[When my children marry, should they sign a pre-nuptial agreement?]

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GoldenFinch
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Re: Daddy I'm engaged! Pre-nup?

Post by GoldenFinch » Thu Oct 03, 2019 4:34 pm

Unless it’s a second marriage or there are significant assets I see no reason for a prenup.

Attempting to control adult children with ideas about how money will be distributed in the future can really ruin relationships. You have to think about what is more important - the relationship you have with your child’s spouse (potentially the mother or father of your grandchildren) or money. The truth is you have very little control over what happens to your money after you’re gone. I would have been creeped out if I was engaged to a guy whose parents were thinking this way. I would consider it a zero confidence vote in their son’s judgement and our marriage and be nervous about what was to come. I realize you are well meaning, and are trying to protect your children, but it’s time to say your job is done, you did it well, and send them off to make their own way in the world for better or for worse (hopefully for better).

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FIREchief
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Re: Daddy I'm engaged! Pre-nup?

Post by FIREchief » Thu Oct 03, 2019 4:46 pm

Lazareth wrote:
Thu Oct 03, 2019 1:11 pm
Someday our kids will inherit what we have and I'd like to help them now. I don't expect it will be easy.
I'm not certain that the OP was entirely clear. The bolded text above suggests that the OP would like to share some of what would otherwise become inheritance with the kids now. That's a different question than what has been addressed by many posts within this thread. Maybe he/she wants to, for example, carve out $500K of assets to share with the kids now, and wants to ensure that half (or more) of it doesn't disappear due to divorce. I would envision two possible approaches:
a) gift it to an irrevocable trust for benefit of the children, and have the trust drafted and controlled in such a manner that would protect the assets from loss due to divorce (I'm referring to a trust created immediately, not one funded upon death)
b) do as another poster suggested in "loaning" it to the children but gifting back the annual interest (the other post offered the example of helping with a house, which might make the most sense)

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louiethelilac
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Re: Daddy I'm engaged! Pre-nup?

Post by louiethelilac » Thu Oct 03, 2019 4:47 pm

Lazareth wrote:
Thu Oct 03, 2019 1:11 pm
We're not hearing wedding bells yet but our son and daughter are both launching themselves... one in the military and the other is just finishing up college.

I would appreciate some input on the unfamiliar (to me) subject of pre-nuptial agreements for children who get engaged. Someday our kids will inherit what we have and I'd like to help them now. I don't expect it will be easy.

We are financially secure but not rich by most standards. I'm age 65, married, both at/near retirement, we're both in good health, we self-manage our total $1.3 million retirement accounts and joint brokerage. We paid off the mortgage on our modest $300K home. No family business, no pensions, no expected inheritances, pretty simple.

I read recently that parents should consider having their engaged kids sign a prenup and should have this discussion before they are even in a serious relationship. Any thoughts or experience on the matter? Thanks so much!
You can probably wait until the prospective spouse asks for your blessing

Grt2bOutdoors
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Re: Daddy I'm engaged! Pre-nup?

Post by Grt2bOutdoors » Thu Oct 03, 2019 5:00 pm

miamivice wrote:
Thu Oct 03, 2019 2:20 pm
protagonist wrote:
Thu Oct 03, 2019 2:16 pm
Lazareth wrote:
Thu Oct 03, 2019 1:11 pm


I read recently that parents should consider having their engaged kids sign a prenup and should have this discussion before they are even in a serious relationship. Any thoughts or experience on the matter? Thanks so much!
I believe a prenup is an excellent idea, especially for the higher potential earner of a couple (not so much so for the other one).
That said, how can parents "have" their engaged kids sign a prenup. Isn't that ultimately their decision? All you can do is advise.
The objection to a prenup that protects a normal higher earner (not a billionjaire) is that, especially when kids come into play, often the higher earner relies on having a strong spouse at home to enable those earnings.

Should my wife and I ever divorce, I'd love to keep 2/3 of our assets since I make 2/3 of the money. Out of fariness, she has made many non-financial sacrifices in order to enable my higher earnings, and it wouldn't be fair. Fortuantely, we haven't divorced so far so I don't spend much time thinking about it.
Even if you decided not to play fair, that is what the courts are for. Usually, the judge will decide what is equitable distribution, not you.
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junior
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Re: Daddy I'm engaged! Pre-nup?

Post by junior » Thu Oct 03, 2019 5:44 pm

Lazareth wrote:
Thu Oct 03, 2019 1:11 pm

I read recently that parents should consider having their engaged kids sign a prenup and should have this discussion before they are even in a serious relationship. Any thoughts or experience on the matter? Thanks so much!
Do you have a prenup in your marriage? I'm guessing not. To suggest it would be hypocritical.

THY4373
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Re: Daddy I'm engaged! Pre-nup?

Post by THY4373 » Thu Oct 03, 2019 5:54 pm

junior wrote:
Thu Oct 03, 2019 5:44 pm
Lazareth wrote:
Thu Oct 03, 2019 1:11 pm

I read recently that parents should consider having their engaged kids sign a prenup and should have this discussion before they are even in a serious relationship. Any thoughts or experience on the matter? Thanks so much!
Do you have a prenup in your marriage? I'm guessing not. To suggest it would be hypocritical.
Not necessarily views can change over time based on additional knowledge and experience. It is not like op can go back in time and change what he/she did when they got married.

junior
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Re: Daddy I'm engaged! Pre-nup?

