We have a prenup, now buying a house.

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jeremyj
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We have a prenup, now buying a house.

Post by jeremyj »

I have been an active member of the forum for a while, but didn't want to post personal info to a screenname some real life friends know.

- My wife and I have been married for 3.5 years, and we have a 1 year old daughter.
- I have $3mm. She has $200k, $150k of which is in retirement accounts. When we married it was $2mm and $50k (net of debts).
- We have a prenup that boils down to "Hers is hers, mine is mine; going forward she prioritizes retirement accounts and savings first before sharing expenses 40/60 with me." In practice, I've paid rent and we've roughly split the day-to-day stuff without worrying too much about it.
- If we separate, I will write her a (small, relative to assets) lump sum payout based on years of marriage, which will be larger if she ever chooses to put her career on hold to care for our child(ren).
- We have changed states since we married, but neither state is a community property state. We both work.

Matrimonially, things are very good, and I think the probability of needing any of these preparations is very low, but I've heard enough horror stories from coworkers to realize I shouldn't assume I have no chance of becoming part of the statistic. She rationally agrees, as we are able to realize our currently bonded selves and our unlikely but hypothetical separating future selves are different people.

We have rented since we met, but will likely buy a house in the $500k-$1mm range in 2020. After viewing some houses this past weekend, I asked her how important it would be to her that her name be on the deed/title, with the promise that we would figure something out that made us both comfortable. She expressed concern that if she were merely a tenant, I would have all the power in a potential separation (effectively threatening her with homelessness), which would also bleed into a custody battle; she also fairly points out that we changed states for my new job. I said I understood her concerns and we would figure something out. Two days later, she admitted that she's been stressed about this since we had the conversation, so I am hoping to find some information to reassure both of us.

I find her position legitimate and don't want her feeling marginalized and upset, but registering 50/50 ownership of a potentially $1mm asset I largely finance doesn't seem like an appropriate solution to that problem. Has anyone been in a similar situation and could provide advice?

Go with a non-50/50 ownership? (Doesn't help much with feelings of marginalization, but may legally give her more leverage as reassurance?)
Get a mortgage she can afford half of to build true joint equity?
Quote some legal precedent that would assure her that she wouldn't be in a precarious spot even if I were solely named?

Thanks to the knowledgeable and insightful folks on here for their help in the past and future.
mptfan
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Re: We have a prenup, now buying a house.

Post by mptfan »

I think it would be a big mistake to buy the house in your name only or expect your wife to agree to less than equal joint ownership in a home in which you will both live as a family. I understand your desire to keep your premarital money separate, but I think it goes too far to expect your wife to agree to live in a house as a family and be your tenant or anything less than an equal joint owner. If I were in your wife's shoes and you proposed that idea to me, the odds of you becoming another divorce statistic would go way up.

Think about the consequences...what if your wife divorces you and you now have shared custody of your child, how would you feel about that? You said you moved to a different state, what if she moves back and now you only see your child on alternate holidays? You didn't say how much you earn compared to her, but you need to think about how much you will pay in child support in addition to whatever you will have to pay her per the prenup agreement. (Her right to child support cannot be waived or modified by a prenup) I think you are walking down the path of shooting yourself in the foot more than you realize in a misguided attempt to protect yourself.
Last edited by mptfan on Mon Nov 25, 2019 11:41 am, edited 5 times in total.
sport
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Re: We have a prenup, now buying a house.

Post by sport »

IMO you have too much "me and she" and not enough "we". This is a marriage, not a business.
deltaneutral83
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Re: We have a prenup, now buying a house.

Post by deltaneutral83 »

I think there may already be plenty of accounts with commingled assets of pre marital and post marriage monies. Unless you started brand new accounts after the wedding, then all of your accounts would be commingled? Plus you have a child, the ultimate co mingling. I don't think the agreement you have in place signed beforehand is as straight forward as you may think. Are there specific dollar amounts attached to this prenuptial agreement? If not, the "what's mine is mine and what's hers is hers" might not have even necessitated a prenuptial agreement. Suggesting that one spouse not be on the deed to the primary residence would land a lot of people in hot water for obvious reasons. Think about it if you were in that situation?
sjt
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Re: We have a prenup, now buying a house.

