Divorces

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ju1ce
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Divorces

Post by ju1ce »

I've seen people post about how they have assets or stocks under their spouses name to minimize tax, and it's lead me to wonder how things could go doing this if there was a divorce? Not just specifically the assets that are under their name too, but in general, getting divorced and losing a chunk of your money/assets seems ultra depressing, and makes me wary of getting married :?. Is there anything I should know that would make me feel less pessimistic? (besides 'don't get divorced', can never know what happens), I'd really just like to read any discussion about this.
rascott
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Re: Divorces

Post by rascott »

Marry somebody with more money than you? :D
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Re: Divorces

Post by rockstar »

exigent
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Re: Divorces

Post by exigent »

Marry well and you won’t have to worry about divorce.
hoofaman
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Re: Divorces

Post by hoofaman »

Not a lawyer, but I don't think shifting assets between spouses would create any different sort of outcome in a divorce, typically the net worth of the married couple would be split in half (more or less) and divided.

However, dividing assets/debts is probably the more straight forward part most of the time. The more complicated part is ongoing financial support of the lesser earning/non-earning spouse post-divorce, of which the amount and length of time is going to be all of the place and an agreement like a pre-nup/post-nup won't necessarily help shield you from this liability. The part that concerns most people is that, because of "imputed income" you may no longer be able to choose to retire early or downshift to a less stressful job
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unclescrooge
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Re: Divorces

Post by unclescrooge »

ju1ce wrote: Thu Nov 26, 2020 9:37 pm I've seen people post about how they have assets or stocks under their spouses name to minimize tax, and it's lead me to wonder how things could go doing this if there was a divorce?
That's not how taxes work. Can you cite a source?
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willthrill81
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Re: Divorces

Post by willthrill81 »

exigent wrote: Thu Nov 26, 2020 10:15 pm Marry well and you won’t have to worry about divorce.
Sage advice. Few things will destroy wealth (and many other aspects of your life) as quickly as a divorce will.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
Marseille07
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Re: Divorces

Post by Marseille07 »

I think the only reasonable defense is to have a prenup. I know it's a touchy topic, but there are people whose motive is to snatch up premarital assets.

As far as the names on the account, it really depends on which state you're in. Common-law states and community property states handle assets very differently.
MathIsMyWayr
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Re: Divorces

Post by MathIsMyWayr »

willthrill81 wrote: Thu Nov 26, 2020 10:26 pm
exigent wrote: Thu Nov 26, 2020 10:15 pm Marry well and you won’t have to worry about divorce.
Sage advice. Few things will destroy wealth (and many other aspects of your life) as quickly as a divorce will.
How can a divorce destroy wealth per person except the fees involved? Don't you own only half of the couple's "shared" NW in the first place? I don't take it lightly, but that is the cold math. I understand that 1*1/2=1, but that 1*1/2 does not equal 1 in other aspects.
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willthrill81
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Re: Divorces

Post by willthrill81 »

MathIsMyWayr wrote: Thu Nov 26, 2020 10:48 pm
willthrill81 wrote: Thu Nov 26, 2020 10:26 pm
exigent wrote: Thu Nov 26, 2020 10:15 pm Marry well and you won’t have to worry about divorce.
Sage advice. Few things will destroy wealth (and many other aspects of your life) as quickly as a divorce will.
How can a divorce destroy wealth per person except the fees involved? Don't you own only half of the couple's "shared" NW in the first place? I don't take it lightly, but that is the cold math. I understand that 1*1/2=1, but that 1*1/2 does not equal 1 in other aspects.
It's generally much more efficient to run one household rather than two.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
checkyourmath
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Re: Divorces

Post by checkyourmath »

Divorces were super popular in the 1990s. I recommend going back and reading the thread then.
sd323232
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Re: Divorces

Post by sd323232 »

