Should you Protect your Assets with a Prenup?

I love the way you think through things!

@Chaz Mathias I totally agree with you that if someone comes in with more assets they should have every right to protect that.

Does anyone have any advise about weather putting your assets in a trust or LLC would be the best way to protect your assets on top of a prenup?

Karl B.

Rental Property Investor · Erie, PA · Member since 2015 · 1k+ posts · 2k+ votes

8y

Originally posted by @Dylan Mathias:

I love the way you think through things!

@Chaz Mathias I totally agree with you that if someone comes in with more assets they should have every right to protect that.

Does anyone have any advise about weather putting your assets in a trust or LLC would be the best way to protect your assets on top of a prenup?

Many thanks!

That's a good question. I found this thread on BP that's a few years old: https://www.biggerpockets.com/forums/51/topics/137569-prenup-tips

There are a few good posts in the thread. Jerry W. brought up some interesting points I wasn't aware of.

No doubt there are different laws for different states. A good attorney would have the answers and your question is definitely a good one.

Scott TitusPro Member

Rental Property Investor · Lake Ozark, MO · Member since 2017 · 102 posts · 86 votes

8y

@Chaz Mathias Prenups are wonderful, BUT very dependent upon the state that the divorce is held in. Meaning, if you file a prenup in Illinois and move to Missouri then get dIvorced, the divorce courts don’t view property the same. So you’d want to get a postnup, which holds up FAR better is nearly all jurisdictions.

Chaz Mathias

OP

Real Estate Agent · Santa Rosa, CA · Member since 2018 · 84 posts · 105 votes

8y

Thank you @Scott Titus I never thought of that and thank you @Karl B. i'll give that a read.

2 Reply

Dylan Mathias

Real Estate Agent · Sebastopol, CA · Member since 2017 · 56 posts · 161 votes

8y

@Scott Titus

Hi Scott. Do you know off the top of you head if you got a prenup and then were looking to move to another state. If your first prenup was not well written can you modify the one you got or get a new one that takes priority to the first even after your married? I will do some research on this but wanted to see the rules around this. I am assuming once you get a prenup it is bound and any altercations to it voids the prenup.

What I am hearing is it is worth the money to pay a lawyer who specializes in this area to make sure it is rock solid.

Account Closed

Rental Property Investor · Las Vegas, NV · Member since 2018 · 133 posts · 171 votes

8y

@Chaz Mathias "Hell hath no fury like a woman scorned"

Just sayin' :)

7 Reply

Dylan Mathias

Real Estate Agent · Sebastopol, CA · Member since 2017 · 56 posts · 161 votes

8y

I just read through that old forum and it amazes me how ludicrous some people sound. People always say that a prenup is setting the marriage up for failure and about money....No it is about protecting assets you worked hard for before you decided to marry someone. That is the problem with our society though. People think they deserve something that they never even earned.

I know personally if I married a girl that was successful or her family had money before we got married I would encourage her to get one. What she did or what her family did before we were married is all hers to protect. I know together we would make money together after the marriage.

From what i have read in the previous forum is people that are against prenups are ones that got married young when they both brought very little assets to the relationship and the people that brought less to the relationship then the other person.

9 Reply

Anthony Wick

Rental Property Investor · Ankeny, IA · Member since 2017 · 2k+ posts · 3k+ votes

8y

50% of marriages end in divorce. If you were making a business partnership and knew it had a 50/50 chance of failing, would you want to protect yourself? Wait, don't we all protect ourselves with any business partnership? Well, I would absolutely get a prenup IF you are bringing in significant assets into the marriage. Of course, I'm divorced, so maybe I'm not an objective person here!

Linda S.

Investor · Richmond, VA · Member since 2016 · 1k+ posts · 2k+ votes

8y

@Chaz Mathias,

As others have mentioned your state laws will decide how it's treated, and they are all different. In VA, inheritances and real estate acquired prior to a marriage aren't marital assets, clear and simple.

The way me and my husband/partner did it prior to our marriage, is we started an LLC, and we each own 50% of the LLC. The LLC owns all the houses. If you are doing a partnership with your spouse for real estate, that's how I'd suggest it. If your spouse isn't involved, a pre or post nup is probably the best idea.

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Brie SchmidtBusiness Member

Moderator

Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes

8y

I have a prenup and post nup for any new properties I acquire. It was a non-negotiable issue for me and I think I told my now husband that it would be on our 2nd or 3rd date. He totally understood and did not push back at all, even when his lawyer told him that my prenup was over the top and very one sided.

