Post # 17
I recently read an article about a similar issue, about the divorce between Elon Musk (founder of paypal, spaceX, tesla etc) and Justine Musk, his first wife and the mother of his five sons. Basically he had a post-nuptual agreement protecting those businesses and it became a nasty court battle over whether she was entiteled to any part of them. I’m torn on what I think is fair here, but it got messy: http://www.marieclaire.com/sex-love/relationship-issues/millionaire-starter-wife
I think the important thing to ask yourself is– what do you really think would be fair, in the case of a divorce? My Fiance and I both want to start businesses– if I was successful and he took half of my BUSINESS in a divorce I’d be very upset! If it were the other way around, I think I’d feel entitled to the MONEY but not the BUSINESS, if that makes any sense. Like I think being entitled to half of the profits that he kept from it during the marriage is fair, but expecting to have an ownership share and future decision making role in a business you had no part in building would not be fair.
That said, let’s say that during the marriage he builds the business into a success…but does it by reinvesting all of the profits back into the business. AKA you rent an apartment instead of buying a house and live very cheaply for 20 years so that everything the business earns goes into making it more and more successful, and basically pays himself a very small “salary”…and then you divorce, and he owns a million dollar business and you get nothing. That doesn’t seem fair!
I think you can tell him that you understand where he’s coming from, and that he wants to protect his business and come to a fair agreement. However, you’re not sure that the agreement he presented IS fair, and you don’t appreciate that he just made one-sided demands about your financial future instead of discussing it with you as a partner. You can say that you should each have seperate legal counsel and negotiate a pre-nup that you feel fairly represents you both. Things to discuss might be how financial assets unrelated to the business would be divided, what you would be entitled to regarding the business (e.g. that you own some share but with a buy-out clause that you’d have to sell him your share at whatever price that % of the business would be worth at that time, etc) and so on.
However, whatever else you do I strongly recommend that you DO NOT sign a pre-nup or ANY legal document without having YOUR OWN LAWYER look over it!
Post # 18
@KristynGuelph: I would have a lawyer look over this before you signed it. I don’t like the idea of him completely cutting you out of the equation in the event of a divorce. What if you’ve been out of the workforce for a while when you separate? Would this mean you were not entitled to alimony to help you get on your feet? Would you be okay with that?
Post # 19
I would never sign a pre-nup. I think going into a marriage with a “just in case we divorce contract” is setting up the marriage for failure. If he’s not 10000% into this marriage, I wouldn’t want to be either 🙁
Post # 20
This would bother me because you are like me – once you are married, you believe your income is joint. The way small businesses work, if the business takes a hit, he will be using some of his savings or other income to help remediate the situation – so many small businesses have to pull from personal savings and accounts, and after marriage, that’s YOUR money, too. You may end up supporting the business sometimes, not to mention both of yourselves. This would bother me a lot and it seems like it’s really bothering you, too. I do not think I would sign this. I agree that everything he’s earned to date is exclusively his and off-limits, but that’s it.
Post # 21
I wouldn’t sign due to the fact that you “…will have no rights to the business forever.” His business becomes your business too once you are married. It is wealth that you earn as a couple. Do you think he’d comprimise if you agree that all of his assets prior to marriage remain his?
Post # 22
Gosh he should have spoken to you about the process no wonder prenups get a bad rap.
First thing to know is that while the majority of people on this post, seem to be coming from it at the what if he is successful angle(which is important,), but have you thought about what happens if the business goes under, or has huge debt from credit card and other ventures? It can impact you severely and in the event anything happens you could end up having a huge amount of debt for something that had nothing to do with you.
Second the process of a prenup is basically Lawyers looking out for their clients, so it’s actually quite standard that lawyer would come out and say you have no rights to xyz, with no mention of what you do get. Because it’s then you and your lawyers job to go through the agreement and come up with what you think a fair offer is.
Prenups can be used for a variety of things and in different ways I wrote a post about them previously if you want to check it out, so I don’t have to write a novel about it. http://boards.weddingbee.com/topic/the-truth-about-prenups-very-long#axzz2m0fnQSmH.