Post by sjt »

sport wrote: Mon Nov 25, 2019 11:27 am IMO you have too much "me and she" and not enough "we". This is a marriage, not a business.
+1
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chevca
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Re: We have a prenup, now buying a house.

Post by chevca »

sport wrote: Mon Nov 25, 2019 11:27 am IMO you have too much "me and she" and not enough "we". This is a marriage, not a business.
This ^^^

Might as well draw up yet another contract for this part....

If she will be paying anything to the house, she should be on the title. Simple as that. It's your together, right? She can be on the title and not the mortgage if you guys choose that, or it works better for financing. Although, I don't see how it would as you both seem to be doing well. Put both your names on the mortgage as well.

It will be her house also, right?
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Mlm
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Re: We have a prenup, now buying a house.

Post by Mlm »

You're married now and I think you should be co-owners on any property purchased going forward.
Chris K Jones
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Re: We have a prenup, now buying a house.

Post by Chris K Jones »

sport wrote: Mon Nov 25, 2019 11:27 am IMO you have too much "me and she" and not enough "we". This is a marriage, not a business.
+1. I am divorced so know all about the perils of marriage and divorce, but your post seems to have way too much of this stuff. Best wishes.
stoptothink
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Re: We have a prenup, now buying a house.

Post by stoptothink »

mptfan wrote: Mon Nov 25, 2019 11:24 am I think it would be a big mistake to buy the house in your name only or expect your wife to agree to less than equal joint ownership in a home in which you will both live as a family. I understand your desire to keep your premarital money separate, but I think it goes too far to expect your wife to agree to live in a house as a family and be your tenant or anything less than an equal joint owner. If I were in your wife's shoes and you proposed that idea to me, the odds of you becoming another divorce statistic would go way up.

Think about the consequences...what if your wife divorces you and you now have shared custody of your child, how would you feel about that? You said you moved to a different state, what if she moves back and now you only see your child on alternate holidays? You didn't say how much you earn compared to her, but you need to think about how much you will pay in child support in addition to whatever you will have to pay her per the prenup agreement. I think you are walking down the path of shooting yourself in the foot more than you realize in a misguided attempt to protect yourself.
+1. We married and bought a home in a similar position as OP. I didn't have anywhere near the assets that OP did, but enough that I wasn't willing to lose them (which I did in my first marriage) and wife came into the marriage with a negative net worth. We got a pre-nup, which she was understanding of, but when we bought the home there was no question whatsoever that she would go on the deed even though the mortgage was in my name.

OP, don't shoot yourself in the foot for little (probably no) benefit.
yohac
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Re: We have a prenup, now buying a house.

Post by yohac »

My DW would have never gone along with anything short of full joint ownership. Commitment to the family trumps financial "fairness", ten times over.
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Re: We have a prenup, now buying a house.

Post by bloom2708 »

I don't know what you should do with the house.

It doesn't sound like a fun marriage. Sorry for your inability to become "we". The "for richer and poorer" part of your vows.
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mptfan
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Re: We have a prenup, now buying a house.

Post by mptfan »

Also, I don't think you understand that even if you owned the house in your name only, it is likely that over time your wife will contribute to the maintenance and upkeep of the house in terms of her labor and her money, and once that happens she will have a strong legal claim to a share of the ownership of the house in the event of a divorce anyway.
Last edited by mptfan on Mon Nov 25, 2019 11:55 am, edited 1 time in total.
teelainen
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Re: We have a prenup, now buying a house.

Post by teelainen »

jeremyj wrote: Mon Nov 25, 2019 9:51 am Has anyone been in a similar situation and could provide advice?
Prenuptial agreements are important, but there are lines that should not be crossed.
mptfan
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Re: We have a prenup, now buying a house.

Post by mptfan »

bloom2708 wrote: Mon Nov 25, 2019 11:47 am It doesn't sound like a fun marriage. Sorry for your inability to become "we". The "for richer and poorer" part of your vows.
You should not assume that was part of their vows, those words are part of the traditional wedding vows but some people write their own vows now and eschew tradition.
Doohop65
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Re: We have a prenup, now buying a house.

Post by Doohop65 »

I strongly encourage you to either consider your wife an equal in this situation or get a divorce.

Throughout my marriage I have been the lower earner by a small amount to 3x higher than my wife. Every day we share it is with the goal of winning with money together.