Post by junior » Thu Oct 03, 2019 6:03 pm

THY4373 wrote:
Thu Oct 03, 2019 5:54 pm
junior wrote:
Thu Oct 03, 2019 5:44 pm
Lazareth wrote:
Thu Oct 03, 2019 1:11 pm

I read recently that parents should consider having their engaged kids sign a prenup and should have this discussion before they are even in a serious relationship. Any thoughts or experience on the matter? Thanks so much!
Do you have a prenup in your marriage? I'm guessing not. To suggest it would be hypocritical.
Not necessarily views can change over time based on additional knowledge and experience. It is not like op can go back in time and change what he/she did when they got married.
OP can still get a post-nuptual agreement today. :D

6Pack
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Re: Daddy I'm engaged! Pre-nup?

Post by 6Pack » Thu Oct 03, 2019 6:07 pm

I’m a lawyer and I find pre-nups and post-nups sort of self defeating. You are basically saying “I want to get married, but eventually it won’t work out, so here’s the split...”

I couldn’t imagine marrying someone and asking for a pre-nup. In fact, my wife once asked why I never asked her for one even though I have some assets. I told her that I wouldn’t marry someone unless I had full faith that it would work.

I wouldn’t say anything unless asked for your advice. Also, you can leave your inheritance to anyone you want. Inheritances are exempt from marital property in the event of a divorce as long as your state allows for it and the funds aren’t co-mingled.

michaeljc70
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Re: Daddy I'm engaged! Pre-nup?

Post by michaeljc70 » Thu Oct 03, 2019 6:44 pm

Good advice already given above. There may be a good chance the spouse of your kids makes more than your kids and this could be bad if they get divorced. I think a prenup for young people without a lot of assets is not very common or necessary (contrary to a 2nd marriage with kids). I wouldn't get involved but would maybe make preparations (like a trust mentioned above) if I thought the spouse was likely a loser.

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LilyFleur
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Re: Daddy I'm engaged! Pre-nup?

Post by LilyFleur » Thu Oct 03, 2019 7:02 pm

ohai wrote:
Thu Oct 03, 2019 2:01 pm
OP, you are nowhere near rich enough that your inheritance should trigger pre nup concerns. If your kids become the next Jeff Bezos, then yes, tell them to consider it.
I think it would be kind and respectful not to discount the OP's concerns. OP worked hard for this money and wants to make sure it's not taken from OP's children in a divorce. I respect that. And, half of 1.3 million is a LOT more than a lot of the population will ever inherit. OP's children will receive well above the median inheritance in the United States.
https://www.newretirement.com/retiremen ... -to-heirs/
I agree that it is a vote of non-confidence to bring up a prenup with your children. But I do understand and share OP's concern, just not certain of the best way to help our children protect an inheritance, or if parents even CAN do so successfully. Perhaps just a discussion about co-mingling and documenting properly, just in case. Even that discussion would be difficult, and omg, we really don't want to be alienating a son-in-law or daughter-in-law that might help care for us when we are old, now, do we?

sd323232
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Re: Daddy I'm engaged! Pre-nup?

Post by sd323232 » Thu Oct 03, 2019 7:19 pm

6Pack wrote:
Thu Oct 03, 2019 6:07 pm
I’m a lawyer and I find pre-nups and post-nups sort of self defeating. You are basically saying “I want to get married, but eventually it won’t work out, so here’s the split...”

I couldn’t imagine marrying someone and asking for a pre-nup. In fact, my wife once asked why I never asked her for one even though I have some assets. I told her that I wouldn’t marry someone unless I had full faith that it would work.

I wouldn’t say anything unless asked for your advice. Also, you can leave your inheritance to anyone you want. Inheritances are exempt from marital property in the event of a divorce as long as your state allows for it and the funds aren’t co-mingled.
Do you know anyone who got divorced among your friends or other people that you know? Ask them if prenup is a good idea. Just because you dogged a bullet doesn't mean other people will. Self righteously telling people not to get married if they even consider a prenu is wrong. OP has a legitimate concern, cause a divorce can ruin his kids lifes, financially and spiritually. At least he is trying to protect them from a financial ruin. I think prenup is great idea and there is nothing wrong with it.

EddyB
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Re: Daddy I'm engaged! Pre-nup?

Post by EddyB » Thu Oct 03, 2019 7:29 pm

sd323232 wrote:
Thu Oct 03, 2019 7:19 pm
6Pack wrote:
Thu Oct 03, 2019 6:07 pm
I’m a lawyer and I find pre-nups and post-nups sort of self defeating. You are basically saying “I want to get married, but eventually it won’t work out, so here’s the split...”

I couldn’t imagine marrying someone and asking for a pre-nup. In fact, my wife once asked why I never asked her for one even though I have some assets. I told her that I wouldn’t marry someone unless I had full faith that it would work.

I wouldn’t say anything unless asked for your advice. Also, you can leave your inheritance to anyone you want. Inheritances are exempt from marital property in the event of a divorce as long as your state allows for it and the funds aren’t co-mingled.
Do you know anyone who got divorced among your friends or other people that you know? Ask them if prenup is a good idea. Just because you dogged a bullet doesn't mean other people will. Self righteously telling people not to get married if they even consider a prenu is wrong. OP has a legitimate concern, cause a divorce can ruin his kids lifes, financially and spiritually. At least he is trying to protect them from a financial ruin. I think prenup is great idea and there is nothing wrong with it.
Hard to say anything for sure, given that it’s really a hypothetical, but assuming we are talking about “new” adults, with no substantial assets before the marriage, how do you see a prenup protecting them? What effect do you see it having on (potential) future inherited assets? While the OP may have legitimate concerns, they seem vague, and it’s not at all clear that a prenup addresses them.

