We have a prenup, now buying a house.

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Kaizen Soze
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Re: We have a prenup, now buying a house.

Post by Kaizen Soze »

You need to consult a lawyer. My non-expert opinion is that your wife needs to sign-off on the understanding that the house isn't marital property. And very strictly, you must only use your prenup money for all housing expenses including mortgage, repairs, and even furniture. Otherwise, if her funds or commingled funds contribute to the house at any time then it becomes marital property. Sounds like a nightmare to maintain that level of separation and would put an unnecessary strain on the marriage.

It would be uncomfortable to me to live in my spouse's house that was purchased as our family home after getting married. I predict many more issues from this situation that would outweigh the benefits of saving money in a potential divorce.
Last edited by Kaizen Soze on Tue Nov 26, 2019 12:58 pm, edited 1 time in total.
scotthew
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Re: We have a prenup, now buying a house.

Post by scotthew »

I wish I had a simple answer to this, but this scenario was a very large part of the reason my previous fiance left me.

I had about 10 times the net worth of her, including a nearly paid off house. She was ready to move to a larger house, and felt the burden of the down-payment should go on my pre-marital assets, but she should go on the deed and own the home 50/50. I was fully subscribed to dividing future earnings equally, but her insistance on entitlement to inheritance of premarital assets really killed that relationship. We were in a different situation from you, in that I had kids from a previous marriage and she had no kids of her own.

So, I''d say while in theory I'm all behind putting equal down-payment on the house, and splitting it equally, be careful how you discuss that.
mptfan
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Re: We have a prenup, now buying a house.

Post by mptfan »

Kaizen Soze wrote: Tue Nov 26, 2019 11:38 amAnd very strictly, you must only use your prenup money for all housing expenses including mortgage, repairs, and even furniture. Otherwise, if her funds or commingled funds contribute to the house at any time then it becomes marital property.
And how exactly would he enforce that? How can he stop her from spending her time and money to maintain and improve the house? She could go to a home improvement store and buy things to improve the house and bring them home and he could not stop her from doing that.
mmcmonster
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Re: We have a prenup, now buying a house.

Post by mmcmonster »

You had $3M going in.

You won the game prior to getting married. The prenup protects that.

Everything else is gravy.

Enjoy the marriage. Combine all finances that occur after marriage, including the house and making sure BOTH OF YOU have the ability to put money into tax deferred accounts.

The kindness you do to others will come back to you.

Otherwise ... well, karma can be a b!tch.
Kaizen Soze
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Re: We have a prenup, now buying a house.

Post by Kaizen Soze »

mptfan wrote: Tue Nov 26, 2019 11:56 am
Kaizen Soze wrote: Tue Nov 26, 2019 11:38 amAnd very strictly, you must only use your prenup money for all housing expenses including mortgage, repairs, and even furniture. Otherwise, if her funds or commingled funds contribute to the house at any time then it becomes marital property.
And how exactly would he enforce that? How can he stop her from spending her time and money to maintain and improve the house? She could go to a home improvement store and buy things to improve the house and bring them home and he could not stop her from doing that.
I have no idea, he should consult a lawyer. Generally whatever commingled funds are used towards becomes a marital asset.
BillyK
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Re: We have a prenup, now buying a house.

Post by BillyK »

As others have mentioned, you need to speak with an attorney. However, in many states if the home is your marital homestead where you both live in it together as your domicile, it doesn't matter whether her name is on the deed or whether you are using separate monies to purchase it. A lot of states have strong community property rights or have tenancy by entirety laws. Separating non-homestead property can be different from a marital homestead.
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celia
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Re: We have a prenup, now buying a house.

Post by celia »

sperry8 wrote: Tue Nov 26, 2019 11:04 am That is correct. However, just for safety purposes, I advise opening an intermediary bank... so that premarital is in Bank A, Bank B is a new bank account opened, and Bank C is comingled. Then, whenever one party with premarital assets wants to contribute to marriage, have monies move from Bank A to Bank B and then Bank C. This ensures that monies are never considered comingled. And in reverse, if ever taking monies out of Bank C for some reason... put them all in Bank B. Nothing ever goes into Bank A after marriage. It stays separate and monies only come out of it and only to Bank B.
Sperry8, What is the point in using Bank B? Are those accounts separate or co-mingled? Why not just go from Bank A to Bank C? If you rarely move money from separate to joint, the account(s) in Bank B will likely be empty most of the time.
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sperry8
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Re: We have a prenup, now buying a house.