I believe you are looking at this as a business. It is bound to fail and over time you will erode trust and love from your spouse. If you don’t start trusting her and your marriage I strongly believe it is best to end it sooner rather than later. It will be cheaper for you.
mptfan
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Re: We have a prenup, now buying a house.

Post by mptfan »

OP, I am curious...if the roles were reversed and your wife proposed that idea to you, what would be your reaction?
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Watty
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Re: We have a prenup, now buying a house.

Post by Watty »

It would be good to talk to a marriage counselor help figure out what you should do.

Things may not be as good as you think.
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Tamarind
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Re: We have a prenup, now buying a house.

Post by Tamarind »

Leaving aside the argument for a less transactional view of marriage - which I agree with but that's not the situation OP is in - what does your prenup say about marital property and/or real property purchased after marriage?

It does contain a clause about what you'll do with property obtained after marriage, right? You should follow the definition you already agreed on, whether that's "50/50" or "divide in proportion to how much each one paid".

If your prenup says that what you pay for is yours, and she is not in a position to pay any of the mortgage, and not being on the deed of the home she lives in is unacceptable to her, as it might well be, then the solution is contractually clear. She needs to divorce you now.

If your prenup says real property purchased after marriage is 50/50, you need to put her on the deed.

If I were in your shoes, I would likely choose to 1) keep renting or else 2) scale your purchase to something she could afford to pay half of while still prioritizing her retirement accounts.

That is the fair way to square the fact that your tastes are not in line with her budget.
BogleMelon
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Re: We have a prenup, now buying a house.

Post by BogleMelon »

sport wrote: Mon Nov 25, 2019 11:27 am IMO you have too much "me and she" and not enough "we". This is a marriage, not a business.
I couldn't agree more!
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CoastalWinds
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Re: We have a prenup, now buying a house.

Post by CoastalWinds »

This could become self-fulfilling. I would treat a home purchase as a joint purchase and stop focusing on ‘mine vs yours’ in such detail.
daheld
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Re: We have a prenup, now buying a house.

Post by daheld »

Does your wife provide a larger share of the care for your 1 year old? If the answer is yes and you separate, will your wife automatically get full custody of your child based upon this?
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8foot7
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Re: We have a prenup, now buying a house.

Post by 8foot7 »

Regardless of whatever you decided, in the event of a divorce she would have a plenty strong claim to 50/50 in the house given it was purchased after marriage and kids. I think you'll find that attempting to micromanage the potential consequences of this purchase in the event of a divorce now that you're married will be very difficult.

I do tend to agree with the other posters -- you were wise to get a prenup. That's bought you quite a bit of protection. You did good. Now stop. Trying to further "protect" yourself against divorce may invite troubles that could very well lead to that event, sort of like overdosing on a medicine.

Your wife and you are raising your child(ren) together in a marital home. Buy it, both of you on the title, and move on.
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CAsage
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Re: We have a prenup, now buying a house.

Post by CAsage »

While it makes sense to protect your separate assets from before your marriage with a prenup .,. after you are married you really need to think it all as joint. That's one thing that does make sense about a community property state - all earnings by either party during the marriage are joint. Do you see yourself going on vacation with you in first class and her in coach because you make more? I think I'd leave a rich guy like that for the bum who shares hamburger in a flash, just because of how it would make me feel as a wife. You have your nest egg sheltered - ok, call it good. Now, going forward make it 50-50 all the way. Fund both your retirements equally, share the darn house, make sure your wife feels like an equal partner or she will be very very unhappy and insecure. Just my thoughts. Especially because she is the mother of your child, and women tend to be the ones who sacrifice their earnings and financial security in relationships. Rethink your priorities.
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setancre
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Re: We have a prenup, now buying a house.

Post by setancre »

jeremyj wrote: Mon Nov 25, 2019 9:51 am Two days later, she admitted that she's been stressed about this since we had the conversation, so I am hoping to find some information to reassure both of us.

I find her position legitimate and don't want her feeling marginalized and upset, but registering 50/50 ownership of a potentially $1mm asset I largely finance doesn't seem like an appropriate solution to that problem. Has anyone been in a similar situation and could provide advice?
Reminds me of the Mastercard priceless commercials...

