Has anyone been through the process of writing a prenup or wishing they had?

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akratic
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Has anyone been through the process of writing a prenup or wishing they had?

Post by akratic »

Divorce is extremely unlikely in our case (maybe everyone else thinks this too at this point), but still we're going in with substantial assets. We've had separate finances until now and plan to combine income and expenses after the marriage (to make logistics of having kids easier).

I've been reading about premarital assets and things seem pretty complicated and to vary by state. It seems like there are a bunch of rules like both sides need independent professional legal counsel. We don't care to play by these rules and instead just want to write down what we want simply and explicitly on a piece of paper and sign that (and trust in the sanity of anyone who reads that paper in the future).

Anyway, let's say she has x and I have 7x.

What makes sense to me is if we divorce with more assets than 8x, then she takes 1x, I take 7x, and the extra gets split 50/50. If we divorce with with less than 8x (unlikely) then we divide it 1/8 to her and 7/8 to me. (Or 50/50? I don't care about this case at all.)

Where things get murkier is do we inflation adjust x? How about investment income? It could in theory be pretty clean if we keep our existing independent brokerage accounts separate and then just create a new joint one for new assets. However, what if we do something like liquidate a substantial portion of premarital assets to buy a house?

Maybe you see all these questions and complications and think: this guy needs a lawyer. I see that same list and think: this guy needs help from the renaissance ERE community!

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Ego
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Re: Has anyone been through the process of writing a prenup or wishing they had?

Post by Ego »

My opinion.....
http://forum.earlyretirementextreme.com ... =75#p55176
akratic wrote: Where things get murkier is do we inflation adjust x? How about investment income? It could in theory be pretty clean if we keep our existing independent brokerage accounts separate and then just create a new joint one for new assets. However, what if we do something like liquidate a substantial portion of premarital assets to buy a house?
However, if you do it on your own you might find NOLO useful.

http://www.nolo.com/legal-encyclopedia/ ... -agreement

jacob
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Re: Has anyone been through the process of writing a prenup or wishing they had?

Post by jacob »

Everyone thinks it's unlikely. But the likelihood of divorce is ~50% ... yours is statistically lower since you've been together for years and you're over 30. Might be far lower than 50% ....

We did a pre-nup on the back of a napkin. I'm told it has zero legal-value. However, we've aimed to keep things very very even in terms of the original imbalance of assets (I was 4, she was -1). All income (including taxable capital income+gains) has been split 50/50. I've made quite a bit more (both earned income and capital gains+income) than she has since we got married. Assets have been kept separate but income and expenses have been shared. This makes taxes very easy. When we bought the house, we saved up in a joint account. That just meant that all joint income went to the house savings for a while. Never cared about inflation adjustment. In the short run, it's imprecise. In the long run, we more than made up for it with income.

I'm currently at 121x annual expenses and she's at 54x. Should we, very unexpectedly, break the pre-nup in a hostile manner and divide everything 50/50 despite prior agreements, we'd both end up at 88x. I can live with that even though I'd be mad and disappointed.

Laura Ingalls
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Re: Has anyone been through the process of writing a prenup or wishing they had?

Post by Laura Ingalls »

Jacob if you divorced and your assets were split 50/50 I suspect you both would be at less than 88x expenses as at least transitionally you both would have more expenses.

If Dh and I became to separate households instant no longer retired for either party.

BRUTE
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Re: Has anyone been through the process of writing a prenup or wishing they had?

Post by BRUTE »

brute says do it right. depending on state laws, just writing up a piece of paper might not even be valid in court later. better to find this out now.

brute is not a romantic concerning marriage. lots of times humans change and the results are out of their control. one look at divorce tables suggests a prenup is a wise investment.

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jennypenny
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Re: Has anyone been through the process of writing a prenup or wishing they had?

Post by jennypenny »

I'd forgotten about that thread. :oops:


@akratic--I don't know what to say. The practical side of me completely understands why people recommend pre-nups. OTOH, if I were your fiance, I could see myself being hurt and a little suspicious at the suggestion of a pre-nup, especially since you're planning on having kids. I would want to make it as hard as possible for you to walk out and leave me stuck with the kiddos. I would want to make sure a divorce would hurt you enough to deter you from leaving.

