have a 21st century Californian’s attitude towards real estate: It’s just an asset.

            You know all those “way things are” v. “way we wish things were” emotions that come up with weddings? Well, they’re equally there with “family” real estate. And just like APW teaches us to let go of a lot of attachment to mere wedding things, I think society will be healthier when we learn to let go of attachment to mere buildings.

            Application: In considering a pre-nup, or estate plan, keep in mind that your emotional attachment to your castle, to take Meg’s original example, may change, and you may not be able to pass those emotions on to your children.

      • Jo

        Again, thank you to the APW community for sharing such valuable assets as your professional knowledge and experience!

  • fleda

    Really interesting post and discussion! I’ll offer a friendly counterpoint. We both had/have some assets, and we decided not to do a prenup. I totally respect and actually agree with all the arguments made above–but for us it felt wrong.

    For me, it was a gut feeling. I knew that to me, a prenup meant not actually planning on staying married. Even if it means something different legally and to the rest of the world, that’s what it meant to me: if I signed one, I would be planning on not staying married. Both of our parents are divorced; for us, part of the difficult work of ending that “tradition,” and dealing with the anxiety provoked by that precedent was not getting a prenup.

    I know (from watching my own parents) how antagonisms can develop in ways we don’t anticipate. But this is what it comes down to for me: I would not marry someone whom I thought wouldn’t treat me fairly in a divorce. We trust each other, and that carries over to the way we’d behave if things became unsustainable in our marriage.

    But again, this comes mostly from my gut, and I sort of envy people who feel secure enough about the institution of marriage to do a rational thing like get a prenup!

    • http://cantabridgette.blogspot.com/ Cait

      I feel exactly the same way as you do, and this is the reason the pre-nup issue always gnaws at me. In family law class we looked at the prenup in contrast with all of the horrible divorce cases (and if it’s going to make a law textbook, a case has to be horrible for the parties involved), and I felt as though I was being presented with the stark choice of either being seen as a naive sucker for trusting my partner, or having to draw up a divorce plan. I know it involves risk and uncertainty and a bit of willful ignorance of the twists and turns of our future lives, but we will not be having a pre-nup. We’ll provide for our mutual financial security by making sure that, for instance, we fund retirement accounts in roughly equal amounts in both of our names even though I make less than he does (echoes of yesterday’s married socialism post). I’m sticking with that romantic gut feeling. Of course, we are as privileged as can be in this discussion because we don’t have any of the asset or future asset concerns that would make a pre-nup rational even for hopeless romantics.

  • http://www.robyntheblogedition.blogspot.com Robyn

    I’m really happy to see this post. My partner and I have both been reading a lot of financial advice books lately (firstly to make sure we’re making the best decisions possible for our money and second because we’re about to buy a house together and then get married a couple months later, so we’re about to merge finances) and I was surprised that a lot of them suggested getting pre-nups – it wasn’t really anything that had crossed my mind before, but I’m glad I had the chance to consider it.

    We discussed it one day – should we get one? Did we need one? We came to the conclusion that since neither of us has any debt or significant assets and our incomes are relatively equal we don’t need one, but we still saw a lot of advice out there that said EVERY couple should get one. I’m glad to see someone else agreeing that our situation probably doesn’t warrant one.

    One day at work in the summer I overheard a woman talking about how she was going through a messy divorce and her “evil ex” was trying to take her family homestead away from her and if he succeeded it would absolutely kill her dad. Now obviously this couple would have benefited from a pre-nup but I am always just so shocked at how a couple can go from committing to a life of love and happiness together to hating each other that intensely :(

    • http://www.robyntheblogedition.blogspot.com Robyn

      Why did I put a dash in the word “prenup”? I knew something was wrong with the word when I was typing it but didn’t catch on.

  • Ali

    My fiance told me he wanted to do a “prenup” only for certain property that is his father’s retirement investments, but it is in a company in the names of his three children. Of course I was extremely taken aback by this, but after thinking about it it makes sense for that specific property. I of course went through all the questions of if his father thinks we will get divorced… etc, I still joke with him about how I need to get my lawyer to review this “prenup.”