What is the value to you of your wife feeling secure and confident in her marriage, rather than feeling stressed and marginalized by you?
WanderingPothos
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Re: We have a prenup, now buying a house.

Post by WanderingPothos »

What about if you buy the house and she lives rent free and only pays a portion of the utilities that are spent monthly, but nothing towards what would be spent to maintain (insurance, property tax, etc.) or upgrade the house. If you happen to divorce, then she moves out. Or it can be vice versa where she buys the house and the house is in her name, you share utilities, she pays for maintenance/upgrades to the house?

This is what we currently do, however, neither of us are attached to material things so it would be no problem for me or SO to move out of a shared house. However, there are so many variables (emotionally, financially, children) that could impact that arrangement. Also, if you are nitpicking down to the dollar, this will probably not work.
mptfan
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Re: We have a prenup, now buying a house.

Post by mptfan »

WanderingPothos wrote: Mon Nov 25, 2019 12:20 pm What about if you buy the house and she lives rent free and only pays a portion of the utilities that are spent monthly, but nothing towards what would be spent to maintain (insurance, property tax, etc.) or upgrade the house.
That would be next to impossible to accomplish, especially if they use joint accounts for spending and the joint account is used to pay for property taxes, insurance, maintenance, improvements. Even if all accounts were separate, he could not stop his wife from using her money to fix up or improve the house and he could not stop her from using her labor and efforts, then she would have a claim.
dboeger1
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Re: We have a prenup, now buying a house.

Post by dboeger1 »

I agree with several of the commenters. As much as I personally loathe the way many states stack divorces so much in favor of the lower-earning spouse, I think it's easy to go too far the other way in the name of "fairness". If everything in your life is split up based on who paid for it, then there's virtually nothing you will ever completely own together, which kind of defeats the purpose of marriage. Why did you get married? Why not (excuse my French) friends with benefits? Presumably, you got married in part because you wanted to live your lives together instead of just having romance but keeping finances separate. Thus, marriage is not about a fair split of everything, but about maximizing the value of your existence through a special bond that transcends any fixed dollar amount.

I can sympathize to some degree with a prenup in cases like yours where there is a substantial gap in finances going into the marriage, but beyond that, you should really stop treating everything as belonging to one or the other. I know several couples who get along well by funding separate spending accounts which give them limited freedom to buy whatever they want individually, but even in those cases, they fund those accounts together, and only after taking care of shared expenses like savings and rent.
WanderingPothos
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Re: We have a prenup, now buying a house.

Post by WanderingPothos »

mptfan wrote: Mon Nov 25, 2019 12:23 pm
WanderingPothos wrote: Mon Nov 25, 2019 12:20 pm What about if you buy the house and she lives rent free and only pays a portion of the utilities that are spent monthly, but nothing towards what would be spent to maintain (insurance, property tax, etc.) or upgrade the house.
That would be next to impossible to accomplish, especially if they use joint accounts for spending and the joint account is used to pay for property taxes, insurance, maintenance, improvements. Even if all accounts were separate, he could not stop his wife from using her money to fix up or improve the house and he could not stop her from using her labor and efforts, then she would have a claim.
Oh yeah, so then they would need to have their own accounts as well as a joint account. If they are contributing 60/40, then maybe this is already set up. But interesting point about his wife using her money to fix up the house...I guess that would be true. Sounds as if a prenup is only good for protecting pre-marital assets then and nothing gained after marriage.
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Re: We have a prenup, now buying a house.

Post by orhkaf »

You had a high net worth going into the marriage, so it’s understandable that you wanted a prenup. But in my opinion any wealth accumulated after marriage should be split evenly. Marriage is a team effort and it doesn’t seem like she’s in it for the money. She’s the mother of your child and you’ve been married for quite some time now — frankly I don’t see anything wrong with her being on the title.
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Re: We have a prenup, now buying a house.

Post by KyleAAA »

IANAL so I won't comment on the validity of the post-marriage prenup arrangement, but from a relationship perspective you are going about this the wrong way. Keeping prior assets separate is all well and good, but when you married you agreed the future should be 50/50. That means your wife is an equal owner in everything going forward, including the house. The easiest way to manage this situation is to not use prior assets to purchase the home. If that means you have to take on PMI because you can't come up with a 20% down payment using co-mingled fund, so be it. She absolutely should be on the title. There is no question about this.
Last edited by KyleAAA on Mon Nov 25, 2019 12:42 pm, edited 1 time in total.
poor & ignorant soul
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Re: We have a prenup, now buying a house.