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Lazareth
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Re: Daddy I'm engaged! Pre-nup?

Post by Lazareth » Thu Oct 03, 2019 7:33 pm

ChrisLA wrote:
Thu Oct 03, 2019 1:29 pm
If you're concern is protecting your kids' future inheritance from being taken in a divorce I believe in all states those assets are protected, as long as they aren't ever commingled with the spouses'.
Thank you. I am the OP, and the genesis of my post was a law-firm social media post I read recently, it raised the issue that in some states everything is considered community property and therefore everything gets split 50/50 in the event of divorce. It said a pre-nup is a must these days not only to protect a possible inheritance but to protect the saver from the spender/borrower in the event of short-lived marriage. But if the reaction here in this forum is any indication, that concern is not shared so much in financial planning circles.

I certainly would not impose any such requirement on my kids and I am pleased to say that they wouldn't listen to me if I did.
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Lazareth
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Re: Daddy I'm engaged! Pre-nup?

Post by Lazareth » Thu Oct 03, 2019 7:45 pm

Thank you. I am the OP, and the genesis of my post was a law-firm social media post I read recently, it raised the issue that in some states everything is considered community property and therefore everything gets split 50/50 in the event of divorce. It said a pre-nup is a must these days not only to protect a possible inheritance but to protect the saver from the spender/borrower in the event of short-lived marriage. But if the reaction here in this forum is any indication, that concern is not shared so much in financial planning circles.

I certainly would not impose any such requirement on my kids and I am pleased to say that they wouldn't listen to me if I did.
"I want to light the lights of patriotism." - Lech Walesa

EddyB
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Re: Daddy I'm engaged! Pre-nup?

Post by EddyB » Thu Oct 03, 2019 7:48 pm

Lazareth wrote:
Thu Oct 03, 2019 7:45 pm
Thank you. I am the OP, and the genesis of my post was a law-firm social media post I read recently, it raised the issue that in some states everything is considered community property and therefore everything gets split 50/50 in the event of divorce. It said a pre-nup is a must these days not only to protect a possible inheritance but to protect the saver from the spender/borrower in the event of short-lived marriage. But if the reaction here in this forum is any indication, that concern is not shared so much in financial planning circles.

I certainly would not impose any such requirement on my kids and I am pleased to say that they wouldn't listen to me if I did.
Not having seen the law firm social media post to which you refer, I can’t necessarily say it’s wrong, but your characterization of it is not an accurate synopsis of community property law.

ScubaHogg
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Re: Daddy I'm engaged! Pre-nup?

Post by ScubaHogg » Fri Oct 04, 2019 12:13 am

If my goal was to attempt to prevent having a positive relationship with a prospective son-in-law/daughter-in-law I would make sure to suggest that he/she signs a pre-nup.

Otherwise I wouldn't dream of doing that.

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nativenewenglander
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Re: Daddy I'm engaged! Pre-nup?

Post by nativenewenglander » Fri Oct 04, 2019 3:59 am

Lazareth wrote:
Thu Oct 03, 2019 1:11 pm
We're not hearing wedding bells yet but our son and daughter are both launching themselves... one in the military and the other is just finishing up college.

I would appreciate some input on the unfamiliar (to me) subject of pre-nuptial agreements for children who get engaged. Someday our kids will inherit what we have and I'd like to help them now. I don't expect it will be easy.

We are financially secure but not rich by most standards. I'm age 65, married, both at/near retirement, we're both in good health, we self-manage our total $1.3 million retirement accounts and joint brokerage. We paid off the mortgage on our modest $300K home. No family business, no pensions, no expected inheritances, pretty simple.

I read recently that parents should consider having their engaged kids sign a prenup and should have this discussion before they are even in a serious relationship. Any thoughts or experience on the matter? Thanks so much!
You could set up a trust so your future grandchildren get a portion of your assets at let's 25,30 and 35 years old. I'm not a lawyer, so how to set that up is something you'd need to talk to an estate planning attorney to figure out. At any rate that's what my parents did for my brothers kids we have no children. You could suggest to your two children that they take any inheritance received and hold it in an account in their own name. My brother I both did this with our inheritance. Our wives are fine with it as they both benefit from the money. Should we die first they'll get it anyway.

usagi
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Re: Daddy I'm engaged! Pre-nup?

Post by usagi » Fri Oct 04, 2019 5:10 am

I made a present of the following to each of my children when they graduated from college:

https://store.nolo.com/products/marriag ... ment-books

In my opinion your concerns are very justified. My children took it very seriously as they are rapidly accumulating assets without even considering inheritance.

runner540
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Re: Daddy I'm engaged! Pre-nup?

Post by runner540 » Fri Oct 04, 2019 6:26 am

Lazareth wrote:
Thu Oct 03, 2019 7:45 pm
Thank you. I am the OP, and the genesis of my post was a law-firm social media post I read recently, it raised the issue that in some states everything is considered community property and therefore everything gets split 50/50 in the event of divorce. It said a pre-nup is a must these days not only to protect a possible inheritance but to protect the saver from the spender/borrower in the event of short-lived marriage. But if the reaction here in this forum is any indication, that concern is not shared so much in financial planning circles.

I certainly would not impose any such requirement on my kids and I am pleased to say that they wouldn't listen to me if I did.
What would you want your child's spouse to do if your child became disabled or sick? Or if your child stayed home to care for your grandkids? An you really prebake all the "fair" outcomes?

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galawdawg
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Re: Daddy I'm engaged! Pre-nup?