Marriage is a partnership of course, but not everything needs to be 50/50. Some things are 60/40 and some things are 80/20 but if one partner has significant assets then they should be protected.

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14 Reply

Chaz Mathias

OP

Real Estate Agent · Santa Rosa, CA · Member since 2018 · 84 posts · 105 votes

8y

Thank you @Brie Schmidt for sharing your experience. It's refreshing to hear stories of understanding in a relationship such as yours.

Caleb Heimsoth

Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes

8y

@Chaz Mathias Interesting topic. I broached this with my long term girlfriend recently. She wasn’t exactly thrilled at the idea (naturally). Lol My opinion is basically id want one likely. Just have it set up where I keep what I had before marriage and we split what we had or accumulated during marriage. A prenup to me is like life insurance. You hope you never need it (aka get divorced), but it’s not a bad thing to have. In my case, assuming I marry my current girlfriend, it would be difficult to get our families on board (assuming I could get her on board lol) since they’re both very traditional. I probably don’t want to create drama over it.

Chinmay J.

Investor · Northern, VA · Member since 2016 · 1k+ posts · 904 votes

8y

Originally posted by @Chaz Mathias:

Hi All,

I wanted to begin a discussion on prenuptial agreements when bringing assets into a new marriage. I know this is a controversial topic, however I thought that the BiggerPockets community was the best place to begin a conversation on this important issue.

I have always had the mindset that marriage should not be about money, it should be about your relationship with your partner. Therefore, if you have earned assets and have a portfolio of properties and investments prior to marriage, wouldn't the marriage be better off if these assets were protected by a prenuptial agreement? Then everything earned after marriage (outside of these assets) could be communal property.

I've personally seen too many marriages end when one individual brought significantly more into the marriage and it caused for a messy divorce. When this happens, the divorce lawyers are the only ones who wins!

Please share your thoughts!

Terrible idea !!

If you love your money more than the thought of giving away half of it to the other person, then don't get married. I used to be a huge proponent of it when I was younger, but as I have grown older (and perhaps a little wiser) I have realized that it's a terrible precedent to set. You are essentially sending a message that you don't trust the other person one bit.

I have seen so many marriages spiral into divorce despite having prenups, enough to make a case that perhaps having a prenup is what led to the eventual demise of the marriage.

If you think you have found the right person. Get married.. Then keep working on your marriage every day, for the rest of your life to make it better. Good Luck. If you think she is a gold digger.. Dump her..

19 Reply

Mike CumbieBusiness Member

REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes

8y

Like anything else from a business perspective it is a good idea and a no brainer. However.... just like everything business related, once you inject emotion the line is no longer clear. If you and your spouse-to-be are both analytical, number crunching people then sure there is no problem. You will both agree and make up one that has all sorts of fun clauses in it. However if you have fallen in love with a creative/ dreamer type individual, they may find the thought that you don't trust them with your "little houses", but claim to "want to spend your life with me" just does not compute.

So I would say it is relationship dependent and there is not a clearcut answer. Bill Gates never got one.

4 Reply

Will GastonPro Member

Rental Property Investor · Columbia, SC · Member since 2010 · 1k+ posts · 2k+ votes

8y

Originally posted by @Account Closed:

@Chaz Mathias "Hell hath no fury like a woman scorned"

Just sayin' :)

I'd rather lose all of my assets than bring up a Postnup with my wife.

25 Reply

Mike CumbieBusiness Member

REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes

8y

"I'd rather lose all of my assets than bring up a Postnup with my wife."

Yeah mine knows how to use a backhoe and understands how lye works.........

16 Reply

Chinmay J.

Investor · Northern, VA · Member since 2016 · 1k+ posts · 904 votes

8y

Originally posted by @Caleb Heimsoth:

@Chaz Mathias

Interesting topic. I broached this with my long term girlfriend recently. She wasn’t exactly thrilled at the idea (naturally). Lol

My opinion is basically id want one likely. Just have it set up where I keep what I had before marriage and we split what we had or accumulated during marriage.

A prenup to me is like life insurance. You hope you never need it (aka get divorced), but it’s not a bad thing to have.

In my case, assuming I marry my current girlfriend, it would be difficult to get our families on board (assuming I could get her on board lol) since they’re both very traditional. I probably don’t want to create drama over it.