Post by poor & ignorant soul »

Much good advice here, joint ownership, candid conversations, maybe even therapy. You are a team. and, to be honest, you come off as a ball hog here.

This may come off as strong, but you need to reassure your wife that she is more important to you than money. You need to prove that you're willing to sacrifice for your relationship. You net worth is already high.

How much is a happy marriage worth to you?
mptfan
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Re: We have a prenup, now buying a house.

Post by mptfan »

KyleAAA wrote: Mon Nov 25, 2019 12:39 pm IANAL so I won't comment on the validity of the post-marriage prenup arrangement,
The OP did not say the prenup was post marriage. If it were post marriage, it would not be a prenup, it would be a postnup. ;)
chevca
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Re: We have a prenup, now buying a house.

Post by chevca »

Truth is, OP, you should be more worried about child support and alimony if you guys should end up getting divorce. Those are going to irk you a lot more than how the house gets divided up. Assuming you're the much higher earner, as it seems is the case.

I get the feeling OP is not liking, or going to like what they hear in this one. Maybe it will sink in though if many others say similar things about ownership/partnership.
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HomerJ
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Re: We have a prenup, now buying a house.

Post by HomerJ »

jeremyj wrote: Mon Nov 25, 2019 9:51 ambut registering 50/50 ownership of a potentially $1mm asset I largely finance doesn't seem like an appropriate solution to that problem. Has anyone been in a similar situation and could provide advice?
You paying cash for this house?

If you're not paying cash, put it in both your names. Over time, you'll pay it off together, and you both should own it.

You're going to have to accept that marriage is a partnership. Protect that first $2 million, sure...

But from now on, everything should be 50/50. The person who makes more doesn't get to keep more. Just because one spouse makes $200k and the other spouse makes $100k does NOT mean all money saved during the 3,5,10,20, or 40 years of marriage should be split 66/33.

It's a partnership. If a wife makes $200k a year and the husband makes $50k, what matters is that the COUPLE make $250k a year. Or if the husband stays home to take care of the kids and makes zero, the COUPLE makes $200k.

All assets and savings generated DURING the marriage are 50/50.

It's a pre-nup. It only deals with the money you had before the marriage. If you make enough together to make a large house payment, then BOTH of you make enough to make a large house payment, and BOTH of you should own it. Stop thinking of your current salary as YOUR money.

If you ARE paying $1 million cash, then I will amend my above advice this one time only. Buy it in your name only, but amend the pre-nup (post-nup?) stating that she gets half of the gains if you guys split 10 years from now.

Since you will using prenup money to buy the house outright, you should be protected to keep it.

But again, you really need to change your mindset. It's 50/50 from now on.

My wife had quite a bit more than me when we got married (as in, I had nothing, and she had something). She also had two kids from a previous marriage. We signed a prenup to protect her and the kids.

21 years of marriage later, none of it really matters. Our joint assets have grown so much together, the prenup is meaningless at this point.

You're a team. You've got to start thinking like a team. Especially with a kid.
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Re: We have a prenup, now buying a house.

Post by Dottie57 »

sport wrote: Mon Nov 25, 2019 11:27 am IMO you have too much "me and she" and not enough "we". This is a marriage, not a business.
+1

It is good to protect yourself. However if you are the only one on the deed, she is just a visitor.
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mrc
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Re: We have a prenup, now buying a house.

Post by mrc »

before sharing expenses 40/60 with me
Wow.

Why don't you buy a house she can afford to pay 50/50?

If you want more house than she can afford, well ...

I just can't get past this statement from a husband about his wife:
I find her position legitimate and don't want her feeling marginalized and upset, but registering 50/50 ownership of a potentially $1mm asset I largely finance doesn't seem like an appropriate solution to that problem
Last edited by mrc on Mon Nov 25, 2019 1:03 pm, edited 1 time in total.
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Re: We have a prenup, now buying a house.