Post by galawdawg » Fri Oct 04, 2019 7:55 am

Lazareth wrote:
Thu Oct 03, 2019 7:45 pm
Thank you. I am the OP, and the genesis of my post was a law-firm social media post I read recently, it raised the issue that in some states everything is considered community property and therefore everything gets split 50/50 in the event of divorce. It said a pre-nup is a must these days not only to protect a possible inheritance but to protect the saver from the spender/borrower in the event of short-lived marriage.
In other words, you read an advertisement (disguised as an informative article) from a law firm that handles that type of work saying that a prenup is a "must"....

If you read a social media post from a local car dealer explaining that in this day and age of climate concerns, it is critical to have your car treated with dealer-applied undercoating, rust-proofing, and paint and fabric protection, would you seriously consider taking your car to the dealer for those services?

it was an advertisement designed to drive business to that law firm...ignore it. Based upon what you have shared, I can see no reason whatsoever from a legal perspective for a prenuptial agreement. IANYL.

Hulu
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Re: Daddy I'm engaged! Pre-nup?

Post by Hulu » Fri Oct 04, 2019 8:15 am

I’d figure out what your concerns are first. If you’re concerned about their financial savvy that’s one thing. If you’re concerned at how they’d spend your money another. If you’re concerned that they’ll pick terrible partners another. Or get divorced another. Seeing their ages it seems all the possible fears are out of your control. So the best thing to do is to model the behavior and wish them well. You’re mostly done parenting...enjoy the good things they’ve learned and accept the bad...you’ll enjoy the experience much more.

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Re: Daddy I'm engaged! Pre-nup?

Post by Hulu » Fri Oct 04, 2019 8:27 am

And on a practical note it’s probably very unappealing to consider a spouse who’s parents are involved in the relationship. It’s hard enough dating one person let alone their parents. Don’t discount that unboundaried parent behavior may contribute to a good potential partner picking less “involved” in-laws. Or at a minimum your involvement may convey to your children that you don’t trust them. Which could create tension, resent and a lack of trust in themselves.

Hopefully your adult children learned to protect themselves, think critically, not overthink and surround themselves with good people.

If they ask you I’d encourage and support them. And have THEM do the research...like adults haha.

It’s great that you care about your adult children. And are in a good position to let them live, fail, learn and love

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HomerJ
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Re: Daddy I'm engaged! Pre-nup?

Post by HomerJ » Fri Oct 04, 2019 8:59 am

6Pack wrote:
Thu Oct 03, 2019 6:07 pm
I’m a lawyer and I find pre-nups and post-nups sort of self defeating. You are basically saying “I want to get married, but eventually it won’t work out, so here’s the split...”

I couldn’t imagine marrying someone and asking for a pre-nup. In fact, my wife once asked why I never asked her for one even though I have some assets. I told her that I wouldn’t marry someone unless I had full faith that it would work.
The reverse is also equally true however.

If you think the marriage will work, then why WOULDN'T you sign one? The fact that someone won't sign a prenup could also be seen as saying "I want to get married, but eventually it won't work out..."
The J stands for Jay

Hikes_With_Dogs
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Re: Daddy I'm engaged! Pre-nup?

Post by Hikes_With_Dogs » Fri Oct 04, 2019 10:03 am

HomerJ wrote:
Thu Oct 03, 2019 2:28 pm


By the way, Inheritance is completely different from pre-nups. You can use a trust or something if you want to make sure the inheritance stays with your kid and doesn't get co-mingled.
This is the most important comment in the thread. A pre-nump will protect current assets. Inheritance can always be kept separate as long as the $ stays un-joined.

Plus, 500k is not that much to inherit or worry about in reality. Especially in (hopefully) 20+ years time?

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dm200
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Re: Daddy I'm engaged! Pre-nup?

Post by dm200 » Fri Oct 04, 2019 10:04 am

Hulu wrote:
Fri Oct 04, 2019 8:27 am
And on a practical note it’s probably very unappealing to consider a spouse who’s parents are involved in the relationship. It’s hard enough dating one person let alone their parents. Don’t discount that unboundaried parent behavior may contribute to a good potential partner picking less “involved” in-laws. Or at a minimum your involvement may convey to your children that you don’t trust them. Which could create tension, resent and a lack of trust in themselves.
Hopefully your adult children learned to protect themselves, think critically, not overthink and surround themselves with good people.
If they ask you I’d encourage and support them. And have THEM do the research...like adults haha.
It’s great that you care about your adult children. And are in a good position to let them live, fail, learn and love
Yes!

It all depends, though in my opinion, on the potential son or daughter-in-law. Some might be very bothered by this - and some might choose to ignore it.

While it never involved financial (or related) matters, my mother-in-law seemed to have a lot of "opinions" about a lot of things. Fortunately, though, my wife and I just chose to ignore her.

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dm200
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Re: Daddy I'm engaged! Pre-nup?

Post by dm200 » Fri Oct 04, 2019 10:07 am

What might be ok - is to suggest, as the appropriate time, to the adult children the importance of things like having a will and/or trust, guardians for children if both parents die, beneficiaries on life insurance and retirement accounts, and so on - and suggest consulting an estate planning attorney.

miamivice
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Re: Daddy I'm engaged! Pre-nup?

Post by miamivice » Fri Oct 04, 2019 10:23 am

Lazareth wrote:
Thu Oct 03, 2019 7:45 pm
Thank you. I am the OP, and the genesis of my post was a law-firm social media post I read recently, it raised the issue that in some states everything is considered community property and therefore everything gets split 50/50 in the event of divorce. It said a pre-nup is a must these days not only to protect a possible inheritance but to protect the saver from the spender/borrower in the event of short-lived marriage. But if the reaction here in this forum is any indication, that concern is not shared so much in financial planning circles.

