Ask Team Practical: The Pre-Nuptial Agreement

Heyyyyy! It’s Friday, so that means Ask Team Practical with Alyssa. As you know, we’ve been discussing money and the ways it impacts our relationships all week. We started with my post about externally imposed martyrdom, and fighting the urge to nail yourself to a cross. Then we talked about grand married adventures. Then we dove into engagement rings, and what they do and don’t mean. Yesterday was the kicker, with Sara discussing how difficult it is to give up your financial independence as a wife. It’s a nice run, but we couldn’t really end it without discussing what is perhaps the most taboo subject in wedding media: the pre-nuptial agreement. So today we have Team Practical member K, with words about pre-nups so wise, that every single person is going to learn something. Take it away Alyssa:

Most of the reason that Meg brought me on was to help wade through the TONS of mail that she gets on a daily basis.  In the midst of the praise, criticism, mean emails and spam that she receives, there are gems like K’s question.   She wrote back in July about needing advice regarding pre-nups.  Pre-nuptial agreements are part of that scary big “Stuff You Have No Idea How to Deal With Until You Have To,” section of life, so Meg definitely wanted to tackle it.

When I wrote K back to see if she had further thoughts that we could put in a post, not only did she write back with more information but she wrote it so well that we’re just going to post her email here.

Here’s K’s very personal but very wise feelings on pre-nuptial agreements. I suggest you read it even if you’re not getting one, because everyone at APW got wide eyed and nod-y when they read it, and we all told our husbands they didn’t have enough cash to even whisper the word pre-nup (ok, that was actually Meg. She’s sort of a hard-*ss when it comes to money). So. Read on:

Iam a pretty average bride-to-be who is in the midst of having to deal with a pre-nup.  I’ve been handling it ok for the most part but I was just searching through your site hoping to find some words of wisdom for navigating the pre-nup process with a sane head.   I never ever thought I would be in the position to HAVE to have a pre-nup – ever…but my fiance’s family has a trust that he’s an equal partner in and they want to protect it from any spouses, should a divorce come along.   Since it really has more to do with family money, money that isn’t mine, isn’t his, isn’t ours, I really have no problem signing something saying I won’t bankrupt the family if we go through a divorce – it’s not ours to begin with and if it helps us to live a more comfortable life I am nothing but grateful.

Sounds like I have a pretty good perspective of the situation right?  Well, I knew it was coming, and am grateful that it is happening now rather than the week of the wedding, but the reality of the process is not as arms-lengthy as I had hoped.

 A part of the process is claiming all of our assets and what happens to them based on how long we are together.  I mean, I really honestly don’t give a sh*t about his CD’s or 401K’s – really, I’m a big girl and have been independent for a long time.  We live a pretty frugal life and we’re financially stable – but then why does it hurt my feelings so much to hear him say things like, “Well, if we are married less than 5 years and I die I want half of my money to go to my brother.”

I really don’t think it’s the money, but it’s that it makes this union – this combining of assets and moving forward as a team – seem like a little bit of a facade, like if we are getting married he should already know and trust me to do the right thing with his assets especially if we discuss it.   And I guess I feel like our union as husband and wife should feel like the most precious of his relationships – why wouldn’t he want to take care of me even after he’s gone – god forbid?  He only loves me so much now, but will he love me more after 5 years, but not quite as much as he will after 15 years or if we have children?  See what I mean?  All of these different thoughts and feelings are spinning around and I’m having a hard time keeping my emotions out of it.  It’s such a personal topic that friends aren’t always the best to go to for advice… and my folks are such Wisconsin hippies that while they are supportive, they really cannot relate or offer any guidance, so APW – you’re my only hope!  Any words of wisdom?

We, unfortunately did not get to K’s question in time. Plus, we had no idea what we were talking about, so it’s just as well.  So now with some distance and thoughtfulness, K is her own informant, and hopefully the informant for others going through similar situations.

Here is some info about my pre-nup situation after the fact.  When it came down to it my worst fears came true, I was on a boat two days before my wedding with my now husband and we were stuck below in tears on conference calls with our lawyers rather than enjoying our friends and family who were there to celebrate with us.  It sucked.

Here is how the situation broke down:

Lawyers are there to get as much for you as possible and to protect you, but they don’t have you both in mind by design or necessarily the reality of your situation.  Initially his lawyers pushed so hard that my father was horrified and even uttered the words, “I hope M doesn’t understand this, and that it didn’t come from him because if it did I would tell you to pull the plug on the marriage.”  Not what I wanted to hear ten days before the wedding from my father.

