I’m pretty that in many states any inheritance belongs to the one who received it, unless they co-mingle, so technically they shouldn’t need a pre-nup for that, but I think my son included it in his.
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Pre-nups in my circle are also more about family assets/inheritance for young adults in addition to having trusts set up where estates are parceled out over the course of many years to avoid too much inheritance potentially being co-mingled. (And we’ve been told that we have no way to prevent the co-mingling after we are gone if that’s what our D choses to do (you can only plan and manage from the grave so much ; )).
But, most of the people we know with pre-nups it’s because of second marriages or later in a life marriages.
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Interesting discussion. Our assets are all co-mingled after many years of marriage. Even the modest inheritances we each got went into the joint account. My kids are not married yet. For one, they seem to be on even footing. For another, a pre-nup may make sense due to some family challenges for his partner, especially if we gift him some $$ for property purchase.
I wonder about who was polled to get to 53% of young people getting pre-nups. Do more than 50% really have the assets, concerns or knowledge to set up a pre-nup? Or was this a poll of professionals?
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My ex and I were married right out of college, so we didn’t have any money. We always had joint accounts. I think it was one of our big problems. He had very expensive taste, but was not a high earner, or even an earner at some point. We used to argue when he wanted to buy something expensive and I felt it wasn’t necessary. He felt I was too controlling and I thought he was too impractical. If we each had our own accounts, we probably could have avoided some of those frictions. He could manage his own spent, and I wouldn’t need to judge how he spent his money.
My kids have their own accounts. They contribute to their family accounts based on their earnings. One of my son-in-laws likes skiing and sports (he likes to bet on them sometimes). He spends his money on what he likes without having to consult D1 constantly.
I still remember a newly married colleague got very upset because her husband bought a sailboat without consulting her. The guy was doing well at the bank and was single for a while. I was also friends with him. He didn’t understand why she was so upset. The woman said to me that in a marriage if you are spending more than the cost of a man’s shirt then you should talk about it. 
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Even separate accounts don’t always solve that problem. 
My ex and I had separate accounts from the first day to the end. We went from me making a lot more, to being sort of even, to me making more again. We had separate accounts the entire way. For most of our time living together, I paid the majority of the bills and almost all of the money that went toward our children.
She resented money I spent from my solo accounts on business investments that would help our growing family in the future. She felt investing in business was a luxury and some of “my” savings should go toward things she wanted, like vacations or a newer car. I felt her income provided enough to buy anything (within reason) she wanted, just not everything she wanted. Also, our day-to-day spending habits were different. I was more of a saver, while she was more of a daily coffee, daily this, daily that kind of person. If she had $150 in her account three days before payday, it seems she had an imperative to spend it before payday. I didn’t criticize her lack of saving, but I also felt my diligence at saving was not another pot from which she could pull.
Ultimately, that disagreement was a big reason we divorced.
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Our accounts, such as they are, are jointly held except for a savings account bc it would have taken both of us to do the paperwork and DH couldn’t leave work to do that so we just punted.
I have a small IRA fron working, he has his work 401K and we are each other’s beneficiaries. I have a small investment account in my name and the beneficiaries are my two DILs. This was a gift from my dad. We have only one credit card account , held by us both. About 6 years ago my folks started giving us all significant amounts of gift money every year, and that goes into our joint account too.
Our belief 30+ years ago was all we have belongs to both of us. Our financial decisions belong to both of us. Our spending belongs to both of us. We don’t make any large purchases without checking in with the other person.
I think the details of how any couple manages money is less important than the fact that it needs to be a conversation and a plan. ANd a lot of honesty about attitude towards money goes a long way – DIL1 was refreshingly candid about her ignorance of finance, and also her mother’s awful example. That couple has a plan that wouldn’t work for us, but is working great for them.
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I think finance can be a big friction in a marriage, but it is not the only cause. I do believe the pre-nup facilitated some financial discussions for my kids and their SOs.