I certainly would not impose any such requirement on my kids and I am pleased to say that they wouldn't listen to me if I did.
That social media post is wrong.

In a community property state, all assets that are acquired through the course of marriage are community property (shared assets). That part is true. So for example (we live in a community property state), both vehicles are titled in my name only. However, we each could claim 1/2 ownership of the value because we are in a community property state. How things are titled doesn't matter as to how assets are split up.

The one exception in every state I am familiar is inheritance. It can (without trusts or other complex vehicles) be kept out of the marriage and thus not split in the divorce eventuality. The one big thing is that the person receiving the inheritance has to take some basic measures to keep it out of the marriage. For example, if it is used to buy a larger family home, where both spouses put time into maintaining, it then becomes marital property.

In my case, my wife received a small inheritance which she (and I) agreed she wasn't going to spend. She opened a bank account, in her name only, and the money sits in the bank account. It's there for her use and I can't touch it. In the event of the split, that money is not part of our marriage and thus would not be subject to a court splitting it.

(I've asked about how folks here handle inheritance, and a popular opinion is that the principle of inheritance among Bogleheads is kept as separate property, but the dividends / capital gains from that principle is co-mingled money. So a person inheriting $1,000,000 would keep the million separate, but the $40,000 a year in dividends would be joint money.)

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Lazareth
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Re: Daddy I'm engaged! Pre-nup?

Post by Lazareth » Fri Oct 04, 2019 10:29 am

miamivice wrote:
Fri Oct 04, 2019 10:23 am

That social media post is wrong.

In a community property state, all assets that are acquired through the course of marriage are community property (shared assets). That part is true. So for example (we live in a community property state), both vehicles are titled in my name only. However, we each could claim 1/2 ownership of the value because we are in a community property state. How things are titled doesn't matter as to how assets are split up.

The one exception in every state I am familiar is inheritance. It can (without trusts or other complex vehicles) be kept out of the marriage and thus not split in the divorce eventuality. The one big thing is that the person receiving the inheritance has to take some basic measures to keep it out of the marriage. For example, if it is used to buy a larger family home, where both spouses put time into maintaining, it then becomes marital property.

In my case, my wife received a small inheritance which she (and I) agreed she wasn't going to spend. She opened a bank account, in her name only, and the money sits in the bank account. It's there for her use and I can't touch it. In the event of the split, that money is not part of our marriage and thus would not be subject to a court splitting it.
(from OP) Thank you, perhaps it might suffice to explain this at home.
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TheHouse7
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Re: Daddy I'm engaged! Pre-nup?

Post by TheHouse7 » Fri Oct 04, 2019 10:44 am

sergeant wrote:
Thu Oct 03, 2019 1:24 pm
Not being rude but your modest estate won't be attracting any gold diggers. Stay out of it.
+1 I have relatives that were concerned (for the wrong reasons) that I should get a pre-nup when marrying at 27 y/o. I had a net worth of 70k and stand to inherit your ballpark.

I went to a lawyer. Did not have any issue charging me $200 for first conciliation and a retainer of $500 to make sure I was serious. All told I didn't get it after some premarital counseling and cost me ~$1,200 to get away from the lawyer.

Please don't say a word. You will waste their time and money. :moneybag
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iamblessed
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Re: Daddy I'm engaged! Pre-nup?

Post by iamblessed » Fri Oct 04, 2019 10:48 am

I would not worry about it. You both have a lot of years to cover. In 20 years they may have more than 1.3 million. In today's world a million is not a lot. That would keep the average family afloat for about 19 years. Now you divide that by two.

EnjoyIt
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Re: Daddy I'm engaged! Pre-nup?

Post by EnjoyIt » Fri Oct 04, 2019 11:03 am

I read some of the responses here and frankly there is a bunch of hogwash being thrown around.

1) $1.3 million is a ton of money for young adults. It is a life changing amount of money and for those who think it is not that big of a deal must be living high and large compared to the rest of the US and out of touch with reality.

2) Statistically marriage is no better than a coin flip and odds are that this relationship has a 50% percent chance of divorce.

3) It is much easier to decide how to split up finances now when they love each other as opposed to when poop hits the fan and they hate each other which will cost tons of money in lawyer fees. There is a post here on this forum of a 50ish year old who was married for 20 years and recently spent $400k in divorce costs.

4) Every state already has laws that direct finances after a divorce. This means everyone already has a prenup and if you like what the law states, no changes need to be made. Otherwise a future family can make amendments today. Personally I think everyone who is getting married should look at what the law currently dictates and see if it fits their needs or not. At the very least people should agree to arbitration in the event of a divorce so as to eliminate the expense of litigation.

5) Talk to your offspring about the benefits of a prenup. Try to help them understand the risks of marriage. What they do with that information is up to them.


A prenup is an emotional topic on this forum. People bring in their own values and beliefs into the subject matter which often times gets very heated and usually the thread gets locked. I hope that we can keep this conversation emotion free and insult free.

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dm200
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Re: Daddy I'm engaged! Pre-nup?

Post by dm200 » Fri Oct 04, 2019 11:08 am

TheHouse7 wrote:
Fri Oct 04, 2019 10:44 am
sergeant wrote:
Thu Oct 03, 2019 1:24 pm
Not being rude but your modest estate won't be attracting any gold diggers. Stay out of it.
+1 I have relatives that were concerned (for the wrong reasons) that I should get a pre-nup when marrying at 27 y/o. I had a net worth of 70k and stand to inherit your ballpark.

