Pre nups.

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jackal
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Pre nups.

Post by jackal » Mon Jun 25, 2018 4:20 pm

Do the two parties in a pre nup require different attorneys or can one attorney suffice? How does one find a reasonable attorney in AZ. Basically we just want to say everything mine remains mine now or after marriage, everything hers is hers and everything joint is joint.
Does it also protect one party when the other goes bankrupt or is in legal trouble?
Thank you.

ResearchMed
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Re: Pre nups.

Post by ResearchMed » Mon Jun 25, 2018 4:24 pm

jackal wrote:
Mon Jun 25, 2018 4:20 pm
Do the two parties in a pre nup require different attorneys or can one attorney suffice? How does one find a reasonable attorney in AZ. Basically we just want to say everything mine remains mine now or after marriage, everything hers is hers and everything joint is joint.
Does it also protect one party when the other goes bankrupt or is in legal trouble?
Thank you.
You MUST have separate attorneys, or it could be grounds to invalidate the pre-nup some day in the future.
Best way is also not to have one pay for both attorneys; keep them totally separate so there can be no grounds for claiming any conflict of interest, which would only happen if things are already a big problem, needing to invoke the pre-nup, etc.

The bankruptcy situation may be state specific.
Ask the attorneys about that.

Good luck.

RM
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HueyLD
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Re: Pre nups.

Post by HueyLD » Mon Jun 25, 2018 5:06 pm

Remember, AZ is a community property state and a pre-nup does not protect you from community assets and liabilities.

This is what you pay an attorney for.

jackal
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Re: Pre nups.

Post by jackal » Mon Jun 25, 2018 5:07 pm

HueyLD wrote:
Mon Jun 25, 2018 5:06 pm
Remember, AZ is a community property state and a pre-nup does not protect you from community assets and liabilities.

This is what you pay an attorney for.
Meaning an attorney can help separate out the assets? Or prenups don’t work in a community property state?

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HueyLD
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Re: Pre nups.

Post by HueyLD » Mon Jun 25, 2018 5:34 pm

It is best to consult a lawyer if you are concerned about potential liability from your future spouse.

Here is a summary of AZ Revised Statutes on Marital and Domestic Relations.
https://www.azleg.gov/arsDetail/?title=25

BenBritt
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Re: Pre nups.

Post by BenBritt » Mon Jun 25, 2018 6:16 pm

``
Do your do diligence and then wait a year!

dknightd
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Re: Pre nups.

Post by dknightd » Mon Jun 25, 2018 6:22 pm

If you feel you need a pre-nup, then you both have to pay a lawyer. Sorry

jackal
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Re: Pre nups.

Post by jackal » Mon Jun 25, 2018 6:28 pm

Thank you all for your insights. Will get a lawyer for me and ask her to do the same.

dknightd
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Re: Pre nups.

Post by dknightd » Mon Jun 25, 2018 6:29 pm

Honestly if I felt I needed a Pre-nup, or my potential spouse did. I'd suggest we remain friends with benefits.

camden
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Re: Pre nups.

Post by camden » Mon Jun 25, 2018 6:42 pm

dknightd wrote:
Mon Jun 25, 2018 6:29 pm
Honestly if I felt I needed a Pre-nup, or my potential spouse did. I'd suggest we remain friends with benefits.
Spoken like one who has never experienced a divorce in a community property state. No one ever goes into a marriage thinking that it won't last, but things happen.....

Dottie57
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Re: Pre nups.

Post by Dottie57 » Mon Jun 25, 2018 7:02 pm

dknightd wrote:
Mon Jun 25, 2018 6:29 pm
Honestly if I felt I needed a Pre-nup, or my potential spouse did. I'd suggest we remain friends with benefits.
Pre-nups are important when one or both parties have been married before with kids. Helps to spell out what is whose. Also for those marrying later in life. I’d want it clear my property (including retirement funds) are mine.

dknightd
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Re: Pre nups.

Post by dknightd » Mon Jun 25, 2018 7:26 pm

I guess if this one does not work out, or she dies before me, I'll be single.

TheAncientOne
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Re: Pre nups.

Post by TheAncientOne » Mon Jun 25, 2018 7:29 pm

I believe it's ok for the wealthy partner who presumably is the one who wants the prenup to pay for both attorneys. However, the attorney representing the less well off partner must be completely independent of the partner paying for the prenup other than receiving compensation for this one matter. Best if the attorney is paid in full prior to the negotiations.

dknightd
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Re: Pre nups.

Post by dknightd » Mon Jun 25, 2018 7:31 pm

dknightd wrote:
Mon Jun 25, 2018 6:22 pm
If you feel you need a pre-nup, then you both have to pay a lawyer. Sorry
I don't think I'd do that. YMMV. Do what ever makes you happy :) :) :)

randomguy
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Re: Pre nups.

Post by randomguy » Mon Jun 25, 2018 8:43 pm

camden wrote:
Mon Jun 25, 2018 6:42 pm
dknightd wrote:
Mon Jun 25, 2018 6:29 pm
Honestly if I felt I needed a Pre-nup, or my potential spouse did. I'd suggest we remain friends with benefits.
Spoken like one who has never experienced a divorce in a community property state. No one ever goes into a marriage thinking that it won't last, but things happen.....

