“I’d like a prenuptial agreement — one that says he keeps his debt while I keep mine.” (Photo subject is a model.) – Getty Images/iStockphoto
How do you protect yourself in a marriage? I’m not married and I don’t wish to be, but I might consider it with my partner in about five or six years. I know he will want to get married and that it is important to him.
He has a new house with $650,000 on the mortgage. I cannot afford that alone, nor would I want to. I don’t want to end up homeless if we were to divorce. I’d like a prenuptial agreement — one that says he keeps his debt while I keep mine. What else should I add in?
I’d like to maintain my own bank account. He will have his own account as well. We’ve discussed a third, joint account for common spending such as the mortgage, utilities, etc. I own no property of any significant value. I’m sure he has decent savings. He outearns me by far.
We will have no children together. He has no children, and I have two children from a previous relationship who are currently minors but who will be of age prior to us getting married, if things go the way we think they’re going.
I recently learned about land that has been in my family for 150 years. My grandfather ended up giving up both of his pensions in his divorce to appease his ex-wife in order to protect this land. This is very important, and my family has fought to keep it.
My uncle who now owns this land reached out to me and told me of all this history in recent weeks. He told me he has four children from previous marriages he could leave it to, but some of them would sell it off.
On the other side of my family, I’m the only grandchild. There is acreage there as well that may some day end up mine. It is doubtful, but possible. The current owner will likely sell to developers when the price is right. If they do not, I will be the only heir.
My partner doesn’t know about this land and doesn’t need it financially. I won’t be telling him anything about its history or significance. I try to think ahead: I’m also already thinking about the possible fender benders my kids may have, years before they’re driving. Planning is wise.
From what you say, this inheritance, while exciting to think about, seems a long way from actually happening. – MarketWatch illustration
On paper, he would be the one who would benefit from a prenup.
He is a homeowner and, in time, he will no doubt pay off that mortgage, or the lion’s share of it. He is also a higher earner, so he will — I presume — have a 401(k) or the equivalent through his work that will provide retirement income for him after he turns 59½.
If you were to divorce, you would each take out of the marriage what you brought into it, unless you commingled funds. The Federal Trade Commission and Consumer Financial Protection Bureau say that a person is not liable for their deceased spouse’s credit-card debt, for example.
Personal loans taken out during a marriage can be more complicated, however, particularly in the nine community-property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. So your concerns are not completely unfounded.
Roughly 65% of couples say they discuss their finances before getting hitched or becoming common-law partners. That may also explain why nearly half of couples argue over finances. But your partner has given you no reason to assume he will get himself into a lot of debt.
There are many things you should include in a prenup, if you choose to have one, including property, income, debts (as you mention), alimony and spousal support and, according to the Willick Law Group, confidentiality clauses.
“A confidentiality clause ensures that each spouse keeps the other’s confidence about the contents of their prenuptial agreement, and delineates penalties for violating this clause,” the Las Vegas-based law firm says.
“It is vital to the successful creation of your agreement that you disclose all financial information to your attorney,” the group adds. “This information will also be shared with your future spouse, and will make up schedules that are attached to the agreement.”
Willick also outlines what not to include: infidelity clauses, illegal or unfair activities (obviously) and, for those who share kids, child custody (“if there is a divorce, the court will decide in favor of what is best for the child, regardless of what the prenuptial agreement states”).
You have what you consider a trump card or two: the possibility you will come into one or more inheritances later in life. I have two thoughts about this. First, an inheritance is considered separate property, so it would matter little if you inherited this land now or during your marriage.
Second, you haven’t told your partner about this land because you believe it’s best to keep those cards close to your chest. From what you say, this inheritance, while exciting to think about, seems a long way from actually happening.
Clarity and transparency about each other’s debts is important. Your partner has obviously been up front about his finances (as far as you know). And he has good reason to be, given that the news thus far has been positive: He owns a home, albeit with a large loan, and is a high earner.
Looking objectively at your situation, it would make more sense for your partner to push for a prenup based on his assets and earnings, if or when you do marry, because any equity built up in his home during your marriage could also be considered community or marital property.