    • Lucy

      Do you have a lawyer or a friend who is a lawyer? Couldn’t hurt to have someone look it over….

      • Ali

        Well the problem is that its a foreign country and all the lawyers I know are my fiance´s parents and his sister. Its kind of a private thing and I really wouldnt want to involve a casual acquaintance or coworker in it. I feel comfortable reading it over myself though and asking my fiance any concerns I might have.

        • ElisabethJoanne

          My understanding (from reading fashion magazines, not law books) is it won’t be enforceable if it’s drafted by their lawyer, the family are lawyers reviewing it, and you aren’t at least offered your own lawyer at their expense.

        • http://meaghantothemax.wordpress.com Meaghan

          Yeah no, you need a lawyer to read it over and give you a legal opinion about it. A lawyer that has no ties to your fiancé. GET A LAWYER.

    • RJ

      Sounds like they’ve set something up for tax minimisation – and it’s not quite kosher. He’s trying to hide income or reduce tax by doing this. It may be a legal way of doing it, but the income from that company may be taxed as part of your family income.

      You do need to find out more about it – from an estate planning angle as much as anything.

      • ambi

        ALI, I know this can be really difficult, so I want to first say that I feel for you. Being in this situation, with his family, in a foreign country, seems really intimidating. Standing up about this and insisting on having your own legal advice is going to be hard. But I have to echo the other posts that say you really need to get your own attorney to look at it. I do not want to accuse your future in-laws of anything, but I agree with RJ that this seems a bit fishy. And simply put, if you don’t protect yourself now, you (and your husband) could end up in hot water later. Through no fault of your own, you may end up liable for whatever it is his parents are trying to do. Talk to a lawyer, and if the lawyer has concerns, ask her to give you advice on how to handle this with the family. Maybe she can offer suggestions for how the family could structure this that wouldn’t be detrimental to your baby family, or maybe she can contact the family’s lawyer directly and help work something out. It doesn’t have to be adversarial – you can be as sweet and agreeable and smiley as can be, but just say that your parents raised you to have ANY legal document checked out, and that is what you are going to do. Honestly, if his whole family are lawyers, they’ll respect you for it – it’s the smart thing to do.

        • Ali

          Thanks for this – I hadn´t thought about how the arrangement could possibly affect us in the future.. I guess I will need to find out more

  • Flamingo

    Thank you for this discussion and for such a great community! This topic has been on my mind, but I’m not sure where to turn to. A couple of basic questions that have been floating in my head:

    a) What are some examples of how one partner in the relationship may get screwed for deciding to take care of the children / family in case of a divorce? How would a prenup help this situation?

    b) My SO has more assets than I do, in the way of investment (or actually everything), which has prompted the prenup discussion. His feeling is that any investments before marriage remain his. My feeling is that whatever interest / extra income earned on those after marriage is shared. Am I way off base here?

    • http://cantabridgette.blogspot.com/ Cait

      I don’t practice family law, but if your SO has opinions about who owns his pre-marriage investments you should at least talk to a marriage and divorce lawyer. It really depends on the laws of the state where you live, but in many places his perception would be wrong. In Massachusetts, for example, assets in a divorce are equitably distributed by the judge if you don’t have a pre- or post-nup or other contractual agreement, and all assets owned by both parties to the marriage are considered to be in “one pot” (regardless of who earned or owned the asset before marriage). The difference of opinion you describe could be right or wrong as a matter of state law depending on where you live, but that’s not up to you. Pre- or post-nups can be helpful in your situation; you guys could negotiate an agreement on the issue with the help of lawyers and make your preferences a reality for your situation.