I went to a lawyer. Did not have any issue charging me $200 for first conciliation and a retainer of $500 to make sure I was serious. All told I didn't get it after some premarital counseling and cost me ~$1,200 to get away from the lawyer.

Please don't say a word. You will waste their time and money. :moneybag
Wow!! From experience, dealing with lawyers can often be financial "quicksand". I have had both extremes (and in the middle) of such circumstances. It does not always work out this way, but lots of research when dealing with an attorney can make things quite cost effective. Always know and understand how you will be billed and whether you have any choice. If at all possible, I prefer fixed prices for a deliverable from the attorney (such as a will). Finding "the right" attorney for a matter is also vital. For example, you should almost never ask an attorney, "Do you handle XYZ legal situations?" They will almost always say, "Yes" - because they want the business. You should first ask about their practice, what part of their time goes to what kind of cases. Then, if a significant part of their practice is what you need - that is OK. Also, ask how long they have been doing the kind of legal work you need. You probably don't want an attorney who made a big switch to that area just a short time ago. For example, when we needed to redo our wills many years ago, we got a recommendation for this attorney from someone in the financial advisory business. I called this attorney and I asked what part of his business was estate planning and related. He replied most of it. [I did not ask how long he had been doing it, nor how he billed.] So, we have him do our wills. Turns out that, while he had been an attorney for quite a while, he recently switched from being a litigator to estate work AND he charged by the hour. Even "simple" (in my opinion) issues required him to do "research" while the billing meter was running. A few years later, when we revised the wills again, that attorney told us that this previous attorney's work was very odd - he never saw anything like it.

Many decades ago (40+ years) - when my wife and I got engaged, we decided that we should have wills, etc. drafted and executed immediately after the wedding. We actually met with an attorney well before the wedding date and had everything ready to sign right after being married. Those wills were good for many years - and even provided for our having child(ren) in the future. While it cost slightly more to have wills done with provisions for possible future situations, in the end - since the wills were good for a long time - we actually saved money. It was several decades until we needed new documents.

Now, several decades later, I think it may be time to review our wills to see if they should be updated.

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Re: Daddy I'm engaged! Pre-nup?

Post by Ybsybs » Fri Oct 04, 2019 11:17 am

I'm imagining myself as one of the young adults in this situation.

I think being told that there maybe a large inheritance coming is not particularly helpful. Ideally, the OP and spouse will live a long time such that any inheritance happens when the young adult is in his/her fifties or sixties. The amount, if any, to be inherited is unpredictable.

What would be helpful is access to a skilled local lawyer. If OP would pay for the young adult to sit down and have a first will made, that'd be great. Getting the lawyer to explain the local laws for how marriage impacts property ownership and what pre-nups and post-nups that are likely to holdup in court are likely to do, is helpful information. Explaining how guardianship of possible future children works in that state would be helpful. Likewise details about health care power of attorney documents and so forth.

If this were pitched as a full service seminar on legal matters, I think a young adult would appreciate the education. He/she could learn about what would be necessary in the event of needing to serve as executor of OP's estate, get her own will documents in order, and pick up useful knowledge about the legal ramifications of marriage and divorce.

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Re: Daddy I'm engaged! Pre-nup?

Post by psteinx » Fri Oct 04, 2019 11:18 am

EnjoyIt wrote:
Fri Oct 04, 2019 11:03 am
1) $1.3 million is a ton of money for young adults. It is a life changing amount of money and for those who think it is not that big of a deal must be living high and large compared to the rest of the US and out of touch with reality.
OP is 65, with $1.3M and a $300K home (NW ~$1.6M). No pension. OP and OP's spouse will live out there retirement, presumably, on this money plus SS. The longer to live of OP and OP's spouse will live perhaps 20-25 years, presumably drawing down (in real terms at least), that $1.3M. While there's a good chance the kids will eventually inherit something, the likelihood, I would say, is that it's significantly less than $1.6M in real terms. And there are ways to structure inheritances (trusts), so that whatever IS passed goes in a way that reflects OP's wishes.

(I would note that OP does mention "I'd like to help them now", but I assume that such help is more along the lines of typical life starting money - educational expenses and/or a bit of help with early-life moves, car, and/or house down payment, and not a substantial portion of OP's NW.)
EnjoyIt wrote:
Fri Oct 04, 2019 11:03 am
2) Statistically marriage is no better than a coin flip and odds are that this relationship has a 50% percent chance of divorce.

According to this: https://psychcentral.com/lib/the-myth-o ... f-divorce/
the divorce rate for first marriages is about 30%. And that's across the population. Bogleheads in general tend to be significantly above population-wide norms in education, income and wealth. OP is at least above the curve in wealth. These traits, I believe, correlate with even better marriage survival odds. And the fact that OP is ~65 and married, presumably to the kids' original mother, is another suggestive positive fact.