MathIsMyWayr wrote: Thu Nov 26, 2020 10:48 pm
willthrill81 wrote: Thu Nov 26, 2020 10:26 pm
exigent wrote: Thu Nov 26, 2020 10:15 pm Marry well and you won’t have to worry about divorce.
Sage advice. Few things will destroy wealth (and many other aspects of your life) as quickly as a divorce will.
How can a divorce destroy wealth per person except the fees involved? Don't you own only half of the couple's "shared" NW in the first place? I don't take it lightly, but that is the cold math. I understand that 1*1/2=1, but that 1*1/2 does not equal 1 in other aspects.
How do you if u married well? U can't control other person. If the other person decides to go different life path and asks for divorce, not much u can do. I wouldn't want to force someone to stay married for sake of not getting divorce. Life is too short for that. Divorce is very common nowadays, and finances need to be planned to anticipate a divorce in future, like pre nup.
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Re: Divorces

Post by Grt2bOutdoors »

ju1ce wrote: Thu Nov 26, 2020 9:37 pm I've seen people post about how they have assets or stocks under their spouses name to minimize tax, and it's lead me to wonder how things could go doing this if there was a divorce? Not just specifically the assets that are under their name too, but in general, getting divorced and losing a chunk of your money/assets seems ultra depressing, and makes me wary of getting married :?. Is there anything I should know that would make me feel less pessimistic? (besides 'don't get divorced', can never know what happens), I'd really just like to read any discussion about this.
May I suggest stop being so pessimistic? Rather than focusing on outcomes, focus your time and energy on the relationship. This is a forum on finances, but you ought to be able to read the red flags, if you are not on the same page then do not enter into a financial contract which can have severe penalties if the partnership were to sour. You should enter into a true partnership where both contribute to the financial well-being of the entity, if one is rowing the oar in one direction and one is going in the opposite direction then common sense says what? One bank account held jointly, one taxable account held jointly, all assets after marriage go into those accounts, all pre-marital assets remain separate - do not comingle the money.
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Re: Divorces

Post by Sandtrap »

ju1ce wrote: Thu Nov 26, 2020 9:37 pm I've seen people post about how they have assets or stocks under their spouses name to minimize tax, and it's lead me to wonder how things could go doing this if there was a divorce? Not just specifically the assets that are under their name too, but in general, getting divorced and losing a chunk of your money/assets seems ultra depressing, and makes me wary of getting married :?. Is there anything I should know that would make me feel less pessimistic? (besides 'don't get divorced', can never know what happens), I'd really just like to read any discussion about this.
You will not be pessimistic if your heart it “touched” by the right person and you both have each other’s best interests in mind and spirit.

Sometimes or often or not: divorce is a lose/lose for all it effects with long term or permanent fallout.

The dollar losses from divorce can be dwarfed by the long term human costs. Be concerned with the later to avoid the former.

Also...no commingling before mingling🙀
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Grt2bOutdoors
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Re: Divorces

Post by Grt2bOutdoors »

sd323232 wrote: Thu Nov 26, 2020 11:03 pm
MathIsMyWayr wrote: Thu Nov 26, 2020 10:48 pm
willthrill81 wrote: Thu Nov 26, 2020 10:26 pm
exigent wrote: Thu Nov 26, 2020 10:15 pm Marry well and you won’t have to worry about divorce.
Sage advice. Few things will destroy wealth (and many other aspects of your life) as quickly as a divorce will.
How can a divorce destroy wealth per person except the fees involved? Don't you own only half of the couple's "shared" NW in the first place? I don't take it lightly, but that is the cold math. I understand that 1*1/2=1, but that 1*1/2 does not equal 1 in other aspects.
How do you if u married well? U can't control other person. If the other person decides to go different life path and asks for divorce, not much u can do. I wouldn't want to force someone to stay married for sake of not getting divorce. Life is too short for that. Divorce is very common nowadays, and finances need to be planned to anticipate a divorce in future, like pre nup.
Point to those statistics that say "its very common". Counseling is common too, but counseling doesn't lead to divorce.
What destroys assets is emotion and the use of middlemen to steal the hard earned wealth. Otherwise, divorce should not be a great evaporator of anything except the dissolution of the contract. It's actually in each parties self interest to work out an amicable solution but there are alot of vindictive people out there.
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Lee_WSP
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Re: Divorces