Post by fru-gal »

I understand what you've done up to now, but I also vote for 50-50 ownership of the house. I'm pretty cynical about marital finances, but this feels different. If I were your wife, I'd feel very insecure about anything other than 50-50. Be nice. You're in this together, You've already protected a lot of your assets.
coachd50
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Re: We have a prenup, now buying a house.

Post by coachd50 »

Admiral wrote: Mon Nov 25, 2019 11:44 am It's good you have a pre-nup because I see divorce in your future! :shock:

That's only partially in jest. I recommend you put aside your thoughts about who owns what and who is entitled to what and focus on making a life together, which includes buying a home jointly.

Marriage is a 50-50 partnership, or at least that should be the goal.
I had the same thought here.

As someone else mentioned, the OP needs to view this is a life partnership, not a business partnership.
bdaniel58
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Re: We have a prenup, now buying a house.

Post by bdaniel58 »

Stop thinking of your current salary as YOUR money.
This is a very important point. My wife has not worked a day outside the home since we married 8.5 years ago. But the value of what she does for me, our home and our life is equal in value to what I bring home in salary.

I would never consider my salary "my money". We are in this thing together.
winterfan
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Re: We have a prenup, now buying a house.

Post by winterfan »

Her name should absolutely be on the title. You are a family.

Why would you be solely financing? Are you paying cash for it from the savings you had prior to marriage? If you don't want to use those assets, then keep renting and save for a house out of your joint income. It may take longer tor purchase a house though.
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RickBoglehead
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Re: We have a prenup, now buying a house.

Post by RickBoglehead »

sport wrote: Mon Nov 25, 2019 11:27 am IMO you have too much "me and she" and not enough "we". This is a marriage, not a business.
This ^^^ I find the subject line on the thread most concerning.
Last edited by RickBoglehead on Mon Nov 25, 2019 1:42 pm, edited 1 time in total.
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Re: We have a prenup, now buying a house.

Post by fortunefavored »

KyleAAA wrote: Mon Nov 25, 2019 12:39 pm ... The easiest way to manage this situation is to not use prior assets to purchase the home. If that means you have to take on PMI because you can't come up with a 20% down payment using co-mingled fund, so be it. She absolutely should be on the title. There is no question about this.
Before this thread gets locked due to all the marriage preaching instead of the financial question, this is the best comment on the thread. Yes, it may be financially (in aggregate) less efficient, but is the only way to preserve your previous arrangement.
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JoeRetire
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Re: We have a prenup, now buying a house.

Post by JoeRetire »

jeremyj wrote: Mon Nov 25, 2019 9:51 amHas anyone been in a similar situation and could provide advice?
I haven't been in a similar situation, nor would I ever be.

My advice would be to have your lawyer talk to her lawyer so that they can negotiate and hammer out yet another written agreement. Why change a good thing now?

Personally, I think you should continue renting, and never purchase any new assets that aren't specifically spelled out in your prenup.
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.
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mrspock
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Re: We have a prenup, now buying a house.

Post by mrspock »

Here’s some advice from a guy who has a NW which would put me in a similar position. Disclaimer, I don’t plan to marry. What about something like this:

1. First, at some point talk about putting HER career first. You can be a stay at home dad, work part time, or from home if that’s possible. Have this conversation, it’s super important for her to know where you stand on this. IMO having one person’s career be the priority due to how much they are paid is a mistake — we only get one go at this life, everyone should be able to chase ones dreams.

2. Now the house, honestly, I would have figured this one out before marriage as this is one of those “deal breakers”. As it stands now, I think you have to suck it up and go 50/50 on this, just don’t go insane on the purchase price of the house. Can you wait a bit till she can contribute a bit to the down payment? I think going small at first with a 500k place and you both kicking in 50k for a down makes a lot of sense. You both will feel like you are building your life together, and equally. In other words, figure out what you can afford equally, and buy that.

3. Ok... now for the BUT. Now, if you moved to a HCOL area from a LCOL area for your career, then equal is out the window. It’s as simple as that. You simply can’t make somebody cripple their finances when they are moved to a place where their wages no longer pay for a gardener, never-mind a mortgage. In such a case, I think you will need a solution which accounts for: income differences, COL differences from whence she came, the fact she’s trading her career for yours at the moment (she moved for your career). Depending how these variables play out, it might mean your are 50/50 without her putting in a dime. Again, if this is the case, don’t go crazy on the house price, don’t be cheap, but don’t go overboard.