Of course, there are not guarantees on such things. Yes, even with many positive factors, OP's kids' marriages could end in divorce. But a 50/50 shot? Seems pretty unlikely. If I had to guess, I'd say something closer to 20%. Maybe less.
EnjoyIt wrote:
Fri Oct 04, 2019 11:03 am
3) It is much easier to decide how to split up finances now when they love each other as opposed to when poop hits the fan and they hate each other which will cost tons of money in lawyer fees. There is a post here on this forum of a 50ish year old who was married for 20 years and recently spent $400k in divorce costs.
Anecdotes aren't all that helpful. And serious discussions between two young people in love and planning to get married are perhaps not so conducive to the marriage going through and surviving if it happens. If both spouses have a large flashing "Emergency Exit" sign that they've carefully installed above multiple doors, I think there's likely a significantly higher chance they'll use it.
EnjoyIt wrote:
Fri Oct 04, 2019 11:03 am
4) Every state already has laws that direct finances after a divorce. This means everyone already has a prenup and if you like what the law states, no changes need to be made. Otherwise a future family can make amendments today. Personally I think everyone who is getting married should look at what the law currently dictates and see if it fits their needs or not. At the very least people should agree to arbitration in the event of a divorce so as to eliminate the expense of litigation.
Of course there are default, or state-based rules for divorces among those without pre-nups (who, I assume, are the vast majority). They're probably reasonable (though I don't know the details of my state's laws, nor OP's). But if kids aren't yet in the picture, and you try to move from the defaults, that's strongly suggestive that one side wants a "better deal". If they're both just-starting-out 20-somethings, and groom asks bride (or vice versa), for a bigger cut of the financial pie (relative to defaults) in the event of divorce, and the other party agrees, that suggsts a power imbalance that's not likely to be helpful in a presumed lifelong marriage and partnership.

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HomerJ
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Re: Daddy I'm engaged! Pre-nup?

Post by HomerJ » Fri Oct 04, 2019 11:34 am

EnjoyIt wrote:
Fri Oct 04, 2019 11:03 am
I read some of the responses here and frankly there is a bunch of hogwash being thrown around.

1) $1.3 million is a ton of money for young adults. It is a life changing amount of money and for those who think it is not that big of a deal must be living high and large compared to the rest of the US and out of touch with reality.

2) Statistically marriage is no better than a coin flip and odds are that this relationship has a 50% percent chance of divorce.
Since you're concerned about hogwash, I'd like to address Point #2

#2 is not true. Divorce isn't 50% even across the average population, and it's far less for certain demographics.

The couples who get divorced the most are the ones who marry young.

High-school education and married as teenagers or early 20s - highest rate of divorce
College education and married in early 20s - lower rate, but still fairly high
High-school education and married in late 20s or early 30s - lower rate
College education and married in late 20s or early 30s - lower rate still.

I don't remember the numbers except for the last one (since that's the demographic I was in, and it was around 20% divorce rate)

I found it interesting that education level didn't matter as much as just marrying later in life.

Oh, and I 100% agree with you about Point #1. Anyone who says a million dollars isn't much money is living in a strange little bubble. It may be a true statement for them, and that's fine, but they should at least be aware that it's not a true statement for 99% of humanity.
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miamivice
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Re: Daddy I'm engaged! Pre-nup?

Post by miamivice » Fri Oct 04, 2019 11:38 am

The kids won't receive $1.3 million each if the parents die today. Each kid would receive $650k, plus half of home proceeds (maybe 800k total) if the estate was split equally.

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Re: Daddy I'm engaged! Pre-nup?

Post by sd323232 » Fri Oct 04, 2019 11:42 am

EnjoyIt wrote:
Fri Oct 04, 2019 11:03 am
I read some of the responses here and frankly there is a bunch of hogwash being thrown around.

1) $1.3 million is a ton of money for young adults. It is a life changing amount of money and for those who think it is not that big of a deal must be living high and large compared to the rest of the US and out of touch with reality.

2) Statistically marriage is no better than a coin flip and odds are that this relationship has a 50% percent chance of divorce.

3) It is much easier to decide how to split up finances now when they love each other as opposed to when poop hits the fan and they hate each other which will cost tons of money in lawyer fees. There is a post here on this forum of a 50ish year old who was married for 20 years and recently spent $400k in divorce costs.

4) Every state already has laws that direct finances after a divorce. This means everyone already has a prenup and if you like what the law states, no changes need to be made. Otherwise a future family can make amendments today. Personally I think everyone who is getting married should look at what the law currently dictates and see if it fits their needs or not. At the very least people should agree to arbitration in the event of a divorce so as to eliminate the expense of litigation.

5) Talk to your offspring about the benefits of a prenup. Try to help them understand the risks of marriage. What they do with that information is up to them.


A prenup is an emotional topic on this forum. People bring in their own values and beliefs into the subject matter which often times gets very heated and usually the thread gets locked. I hope that we can keep this conversation emotion free and insult free.
Very well said. I hope prenup will become norm in future. Or, at least for people not to freak out when pre nup is mentioned. Alot of people start talking love love love when talking about marriage, when it is mostly a financiala trancaction. I mean when two people love each other, marriage does not make love stronger.

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dm200
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Re: Daddy I'm engaged! Pre-nup?

Post by dm200 » Fri Oct 04, 2019 11:51 am

As with so many such issues and dilemmas -

often addressed in Seinfeld -

https://youtu.be/sEsIV79ixok

EddyB
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Re: Daddy I'm engaged! Pre-nup?

Post by EddyB » Fri Oct 04, 2019 11:58 am

sd323232 wrote:
Fri Oct 04, 2019 11:42 am
EnjoyIt wrote:
Fri Oct 04, 2019 11:03 am
I read some of the responses here and frankly there is a bunch of hogwash being thrown around.

1) $1.3 million is a ton of money for young adults. It is a life changing amount of money and for those who think it is not that big of a deal must be living high and large compared to the rest of the US and out of touch with reality.

2) Statistically marriage is no better than a coin flip and odds are that this relationship has a 50% percent chance of divorce.