Post by Lee_WSP »

Marseille07 wrote: Thu Nov 26, 2020 10:27 pm I think the only reasonable defense is to have a prenup. I know it's a touchy topic, but there are people whose motive is to snatch up premarital assets.
They've been chipped away at pretty severely by modern case law. The bullet proof route these days is an irrevocable trust.
Marseille07
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Re: Divorces

Post by Marseille07 »

Lee_WSP wrote: Thu Nov 26, 2020 11:14 pm
Marseille07 wrote: Thu Nov 26, 2020 10:27 pm I think the only reasonable defense is to have a prenup. I know it's a touchy topic, but there are people whose motive is to snatch up premarital assets.
They've been chipped away at pretty severely by modern case law. The bullet proof route these days is an irrevocable trust.
I wasn't aware of this, will look it up. Thanks.
l1am
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Re: Divorces

Post by l1am »

exigent wrote: Thu Nov 26, 2020 10:15 pm Marry well and you won’t have to worry about divorce.
All you can do is reduce the risk. And if you're too risk averse, you'll never get married.
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Re: Divorces

Post by HomerJ »

ju1ce wrote: Thu Nov 26, 2020 9:37 pmI've seen people post about how they have assets or stocks under their spouses name to minimize tax
Never heard of this. Do you have an example?

As far as divorce, you usually split things in half.

Keep in it your name, and she gets half. Put it in her name, and you get half.

Not sure what you are saying.
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Re: Divorces

Post by 1789 »

ju1ce wrote: Thu Nov 26, 2020 9:37 pm I've seen people post about how they have assets or stocks under their spouses name to minimize tax, and it's lead me to wonder how things could go doing this if there was a divorce? Not just specifically the assets that are under their name too, but in general, getting divorced and losing a chunk of your money/assets seems ultra depressing, and makes me wary of getting married :?. Is there anything I should know that would make me feel less pessimistic? (besides 'don't get divorced', can never know what happens), I'd really just like to read any discussion about this.
Get married to someone you love more than your money.
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Grt2bOutdoors
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Re: Divorces

Post by Grt2bOutdoors »

1789 wrote: Fri Nov 27, 2020 12:09 am
ju1ce wrote: Thu Nov 26, 2020 9:37 pm I've seen people post about how they have assets or stocks under their spouses name to minimize tax, and it's lead me to wonder how things could go doing this if there was a divorce? Not just specifically the assets that are under their name too, but in general, getting divorced and losing a chunk of your money/assets seems ultra depressing, and makes me wary of getting married :?. Is there anything I should know that would make me feel less pessimistic? (besides 'don't get divorced', can never know what happens), I'd really just like to read any discussion about this.
Get married to someone you love more than your money.
Should be the other way around, get someone who loves you more than your money.
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l1am
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Re: Divorces

Post by l1am »

Grt2bOutdoors wrote: Fri Nov 27, 2020 12:30 am Should be the other way around, get someone who loves you more than your money.
I never reveal to any woman I date what my NW is. I'm sure they could figure out I'm on a decent salary, and know I'm financially stable, but they've all heavily underestimated my NW. I'm good with that.
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Re: Divorces

Post by Samosa22 »

HomerJ wrote: Thu Nov 26, 2020 11:30 pm
ju1ce wrote: Thu Nov 26, 2020 9:37 pmI've seen people post about how they have assets or stocks under their spouses name to minimize tax
Never heard of this. Do you have an example?

As far as divorce, you usually split things in half.

Keep in it your name, and she gets half. Put it in her name, and you get half.