    • ElisabethJoanne

      Going backwards:

      b) I agree with Cait. It’s important to understand it’s not about “feelings.” It’s about the applicable state(s) laws, in all their boring, beautiful fake-leather covers with gilt writing, volume after identical volume.

      a) Even in non-community property states, the trend is away from this, but the idea is what the income-earning spouse makes is his (or hers, but let’s go with what’s more common), less only expenses. Say he’s been making $100,000/year for 15 years of marriage, putting into retirement accounts $25,000/year, with the family living off of the remaining $75,000. That’s $375,000 he’s been able to earn and save, while his home and children are cared for, because his wife hasn’t been earning income. In some states, however, because he’s been “the only spouse working,” he’ll get all the retirement accounts in a divorce.

  • http://amidlifeofprivilege.blogspot.com LPC

    On the issue of inheritances. Yes, what you bring to the marriage remains separate property. However, it gets tricky when you use your separate property, during the marriage. When it’s spent, it’s spent, and assumed to be commingled and community. Done. Water under the bridge of love. But if you INVEST with separate property during the marriage, things are infinitely murkier. I caution anyone with substantial separate property to read and understand the laws, whether or not you pre-nup. They will also provide context for the role of your separate property in the marriage. Something you may not be ready to understand when you marry.

  • http://www.anniefargo.blogspot.com Annie

    I know someone who got a pre-nup before getting married because she has a mentally disabled brother for whom she has legal care giving obligations. I don’t know the details, but thought I should mention it since it wasn’t touched upon in this post!

    • Caroline

      Please Please get your friend to come share details of how this protects her/her brother. My partner’s brother is mentally disabled and will need care his whole life(we think, certainly he won’t be able to be fully independent.) He currently lives with their parents but will eventually be our responsibility. I assume her pre-nup is so any assests she has remain hers to care for him? Did she uav significant assests before marriage?
      I’ve always sort of been the “a pre-nup is deathwishing your marriage, planning the end before it starts” type, but then we have a complete lack of assests, so it’s not so much of a big deal, but I didn’t realize his brother might factor in.

      • http://landlockedlove.blogspot.com Kelly

        I’m actually in this situation as well. My partner’s sister is mentally disabled as well, and currently he is her co-legal guardian (along with their mother). At the moment the mother handles all of the affiars (the sister was just recently moved into an adult group home that we’re hopeful will be beneficial to her for the remainder of her life, but we know all too well that these situations are volatile) but eventually my partner will become the sole legal guardian. His sister has her own assets that largely contribute toward her care (we have none). It never occured to me that a prenup might be relevant in this situation. I’ve simply accepted her role in our family and my new and future joint responsibility for her wellbeing.

  • Laura

    As a recently graduated lawyer (also not admitted, so this is not “legal advice”), I thought I would mention (as an added example of the difference btw. community & separate property states) that Elizabeth’s (quoted in the story) pre-nup terms essentially mirror what the law would automatically do in a community property state.

    So if she lived in many Western states, she’d likely be covered without the pre-nup (with the caveat to always check with a lawyer very familiar with that state’s laws). If she lived in most other states, some of her terms would likely be taken care of and some not, but a pre-nup would be a good idea to preserve her & her fiance’s understanding.

    If you’re going to make a pre-nup, be aware that you should start thinking about a will as well – if you want certain property kept separate, a good attorney should ask what you want to happen to it should you die rather than divorce.

    • Elizabeth from Lowe House

      This is generally true! However, cases can be made that individual property was co-mingled over the course of a marriage in a way that caused it to become community property, and things can get complicated in other ways by say, moving to another state (my very basic non-lawyer understanding: assets at the time of move would generally fall under the laws of the state they were acquired in, assets earned or acquired in the new state may fall under those laws.). For me, it’s not a big deal to have a contract that additionally enforces the (likely) law. But again, child of a lawyer with a strong belief in clear contracts that you’ll hopefully never use (this is my feeling about all contracts – have them, but hopefully never use them.)

  • kathleen

    Just want to say how happy I am that my post Monday was like “more prenup talk pllllease” and aha! wish granted.