Or someone is marrying someone richer than they are.:) In second marriages with kids and assets, they are pretty much a requirement. In first marriages with assets they may or may not be needed. You have to ask if you prefer to specify the terms of the divorce yourself or if you would prefer to default to the ones in whatever state you happen to being living if it happens.

Technically you don't need 2 lawyers in the states I am aware of. However if you if you want the prenup to stand up in court, the 2 lawyers drastically improves the odds of it standing up. I imagine a basic mine is mine, yours is yours might work with 1 lawyer but as soon as you add anything like waiving of alimony or the like all bets are off. This is the type of thing where you should do it right or not at all.

And this definitely isn't legal advice but if you don't comingle assets (i.e. you keep everything you make before marriage separate and don't add joint contributions), that asset isn't considered martial and doesn't get split in a divorce. Obviously somewhat state specific. And those assets will be considered when things like alimony is calculated.

Prenups do nothing for bankruptcy protection versus holding accounts in your name. How much protection that provides depends a bit on the state.

togb
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Re: Pre nups.

Post by togb » Mon Jun 25, 2018 10:45 pm

Echoing those who say yes, each party should have their attorney. Alternatively, it can state that XX party chose not to engage their own attorney, but had the chance to do so/ have their own counsel review the agreement and chose not to. I suspect the former is more defensible.

ResearchMed
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Re: Pre nups.

Post by ResearchMed » Mon Jun 25, 2018 10:53 pm

togb wrote:
Mon Jun 25, 2018 10:45 pm
Echoing those who say yes, each party should have their attorney. Alternatively, it can state that XX party chose not to engage their own attorney, but had the chance to do so/ have their own counsel review the agreement and chose not to. I suspect the former is more defensible.
Right.

The latter, or anything deviating from "each pays for own attorney" *might* be subject to some sort of claim of "I was misled about not getting my own attorney" or such.

Keep in mind that the *only* time any of this will matter is when it will be the worst situation: when a marriage is ending and under unpleasant circumstances.
Otherwise, the pre-nup wouldn't be needed, or wouldn't be critical.
So to protect in case of the extreme/worst case scenario, "do it right", and make sure there are as few "openings" for dispute later.

Best case, the "results" from the extra attorney fees won't ever actually be needed :happy

RM
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ProfLA
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Re: Pre nups.

Post by ProfLA » Mon Jun 25, 2018 10:58 pm

randomguy wrote:
Mon Jun 25, 2018 8:43 pm

And this definitely isn't legal advice but if you don't comingle assets (i.e. you keep everything you make before marriage separate and don't add joint contributions), that asset isn't considered martial and doesn't get split in a divorce. Obviously somewhat state specific. And those assets will be considered when things like alimony is calculated.
It seems to me that if spouse A has a taxable account, its dividends and capital gains will have tax implications that affect spouse B at tax time, even if those proceeds are kept within spouse A's taxable account. Same with spouse A's retirement accounts once distributions are made, even if those distributions are kept separate from joint accounts. Not to mention if Roth conversions are made, using up the couple's advantaged tax space. Can anyone shed light on how this issue is handled if divorce strikes? Can't spouse B claim there was comingling due to these tax effects?
Last edited by ProfLA on Mon Jun 25, 2018 11:01 pm, edited 1 time in total.

H-Town
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Re: Pre nups.

Post by H-Town » Mon Jun 25, 2018 11:00 pm

dknightd wrote:
Mon Jun 25, 2018 6:29 pm
Honestly if I felt I needed a Pre-nup, or my potential spouse did. I'd suggest we remain friends with benefits.
I disagree. The pre-nup is necessary unless you both start out with zero assets and liabilities.

H-Town
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Re: Pre nups.

Post by H-Town » Mon Jun 25, 2018 11:02 pm

ProfLA wrote:
Mon Jun 25, 2018 10:58 pm
randomguy wrote:
Mon Jun 25, 2018 8:43 pm

And this definitely isn't legal advice but if you don't comingle assets (i.e. you keep everything you make before marriage separate and don't add joint contributions), that asset isn't considered martial and doesn't get split in a divorce. Obviously somewhat state specific. And those assets will be considered when things like alimony is calculated.
It seems to me that if spouse A has a taxable account, its dividends and capital gains will have tax implications that affect spouse B at tax time, even if those proceeds are kept within spouse A's taxable account. Same with spouse A's retirement accounts once distributions are made, even if those distributions are kept separate from joint accounts. Not to mention if Roth conversions are made, using up the couple's advantaged tax space. Can anyone shed light on how this issue is handled if divorce strikes? Can't spouse B claim there was comingling due to these tax effects?
Is your state a community property state? If it is, everything is joint after marriage. Everything after marriage will be split right down the middle.

Twood
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Re: Pre nups.

Post by Twood » Mon Jun 25, 2018 11:04 pm

ResearchMed wrote:
Mon Jun 25, 2018 10:53 pm
Right.

The latter, or anything deviating from "each pays for own attorney" *might* be subject to some sort of claim of "I was misled about not getting my own attorney" or such.

Keep in mind that the *only* time any of this will matter is when it will be the worst situation: when a marriage is ending and under unpleasant circumstances.
Otherwise, the pre-nup wouldn't be needed, or wouldn't be critical.
So to protect in case of the extreme/worst case scenario, "do it right", and make sure there are as few "openings" for dispute later.

