My daughter is in that situation. She has no college debt and has been working for 10 years and contributing to her 401k. Her boyfriend has substantial debt but is now working making much more than she does. He’ll catch up to her savings rate soon, he may be able to get debt forgiveness on the loans. The rules have changed for debt forgiveness and it’s easier to get.
I have no idea what they will do. On paper, she has more assets now but in a couple of years, that will switch. What if they decide that she should stay home with any children in the future? They will have that option if they want but my daughter will have to scale back her earnings potential.
In a past relationship, daughter dated someone involved in a family business. There was talk about a prenup in that case but they broke up for other reasons.
My D has no prenup and has been a SAHM for 6 years. I sometimes worry if she will be protected enough should there be a future divorce.(I am just being practical). She will have a significant inheritance as my father established a trust for her and her brother on top of what we will leave them.
My son has a prenup because he bought a 2BR/2BA apt in Manhattan before marriage and it’s used to protect that asset. His wife works part time as a pediatrician (she repaid her school loans herself) and he makes significantly more. They have a joint account to pay for ordinary household expenses but he contributes the bulk of it.
If you are worried about how your assets will be distributed to your kids, you can address that through your will and by the use of trusts. Definitely more work but potentially worth it for something like a family home.
I have lived through one of these as the child and it was a godsend. And there was a pre-nup in that case. But it did not provide the protection the trust did as a result of a small (scheming) amendment to the will made in the last 100 days of life.
Overall, I think a pre-nup can be valuable in setting expectations. Over a lifetime together, it may become irrelevant.
This is an interesting topic and a great question given the levels of college debt I’ve seen listed on this forum. I think our kids have more to be aware of than we did.
Generally, the student loan debt accumulated before marriage is only owed by the one who incurred it, not the spouse.
Inheritances are separate property in a community property state. But the income from the inheritance may be taken into account in determining spousal support payments, like other income. However if the inheritance is commingled for example, used to buy a house, then it becomes community property.
I know that my parents have structured their will so if either of my brothers or I die before they do our share of the estate passes on to our children and not to our spouses. My parents discussed this with me (I’m the executor) because they fear that if something happened to my one brother his wife would just blow through the inheritance.
Just a note: in some states a prenup is not valid if both sides were not actually advised by their own attorney. That doesn’t mean an informal prenup is worthless… it just might not be legally valid. But it can still be a starting point for settlement negotiations. (Very few divorces actually go to trial by the way - typically it’s not worth the cost of legal fees… and only happens when something like custody is being fought over).
Second note: a prenup will most definitely be challenged if any information was withheld or misrepresented by either party.
Third note: Even thought you are talking about adult children, what typically passes for “adult” today is not what it used to be. Even the typical 30-year-old has paltry assets to speak of in a borrow-and-spend society. Now I don’t care for this site for a few reasons, so I don’t want to contribute too their content, but, out of courtesy and “giving back” let’s just say that the one exception would be for someone who has started a business. It might not have much value at the time of the marriage, and the equity might be clearly “per-marital” property. But where things get confusing is when that business grows as a result of the labor by one spouse. Perhaps that spouse’s wage at a fair market salary was sacrificed to boost the value of his or her equity. Those wages would have most definitely been a marital asset. So spelling out very clearly how each party will share in the appreciation of equity is worth doing for people in that situation. As for “parents” worried that their own wealth will end up in the hands of “that dirty son-in-law”… you are better off investing in a good estate plan / engage in planned giving that will serve your purpose. A pre-nup is not the right tool for that.
I understand the need but it’s like starting with one foot out the door.
I suppose it depend on assets one brings in vs the other. I had more than my wife but I would personally not consider. Just seems wrong. Just my opinion.
I do not know whether our prenup was ever legally valid. OOps. Perhaps this never mattered.
We went into our marriage at least with some evidence that we could talk about financial matters and figure out some reasonable compromise that we were both good with. To me this seems like a good idea.
If that’s the concern then depending on how much money is involved perhaps they should consider leaving the estate in trusts (one per child) with each child the trustee of their own trust. Each trust can provide that should the child pass away before the grandchildren are adults then the grandchildren become the beneficiaries and another trustee (possibly a sibling or a bank) takes over.
Otherwise if your parents pass away then the one brother passes away before his kids are grown, the scenario they fear could happen.
D got married young (24), no student debt but no assets either. SIL had some student loans. No pre nup and we never talked about it.
OTOH a friend of mine married last fall - she is early 40’s , has a pension/retirement account as well as owned her home. Her fiance (now husband) is in his 50’s also with retirement assets and owned a home. They did a prenup and I gave the thumbs up when she asked my opinion.
This was in the DC area and I think they each paid several hundred dollars.
D2 is an attorney, has no debt, and has significant assets. She and her fiance will be signing a pre-nup. Even though she is an attorney, she will be hiring a lawyer with expertise in this field to draft it for her.
Well I guess as a romantic, married 28 years now, I am really glad this isn’t something that even occurred to either of us to bring up. Everything has always been shared, and I do think that sets a tone of expecting a lifetime together, whereas having separate accounts and joint accounts for common household expenses just seems yucky to me.
BUT I also have a practical side, and have witnessed many marriages go sideways. So for my own kids, I guess it will depend on how drastically different their situations are going into the marriage. I wouldn’t advise a prenup if their partner has a few hundred thousand dollars of medical school debt and they themselves have no debt. I would assume the marriage should last beyond student loan repayment (!!) and if not, well, that’s recoverable and a big lesson. To me, it’s not worth the potential message of “not sure this is going to work out”. Our kids will inherit from us (but no idea if it’s more of less than their potential spouse’s family situation!!), but they won’t have much of that before marriage, I imagine.
I would definitely feel differently if they don’t end up marrying until their 40s or if it’s a 2nd marriage, etc. But for a first marriage happening in 20s or early 30s, I kind of hope they don’t do it. I want them “all in” on marriage, and prenup—as smart and practical as it is—makes me think you aren’t all in.
I guess I’m thinking about it from the side of protecting themselves, and thinking it’s ok to skip. They can take the risk. But what if their partner has a small fortune and wants a prenup, how would I advise them? I don’t like it. Yeah, in the neither direction do I like it. But I understand the other points of view.
One other situation I have seen with friends recently divorced. Both sets of grandparents are fairly wealthy, I’d assume pretty similar. One set started giving the couple a lot of money a long time ago, in part to get money out of the estate, in part to be helpful/generous. Those grandparents also paid for private school and all college. The other grandparents haven’t given them any money all this time.
Now after 20+ years they recently divorced. The wife who’s parents hadn’t yet given inheritance money will now get 100% of her parents money when they give it to her, while the husband’s parents money was split between the two of them during the time of their marriage. Maybe no one is resentful of this situation, but it did give me a little pause to think I may be more likely to hold back on big gifts until I’m really confident the marriage is working. I kind of think I’d be annoyed by this if I was the early-generous grandparents.
I know this contradicts what I said above about being “all in” and more romantic about it, but I don’t think as the in-law I’m required to be quite as romantic as the partner is