  • http://theroadto92912.blogspot.com Molly

    Yes yes yes to all this! Even as a law student and divorce lawyer-in-training, I’m not getting a prenup because it’s not right for us. Thank you for pointing out that YOU CANNOT DETERMINE CUSTODY IN A PRENUP! This has got to be the biggest misconception about prenups out there, so thank you for sharing all of this information.

  • http://smittenimmigrant.wordpress.com Pluis

    We have a pre-nup. We need one too. I was the one who started the talk about it and I was the one we insisted we get one. My husband told me that had I not mentioned it, he would likely not have been comfortable bringing it up.

    My husband had been working (and contributing a lot to private pension accounts and stuff). He also owns a house that has increased a lot in value. Me, I have student debt (although three months post-marriage I’ve paid off 90%) and we currently live in a community property country.

    Our pre-nup allowed us to set the legal conditions for what things remained private (pre-marital assets) and what would become shared (all income and assets gained during marriage). It (more importantly)also allows for those decisions to remain valid, no matter where we move, which is nice, since we plan to live just about everywhere :)

    I like that we’ve been able to agree on these things once, and then not need to worry about them again.

    The pre-nup also makes me feel more comfortable having my husband (who earns 3 times more than I do) pay for things – we agreed after all that income is treated as shared property. It’s not like he actually pays more, because it’s ours. Anyway, I’m all for pre-nups, but it really helps when you get good, friendly legal assistance.

  • clampers

    My spouse and I didn’t do a prenup, even though I was going into the marriage with some decent assets. Neither of us feel like we will get divorced from each other. Also we come from households where our parents are still married. So we felt like we didn’t really need a prenup.

    We did, however, talk seriously about what would happen if something crazy happened and we ended up divorcing. We agreed that we would split everything evenly, except for whatever assets/debts we came into the marriage with…those would remain with the individual. We didn’t make this conversation a “we need to talk” type discussion…we just were talking about either finances or divorce and then ended up agreeing on those terms. We also agreed that it was better to talk about it now while we are getting along than during a divorce when we hated each other.

    Obviously this is not “legal” by any means…we didn’t even write anything down…and if things got crazy during a divorce obviously this conversation would hold no legal water…but again, we both feel very confident in our marriage lasting and at least we had the conversation and came to a verbal agreement.

  • Leanne

    Also, for all those LGBT couples out there whose marriages are not legally recognized by their states – GET THEE TO A LAWYER! RIGHT AWAY! This gets waaaaay more complicated for us gays, as you will likely be treated as total strangers if “divorce” were to come your way, no matter what your best intentions were. Though it does not have to be as formal as a prenup, it will be VERY important to identify and appoint you and your partner’s legal rights to financial decisions, assets, est. Work with a lawyer who is intimately familiar with the legal intricacies of same sex couples, and with whom you can have a good, relationship-long working relationship because it will all have to chance if you have children and need to identify additional beneficiaries.

    • meg

      YES. Sadly you will need a lawyer for everything, always, until we repeal DOMA.

    • http://thevoiceofthelobster.wordpress.com Laurel

      I was just thinking about this. It’s so frustrating to know that we’re going to have to hire a lawyer even though we don’t need a prenup and can’t really afford one: we’ll be registering as domestic partners in CA and possibly getting a marriage license somewhere else, but that won’t count if we end up moving in a few years. Also, I have no idea how to find a lawyer or (preferably) a legal clinic. Grumble.

      • http://theblogwhisperer.tumblr.com Heather G

        Yes, this is yet another reason why LGBT couples are at a disadvantage. My moms happen to have the resources for an attorney when they got married (partially because they were in their 40s and had been working). A lot of couples do not have the resources or know where to start.

        Totally echoing your grumble!