Best case, the "results" from the extra attorney fees won't ever actually be needed :happy

RM
One lawyer does the initial drafting of the prenup. I would recommend that person be a mediator instead of someone who specializes in litigation, for the difference in perspective/attitude.

ProfLA
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Re: Pre nups.

Post by ProfLA » Mon Jun 25, 2018 11:10 pm

thangngo wrote:
Mon Jun 25, 2018 11:02 pm

Is your state a community property state? If it is, everything is joint after marriage. Everything after marriage will be split right down the middle.
Yes, California. I'm not sure I understand fully what you mean when you say "everything is joint after marriage". If you mean everything, including assets that each person brought to the marriage, I have it on pretty good authority that is not the case. If you mean everything acquired after the date of marriage is joint, that jives with my understanding. The question is does everything acquired after the date of marriage include any gains (dividends and stock appreciation) in separate accounts? What about gains in IRA's, 401K's even if they were kept completely separate?

If the answer to the last question is those gains become community property, my next question (and I apologize for hijacking this thread but hopefully this is of interest to OP, as this seems to lead naturally from the questions OP posed) is: Can a prenup specify that those gains remain the separate property of the spouse who owns the account, in the event of divorce.

H-Town
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Re: Pre nups.

Post by H-Town » Mon Jun 25, 2018 11:28 pm

ProfLA wrote:
Mon Jun 25, 2018 11:10 pm
thangngo wrote:
Mon Jun 25, 2018 11:02 pm

Is your state a community property state? If it is, everything is joint after marriage. Everything after marriage will be split right down the middle.
Yes, California. I'm not sure I understand fully what you mean when you say "everything is joint after marriage". If you mean everything, including assets that each person brought to the marriage, I have it on pretty good authority that is not the case. If you mean everything acquired after the date of marriage is joint, that jives with my understanding. The question is does everything acquired after the date of marriage include any gains (dividends and stock appreciation) in separate accounts? What about gains in IRA's, 401K's even if they were kept completely separate?

If the answer to the last question is those gains become community property, my next question (and I apologize for hijacking this thread but hopefully this is of interest to OP, as this seems to lead naturally from the questions OP posed) is: Can a prenup specify that those gains remain the separate property of the spouse who owns the account, in the event of divorce.
I mean everything acquired after marriage would be divided equally in a community property state in the absent of a pre-nup. That includes gain/loss on assets acquired pre-marriage, gains in IRA's, 401k's.

To answer your second question: you will need legal advice because each state has different laws on what can or can't be included in the pre-nup. Since the gains remains on a separate account of the spouse who owns the account pre-marriage, it seems fair that the gains would belong to that spouse. This is why a pre-nup is necessary.

ProfLA
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Re: Pre nups.

Post by ProfLA » Mon Jun 25, 2018 11:32 pm

thangngo wrote:
Mon Jun 25, 2018 11:28 pm

I mean everything acquired after marriage would be divided equally in a community property state in the absent of a pre-nup. That includes gain/loss on assets acquired pre-marriage, gains in IRA's, 401k's.

To answer your second question: you will need legal advice because each state has different laws on what can or can't be included in the pre-nup. Since the gains remains on a separate account of the spouse who owns the account pre-marriage, it seems fair that the gains would belong to that spouse. This is why a pre-nup is necessary.
Great information, thanks thangngo.

VegasBH
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Re: Pre nups.

Post by VegasBH » Tue Jun 26, 2018 6:10 am



I was researching this question a few weeks ago it Appears very tricky to protect 401(k) and 403B accounts using a prenup because certain spousal rights are built into those accounts I can’t find the in-depth pages that I read so you’ll need to do your own research but here’s a little snippet to get you started. https://www.investopedia.com/ask/answer ... p-401k.asp

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Re: Pre nups.

Post by Call_Me_Op » Tue Jun 26, 2018 7:03 am

thangngo wrote:
Mon Jun 25, 2018 11:00 pm
dknightd wrote:
Mon Jun 25, 2018 6:29 pm
Honestly if I felt I needed a Pre-nup, or my potential spouse did. I'd suggest we remain friends with benefits.
I disagree. The pre-nup is necessary unless you both start out with zero assets and liabilities.
May well be true. But every time I have broached the topic with a prospective spouse, it has resulted in tears and/or anger..
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

Luckywon
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Re: Pre nups.

Post by Luckywon » Tue Jun 26, 2018 7:26 am

Call_Me_Op wrote:
Tue Jun 26, 2018 7:03 am
thangngo wrote:
Mon Jun 25, 2018 11:00 pm
dknightd wrote:
Mon Jun 25, 2018 6:29 pm
Honestly if I felt I needed a Pre-nup, or my potential spouse did. I'd suggest we remain friends with benefits.
I disagree. The pre-nup is necessary unless you both start out with zero assets and liabilities.
May well be true. But every time I have broached the topic with a prospective spouse, it has resulted in tears and/or anger..
I'm not trying to be snarky but some people may consider that if their prospective spouse was unable to have that conversation without tears and /or anger, or refused to sign one, that they are better off not marrying that person, and therefore though unpleasant, it was still a useful conversation to have. Not right or wrong, just a point of view.

SQRT
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Re: Pre nups.