.... anyhow good luck. Man marriage sounds like so much fun! :D
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mrspock
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Re: We have a prenup, now buying a house.

Post by mrspock »

fortunefavored wrote: Mon Nov 25, 2019 1:30 pm
KyleAAA wrote: Mon Nov 25, 2019 12:39 pm ... The easiest way to manage this situation is to not use prior assets to purchase the home. If that means you have to take on PMI because you can't come up with a 20% down payment using co-mingled fund, so be it. She absolutely should be on the title. There is no question about this.
Before this thread gets locked due to all the marriage preaching instead of the financial question, this is the best comment on the thread. Yes, it may be financially (in aggregate) less efficient, but is the only way to preserve your previous arrangement.
Not necessarily fair. If I’m a school teacher doing just fine making $50k in wisconsin, and I moved to SF for hubby, where my salary puts me on the street or a 2 hour commute, there's just no way this is fair as my salary can no longer buy me my “wisconsin” standard of living. The details matter.
cdu7
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Re: We have a prenup, now buying a house.

Post by cdu7 »

Most prenups I have heard of usually ONLY cover assets obtained before marriage. Also you should know that judges frequently throw them out of the window if they feel like they don't like the agreement or that it was written in a way that doesn't conform to their understanding of the law. With that in mind, homes purchased after marriage are almost certain to be considered joint property in divorce no matter what your prenup said. Personally, I cannot imagine refusing to put your wife's name on the deed of a house you purchase together as a family. I have no doubt that your wife is concerned; I would urge you to immediately tell her she will be on the deed as a 50/50 owner period, and that is how you will deal with this moving forward. Seriously, tell her this as soon as possible; the longer you wait the longer she is questioning your commitment to her and the marriage.
FrugalConservative
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Re: We have a prenup, now buying a house.

Post by FrugalConservative »

sport wrote: Mon Nov 25, 2019 11:27 am IMO you have too much "me and she" and not enough "we". This is a marriage, not a business.
+1
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dm200
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Re: We have a prenup, now buying a house.

Post by dm200 »

jeremyj wrote: Mon Nov 25, 2019 9:51 am I have been an active member of the forum for a while, but didn't want to post personal info to a screenname some real life friends know.
- My wife and I have been married for 3.5 years, and we have a 1 year old daughter.
- I have $3mm. She has $200k, $150k of which is in retirement accounts. When we married it was $2mm and $50k (net of debts).
- We have a prenup that boils down to "Hers is hers, mine is mine; going forward she prioritizes retirement accounts and savings first before sharing expenses 40/60 with me." In practice, I've paid rent and we've roughly split the day-to-day stuff without worrying too much about it.
- If we separate, I will write her a (small, relative to assets) lump sum payout based on years of marriage, which will be larger if she ever chooses to put her career on hold to care for our child(ren).
- We have changed states since we married, but neither state is a community property state. We both work.
Matrimonially, things are very good, and I think the probability of needing any of these preparations is very low, but I've heard enough horror stories from coworkers to realize I shouldn't assume I have no chance of becoming part of the statistic. She rationally agrees, as we are able to realize our currently bonded selves and our unlikely but hypothetical separating future selves are different people.
We have rented since we met, but will likely buy a house in the $500k-$1mm range in 2020. After viewing some houses this past weekend, I asked her how important it would be to her that her name be on the deed/title, with the promise that we would figure something out that made us both comfortable. She expressed concern that if she were merely a tenant, I would have all the power in a potential separation (effectively threatening her with homelessness), which would also bleed into a custody battle; she also fairly points out that we changed states for my new job. I said I understood her concerns and we would figure something out. Two days later, she admitted that she's been stressed about this since we had the conversation, so I am hoping to find some information to reassure both of us.
I find her position legitimate and don't want her feeling marginalized and upset, but registering 50/50 ownership of a potentially $1mm asset I largely finance doesn't seem like an appropriate solution to that problem. Has anyone been in a similar situation and could provide advice?
Go with a non-50/50 ownership? (Doesn't help much with feelings of marginalization, but may legally give her more leverage as reassurance?)
Get a mortgage she can afford half of to build true joint equity?
Quote some legal precedent that would assure her that she wouldn't be in a precarious spot even if I were solely named?
Thanks to the knowledgeable and insightful folks on here for their help in the past and future.
No experience with pre-nups or with such net worth!