Not sure what you are saying.
A working spouse funding non-working spouse's IRA is one way to increase tax advantage space and hence save on taxes.
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Re: Divorces

Post by Samosa22 »

unclescrooge wrote: Thu Nov 26, 2020 10:22 pm
ju1ce wrote: Thu Nov 26, 2020 9:37 pm I've seen people post about how they have assets or stocks under their spouses name to minimize tax, and it's lead me to wonder how things could go doing this if there was a divorce?
That's not how taxes work. Can you cite a source?
A working spouse funding non-working spouse's IRA is one way to increase tax advantage space and hence save on taxes.
Diversification is protection against ignorance - WB.
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Re: Divorces

Post by Schlabba »

ju1ce wrote: Thu Nov 26, 2020 9:37 pm I've seen people post about how they have assets or stocks under their spouses name to minimize tax, and it's lead me to wonder how things could go doing this if there was a divorce? Not just specifically the assets that are under their name too, but in general, getting divorced and losing a chunk of your money/assets seems ultra depressing, and makes me wary of getting married :?. Is there anything I should know that would make me feel less pessimistic? (besides 'don't get divorced', can never know what happens), I'd really just like to read any discussion about this.
Never get married in the first place. There is no advantage but divorces can destroy you.

Ever heard of lifetime alimony states?
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BeBH65
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Re: Divorces

Post by BeBH65 »

hoofaman wrote: Thu Nov 26, 2020 10:20 pm Not a lawyer, but I don't think shifting assets between spouses would create any different sort of outcome in a divorce, typically the net worth of the married couple would be split in half (more or less) and divided.

However, dividing assets/debts is probably the more straight forward part most of the time. The more complicated part is ongoing financial support of the lesser earning/non-earning spouse post-divorce, of which the amount and length of time is going to be all of the place and an agreement like a pre-nup/post-nup won't necessarily help shield you from this liability. The part that concerns most people is that, because of "imputed income" you may no longer be able to choose to retire early or downshift to a less stressful job
unclescrooge wrote: Thu Nov 26, 2020 10:22 pm
ju1ce wrote: Thu Nov 26, 2020 9:37 pm I've seen people post about how they have assets or stocks under their spouses name to minimize tax, and it's lead me to wonder how things could go doing this if there was a divorce?
That's not how taxes work. Can you cite a source?
OP seems to be Australian.
Different countries have different rules around taxes and divorces.
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ju1ce
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Re: Divorces

Post by ju1ce »

For the people asking about the tax part, I'm not too sure, but I've read people saying they have had their spouses buy stocks under their name if they are in a lower tax bracket than you.

Also, I realize that asking this has made me sound like I'm worried about myself getting divorced, which I'm not, I was simply curious to know about what would happen as it does seem like a terrible thing.
xxd091
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Re: Divorces

Post by xxd091 »

In the current volatile situation there have been some proven survival techniques
Get married
Have children
Go to church once a week
(Re investing-use index trackers)
These behaviours have a long-biblical?-proven track record excluding Index Trackers!
They can be successfully ignored in the good times but are seen to come into their own in tough times
Very easy to promulgate-very hard to follow
Divorce therefore rank along with annuities,day trading etc as failed financial behaviours
To be avoided -if possible
xxd09( married 51 years,3 married children ,8 grandchildren but don’t go to church!)
Investments-3 Index Tracker Funds only
So far so good
manatee2005
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Re: Divorces

Post by manatee2005 »

exigent wrote: Thu Nov 26, 2020 10:15 pm Marry well and you won’t have to worry about divorce.
People change in 25 years.
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Re: Divorces

Post by Sandtrap »

ju1ce wrote: Fri Nov 27, 2020 5:01 am For the people asking about the tax part, I'm not too sure, but I've read people saying they have had their spouses buy stocks under their name if they are in a lower tax bracket than you.

Also, I realize that asking this has made me sound like I'm worried about myself getting divorced, which I'm not, I was simply curious to know about what would happen as it does seem like a terrible thing.
Yes.
It can be a very terrible thing financially, sometimes irrecoverable.

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firebirdparts
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Re: Divorces

Post by firebirdparts »

manatee2005 wrote: Fri Nov 27, 2020 6:17 am
exigent wrote: Thu Nov 26, 2020 10:15 pm Marry well and you won’t have to worry about divorce.
People change in 25 years.
I read somewhere that they change ever 7 years, and my wife does that like clockwork. She changes dramatically. We've been married 30 years, so I am on the 5th version of her. It's fairly new. Some versions are an improvement.