Post by sperry8 »

celia wrote: Tue Nov 26, 2019 1:39 pm
sperry8 wrote: Tue Nov 26, 2019 11:04 am That is correct. However, just for safety purposes, I advise opening an intermediary bank... so that premarital is in Bank A, Bank B is a new bank account opened, and Bank C is comingled. Then, whenever one party with premarital assets wants to contribute to marriage, have monies move from Bank A to Bank B and then Bank C. This ensures that monies are never considered comingled. And in reverse, if ever taking monies out of Bank C for some reason... put them all in Bank B. Nothing ever goes into Bank A after marriage. It stays separate and monies only come out of it and only to Bank B.
Sperry8, What is the point in using Bank B? Are those accounts separate or co-mingled? Why not just go from Bank A to Bank C? If you rarely move money from separate to joint, the account(s) in Bank B will likely be empty most of the time.
That's correct. But I want full separation so in the case of a judge I don't even move money from a premarital account to a post marital one. I move premarital to a separate account I own... and only then from this separate account to post-marital. I want no confusion and want any judge to see that monies to Bank C (which is what they care about) come from what appears to be a mostly empty account!
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chevca
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Re: We have a prenup, now buying a house.

Post by chevca »

Kaizen Soze wrote: Tue Nov 26, 2019 1:06 pm
mptfan wrote: Tue Nov 26, 2019 11:56 am
Kaizen Soze wrote: Tue Nov 26, 2019 11:38 amAnd very strictly, you must only use your prenup money for all housing expenses including mortgage, repairs, and even furniture. Otherwise, if her funds or commingled funds contribute to the house at any time then it becomes marital property.
And how exactly would he enforce that? How can he stop her from spending her time and money to maintain and improve the house? She could go to a home improvement store and buy things to improve the house and bring them home and he could not stop her from doing that.
I have no idea, he should consult a lawyer. Generally whatever commingled funds are used towards becomes a marital asset.
Easy answer is, never get married in the first place if one never wants to own anything as a couple.
Sam1
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Re: We have a prenup, now buying a house.

Post by Sam1 »

chevca wrote: Tue Nov 26, 2019 3:39 pm
Kaizen Soze wrote: Tue Nov 26, 2019 1:06 pm
mptfan wrote: Tue Nov 26, 2019 11:56 am
Kaizen Soze wrote: Tue Nov 26, 2019 11:38 amAnd very strictly, you must only use your prenup money for all housing expenses including mortgage, repairs, and even furniture. Otherwise, if her funds or commingled funds contribute to the house at any time then it becomes marital property.
And how exactly would he enforce that? How can he stop her from spending her time and money to maintain and improve the house? She could go to a home improvement store and buy things to improve the house and bring them home and he could not stop her from doing that.
I have no idea, he should consult a lawyer. Generally whatever commingled funds are used towards becomes a marital asset.
Easy answer is, never get married in the first place if one never wants to own anything as a couple.
This. Or perhaps don’t buy property together. Because it seems like buying a home is what has brought all of this up.

I can’t imagine being in a situation where I was married to someone who didn’t want me to have legal rights to my main residence. This seems unkind and strange. My husband wants nothing more than to make me a happy woman and provide for his wife and kids. We are a family unit and in this together. I have made more money than he has and now he makes more than I do. There is no “mine.”

As someone else has mentioned, I’m not entirely sure you can keep a spouse from having a legal stake on your home. For example, if you die, would you expect for your wife to be kicked out? From how OP describes the situation, I don’t get the impression he would be leaving his spouse or children any assets if there is a way he can go about doing that.
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LilyFleur
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Re: We have a prenup, now buying a house.

Post by LilyFleur »

mptfan wrote: Mon Nov 25, 2019 4:34 pm
mrspock wrote: Mon Nov 25, 2019 4:28 pm Check with a good lawyer, but I am reasonably sure in a bunch of states, that as soon as you start co-mingling you prenup assets (including growth), you might as well light it on fire (for the portion of assets you co-mingled). It’s just not a smart idea if you want to maintain rights to those assets per the prenup.
Yes, but you should understand what it means to "comingle." Comingling is to combine marital assets with premarital assets...once combined the total becomes marital assets...the most common example would be to deposit a paycheck while married into an account with premarital assets... that is comingling marital assets (your earnings while married) with premarital assets (an account with premarital savings). That is different from withdrawing some of your pre-marital assets to pay for a marital asset.

So in the OP's case, if he has a premarital account with $2 million and he withdraws $500,000 to pay for a marital home titled in both names, the $500,000 becomes a marital asset but the remaining $1.5 million remains premarital, unless of course he deposits some marital assets into the premarital account...that would be comingling.
Actually, a friend of mine just divorced and was credited in the divorce for the entire amount they contributed to the downpayment on the family home from their separate assets. Community property state. Document everything and file the paperwork in a safe place. YMMV.
Or, own the home in your name only but set up an agreement in advance that in the case of a divorce, the parents will allow the child to remain in her home. Sometimes parents rotate in and out of the home to ensure the stability of the child.
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Doom&Gloom
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Re: We have a prenup, now buying a house.

