Dear Moneyist,
I am 41 and my fiancé is 61. I am worth $1.3 million. I have 1.1M cash in my business, and $200,000 on my house equity and personal checking. My career is booming. In 2015, I made $70,000, and so far this year I have made $550,000. I have 4 teenagers and they will soon go to college by 2021.
He is 61 and worth $250,000, including his retirement. He will move with us once we are married. I have struggled so much financially before finding my niche, and now I am worrying about what would happen should this marriage fail.
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I have asked him for a prenuptial agreement, but he dissed the idea. He said that our marriage is going to be eternal. He said he won’t marry me if I insist upon it. I am head over heels in love with him. Am I heading towards marriage with my eyes closed? We live in a community property state.
How can I protect my assets without a prenuptial agreement?
Yours,
Torn between love or prenuptial agreement
Dear Torn,
Your fiancé is a lucky man.
He is 20 years your senior, and in a relationship with a woman who has evidently created a successful and secure life for herself. You also have other financial and familial responsibilities. I’m sorry that your fiancé does not appear to appreciate that. Your age, net worth and children are all reasons for you both to sign a prenuptial agreement, not that you need a reason.
Would you merge with a company if you were head over heels with the owner, even if you had to think about your employees’ futures? I doubt it. It’s not so different here. Marriage is a contract, and it’s not wise to sign one without being 100% comfortable with it. If your gut says you should have a prenup, go with that. Trust yourself.
There are roundabout ways to help protect your assets if you marry without a prenuptial agreement, including an irrevocable trust. They are typically used by very high net-worth individuals to protect their assets, but not always successfully. Divorce courts increasingly have discretion in how they approach such arrangements in the case of divorce.
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Standard ways of protecting your assets in a community-property state involve keeping your premarital property separate and studiously, perhaps exhaustively, preventing the co-mingling of assets. Keeping account of the value of your business and retirement accounts prior to the marriage, and clearly delineating separate and joint accounts.
In a community-property state, you take out of the marriage what you brought into it, but using marital funds to improve upon your home or pay the mortgage will commingle that asset and turn it from separate to marital property. Given that a prenuptial agreement would solve this, it seems like a lot of fuss and nonsense to put yourself through.
Divorce is an ugly, commonplace and expensive business. If marriage is eternal, then your fiancé does not have to worry about returning to his more modest single lifestyle — and he should sign it. If marriage is ephemeral, he has more reason to be concerned. Either way, your fiancé’s logic does not make sense to me. I’m not buying it.
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