Sorry, I know that sounds harsh, but it's what I would be thinking in her shoes.

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Re: Has anyone been through the process of writing a prenup or wishing they had?

Post by jacob »

@LI - Pretty sure I would actually be more than 88x but that DW would be less. I'd want to go more hardcore and I'd expect DW would be going less hardcore. In either case, 88x is very far from 33x or even 25x.

BRUTE
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Re: Has anyone been through the process of writing a prenup or wishing they had?

Post by BRUTE »

jennypenny wrote:@akratic--I don't know what to say. The practical side of me completely understands why people recommend pre-nups. OTOH, if I were your fiance, I could see myself being hurt and a little suspicious at the suggestion of a pre-nup, especially since you're planning on having kids. I would want to make it as hard as possible for you to walk out and leave me stuck with the kiddos. I would want to make sure a divorce would hurt you enough to deter you from leaving.
brute doesn't want to be a jerk. but if jennypenny argues from that perspective, brute has to argue from the other perspective:
if one party isn't interested in a prenup, brute must wonder if he/she is merely interested in a cash out. anyone who truly loves akratic for who he is, and not just for his 7x capital, surely would agree to take money out of the equation.

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jennypenny
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Re: Has anyone been through the process of writing a prenup or wishing they had?

Post by jennypenny »

@brute--I understand, and if they weren't discussing kids I wouldn't be thinking that way. Kids change the situation for me. I'm not saying I wouldn't come around to your way of thinking eventually, but I would be nervous that it would be too easy to get stuck with a baby or two if the terms of a divorce were spelled out in advance.

I know it sounds irrational (and it's a little embarrassing to admit here), but I thought I should say it so he's prepared in case his fiance expresses some of the same fears.

Dragline
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Re: Has anyone been through the process of writing a prenup or wishing they had?

Post by Dragline »

My Trusts & Estates professor in law school, who was probably the best teacher, was a priest (and still is). He said everyone with substantial assets going into a marriage should have a prenuptial agreement in this day and age. Then we would read about some horrible case that went on for 20 years where the heirs of the departed would be fighting over the scraps, or something worse.

And he would say in a high-pitched sarcastic voice: "And WHY didn't they have a pre-nup? Because they were . . . IN LOVE!" With maximum sarcasm on that last part.

He also said basically ignore feelings and always "do the best law possible."

So go get one. Because a Jesuit priest at Georgetown said you should. Which is pretty much like the Pope. Which is pretty much like God. :lol:

And if you don't have one, all bets will be off the table in a divorce.

If you don't want to use a lawyer, make sure the thing is properly notarized in accordance with the laws of your state. The very existence of it is what matters the most. It could be as simple as what you walk in with remains yours and yours alone, but what is created during the marriage is subject to the usual applicable law.

akratic
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Re: Has anyone been through the process of writing a prenup or wishing they had?

Post by akratic »

Don't worry jennypenny my fiance is the kewlest.

Brute you're right that our document won't stand in court, but that's okay. I understand why someone else might want a bulletproof one or like Ego no prenup at all. I think we just mostly want clarity, napkin style. If we end up with something cumbersome though it might not be worth it for the rare chance it would matter.

Jacob I like your solution. Simple! Hmm. I'll sleep on that. It's income/expense tracking that's so annoying, but asset tracking might be a lot easier. I'm trying to figure out where it would get weird. I guess if we wanted to immediately buy a house costing 4x (gasp), we'd drop down to: house + me @ 5x + her @ -1x. But do we really want to be calculating these numbers and thinking about them. Hmm.

PS: we have a shared expense spreadsheet with 600 rows spanning five years and four currencies.

akratic
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Re: Has anyone been through the process of writing a prenup or wishing they had?

Post by akratic »

Thanks Dragline! Just getting it notarized isn't so bad. I didn't realize it could be that easy to have it actually count for something.

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Ego
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Re: Has anyone been through the process of writing a prenup or wishing they had?

Post by Ego »

Dragline wrote: He also said basically ignore feelings and always "do the best law possible."