      • ambi

        Most law schools run free legal clinics. In fact, a few have specific LGBT legal clinics (Harvard has one, I know), but even a general “domestic relations clinic” should be able to help. When contacting them, frame the work you need done in terms of the educational experience it will provide for the students – that helps in getting your case accepted. Also, several LGBT support organizations run free legal clinics. Just google “pro bono LGBT legal clinic” (sorry if that is way too basic, but it works). The attorneys there may not be able to do all the work you need, but they SHOULD be able to point you in the right direction and tell you what kind of attorney to hire. In fact, it would be good to ask for recommendations for attorneys that have previously volunteered for the LGBT legal clinic – that way, you know they will be willing and eager to help you and will have a background in the type of legal issues you face.

        • http://thevoiceofthelobster.wordpress.com Laurel

          No, super helpful! Especially the idea of calling the local clinic and asking for references. I just looked around and it turns out the income limits for the law school clinic are REALLY low — grad-students-don’t-qualify low — so getting referrals might be our only option. Also I just remembered that a friend did a group advance directive clinic, and those lawyers might be good options.

  • http://againstthegrain2013.blogspot.com/ Skittle

    Thank you so much for this post! My boyfriend and I haven’t discussed prenups at all, but I’m glad that if we do – and if either of our sets of parents mention it – I’ll have a ton of great information backing me when I say that we absolutely do not need one.

  • Mia Culpa

    I’m always struck by how pre-nups are thought of as divorce bait. I have to look at them in a different light: a pre-nup will protect my partner from being liable for debt incurred years before we even met.

    I’m not talking “oh, splitting debt at divorce,” I’m talking “the IRS will take whatever money is considered my assets, including community assets.” I have to get a strong enough pre-nup that exempts us from California’s communal property law for 5 years (when my tax debt is considered no longer collectible). This also means we can’t get joint accounts, and we probably can’t try to qualify for a home loan together. We’ll also have to file our taxes separately.

    And despite reassurances from lawyers that a pre-nup is a mutable document that applies not just to divorce but to marriage, the idea that we can’t combine finances still stings, even though I’m doing it out of consideration for him. We’re not going to get any of the financial perks to being married. And even though I am doing this to keep from dragging him down financially, it hurts that I can’t contribute to our marriage finances in a tangible way for such a long time.

    So I am left with focusing on the emotional and societal commitment we are making to each other. And despite the stingy feelings, that’s still pretty freaking great.

  • ElisabethJoanne

    More legal advice via fashion magazines: Another thing pre-nups do is force you to do full disclosures regarding your assets and debts. Hopefully, you can do this on your own. If not, a therapist is likely a better professional to consult than an attorney. However, therapists aren’t trained in personal finance, per se. I don’t know if they’d force you to bring in your tax returns and credit reports and investment account statements the way a good lawyer would. I know religious pre-marital counseling may discuss finances in general terms, but I’ve never heard of a Priest asking, “What’s your plan about how one of you has twice as much debt as the other, to a total of $100,000?”

    When I was considering a pre-nup, the disclosures were why. Eventually, we had enough discussions on our own that I was comfortable we didn’t need that “neutral third party,” but for months a pre-nup was the plan.

  • Adele

    As some of you have said already, prenups don’t always have to be about assets. My husband and I had a traditional Jewish wedding with traditional documents, all of which do not guarantee my right to a divorce, only his. It’s standard practice in Orthodox weddings nowadays to supplement with a prenup that guarantees the wife’s right to a divorce, too. So technically we have one!

    • ElisabethJoanne

      This reminds me of further considerations: It is possible that your religious officiant will want to review your civil pre-nup to make sure it matches with the teachings of your religion.

      I have had long, round-and-round conversations with Roman Catholics, for example, about whether Roman Catholics can even have pre-nups and still get sacramentally married.

      I know Chabad’s advice is that Jewish couples have a rabbi review pre-nups to make sure they match up with halachah.

      My Anglican Catholic Priest just shrugged when we told him we were planning on a pre-nup.

      My wedding and marriage will involve all 3 religions, and I’m glad at least the intersection of the civil and canonical and rabbinical law has been simple for us.

      • Adele

        Love this! In our case, the Rabbi provided the prenup himself since he officiates weddings regularly. We didn’t have to do anything ourselves (except sign it).

