It is sad to say that marriages today are not like those of yesteryear where you got married at eighteen and you were still married at 85. In those days, you got a job at eighteen at the Ford plant and you could work there until retirement. Or, you got a teaching job, and grew with the system. Life was relatively simple and there were far fewer stressors than in today’s world.
Today, one is more likely not to get married at eighteen, but be divorced at twenty-eight. Job instabilities, needing more, having less place tremendous strains on marriages. And, at the end of the relationship, you feel like she/he took all the good stuff I worked so hard to get.
People leave one relationship and start another. They have blended families. Each has children from a prior relationship. Each has possessions, pensions, savings, real estate from a prior relationship. One has inherited income property from her parents. And so, the problem is that you want to be smarter the second time around than you were the first time. While you want to share with your new spouse, you don’t want to be taken to the cleaners in the unfortunate event that the marriage does not work out.
So what do you do? The first thing is that you each need to list what you want to protect and maintain as your personal property regardless of what is acquired during the course of the marriage. For example, if you saved $75,000 in a 401K before the ceremony that you don’t intend to share in the event of a break up, list it. If your intent is to share the rental income from the two-family you inherited from your parents, but not the property itself, list it. If he is moving into the house you purchased before you knew him, make it clear that he is not now the owner and despite the fact that he might contribute to the mortgage, or make a few repairs, and maintain the lawn, the house remains yours in the event of a break up. Get your list together well before the wedding.
Once each of you has a list BOTH of you should consult with an attorney. Your attorney will help you negotiate a prenuptial agreement, and equally as important, tell you how to treat your assets to protect your ownership of them. For example, your new husband moves into your house that you purchased with your inheritance from your parents. You live in your house with your new husband and his son and your daughter. You want to do some home improvements so you and the new husband sign a mortgage for the improvements placing both names on the mortgage.
Sounds good, but that might create what the courts call an equitable interest in your house and in the event of a divorce, you could end up buying out his interest in your house. An attorney will help you figure out how to share your assets without giving claim to them to second husband.
So why would both of you need a lawyer? After all, you really do trust her, right? Well, if only one of you gets a lawyer, the first claim the non-lawyered party will claim is that, “I had no idea what I was signing” “I trusted him.” “I never thought he wound cheat me.” He had an attorney who explained it all to me. When there is unequal bargaining power, the court will often rule in favor of the underdog.
Each of you needs independent counsel. Don’t be penny wise and pound foolish. You have his list, pay a lawyer to take a look at it. Second, you will want a lawyer to put the precise terms you want into the agreement. The agreement should not say, “if we divorce, I get the house.” Your attorney might be able to negotiate other terms. For example, in the event you need to buy-out your partner’s interest, you may be able to cap the amount of the buyout at the start. For example, you will get 20% of the increased value of the house. Tell your lawyer about the changes you propose. Just because your partner made a list does not mean that you are required to accept it as is.
A prenup is a contract where equal parties negotiate for terms. As I have said on many occasions, the court does not protect a fool from a bad bargain, so let your attorney negotiate for your benefit. It is the point/counterpoint that yields an agreement that is fair to both sides.
The one big thing you need to do is not do the prenup two days before the wedding. A second way to void the agreement is to claim that I signed it under duress. “The wedding cake had been ordered. I had my dress tailored. The hall has been rented and the band is warming up. If I didn’t sign in, the whole thing would have been called off, and the shear embarrassment of it all would have killed me. What was I to do, but sign whatever he wanted?” New Jersey courts have absolutely no problem voiding agreements that were not entered freely, and voluntarily, at arms length.
If you are planning a second trip down the aisle, and you have assets you want to protect, make a plan starting with a list of assets you want to protect. Have an honest conversation with your soon-to-be spouse.