Post by SQRT » Tue Jun 26, 2018 7:41 am

thangngo wrote:
Mon Jun 25, 2018 11:00 pm
dknightd wrote:
Mon Jun 25, 2018 6:29 pm
Honestly if I felt I needed a Pre-nup, or my potential spouse did. I'd suggest we remain friends with benefits.
I disagree. The pre-nup is necessary unless you both start out with zero assets and liabilities.
That was the position I was in after my first marriage/divorce. My second wife had more than I did when we married, especially if you included my alimony liability for #1. Luckily, my career took off and I ended up with way more than expected. No prenup, no problems.

If I were to do it again at this age ([no way! --admin LadyGeek]) I would definately get a prenup.

deltaneutral83
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Re: Pre nups.

Post by deltaneutral83 » Tue Jun 26, 2018 8:49 am

Call_Me_Op wrote:
Tue Jun 26, 2018 7:03 am
May well be true. But every time I have broached the topic with a prospective spouse, it has resulted in tears and/or anger..
Scary stuff. Law requires me to insure my $25k vehicle. Even if you're 30 you don't have to be a BH to have 100k before marriage in your 401k that could grow to $400k 12-15 years down the line (forget other assets for a moment), seems only practical to insure that $300k gain (and a host of other assets) unless your prospective spouse is bringing in similar assets. Another aspect that you cannot predict is mental illness, people lose their faculties through no fault of their own (what if your spouse has a parent or grandparent who had bipolar, you want to roll those dice?). Marriages with kids being brought in with more potential complications, I mean, that's a no brainer for a pre nupt.

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dm200
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Re: Pre nups.

Post by dm200 » Tue Jun 26, 2018 11:20 am

While I agree that each party should have a separate attorney - if both parties are 100% in agreement - might not two attorneys from the same firm tend to reduce costs?

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Re: Pre nups.

Post by Call_Me_Op » Tue Jun 26, 2018 11:43 am

Luckywon wrote:
Tue Jun 26, 2018 7:26 am
Call_Me_Op wrote:
Tue Jun 26, 2018 7:03 am
thangngo wrote:
Mon Jun 25, 2018 11:00 pm
dknightd wrote:
Mon Jun 25, 2018 6:29 pm
Honestly if I felt I needed a Pre-nup, or my potential spouse did. I'd suggest we remain friends with benefits.
I disagree. The pre-nup is necessary unless you both start out with zero assets and liabilities.
May well be true. But every time I have broached the topic with a prospective spouse, it has resulted in tears and/or anger..
I'm not trying to be snarky but some people may consider that if their prospective spouse was unable to have that conversation without tears and /or anger, or refused to sign one, that they are better off not marrying that person, and therefore though unpleasant, it was still a useful conversation to have. Not right or wrong, just a point of view.
Indeed - and a point of view that I both share and acted on. :)
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

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HomerJ
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Re: Pre nups.

Post by HomerJ » Tue Jun 26, 2018 11:55 am

Luckywon wrote:
Tue Jun 26, 2018 7:26 am
Call_Me_Op wrote:
Tue Jun 26, 2018 7:03 am
thangngo wrote:
Mon Jun 25, 2018 11:00 pm
dknightd wrote:
Mon Jun 25, 2018 6:29 pm
Honestly if I felt I needed a Pre-nup, or my potential spouse did. I'd suggest we remain friends with benefits.
I disagree. The pre-nup is necessary unless you both start out with zero assets and liabilities.
May well be true. But every time I have broached the topic with a prospective spouse, it has resulted in tears and/or anger..
I'm not trying to be snarky but some people may consider that if their prospective spouse was unable to have that conversation without tears and /or anger, or refused to sign one, that they are better off not marrying that person, and therefore though unpleasant, it was still a useful conversation to have. Not right or wrong, just a point of view.
One needs to point out that the presumption of a marriage ending goes both ways.

You ask for a prenup.

Potenial spouse says "That means you're worried we're going to divorce someday!"

You say "The fact that you won't sign a prenup means YOU think we're going to divorce someday. If you were sure about us, you'd sign happily."

Because if there's no divorce, the prenup doesn't matter.

(Of course never ever use the exact words in that hypothetical conversation above. But the point is correct) :)

For the record, I signed a prenup with my wife 20 years ago, because she had kids and assets from a previous marriage. I have no idea where that document is, or what it would possibly pertain to, since we've accumulated 10x as many assets together. Hopefully, it will never come up. :)
The J stands for Jay

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dm200
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Re: Pre nups.

Post by dm200 » Tue Jun 26, 2018 12:51 pm


deltaneutral83
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Re: Pre nups.

Post by deltaneutral83 » Tue Jun 26, 2018 1:15 pm

dm200 wrote:
Tue Jun 26, 2018 11:20 am
While I agree that each party should have a separate attorney - if both parties are 100% in agreement - might not two attorneys from the same firm tend to reduce costs?
Having the same attorney can compromise the integrity of the document and gives the lesser net worth spouse the opportunity to challenge the validity of the document in court. Separate checks/separate attorneys is how I've seen it. I wouldn't even use separate attorneys at the same firm.

chevca
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Re: Pre nups.