Post by Doom&Gloom »

This is one of the saddest threads I have read on BH because there is so much stress involved with a couple that should be financially set forever.

And DW and I hold most of our assets separately! Our house is an exception. When we married our financial situations were lopsided--not as much as OP's--but still one-sided. We figured everything out without prenups or getting attorneys involved. When threads re: separate accounts for married couples come up, the one caution I have for those considering it is that all the details must be completely satisfactory to both parties. OP's situation may not be unsolvable mathematically, but it seems they have a long way to go before he and his spouse will be on the same page and will be happy about it.
dboeger1
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Re: We have a prenup, now buying a house.

Post by dboeger1 »

chevca wrote: Tue Nov 26, 2019 3:39 pm
Kaizen Soze wrote: Tue Nov 26, 2019 1:06 pm
mptfan wrote: Tue Nov 26, 2019 11:56 am
Kaizen Soze wrote: Tue Nov 26, 2019 11:38 amAnd very strictly, you must only use your prenup money for all housing expenses including mortgage, repairs, and even furniture. Otherwise, if her funds or commingled funds contribute to the house at any time then it becomes marital property.
And how exactly would he enforce that? How can he stop her from spending her time and money to maintain and improve the house? She could go to a home improvement store and buy things to improve the house and bring them home and he could not stop her from doing that.
I have no idea, he should consult a lawyer. Generally whatever commingled funds are used towards becomes a marital asset.
Easy answer is, never get married in the first place if one never wants to own anything as a couple.
Couldn't agree more. I feel like it's marriage for marriage's sake. In late 2019 coming on 2020, we're seeing practices which were shunned or even outlawed for the bulk of human history, such as gay marriage, civil unions, transgenderism, interracial marriages, living with roommates or parents well into adulthood, etc., being embraced and/or legalized more and more, and yet for some reason, the thought of a man and a woman just dating in perpetuity without getting married is still considered blasphemy by many. I'm not trying to turn this into a moral discussion, because that's not what this topic or forum is about, and I'm sure we as Bogleheads come from all over the spectrum of social and cultural norms and accepted practices. But with divorce statistics the way they are, and the countless horror stories we hear about divorce, I think it's safe to say society needs to chill out when it comes to the insistence on couples getting married.

I just don't get what the appeal of marriage is to people who fundamentally don't want to share assets. What is the point? As primarily a legal construct in a time when it has largely been decoupled from its roots in colonial American courtship and family practices, why would such people get married instead of just dating? You can cuddle, make out, watch Netflix, go to a bar, dance in a club, meet each other's parents, and heck, even have kids all you want without getting married. It seems the only constant, explicit differentiators in marriage then are the financial and legal obligations. Your taxes change, and you share legal ownership of assets. That's pretty much what marriage is across the board today. Obviously, each couple attaches their own special and cultural meanings to it, but virtually none of them are universal today EXCEPT the legal/financial part, and that's because it was encoded into law in a time when there wasn't so much diversity of opinion on what marriage meant.

Again, I'm not trying to get into a rant about what marriage should and shouldn't be, even if it sounds like that. I legitimately hope everything works out with OP. I just feel like if the whole point is to keep the house away from his new wife, he may as well have told her before marriage, "Hey, I really like this arrangement where we own separate things but live together. Instead of getting married, would you like to be both the mother to my child and my tenant in a new $1 million home that I buy and own by myself?" I feel like society needs to get to a point where that's not such a crazy idea, at least not inherently any more crazy than any of the other kinds of relationships people have. Or don't, and keep wondering why the framework of marriage doesn't fit everyone's unique financial objectives. It's like trying to fit a square peg in a round hole.

Because that ship set sail when OP decided to get married, I think he should just accept what he signed up for and share the house. May this be a lesson to young, unmarried Bogleheads to not rush into marriage without fully understanding the repercussions simply because "that's what you do."
stockrex
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Re: We have a prenup, now buying a house.

Post by stockrex »

Someone who has been divorced and having experienced my hard earned premarital $$ end up with her was painful.

Buy the house but loan the entire amount, DO NOT co-mingle.

1. Take out a note for 80 and another for 20, I did this for my 1st house. 20 will be higher interest rate but work out a faster payment schedule with your wife.
2. Ask her to put money down off her retirement as a loan, put same amount down.
Rest get a loan from family/trust etc and write them a simple interest note.
If you ever decide split, you pay those entities first and split any equity.
t1dbkk
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Re: We have a prenup, now buying a house.

Post by t1dbkk »

You got it right in walking this as if it was thin ice, as it is. Your colleagues are right, its statistics, science. Women initiate 70+% of divorces.

People here saying "we" have their love goggles on. Stick to your gut feels, you are doing something right. I would just keep on renting if I were you, find a problem w the new house and move on.
mptfan
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Re: We have a prenup, now buying a house.