  • ambi

    DUDE! Can I just say how amazing it is that APW has become the kind of community where we not only talk about the “soft” stuff like feelings and communication, but where we can get real, concrete advice on everything from financial planning to legal issues to tax, adoption, salary negotiations, and paying down debt?! I always knew APWers were wise, but now it is becoming clear just how damn smart they are too!!!!

  • Not Sarah

    Your mother was horrified when you mentioned that you wouldn’t get married without a prenup? My parents have tried to tell me that I have to get married with one because of a) the level of assets I am accumulating with my high income (I work in software) and b) the inheritance I could receive.

    To throw another loop at that, my parents live in a different country than I do and I have assets in that country too. Would I declare my hypothetical-future-spouse on those accounts? I don’t think I even could unless we were to move there since he/she would not have the equivalent of a Social Security Number to be identified on the accounts. So perhaps my inheritance would be more easily kept private since it would be in another country, but that feels sketchy.

    I believe in community property AFTER marriage, but not before. I am slowly realizing that the likelihood of me marrying someone who is my financial equal is pretty damn unlikely considering that I graduated from college young for my age AND making six figures right off the bat, plus I’m a saver.

    What if I, when I get married, I already have a house/condo paid off? Or what if, god forbid, my parents die before I get married?

    I’m definitely planning on getting a prenup, unless I happen to marry someone who is in a pretty similar financial situation. But what I don’t understand is how the prenup would help me. How do divorce courts split your assets and debts based on the amount that you had before marriage? Do you have to keep statements of the end-of-month just prior to your marriage indicating each of your separate assets to determine your separate net worths? How do those documents actually stick around for the entire time you’re married, especially if you’re married for 20 years? What does that formula look like?

    (Assets_Before_Spouse1 + Assets_Before_Spouse2) + Assets_After = Assets_Divorced_Spouse1 + Assets_Divorced_Spouse2

    where Assets_DivorcedSpouse1 = Assets_Before_Spouse1 + (Assets_After / 2)
    and Assets_Divorced_Spouse2 = Assets_Before_Spouse2 + (Assets_After / 2)

    Is that how it works? And since some assets are hard to split (e.g. physical property like a house/condo), you arrange the assets in both equations so that the math works out?

  • Newtie

    Does anyone have a ballpark estimate of how much getting a prenup would even cost? I don’t need one, but I’m curious.

    • http://bonnieprojects.blogspot.com/ Bonnie

      We’ve been quoted $1,000 – 2,000

  • http://bonnieprojects.blogspot.com/ Bonnie

    My fiance owns his own business, and I have family real estate that will one day be handed down, so it’s always been a no brainer for us to get a pre-nup. We thought it would be really easy, until I realized all the choices you have!!!

    Do you divide assets different depending on the cause of the divorce?
    Is the growth of his business a common asset?
    If I use an inheritance to buy a lake house, is that marital property or just mine?

    We still have a lot to work through, even though we’re both on board. My advice is this, though – get a prenup, and talk things through very thoroughly. Open and honest communication is the best thing.

    I really liked one comment above about “locking in” your understanding. Just because we live in a state now that operates the same way our prenup will, doesn’t mean we’ll always live here!

    Thanks for writing the post!

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  • tirzahrene

    My perspective might be kind of depressing, and I’m sorry if it is, but I’m glad I did this:

    In my first marriage, we didn’t do a formal prenup. We did sit down together and talk about, “If we split someday, how do we think is a fair way to do that?” And we wrote that down.

    We did divorce. And because thankfully we were both people who tend to try to fight fair and be fair about things, we did take those ideas from the initial “prenup” and mostly follow those pretty well.

    I mean, I was surprised by a few of the things that I thought were “ours” and he thought were “his,” and we both came out financially worse off and feeling kind of screwed over, but that’s divorce. It just sucks.

    That piece of paper wouldn’t have held water in court, I’m sure, but it did give us a place to start from and the reminder that we wanted to be decent people about things.

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