3) It is much easier to decide how to split up finances now when they love each other as opposed to when poop hits the fan and they hate each other which will cost tons of money in lawyer fees. There is a post here on this forum of a 50ish year old who was married for 20 years and recently spent $400k in divorce costs.

4) Every state already has laws that direct finances after a divorce. This means everyone already has a prenup and if you like what the law states, no changes need to be made. Otherwise a future family can make amendments today. Personally I think everyone who is getting married should look at what the law currently dictates and see if it fits their needs or not. At the very least people should agree to arbitration in the event of a divorce so as to eliminate the expense of litigation.

5) Talk to your offspring about the benefits of a prenup. Try to help them understand the risks of marriage. What they do with that information is up to them.


A prenup is an emotional topic on this forum. People bring in their own values and beliefs into the subject matter which often times gets very heated and usually the thread gets locked. I hope that we can keep this conversation emotion free and insult free.
Very well said. I hope prenup will become norm in future. Or, at least for people not to freak out when pre nup is mentioned. Alot of people start talking love love love when talking about marriage, when it is mostly a financiala trancaction. I mean when two people love each other, marriage does not make love stronger.
What does any of these supposed reasons have to do with an inheritance (the prompt for the OP's post), which is already separate property in every state? Many of the big prenup supporters in the thread seem to have missed the point that it's not the right tool for the job.

coffeeblack
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Re: Daddy I'm engaged! Pre-nup?

Post by coffeeblack » Fri Oct 04, 2019 12:00 pm

Jack FFR1846 wrote:
Thu Oct 03, 2019 1:15 pm
What if each of them end up marrying bajillionaires?

just a thought
Then that billionaire will have them sign a pre nup. :D

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Re: Daddy I'm engaged! Pre-nup?

Post by CnC » Fri Oct 04, 2019 12:18 pm

sd323232 wrote:
Thu Oct 03, 2019 7:19 pm
6Pack wrote:
Thu Oct 03, 2019 6:07 pm
I’m a lawyer and I find pre-nups and post-nups sort of self defeating. You are basically saying “I want to get married, but eventually it won’t work out, so here’s the split...”

I couldn’t imagine marrying someone and asking for a pre-nup. In fact, my wife once asked why I never asked her for one even though I have some assets. I told her that I wouldn’t marry someone unless I had full faith that it would work.

I wouldn’t say anything unless asked for your advice. Also, you can leave your inheritance to anyone you want. Inheritances are exempt from marital property in the event of a divorce as long as your state allows for it and the funds aren’t co-mingled.
Do you know anyone who got divorced among your friends or other people that you know? Ask them if prenup is a good idea. Just because you dogged a bullet doesn't mean other people will. Self righteously telling people not to get married if they even consider a prenu is wrong. OP has a legitimate concern, cause a divorce can ruin his kids lifes, financially and spiritually. At least he is trying to protect them from a financial ruin. I think prenup is great idea and there is nothing wrong with it.

By that logic ask nearly anyone who got divorced if getting married was a good idea.

I can guarantee nearly all of the would say no.

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Re: [When my children marry, should they sign a pre-nuptial agreement?]

Post by LadyGeek » Fri Oct 04, 2019 12:21 pm

I retitled the thread for clarity.

Please stay focused on the financial aspects.
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shorvath
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Re: Daddy I'm engaged! Pre-nup?

Post by shorvath » Fri Oct 04, 2019 12:28 pm

psteinx wrote:
Fri Oct 04, 2019 11:18 am
Anecdotes aren't all that helpful. And serious discussions between two young people in love and planning to get married are perhaps not so conducive to the marriage going through and surviving if it happens. If both spouses have a large flashing "Emergency Exit" sign that they've carefully installed above multiple doors, I think there's likely a significantly higher chance they'll use it.
If the lack of a clear path out is what is keeping them married, then that is a terrible sign. Why is the survival of the marriage more important than the actual functioning of these people's lives?

Building emergency exits doesn't encourage the building to burn down. It just keeps a bad situation from being even worse.
Last edited by shorvath on Fri Oct 04, 2019 12:31 pm, edited 1 time in total.
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Re: Daddy I'm engaged! Pre-nup?

Post by ScubaHogg » Fri Oct 04, 2019 12:29 pm

EnjoyIt wrote:
Fri Oct 04, 2019 11:03 am


2) Statistically marriage is no better than a coin flip and odds are that this relationship has a 50% percent chance of divorce.
This is a "fact" that's not a fact, but won't die. Just an extrapolation from what previous generations did. It's tough to measure, but it's blindingly obvious that, especially for college graduates, it's likely just plain wrong.

https://www.pewresearch.org/fact-tank/2 ... -marriage/

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Re: Daddy I'm engaged! Pre-nup?

Post by researcher » Fri Oct 04, 2019 1:13 pm

Lazareth wrote:
Thu Oct 03, 2019 7:45 pm
a law-firm social media post I read recently...
said a pre-nup is a must these days...
Consider the source.

It would be quite profitable for this law firm if they could convince people that every marriage requires a pre-nup.

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Re: [When my children marry, should they sign a pre-nuptial agreement?]

Post by EnjoyIt » Fri Oct 04, 2019 2:46 pm

For those who claim divorce rates are less than 50% and that I am wrong about the fact. Fine, even if divorce rates are 20% that is still high risk consider the price tag of divorce.

At the very least people should commit to arbitrage with no litigation prior to agreeing to marry. Save them some useless lawyer fees and endless bickering. In the 20-50% chance the relationship does not last.

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