Post by chevca » Tue Jun 26, 2018 1:21 pm

deltaneutral83 wrote:
Tue Jun 26, 2018 8:49 am
Scary stuff. Law requires me to insure my $25k vehicle. Even if you're 30 you don't have to be a BH to have 100k before marriage in your 401k that could grow to $400k 12-15 years down the line (forget other assets for a moment), seems only practical to insure that $300k gain (and a host of other assets) unless your prospective spouse is bringing in similar assets. Another aspect that you cannot predict is mental illness, people lose their faculties through no fault of their own (what if your spouse has a parent or grandparent who had bipolar, you want to roll those dice?). Marriages with kids being brought in with more potential complications, I mean, that's a no brainer for a pre nupt.
Except that's not how it works. You don't insure all future gains and assets with a prenup. In your example, you could protect the $100k had prior to marriage. The $300k and assets acquired during marriage are likely to be split 50/50.

And, good luck getting something in there about potential future mental illness... 'if my spouse goes looney, I get all my stuff when I split'... um...

These threads are always fun, aren't they? :D

mac808
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Re: Pre nups.

Post by mac808 » Tue Jun 26, 2018 1:27 pm

chevca wrote:
Tue Jun 26, 2018 1:21 pm
deltaneutral83 wrote:
Tue Jun 26, 2018 8:49 am
Scary stuff. Law requires me to insure my $25k vehicle. Even if you're 30 you don't have to be a BH to have 100k before marriage in your 401k that could grow to $400k 12-15 years down the line (forget other assets for a moment), seems only practical to insure that $300k gain (and a host of other assets) unless your prospective spouse is bringing in similar assets. Another aspect that you cannot predict is mental illness, people lose their faculties through no fault of their own (what if your spouse has a parent or grandparent who had bipolar, you want to roll those dice?). Marriages with kids being brought in with more potential complications, I mean, that's a no brainer for a pre nupt.
Except that's not how it works. You don't insure all future gains and assets with a prenup. In your example, you could protect the $100k had prior to marriage. The $300k and assets acquired during marriage are likely to be split 50/50.

And, good luck getting something in there about potential future mental illness... 'if my spouse goes looney, I get all my stuff when I split'... um...

These threads are always fun, aren't they? :D
What! That is exactly how it works. Pre-nups protect assets earned or acquired during the marriage, as well as pre-existing assets that grow in value during the marriage. One of the most common pre-nups I read about is "house and 401k" where all existing value and future appreciation of these two assets, brought into the marriage by one of the partners, is protected.

OP - as you can see, there is widespread confusion online about how these work, even among very smart and well educated people. Consult a lawyer, it's money well spent.
Last edited by mac808 on Tue Jun 26, 2018 1:32 pm, edited 4 times in total.

deltaneutral83
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Re: Pre nups.

Post by deltaneutral83 » Tue Jun 26, 2018 1:30 pm

chevca wrote:
Tue Jun 26, 2018 1:21 pm
deltaneutral83 wrote:
Tue Jun 26, 2018 8:49 am
Scary stuff. Law requires me to insure my $25k vehicle. Even if you're 30 you don't have to be a BH to have 100k before marriage in your 401k that could grow to $400k 12-15 years down the line (forget other assets for a moment), seems only practical to insure that $300k gain (and a host of other assets) unless your prospective spouse is bringing in similar assets. Another aspect that you cannot predict is mental illness, people lose their faculties through no fault of their own (what if your spouse has a parent or grandparent who had bipolar, you want to roll those dice?). Marriages with kids being brought in with more potential complications, I mean, that's a no brainer for a pre nupt.
Except that's not how it works. You don't insure all future gains and assets with a prenup. In your example, you could protect the $100k had prior to marriage. The $300k and assets acquired during marriage are likely to be split 50/50.

And, good luck getting something in there about potential future mental illness... 'if my spouse goes looney, I get all my stuff when I split'... um...

These threads are always fun, aren't they? :D
Money is fungible so I'm sure that most any scenario numbers wise could be worked out into the document from an attorney, whether someone(s) signs is different obviously. This is why it ultimately doesn't matter monetarily that both parties have their own attorney and pay for their own attorney separately but matters significantly in terms of the agreement ever being challenged. Also, you misunderstood my comment about mental issues. I wasn't stating that it's an "if and when" conditional on this specific issue, I was implying that I would create a prenumpt in general to protect myself against that which I have no control, which is a host of factors, especially since it's such a small cost that you can customize it to the extent your attorney thinks will hold up in court.

mptfan
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Re: Pre nups.

Post by mptfan » Tue Jun 26, 2018 1:34 pm

Luckywon wrote:
Tue Jun 26, 2018 7:26 am
I'm not trying to be snarky but some people may consider that if their prospective spouse was unable to have that conversation without tears and /or anger, or refused to sign one, that they are better off not marrying that person, and therefore though unpleasant, it was still a useful conversation to have. Not right or wrong, just a point of view.
I agree with that view.

chevca
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Re: Pre nups.