Post by mptfan »

dboeger1 wrote: Tue Nov 26, 2019 4:46 pmIt seems the only constant, explicit differentiators in marriage then are the financial and legal obligations. Your taxes change, and you share legal ownership of assets. That's pretty much what marriage is across the board today.
There are quite a few legal benefits of marriage, many more than the two you mentioned:

Rights and benefits
Right to benefits while married:
Employment assistance and transitional services for spouses of members being separated from military service; continued commissary privileges
Per diem payment to spouse for federal civil service employees when relocating
Indian Health Service care for spouses of Native Americans (in some circumstances)
Sponsor husband/wife for immigration benefits
Larger benefits under some programs if married, including:
Veteran's disability
Supplemental Security Income
Disability payments for federal employees
Medicaid
Property tax exemption for homes of totally disabled veterans
Income tax deductions, credits, rates exemption, and estimates
Wages of an employee working for one's spouse are exempt from federal unemployment tax[3]
Joint and family-related rights:
Joint filing of bankruptcy permitted
Joint parenting rights, such as access to children's school records
Family visitation rights for the spouse and non-biological children, such as to visit a spouse in a hospital or prison
Next-of-kin status for emergency medical decisions or filing wrongful death claims
Custodial rights to children, shared property, child support, and alimony after divorce
Domestic violence intervention
Access to "family only" services, such as reduced rate memberships to clubs & organizations or residency in certain neighborhoods
Preferential hiring for spouses of veterans in government jobs
Tax-free transfer of property between spouses (including on death) and exemption from "due-on-sale" clauses.
Special consideration to spouses of citizens and resident aliens
Threats against spouses of various federal employees is a federal crime
Right to continue living on land purchased from spouse by National Park Service when easement granted to spouse
Court notice of probate proceedings
Domestic violence protection orders
Existing homestead lease continuation of rights
Regulation of condominium sales to owner-occupants exemption
Funeral and bereavement leave
Joint adoption and foster care
Joint filing of taxes (see filing status)
Insurance licenses, coverage, eligibility, and benefits organization of mutual benefits society
Legal status with stepchildren
Making spousal medical decisions
Spousal non-resident tuition differential waiver
Permission to make funeral arrangements for a deceased spouse, including burial or cremation
Right of survivorship of custodial trust
Right to change surname upon marriage
Right to enter into prenuptial agreement
Right to inheritance of property
Spousal privilege in court cases (the marital confidences privilege and the spousal testimonial privilege)
For those divorced or widowed, the right to many of ex- or late spouse's benefits, including:
Social Security pension
Veteran's pensions, indemnity compensation for service-connected deaths, medical care, and nursing home care, right to burial in veterans' cemeteries, educational assistance, and housing
survivor benefits for federal employees
Survivor benefits for spouses of longshoremen, harbor workers, railroad workers
Additional benefits to spouses of coal miners who die of black lung disease
$100,000 to spouse of any public safety officer killed in the line of duty
Continuation of employer-sponsored health benefits
Renewal and termination rights to spouse's copyrights on death of spouse
Continued water rights of spouse in some circumstances
Payment of wages and workers compensation benefits after worker death
Making, revoking, and objecting to post-mortem anatomical gifts

https://en.wikipedia.org/wiki/Rights_an ... d_benefits
dboeger1
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Re: We have a prenup, now buying a house.

Post by dboeger1 »

mptfan wrote: Tue Nov 26, 2019 5:00 pm
dboeger1 wrote: Tue Nov 26, 2019 4:46 pmIt seems the only constant, explicit differentiators in marriage then are the financial and legal obligations. Your taxes change, and you share legal ownership of assets. That's pretty much what marriage is across the board today.
There are quite a few legal benefits of marriage, many more than the two you mentioned:
https://en.wikipedia.org/wiki/Rights_an ... d_benefits
Thank you. I obviously over-simplified my post to make a point. My point still stands: I think every single couple needs to understand and accept all of the things on this list BEFORE entering into a marriage. Also, again, I'm not trying to make this a post about morals, rather the implications of marriage for people who might find themselves in situations like OP's, but this is a very important and relevant list for people who may want to get married but may not be able to for whatever reason, such as gay couples in jurisdictions where it's illegal. Basically, regardless of who you are, man or woman, black or white, straight or gay, tall or short, you need to look at that list as a couple and decide whether those things fit your lifestyle (ideally a list of obligations as well; I didn't actually click the link, but at first glance, it looks like a list of benefits only). I would bundle all of those things under the legal/financial side, which is pretty much what I stated originally. But again, thanks to mptfan for adding that, because marriage may be fun for some, business for others, and yet something else entirely for you, but at the end of the day, those are the facts for everybody (I'm also not a lawyer, so yeah).
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Re: We have a prenup, now buying a house.

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