Problem with that logic is death is 100% certain. Divorce is a decision, and you can work towards NOT going down that path. With death, you can keep working, but ain't no one beat father time.

2 Reply

Bob Floss II

Attorney · Northbrook, IL · Member since 2017 · 719 posts · 549 votes

8y

When one person has a disproportionate amount of assets compared to the other, and especially when there are potentially huge inheritances or family trusts involved, its not a bad idea.

Jason D.

Rental Property Investor · St. Petersburg, FL · Member since 2017 · 3k+ posts · 4k+ votes

8y

I wonder what the divorce rate is of people that have a prenup vs. those that didnt feel it was necessary?

Nik Moushon

Architect · Wenatchee, WA · Member since 2018 · 843 posts · 907 votes

8y

I think you are looking at this the wrong way. Not that a pre-nup is right or wrong but how will your S.O. feel about it? How are you going to convince them that you are going into marriage already prepared for it to fail but they should be ok with that and trust you that the marriage will last forever anyways. If you go in treating marriage like a business then don't get up set when the other person finds a better deal, bc its just business after all. I, personally, think pre-nups are a way for people to keep one foot out the door at all times to bc deep down there is something they don't trust about the other person. This is not a foundation you want to start a marriage on. I think you are just setting yourself up for failure. I'm not saying a marriage will last if you dont do a pre-nup as theres a thousand things that could end a marriage. Just this wont help you.

I will add though that I think it could make more sense in a second marriage bc this could protect assets for your children. Though again it still comes off as a trust issue.

Anyways, my 2 cents.

11 Reply

Karl B.

Rental Property Investor · Erie, PA · Member since 2015 · 1k+ posts · 2k+ votes

8y

Originally posted by @Dylan Mathias:

I just read through that old forum and it amazes me how ludicrous some people sound. People always say that a prenup is setting the marriage up for failure and about money....No it is about protecting assets you worked hard for before you decided to marry someone. That is the problem with our society though. People think they deserve something that they never even earned.

I know personally if I married a girl that was successful or her family had money before we got married I would encourage her to get one. What she did or what her family did before we were married is all hers to protect. I know together we would make money together after the marriage.

From what i have read in the previous forum is people that are against prenups are ones that got married young when they both brought very little assets to the relationship and the people that brought less to the relationship then the other person.

For real. Years ago, when my sister got married, her now-husband's parents were insulted their son had to sign a prenup. What's ironic is my brother-in-law's dad was a lawyer.

Those who work hard shouldn't lose their assets. I would gladly sign a prenup without hesitation as it's only fair (in the event of divorce) the other person gets to keep what's rightfully theirs.

To lighten the mood, go on Youtube and search for Seinfeld prenup. It's a scene between George and Susan. It's funny stuff.

Jim K.

Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes

8y

All I can think of reading this is that it thankfully doesn't apply to my life and marriage. This would be something you would have to do if you owed a duty to your children before marriage or to your ancestors to manage their inherited wealth wisely. To do it to protect a triplex acquired when the spouse was your girlfriend...you understand that WILL come up in arguments sooner or later. Is it worth having that shadow on your marriage to start with?

Victor S.

WorldWide · Member since 2016 · 1k+ posts · 1k+ votes

8y

Originally posted by @Nik Moushon:

I think you are looking at this the wrong way. Not that a pre-nup is right or wrong but how will your S.O. feel about it? How are you going to convince them that you are going into marriage already prepared for it to fail but they should be ok with that and trust you that the marriage will last forever anyways. If you go in treating marriage like a business then don't get up set when the other person finds a better deal, bc its just business after all. I, personally, think pre-nups are a way for people to keep one foot out the door at all times to bc deep down there is something they don't trust about the other person. This is not a foundation you want to start a marriage on. I think you are just setting yourself up for failure. I'm not saying a marriage will last if you dont do a pre-nup as theres a thousand things that could end a marriage. Just this wont help you.

I will add though that I think it could make more sense in a second marriage bc this could protect assets for your children. Though again it still comes off as a trust issue.

Anyways, my 2 cents.

People change. You might marry one person who turns out to be somebody else completely after the fact. Just like somebody mentioned above - probability of marriage failing or succeeding is akin to flipping a coin or playing Russian roulette with half the chambers loaded. Do you like your odds? I certainly don't, and I enjoy a good gamble. Everything in America is business, even relationships. Not a lawyer either, but heard/read that not all prenups hold up in court, so def. get a good lawyer on board if you do decide to go this route.