Post by chevca » Tue Jun 26, 2018 1:35 pm

mac808 wrote:
Tue Jun 26, 2018 1:27 pm
chevca wrote:
Tue Jun 26, 2018 1:21 pm
deltaneutral83 wrote:
Tue Jun 26, 2018 8:49 am
Scary stuff. Law requires me to insure my $25k vehicle. Even if you're 30 you don't have to be a BH to have 100k before marriage in your 401k that could grow to $400k 12-15 years down the line (forget other assets for a moment), seems only practical to insure that $300k gain (and a host of other assets) unless your prospective spouse is bringing in similar assets. Another aspect that you cannot predict is mental illness, people lose their faculties through no fault of their own (what if your spouse has a parent or grandparent who had bipolar, you want to roll those dice?). Marriages with kids being brought in with more potential complications, I mean, that's a no brainer for a pre nupt.
Except that's not how it works. You don't insure all future gains and assets with a prenup. In your example, you could protect the $100k had prior to marriage. The $300k and assets acquired during marriage are likely to be split 50/50.

And, good luck getting something in there about potential future mental illness... 'if my spouse goes looney, I get all my stuff when I split'... um...

These threads are always fun, aren't they? :D
What! That is exactly how it works. Pre-nups protect assets earned or acquired during the marriage, as well as pre-existing assets that grow in value during the marriage. One of the most common pre-nups I read about is "house and 401k" where all existing value and future appreciation of these two assets, brought into the marriage by one of the partners, is protected.

OP - as you can see, there is widespread confusion online about how these work, even among very smart and well educated people. Consult a lawyer, it's money well spent.
I don't know about "exactly". I'm sure they can be drawn up that way. But, good luck getting the other person to sign and agree to it. Especially if they have their own lawyer. I know I wouldn't.

deltaneutral83
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Re: Pre nups.

Post by deltaneutral83 » Tue Jun 26, 2018 2:25 pm

chevca wrote:
Tue Jun 26, 2018 1:35 pm
I don't know about "exactly". I'm sure they can be drawn up that way. But, good luck getting the other person to sign and agree to it. Especially if they have their own lawyer.
That's mostly the point of a prenuptial agreement, to customize it to the way you see fit following the counsel of your attorney who should provide expertise on how likely your conditions are to hold up in court should the time come. And of course as you mentioned, the little detail of the lesser net worth spouse agreeing to sign it.
I know I wouldn't.

Right, just as someone with say, $700k combined in a home and 401k would likely say the same thing (in the sense of signing the marriage certificate) if they are agreeing to tie the knot with someone who's broke or even negative net worth with student loans (this is simply one of many plausible scenarios where one might find it prudent) . For context, if one has $300k in a 401k, that could easily quadruple in 15 years @ 9-10% CAGR. Switching gears, as far as inheritance and things of that nature, plenty of folks who pay for their child's first home (or large down payment, etc.) who stipulate to have a prenupt when the time comes. They aren't interested in their future in law being entitled to half the gain of a home they paid for 1-15 years later.

H-Town
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Re: Pre nups.

Post by H-Town » Tue Jun 26, 2018 2:55 pm

mac808 wrote:
Tue Jun 26, 2018 1:27 pm
chevca wrote:
Tue Jun 26, 2018 1:21 pm
deltaneutral83 wrote:
Tue Jun 26, 2018 8:49 am
Scary stuff. Law requires me to insure my $25k vehicle. Even if you're 30 you don't have to be a BH to have 100k before marriage in your 401k that could grow to $400k 12-15 years down the line (forget other assets for a moment), seems only practical to insure that $300k gain (and a host of other assets) unless your prospective spouse is bringing in similar assets. Another aspect that you cannot predict is mental illness, people lose their faculties through no fault of their own (what if your spouse has a parent or grandparent who had bipolar, you want to roll those dice?). Marriages with kids being brought in with more potential complications, I mean, that's a no brainer for a pre nupt.
Except that's not how it works. You don't insure all future gains and assets with a prenup. In your example, you could protect the $100k had prior to marriage. The $300k and assets acquired during marriage are likely to be split 50/50.

And, good luck getting something in there about potential future mental illness... 'if my spouse goes looney, I get all my stuff when I split'... um...

These threads are always fun, aren't they? :D
What! That is exactly how it works. Pre-nups protect assets earned or acquired during the marriage, as well as pre-existing assets that grow in value during the marriage. One of the most common pre-nups I read about is "house and 401k" where all existing value and future appreciation of these two assets, brought into the marriage by one of the partners, is protected.

OP - as you can see, there is widespread confusion online about how these work, even among very smart and well educated people. Consult a lawyer, it's money well spent.
Question 1: Do you currently have a prenup set up that way?
Question 2: Was it done by your and your spouse legal counsel?
Question 3: Did they believe firmly that the prenup will be respected in the court?

In community property state, assets acquired pr income earned after marriage will be shared equally. I'd be surprised if there is any court case that would respect such pre-nup. It's unfair in community property states.

gretah
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Re: Pre nups.

Post by gretah » Wed Jun 27, 2018 12:10 am

Putting assets in a Trust before marriage could be a useful tool.

There are many types of Trusts so it is important to consult an attorney and financial planner to choose the right type.

Buying Life Insurance with a retirement plan clause could be another way to secure finances for long term care.

If I were in your shoes, I would consult an attorney who understands Trusts and elder law. And I would ask her to work as a team with my financial planner.


One situation where I saw a prenup go wrong -
Couple married in their 60s. Both had adult children and were widowed. Each brought a house into the marriage (no mortgages). Each left her/his house to the adult children in the prenup and wills. Each got lifetime use of the other's house but no ownership.