D1 is a big vacation person, so it is a big factor in their budget. Education for their kids is also important (private school) and having in home care for the kids. SIL1 may have agreed with most of them, but I think they worked it out before they were married.
SIL2 likes good food, especially cheese. I know they spend more money on food and wine than most people. D2 came into the marriage with a dog. D2 also came into the marriage with law school loans. They worked through all of that before they got married.
I don’t think they covered every scenarios, but it’s good to have a good framework. My ex and I never had any discussions about money because we thought love would conquer all. 
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This is what has happened to us. Bank required both parties to be present physically in the bank to open an account. My husband is working, I am not. I go to the bank by myself and make the account only in my name.
In the old days (before 9/11), I could get away with bringing the signature card from the bank home and having my husband sign it and then returning it signed to the bank.
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I bet we could give them a run for their money. Groceries are our biggest monthly expenditure by far. I always tell DH, “We eat our money.” And I’ve always loved this cartoon:
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I cannot speak for everyone who maintains separate checking/bank accounts.
But describing my own situation- and that of many couples that I know-- it isn’t a lack of trust as some here have implied. It isn’t a lack of “mingling of assets”- H and I own a house together, have many joint assets as well as ones that we keep separate. And it isn’t that our spending habits are so mismatched that only “my paycheck my money” will keep the peace.
H and I are equally savvy about money-- accounting, finance, investment, etc. We DO have different investment strategies-- reflected in the way we manage our 401K’s and IRA’s. We DO have different cash flow objectives, no doubt rooted in the way we were raised. And so MY banking reflects larger cash balances than he would like; HIS banking reflects too much effort (in my opinion) moving money around to cover painting the house, other large (but not huge) unanticipated household expenses. I can see every transaction he makes, and the reverse is true also. We also parted ways a while ago about our insurance needs (when the kids were minors) and strategies (now that the kids DON’T need the money, and in my mind it’s purely a tax play at this point).
The notion that he could be moving money off-shore or supporting a mistress without my knowing it is hilarious. I read True Crime, watch police/FBI procedurals, etc. and he does not. So if either of us could be moving assets to a country with no extradition AND banking privacy laws it would be me. And the last “extravagant” thing he bought was a cashmere throw off the Bloomingdale’s bridal registry for a nephew. And yes, he told me about it.
So check your assumptions. And the idea that ALL of your assets are joint is actually not true. If you have a pension from work, there will likely be a survivor benefit, but your spouse does not “own” that account. Your life insurance is yours right now, regardless of who your beneficiary is. Your social security is yours. So the “we share everything because we trust each other argument” kind of falls apart when reality hits. Your spouse could have borrowed against his/her life insurance without you knowing it. Your spouse could have 5 credit cards without you knowing it. And your spouse could have dropped disability coverage at work and used the money saved at a casino- and you’d never know it.
And to all the “I’m just not good with money” crowd- that’s not the excuse you think it is. People get “good with money” when they have to, really really quickly. Divorce, death, your company goes bankrupt, god forbid a terrible accident. I say get ahead of the curve.
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I had not even heard of a pre-nup back in the dark ages when we got married. We have had a more traditional marriage in the sense that I earn 95% plus of the money. ShawWife is an artist who has been relatively successful (sells work, shows in galleries and museums, has work in collections, etc.) but has not reached the star echelon (middle-tier museums and not MOMA or the Tate) so it has never been a great way to earn a living. I work in the field I began my academic work but could have focused on less lucrative areas but intentionally picked more lucrative ones. ShawWife inherited modest amounts of money that were very helpful earlier in our lives (much of our first downpayment and then a slug of a renovation on a later house). ShawWife and I were both frugal relative to my peer group (and less frugal than her peer group of artists in some ways). For the most part, we have agreed on financial things. I think it would have been harder if we had had radically different ideas.