I've learned a lot about marriage and relationships. One of the things that I accept is the idea that happiness is largely genetic, first suggested by Sonja Lyubomirsky, Kennon M. Sheldon, and David Schkade. I have certainly observed that people don't have all that much control over their behavior. Far before I was even married, I had observed that people don't act in their own best interest. We commonly assume people do, and so I realized that's a bad assumption. Another thing that I accept is the work of John Gottman, who said he could predict who would get divorced as he identified pretty easily the behaviors of people who will be divorced in the future. Harder to do when you're analyzing yourself, though. People's reactive behaviors are based on something, but they're not rooted in effectiveness. Whatever purpose they serve, it's not effectiveness.

Married people are healthier and wealthier on average, and I think their self-reported happiness is higher too. FWIW.
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Re: Divorces

Post by JPM »

Total divorce-proofing probably not possible, but;

It helps a lot to know your partner well before marriage. If you don't know your partner well, it really is a crapshoot. And by that I mean to know well the actual person and not just your dream of him or her and know the difference.

If you marry someone loyal and generous and you yourself are a loyal and generous partner, odds of a long happy marriage are very good.

It's not all peaches and cream all the time in marriage for anybody. During the rougher times it's important to remember that and not give up too early on the marriage. Remain loyal and generous yourself and try to work it thru. It's during the tough times that the loyalty part often breaks down, then there is somebody else in the picture helping to wreck the marriage. Many dentists I know got divorced in middle age and married their assistant or hygienist. This usually happens during one of the rough spots in the marriage. Seldom works out well for the dentist. The ones who stay married generally get rich.

If you love your kids, it's important not to lose sight of what divorce for their parents means for their life chances. Often the divorce bar gets the college savings instead of the college in these cases. They can even attach the 529 in some states.

Divorce used to be only for the rich because only they could afford it. Now people get divorced all the time who really can't afford it in one sense or another.
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Re: Divorces

Post by midareff »

willthrill81 wrote: Thu Nov 26, 2020 10:26 pm
exigent wrote: Thu Nov 26, 2020 10:15 pm Marry well and you won’t have to worry about divorce.
Sage advice. Few things will destroy wealth (and many other aspects of your life) as quickly as a divorce will.
Well said, although if you must divorce do it early and before kids, it is toughest on them.
egrets
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Re: Divorces

Post by egrets »

firebirdparts wrote: Fri Nov 27, 2020 7:52 am Married people are healthier and wealthier on average, and I think their self-reported happiness is higher too. FWIW.
I don't know about general health or wealth, but in terms of happiness, it's single women, married men, married women, single men. Unmarried single women live the longest on average, also.
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Re: Divorces

Post by Schlabba »

egrets wrote: Fri Nov 27, 2020 8:20 am
firebirdparts wrote: Fri Nov 27, 2020 7:52 am Married people are healthier and wealthier on average, and I think their self-reported happiness is higher too. FWIW.
I don't know about general health or wealth, but in terms of happiness, it's single women, married men, married women, single men. Unmarried single women live the longest on average, also.
Its a myth. For the happiness they often count divorced people in the ‘single’ camp.
As for the wealth, correlation is not causation. It could just be that it is a lot easier to find someone willing to marry you if you are successful in society.

There is a lot more to it than a simple comparison between groups.
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Re: Divorces

Post by LadyGeek »

This thread has run its course and is locked (not personal nor actionable - the OP is not planning to get married, relationship issue). General comment threads are off topic in the forums with "Personal" in the title. See: A reminder that non-investing general comment threads are OT
- It must be personal. In other words, you must be asking about your own situation. You can also ask on behalf of someone specific, such as a family member.

- It must be actionable. You must be able to do something specific with the replies that will make a difference in your situation.
This thread is now in the Personal Finance (Not Investing) forum (asset protection).
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