Husband developed dementia. They sold her house to pay for his medical bills. He died and she was left with no assets to pay for a nursing home. And she was exhausted with caregiving.


Suffice to say - these situations are very tricky. Get the best advisors regardless of cost.

mouses
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Re: Pre nups.

Post by mouses » Wed Jun 27, 2018 3:13 am

camden wrote:
Mon Jun 25, 2018 6:42 pm
dknightd wrote:
Mon Jun 25, 2018 6:29 pm
Honestly if I felt I needed a Pre-nup, or my potential spouse did. I'd suggest we remain friends with benefits.
Spoken like one who has never experienced a divorce in a community property state. No one ever goes into a marriage thinking that it won't last, but things happen.....
Yes, I was going to say, there writes a young person with not a lot of life experience.

Miakis
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Re: Pre nups.

Post by Miakis » Wed Jun 27, 2018 8:53 am

Prenups are great. They provide an excellent vehicle to have a very concrete discussion about financial expectations in the marriage.

You find out a lot about your spouse during the conversation:

1. Are they mature enough to have the discussion?
2. Are they reasonable?
3. Do they expect to be a stay at home spouse?
4. What are their expectations about childcare?
5. What assets do they view as being 100% theirs?
6. Are they willing to waive alimony? If not, then why? Do the life choices that require alimony fit your expectations of your partner?
7. Would you keep the family home or sell it in the case of divorce?
8. Will you co-mingle inheritances or keep them separate?

It's better to talk about these things prior to marriage, and while you may touch on them to a certain extent without a prenup, a prenup puts a narrow focus on the issues and really drills into them.

My prenup is 16 years old, and it's very dated, given that our accumulation of joint wealth far exceeds our premarital assets. It still serves as a reminder of how we meant for things to be, and I assume that we would use it as a guideline to try to come up with a fair division of joint assets.

All that aside - Whether or not to get a prenup wasn't the OP's question. So to the OP: We were advised that in order to avoid the possibility of one spouse challenging the prenup during a divorce, both spouses needed their own independent attorney. You can move forward without two attorneys, and a challenge isn't guaranteed to succeed. My understanding is that a court would review the prenup and determine if it's fair, and if it is, they likely would allow it to stand. And obviously you've gotten deep into a contentious divorce if you're in court fighting over the prenup.

truenorth418
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Re: Pre nups.

Post by truenorth418 » Wed Jun 27, 2018 4:15 pm

Miakis wrote:
Wed Jun 27, 2018 8:53 am
Prenups are great. They provide an excellent vehicle to have a very concrete discussion about financial expectations in the marriage.

It's better to talk about these things prior to marriage, and while you may touch on them to a certain extent without a prenup, a prenup puts a narrow focus on the issues and really drills into them.
Miakis I think this is an excellent perspective.

+1

randomguy
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Re: Pre nups.

Post by randomguy » Wed Jun 27, 2018 7:51 pm

thangngo wrote:
Tue Jun 26, 2018 2:55 pm


Question 1: Do you currently have a prenup set up that way?
Question 2: Was it done by your and your spouse legal counsel?
Question 3: Did they believe firmly that the prenup will be respected in the court?

In community property state, assets acquired pr income earned after marriage will be shared equally. I'd be surprised if there is any court case that would respect such pre-nup. It's unfair in community property states.
Income from separate property is not considered community property during a marriage. First google hit for me. https://www.cadivorce.com/california-di ... -property/

The complexity comes from commingling of assets either intentional or unintentional. What happens when you pay half of a mortgage with joint income. Or make 100k of 401(k) contributions to go along with the 100k already there. Or the spouse works at a business at below market rates. And there are cases where fairness doctorines kick in (i.e. the state doesn't want to support anyone).

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JaneyLH
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Re: Pre nups.

Post by JaneyLH » Thu Jun 28, 2018 11:24 am

deltaneutral83 wrote:
Tue Jun 26, 2018 1:15 pm
dm200 wrote:
Tue Jun 26, 2018 11:20 am
While I agree that each party should have a separate attorney - if both parties are 100% in agreement - might not two attorneys from the same firm tend to reduce costs?
Having the same attorney can compromise the integrity of the document and gives the lesser net worth spouse the opportunity to challenge the validity of the document in court. Separate checks/separate attorneys is how I've seen it. I wouldn't even use separate attorneys at the same firm.
Y’all would probably hate it that my fiancé and I wrote our own pre-nup. Second marriage for both of us with eyes wide open. No drama or disagreement. Very simple, we each keep what we brought into the marriage. We attached copies of all our investment account statements and agreed to keep it all separate. 15 years later, all is fine... probably in some degree because we see pretty much eye to eye about finances...

I was confident because I did my own divorce and kept all my investment/retirement accounts and company stock options. (Did pay an attorney for 1 hour of work reviewing my draft property settlement — no changes or edits were recommended.) Turned out to be a costly concession by my ex, but he was the one who found a new honey and wanted out. Plus he agreed to a 60-40 split of community property in my favor. I figure he got off well as I had earned 70% of our income over 20+ years.

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VictoriaF
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Re: Pre nups.