So go get one. Because a Jesuit priest at Georgetown said you should. Which is pretty much like the Pope. Which is pretty much like God. :lol:

And if you don't have one, all bets will be off the table in a divorce.
Father Spock?

I thought your advice in the other thread was better. :D

---

Repost...
Game Theory, Prisoner's Dilemma and Relationships
http://www.spectacle.org/995/love.html

The best way to start off is to assume a cooperative tit-for-tat strategy.

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jennypenny
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Re: Has anyone been through the process of writing a prenup or wishing they had?

Post by jennypenny »

akratic wrote:Don't worry jennypenny my fiance is the kewlest.
Haha ... you mean unlike me?

Sorry, paranoia is my preferred medium.

The Old Man
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Re: Has anyone been through the process of writing a prenup or wishing they had?

Post by The Old Man »

jennypenny wrote: I would want to make it as hard as possible for you to walk out and leave me stuck with the kiddos. I would want to make sure a divorce would hurt you enough to deter you from leaving.
50% of all marriages end in divorce. 2/3rds of all divorces are initiated by women. A divorce to a man is a thermonuclear strike. A man will invariably lose custody of the children. A man is better off living with a woman rather than marrying her.

A prenuptial is helpful, but it is not a magic bullet.

Essential Reading: http://www.realworlddivorce.com/

Did
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Re: Has anyone been through the process of writing a prenup or wishing they had?

Post by Did »

Absolutely get one if you can. I paid some fucker thousands for one, and it was so riddled with errors so as to be completely broken I had to rewrite it to correctly express our intent and he shamelessly sent a final bill for fifty bucks after I could have torn shreds off him. He also commented on how broke I was (only had about 600 Aussie at 38 - yeah so I'm a failure to many).

In Oz the other partner needs to get full independent advice and sign off from a second lawyer as well. We tried to get this done quickly and minimally but the grasping, greedy lawyers again wanted thousands and to drag this out for more thousands.

I have no respect for the profession. It is anti competitive and corrupt to the core at its heart, with self interest, ego and greed driving pretty well everything. The regulatory framework exists solely to stifle competition and ensure profits are maximised.

Most of the medical profession is the same.

Anyway, I digress. Get one if you can. But watch you aren't taken for a ride by the parasites.
Last edited by Did on Fri Aug 19, 2016 2:41 am, edited 1 time in total.

Did
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Re: Has anyone been through the process of writing a prenup or wishing they had?

Post by Did »

Ps so in summary we never got one. Lawyers were so incompetent and grasping we gave up and ran out of time.

wood
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Re: Has anyone been through the process of writing a prenup or wishing they had?

Post by wood »

We have separate finances and wanted a prenup. Went to a lawyer and had it done in 15 minutes.

I like to turn the question around; if you're never getting divorced, why would a prenup matter anyway? And in the case of a divorce, a prenup is better than no prenup. So get the prenup.

FBeyer
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Re: Has anyone been through the process of writing a prenup or wishing they had?

Post by FBeyer »

General Snoopy wrote:
jennypenny wrote: I would want to make it as hard as possible for you to walk out and leave me stuck with the kiddos. I would want to make sure a divorce would hurt you enough to deter you from leaving.
50% of all marriages end in divorce. 2/3rds of all divorces are initiated by women. A divorce to a man is a thermonuclear strike. A man will invariably lose custody of the children. A man is better off living with a woman rather than marrying her.

A prenuptial is helpful, but it is not a magic bullet.

Essential Reading: http://www.realworlddivorce.com/
From the article: "A lot of men in Massachusetts would be surprised to find out that they are still married only because they aren't wealthy enough to be worth suing." :evil:

vraxxos
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Re: Has anyone been through the process of writing a prenup or wishing they had?

Post by vraxxos »

You're all a cynical bunch. I am a married man with kids and at no point have I even considered a pre-nup. If I ever divorce, then she half have 1/2 my assets with no quibble from me. I am ok with this because we have children, and I know whether she loves me or not, the children always come first for her, so really anything she gets is for them. If I was wealthy however, then I would have some sort of upper limit on what she gets (something like £500k). Ironically, I would only want a cap for her own good simply because I think excessive unearned wealth would do her no good. Unfortunately, I don't have that problem to worry about :mrgreen:

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