How Prenups can protect you in the event of a divorce


The only local job available was tapping the maple trees, and I couldn’t even get an interview.

I had moved to small town New Hampshire after falling in love with a Montreal medical student in his senior year at McGill University. An American, he had committed four years to live in New Hampshire, and I decided to leave Canada and join him there.

Without a job, I joined after a year, but was miserable, and missed my formerly lively social and professional life as a reporter, living in Toronto, Montreal, and Paris. This was before the internet, and making new friends was impossible. My boyfriend worked long hours and was often absent or exhausted. His salary during his stay was very low, so our budget was tight, and it took us two hours to drive to the nearest city.

After 18 months of fruitless efforts to settle down happily, I asked him to move to New York so I could find a job, and he agreed. My job search took six months, and he got an instant raise of $14,000 with his new iqama. Thanks to the family inheritance, I had the money to make a down payment on a suburban cooperative apartment.

By the time we started planning our wedding, six years after we met, he was making six figures as a practicing physician. I knew nothing of New York marriage laws, and by that point I was completely dependent on my fiancé’s income and felt very vulnerable. So I consulted a lawyer—at $350 an hour in 1992—and asked him what I might earn in the event of a divorce.

His answer astounded me: If the marriage was short, and because I had a university education, a strong resume, and good health, the court would do nothing for me, because I am perfectly capable of providing for myself.

So I asked my fiancé for a prenuptial agreement to protect my only real asset, which is the apartment. Having chosen medicine in his late twenties after leaving a low-paying industry, my fiancé had only his medical degree and clarinet as assets.

Prenuptials have long been considered cold and unromantic, and often come with a major imbalance of power between spouses, but with so many marriages ending in divorce — and some states offering minimal post-divorce judgments — a prenuptial agreement can save money, time, and affection. . pain. Knowing in advance what each person is entitled to mitigates the costly and time-consuming need to argue about everything later.

The agreement gave me an immediate low five-figure amount, which would cover legal fees, health insurance, and other costs. He will keep his full pension and health insurance.

My fiancé agreed to the terms without endless arguments; I definitely put my life and career on the back burner to accommodate him.

When my husband left me after two years of marriage and quickly married a female colleague, I had the safety net I desperately needed. I destroyed myself, kept my house, and could count on the alimony to get back on my feet.

A prenuptial agreement is basically a legally binding agreement by both parties to fully disclose their assets and debts. It can also determine a wide range of issues, including who will pay the mortgage, who will set up a separate fund to compensate a stay-at-home partner or parent, and where the signatories will live in the event of a divorce. It quickly clarifies each person’s position financially and creates a forum for a frank discussion on how to manage their money after marriage.

The cost of creating one varies widely, with the person ordering it usually bearing the largest cost – perhaps $5,000 to $10,000. A partner who reviews the document with a separate attorney to make sure the agreement is not in his favor may pay about $3,000, according to Raymond Hikmat, founder of Hikmat Law and Mediation in Los Angeles.

Maria Squitieri, a 51-year-old New York teacher, made the mistake of signing an agreement she didn’t take the time to review just days before her wedding. She was raised by her grandmother and said she was “very naive and trusting to a fault”.

“I had nothing to do with marriage,” said Ms. Squitieri, whose ex-husband was a high-earning civil servant who entered his second marriage when I was 33. “I barely glanced at the necklace. Perhaps I saw this older man as my savior.”

Ms Squieri said that if the marriage ends in divorce, she assumes she will be fine and can go back to work. She was young and in good health, and was anxious to marry a man whose generosity to his children from his previous marriage and to her grandmother impressed her. She worked during the first two years of her marriage, then after the birth of her son, she left work for seven years to stay at home with him.

The marriage failed, and the agreement forced her to remain in New York City with her son, where the only affordable housing on her teacher’s salary was a studio apartment. She fell into debt—even though the agreement guaranteed her son tuition fees at a private school, summer camp, and private lessons. The alimony she received was not enough to live without work, which took two years to find.

“I realize now that you can be a romantic who believes in love, and stay smart and come up with a plan just in case,” Ms. Squieri said.

Tori Dunlap, a financial blogger, podcast, and author, said that many people shy away from even discussing creating a prenuptial agreement. “The overwhelming number of people don’t discuss money at all when they get into a relationship,” she said.

While telecommuting has gained popularity, some professions — such as medicine and academia — still require cross-country commutes, which can hurt the earning capacity or income of a late spouse, especially when the spouse is parenting.

“Making these sacrifices is a good negotiating point,” said Brent Cashatt, co-founder and partner at CashattWarren Family Law in Des Moines. “It’s a reason to make the agreement fairer. It’s a reasonable request.”

Mr Hikmat said reaching a prenuptial agreement should be a “win-win situation”.

“They create intimacy and trust,” he said. If negotiations become ugly and trapped, he said, that may be a sign to reconsider marrying that person altogether.

Hikmat said the agreements have also changed over the past seven to 10 years.

“The way premarital cases were handled in the past, it came from one person in a position of power – the man in general – but today marriages have changed, relationships have changed, work has changed,” he said. “My clients are generally professionals in their 30s and 40s or entering into a second marriage. More people are getting married later in life. They have lived on their own. They are used to spending their money as they like, especially women.”

For Tonya Yan, 32, and Linh Yan, 27, creating a prenuptial agreement was a simple and easy decision. The couple lives in San Francisco and married in November. Both women grew up in Asian families — Linh Yan is Vietnamese, Tonya Yan is Chinese — which they say facilitated their frank discussions about finances. “Money is not a taboo subject for us,” said Tonya Yan.

Being a same-sex couple, Tonya Yan said, also made it easier to discuss a prenuptial agreement, because “when you take the script off” of traditional marriage, everything becomes up for discussion.

Tonya Yan is an international tax attorney who earns twice as much as Linh Yan, and both are keenly interested in keeping their finances separate. “It means that we don’t take the other person for granted,” said Linh Yan.

For Tonya Yan, having a legal document that they discussed at length and agreed to easily without rancor is like having a seatbelt. “You put it on hoping you’ll never need it, and you expect it to fall apart,” she said.

The couple lived together for four years. When they decided to marry, they did not want California’s community property divorce laws, which dictate a 50-to-50 division of assets and debts, to apply to them if they divorced. Instead, they set their own rules for using a prenuptial agreement.

“California’s laws are particularly far-reaching, and couples can get stuck in ways they never expected,” Tonya Yan said. “Houses and real property can be considered half owned by the spouse, even if that spouse does not pay a single cent for the down payment or sign any bond,” she said. On the contrary, she added, “a person may suddenly find himself liable for half a debt he never knew his wife owned.”

Linh Yan said she felt similarly about the California laws and described herself as an independent person. “Even when there is a small chance of a divorce happening, I don’t want to rely on my wife’s money when things go wrong,” she said. Nine states She is currently working with community property divorce laws.

“We have joint bank accounts, joint purchases, joint bills – sharing is not the problem,” said Tonya Yan. “But this is the difference between what we choose for ourselves and what the state dictates to us.”

Tonya paid between $10,000 and $12,000 to draft the agreement using the services of Mr. Hikmat, while Linah paid her lawyer $3,000 to review it.

“People ask me, ‘Should I get one too?'” Linh Yan said. “I think it’s a luxury because the people who need it most — the financially vulnerable — are the least likely to afford it.”

Many couples planning to marry don’t investigate their state’s divorce laws, said Ms. Dunlap, the financial writer. “The thing that a lot of people don’t realize is that we all have prenuptial preparations. That’s what the state decides. If you don’t like that, you might want a prenuptial contract.


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