Post by VictoriaF » Thu Jun 28, 2018 11:34 am

HomerJ wrote:
Tue Jun 26, 2018 11:55 am
Luckywon wrote:
Tue Jun 26, 2018 7:26 am
Call_Me_Op wrote:
Tue Jun 26, 2018 7:03 am
thangngo wrote:
Mon Jun 25, 2018 11:00 pm
dknightd wrote:
Mon Jun 25, 2018 6:29 pm
Honestly if I felt I needed a Pre-nup, or my potential spouse did. I'd suggest we remain friends with benefits.
I disagree. The pre-nup is necessary unless you both start out with zero assets and liabilities.
May well be true. But every time I have broached the topic with a prospective spouse, it has resulted in tears and/or anger..
I'm not trying to be snarky but some people may consider that if their prospective spouse was unable to have that conversation without tears and /or anger, or refused to sign one, that they are better off not marrying that person, and therefore though unpleasant, it was still a useful conversation to have. Not right or wrong, just a point of view.
One needs to point out that the presumption of a marriage ending goes both ways.

You ask for a prenup.

Potenial spouse says "That means you're worried we're going to divorce someday!"

You say "The fact that you won't sign a prenup means YOU think we're going to divorce someday. If you were sure about us, you'd sign happily."

Because if there's no divorce, the prenup doesn't matter.

(Of course never ever use the exact words in that hypothetical conversation above. But the point is correct) :)

For the record, I signed a prenup with my wife 20 years ago, because she had kids and assets from a previous marriage. I have no idea where that document is, or what it would possibly pertain to, since we've accumulated 10x as many assets together. Hopefully, it will never come up. :)
What's wrong with using your exact words? Is your assumption that the other party can't handle a straight discussion?

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

ResearchMed
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Re: Pre nups.

Post by ResearchMed » Thu Jun 28, 2018 11:41 am

JaneyLH wrote:
Thu Jun 28, 2018 11:24 am
deltaneutral83 wrote:
Tue Jun 26, 2018 1:15 pm
dm200 wrote:
Tue Jun 26, 2018 11:20 am
While I agree that each party should have a separate attorney - if both parties are 100% in agreement - might not two attorneys from the same firm tend to reduce costs?
Having the same attorney can compromise the integrity of the document and gives the lesser net worth spouse the opportunity to challenge the validity of the document in court. Separate checks/separate attorneys is how I've seen it. I wouldn't even use separate attorneys at the same firm.
Y’all would probably hate it that my fiancé and I wrote our own pre-nup. Second marriage for both of us with eyes wide open. No drama or disagreement. Very simple, we each keep what we brought into the marriage. We attached copies of all our investment account statements and agreed to keep it all separate. 15 years later, all is fine... probably in some degree because we see pretty much eye to eye about finances...

I was confident because I did my own divorce and kept all my investment/retirement accounts and company stock options. (Did pay an attorney for 1 hour of work reviewing my draft property settlement — no changes or edits were recommended.) Turned out to be a costly concession by my ex, but he was the one who found a new honey and wanted out. Plus he agreed to a 60-40 split of community property in my favor. I figure he got off well as I had earned 70% of our income over 20+ years.
It's not up to "us" to "hate" (or not) what you or both of you decided to do.

However, the real time to "be satisfied" with a pre-nup is IF there is the unfortunate occurrence of a contested divorce, and then it "works as planned".

For couples that separate/divorce amicably, the "real power" of a pre-nup won't really be known.

Until there is such a time when there is a lot of hurt feelings and anger, and all sorts of other intense feelings, AND there is a challenge to the pre-nup, "how good the pre-nup is" doesn't necessarily make sense.

RM
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HomerJ
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Re: Pre nups.

Post by HomerJ » Thu Jun 28, 2018 12:14 pm

VictoriaF wrote:
Thu Jun 28, 2018 11:34 am
HomerJ wrote:
Tue Jun 26, 2018 11:55 am
Luckywon wrote:
Tue Jun 26, 2018 7:26 am
Call_Me_Op wrote:
Tue Jun 26, 2018 7:03 am
thangngo wrote:
Mon Jun 25, 2018 11:00 pm


I disagree. The pre-nup is necessary unless you both start out with zero assets and liabilities.
May well be true. But every time I have broached the topic with a prospective spouse, it has resulted in tears and/or anger..
I'm not trying to be snarky but some people may consider that if their prospective spouse was unable to have that conversation without tears and /or anger, or refused to sign one, that they are better off not marrying that person, and therefore though unpleasant, it was still a useful conversation to have. Not right or wrong, just a point of view.
One needs to point out that the presumption of a marriage ending goes both ways.

You ask for a prenup.

Potenial spouse says "That means you're worried we're going to divorce someday!"

You say "The fact that you won't sign a prenup means YOU think we're going to divorce someday. If you were sure about us, you'd sign happily."

Because if there's no divorce, the prenup doesn't matter.

(Of course never ever use the exact words in that hypothetical conversation above. But the point is correct) :)

For the record, I signed a prenup with my wife 20 years ago, because she had kids and assets from a previous marriage. I have no idea where that document is, or what it would possibly pertain to, since we've accumulated 10x as many assets together. Hopefully, it will never come up. :)
What's wrong with using your exact words? Is your assumption that the other party can't handle a straight discussion?

Victoria
Confrontational. There's probably a much better way to respond to "That means you're worried we're going to divorce someday!" than throwing it back in his or her face "No, YOU think that!"
The J stands for Jay

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