After I left professorship and Wall Street to start a consulting firm (and co-founded several other firms), I had to do a LOT of travel. ShawWife slowed her career to raise kids. (We hired help, but ShawWife always chose less than we could afford because she wanted to be and was a hands-on mother). She did not stop working, but when she wanted to have a third kid, I said I was willing but was not sure her career ambitions would be attainable. As the kids needed her less, she accelerated her career and after they flew the nest, she has gone into overdrive. I have supported her financially in this. We built a studio next to our previous house and in our current house, we converted what was a 3 1/2 car garage into a studio. Both buildings designed by excellent architects. I’m not sure the ROI on the studio construction costs would be that high, but that was not the point. She supported me in what I createinga business and earn a living and I supported her in pursuing her career as well. (I’m supportive in many other ways – help her write her artist’s statements and press and articles, help her with IT stuff and now AI, etc.). As a result, she has been able to create art without having to give time to teaching or other ways to support her art (which many of her peers have needed to do).
ShawWife and I think of this as a partnership. Money is part of the partnership but just a part. We each contribute in different ways.
@ChoatieMom and @oldfort, we also have wonderful meals. ShawWife is a very skilled cook. Last night, French lentils in a red wine sauce with feta cheese. Salmon on a cedar plank with a miso/soy glaze the night before and then Mapo Tofu the night before that. Steak au poivre a few weeks ago. I shop and clean.
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We knew one married couple (no kids) who had very different income of teacher vs tech field. Not sure if they had a prenup. I do know they had a strategy of keeping a joint checking account for house expenses etc. They each made monthly deposits proportional to their incomes.
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My kids aren’t married yet, so this hasn’t been an issue. D has a friend who signed one,
I think inheritances aren’t considered marital property??
Usually, but it depends on the state. In Colorado, if you inherit $1M before you get married and then during the marriage the $1M becomes $1.5 M, the additional $.5 M is considered marital property even if you have kept the inherited money in a separate account from your joint accounts.
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I never put anything above a good lawyer attempting to stretch the rules.
As with all laws, the law about co-mingling assets is not above debate. Let’s say I put my inheritance in a separate account in an effort to not co-mingle. Over the course of the next three years, I transfer $10K to my wife’s account to help her buy a car, and more money a couple of other times. Let’s say I also have provided my wife with my password and log-in for that separate account … because y’know, we’re married, I love and trust her, and I want her to have access to it if I unexpectedly die or go into a coma. So even if it’s a separate account, my wife technically has access to the funds at her discretion, even if she never actually takes any money without my agreeing to it.
In a nasty divorce, I can easily see her lawyer making a claim that the inheritance money was effectively co-mingled. The claim may fail, but maybe not. At the least, the claim will add billable hours to my lawyer’s charges to me as the claim will have to be legally disputed
A pre-nup adds another layer of protection for the inheritor, and another hurdle to jump for the other party trying to make a claim to it.
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If you use that $1 mill to buy a house then it would be hard during divorce to get that inheritance out. My kids’ pre-nup clearly spells out how much equity they each get based on the investment they each put in.
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It CAN be, but since Colorado is not a community property state a judge can divide it equitably and there are ways to protect it and keep it from becoming martial property, and one way is through a prenup. My sister and her husband divorced with no kids, and everything wasn’t divided even-steven, especially their 401ks as they both worked, and some of the other things. They agreed to some, court decided on the rest.
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good to know. I have a friend in CO who is getting divorced. I don’t believe he had a prenup. He had a lot of pre-existing assets entering the relationship (it was a 2nd marriage) but my understanding was that while inherited assets, if not commingled, remained his, the appreciation on those assets was considered marital property (probably because they did not have a prenup).
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If it doesn’t bother you that someone has debt when you get married, why should it bother you when get divorced? If the debt was an issue, it should have been paid off before you married the person.
I see lots of cases for a pre-nup - lots of wealth, 2nd marriages, late life marriages, etc. But for the “run of the mill”/average person, in general, don’t like the idea of “mine” and “yours”. Of course it’s not that simple.
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