At your (the OP individually) apparent annual income and assets, the amount of the home purchase you are suggesting seems actually quite modest. I would urge (other posts have many reasons) joint 50-50 ownership (probably joint tenants by the entirety) and get a large mortgage to finance the purchase - with the mortgage joint as well.

My opinion (could be wrong) is that by having a very large joint mortgage, you (the OP individually) have a significant degree of protection against losing a large amount in case of subsequent divorce. For such a small (in my opinion) financial risk, you will gain a considerable degree of "marital harmony".

Just an additional observation that your (both OP and wife) near complete his and hers separation seems quite extreme and give an impression (perhaps reality) of being less than caring in your marital relationship.

As an aside, I wonder how many (formerly or now unmarried) female Bogleheads would enter into such a marriage?
dboeger1
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Re: We have a prenup, now buying a house.

Post by dboeger1 »

I think mrspock's post brings up some good points, and some of them are why I'm not necessarily a firm believer in any inherent moral superiority of the 50/50 in marriage approach. I think there are perfectly legitimate reasons why someone might want to protect personal assets in the unfortunate case of a divorce (some of which are explicitly embraced by the law, such as infidelity or physical abuse). My point is, you don't, and probably shouldn't believe in 50/50 as an unconditional aspect of marriage, because it's trivial to come up with counter-examples, like if your wife stole from you to fund a drug habit or some other self-destructive behavior. After all, if 50/50 was a universal moral truth, then how would buying the house before marriage and including it in the prenup be any more compatible? That sounds like a silly loophole to me.

However, I do think the general consensus appears to be that not everything boils down to a percentage. If it does, you shouldn't have gotten married. You could've stayed boyfriend and girlfriend, and kept your financial lives completely separate. But you didn't. You married. That means the house belongs to both of you. Not 50/50, not 60/40, but 100/100, until one of you passes or you get divorced, in which case, unfortunately, the courts end up with the difficult task of assigning ownership, which is where the over-simplified 50/50 comes from. If you feel the need to make up some kind of arrangement between you and your wife to account for the fact that you paid for the house, then by all means, do so. For example, maybe she has cooking duty, because no amount of cooking is ever really going to offset your million-dollar home purchase. I don't see that as some unreasonable compromise, even if it's not the most palatable in contemporary society (well, I'm a millennial, so that's my lens). But that should not in any way reduce her ownership in the house.

I don't claim to have all the answers when it comes to marriage. I definitely don't. But for me and my wife, joint ownership of our assets is non-negotiable. We have one bank account, we're beneficiaries on each other's retirement accounts, we both own our car, and when we buy a house some day, we'll both own that too. If we were to get divorced, yeah, then it would get really messy. But we're not going through marriage on the assumption of divorce. We're married with the intention of doing our marriage right. Divorce is a last resort in case we really can't figure out how to make it work. In the meantime, we both own everything. I've generally made significantly more income than my wife, but she also was our only source of income while I was unemployed for 18 months. Believe me, I got more than my fair share of flak from her for not working in those 18 months, but we did not start diving up assets either. I now make more than her again, but she also more than doubled her income switching employers, and still, we both just keep putting everything in the same joint account. I can't imagine how complicated it would be if at every turn in our lives, we had to re-evaluate who owned what based on our most recent paycheck.
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Re: We have a prenup, now buying a house.

Post by ponyboy »

mptfan wrote: Mon Nov 25, 2019 11:52 am Also, I don't think you understand that even if you owned the house in your name only, it is likely that over time your wife will contribute to the maintenance and upkeep of the house in terms of her labor and her money, and once that happens she will have a strong legal claim to a share of the ownership of the house in the event of a divorce anyway.
This. Prenup was stuff before the marriage. The house is after. Half of it will be hers whether you like it or not...unless you get her to sign a contract stating otherwise...which she would be out of her mind to sign.

Im all for protecting your assets that you brought to a marriage...but this is different. You guys are married...time to stop viewing all future purchases as yours/hers. yikes

And like all other prenup threads...this will be locked. Ponyboy is already calling it.
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