Basically his lawyer set up a strict “bimbo protection” pre-nup rather than focusing on the fact that we are a poor, struggling young couple and the only reason we were doing this at all was because of the trust, and it deeply offended me and my family.  I had to have a lot of hard conversations with my fiance while stressed, busy, and days from our wedding – like emotions weren’t already a little high – but in the end I am very proud of myself.  I told him, like I told myself, if it wasn’t for the trust I would not even entertain the idea of a pre-nup for the other parts of financial life and at that point – two weeks before the wedding – I certainly wasn’t going to begin entertaining the idea and splitting hairs about 401k’s.  He waited too long, it was too close to D-day, and it just wasn’t something I was willing to do.  He respected that and took responsibility for dragging his feet.  My lawyers sent back a version including only the trust information, but being lawyers they also threw a bag of extreme scenarios at me that made me feel like I needed to ask for more protection than was allowed with the trust – so we ended up loosing sight of the reason we were in these talks once again.

Advice in hindsight:

  • Get ALL of the info beforehand. After a lot of back and forth we thought we had all come to an agreement but then his father, the one who set up the trust had to step in and let us both know that what we agreed on still violated the trust. This seemed like a lot of work and tears and arguments for no reason.
  •  Know what really matters to you. I told myself before the real conversations started that as long as our children, the next generation, were able to benefit – no strings attached – I didn’t care what i had to give up. With lawyers throwing crazy scenarios at you it’s easy to get caught up and become selfish.
  •  For godsake,  do it as soon as you know it will have to be done and do not throw it into the wedding festivities, it’s uncomfortable for everyone and it really did create a wall between us and enjoying our friends and family.
  • It really is hard to understand all of the legal lawyer lingo – and I consider myself an intelligent girl. Having my father on my team to translate and support me was key, even though it is extremely private and I may not have wanted him in the middle and knowing all of the details, I’m glad he was and so thankful I didn’t sign the initial draft – so get help, or  ask the lawyer to go through line by line in layman’s terms.
  • You may not have a lawyer, I didn’t – so get referrals from people you trust.  I asked everyone I knew who was a lawyer or went to law school until I found someone who was both recommended and affordable (yes it is going cost you between $1,000 and $1,500).  It’s easy to become selfish, for good reason, but try if you can to have some perspective.  The whole problem we were dealing with was that M’s father is a very generous man and wants to be able to give us gifts to help our life.  Only days after all of this pre-nup stuff we received the first gift and I could have hidden under the car with my tail between my legs.  My initial perspective was that it wasn’t our money to begin with, it was the rewards of his father’s lifetime of hard work, so we have no real rights to it.  And if it can help us to start a business, or live a more comfortable life, then I am grateful but should in no way feel owed any of it.

I know it’s all very personal and private info but I do think talking about it might help someone else down the line.

So that’s K’s take on pre-nups, and we think she’s wise. Pre-nups are all things that you sign your name to, you need to make sure that you understand exactly what you’re signing, and that you’re properly protected. “But we love each other” is never a good reason to sign your name to a document that does not protect you as you should be protected. Ever. Women don’t get taught this in the same way that men do, so APW is stepping up today, and telling you that you are worth it. Hire a lawyer, read that thing, negotiate. (Puts soap-box under the bed).

So, who’s had experience with pre-nuptial agreements?  Thoughts, strategies to get through it? And how does this feed or complicate the money conversation that we’ve been running all week at APW? Discuss.

***EDIT***

There have been so many great comments today, if someone is reading this after the initial posting date, I HIGHLY suggest reading through them all.

Also, Meg’s husband David offered up some insighful advice; so insightful that we HAD to update the post with it, lest it get lost in the shuffle.

“I might suggest for those of you who are worrying to contact your local bar association and ask for estates and trusts and/or family law specialists and see if there is someone who is willing to sit down with you for an hour or two and just give you a primer on your state’s laws. Generally, a simple consultation would not cost you very much.

I can also throw out some suggested questions:

1. The assets we each have/had before the marriage, how would those be treated if the marriage fell apart?
2. If we wanted to protect pre-marriage assets from a divorce, how would we do that?
3. What happens to those assets if one of us dies?
4. What happens to our personal debts from before the marriage if we divorce?
5. How about if one of use dies?
6. I, or my spouse, owns property from before the marriage, what happens to that property on death/divorce?
7. How can we keep that property separate/How can we make sure we split it?
8. How is what we bring in during the marriage treated? I want to make sure my spouse gets half/doesn’t get a dime.
9. What sorts of assets are federally preempted? [note: there are types of assets that are governed by federal law and will be treated differently from state law]
10. How does the state deal with a spouse that dies without a will? What can a will change in this formula?”

 

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