Since it seems like you guys don’t have a lot assets at the moment, I would recommend doing your own research into his business and field, I’m sure you guys can google and find some of the financial forms you fill out to do a prenup to disclose all of your information, that will cut down on some of the work for the lawyer. Second if you could sit down and talk about what you both want it will make it easier and will possibly be less drafts for the lawyers to work on.
Things I would do, decide how much separation you want from the business and your finances, discuss a timeline for a postnup in like 5/7 years to renogiatie if needed, perhaps once you have assets if you get no direct contribution from the company have them favor you should anything happen, think about assigning percentage for you to get put into a retirement or savings account for you should the company become profitable. Especially if you are indirectly contributing to you, by working or being the breadwinner before it gets off the ground. Also your lawyer will be able to be very specific and breakdown what is and isn’t allowed in your state. So the biggest thing you need to do is find a reputable lawyer. Good Luck!
Post # 24
@secretwife: I disagree. Prenups are about protection. Why not consider the worst possible scenerio, and work out a deal when the two partners love each other? Maybe I’m just risk averse, but considering consequencea does not mean you anticipate those consequences to occur. I recently bought a new helmet for skiing, but the chances of me falling into a situation where that helmet will save my life are very rare. I will still wear my helmet though 🙂
Anything I’d agree to right now as conditions in a prenup would be far more generous than anything I’d consider giving up should marriage breakdown occur.
Since you’re in Ontario, you should know that the recent McCain decision in the courts has made the reliability of prenups uncertain. If your hubby-to-be’s business becomes wildly successful, settlements would still be calculated based on assets on V-day. Unless you worked for the company, you wouldn’t get any sort of interest in the business any way, unless you’re able to make some sort of unjust enrichment claim.
Indemnification from the business’s liabilities should be written into your prenup. Consult a lawyer; the Law Society of Upper Canada has a referral service with a free 30 min consultation.
Post # 25
There is a difference between not getting a say in the business and not getting any of the income he earns from the business. I can completely understand why he wouldn’t want a pissed off ex-wife to have any say in his business if you were to divorce. However, once you’re married you’ll be a team, meaning that if he is using personal savings for the business, that’s your money too, or you might be stuck paying the bills while he works on his business ect.
If he’s saying that you get nothing in the event of a divorce, then that’s crap. If he’s saying that you can’t have any shares in his business (but would still be entitled to a percentage of the financial side of it), I see why he wants it that way.
Don’t sign anything without having a lawyer look over it though.
People who sign a prenup are actually less likely to get divorced.
Post # 26
@antisocialite: Absolutely true. In the event of a divorce, I get nothing from my husbands business. However he has a will that supercedes the prenup, which says that if something were to happen to him while we are married I get a substantial portion of his business. Try not to let your feelings be hurt about this. Get independant legal counsel. And if you decide to go ahead with the prenup – he probably needs to revise his will immediately. We sure needed to.
Post # 27
I also want to add (based off of his comment that his business is not currently that successful), a prenup may actually PROTECT you like some other bees have said. If his business is completely seperate from you, and it tanks, you will be protected. It would be devestating to be responsible for his business’ debts if it were to fail. If I were in your situation I would want to be clearly released from any financial responsibilites in regards to the company.
Post # 28
@KristynGuelph: That’s a tough one. My fiance owns a moderately succesful business and he was previously married and had to buy his ex-wife out of ‘her half’ of the busines even though she never did anything with it….ever. Since then we have built the business up together but I would gladly sign a prenup about that since I have a different job and no interest in the business if our marriage ever dissolves. I don’t think it’s a big deal but I’ve been on the other side of the no prenup business arrangement.
Post # 29
@KristynGuelph: My first and best advice is get an attorney and read it over with them. The “not getting part of his business” in the eventuality of divorce is pretty standard, but still get an attorney to look after your interest and offer advice.
My view on prenups is my view on wills and living wills. I want to have this all done while I’m still mentally savy enough to handle it. Divorce is so emotional, that having this done while we care about eachother I think is much better than trying to hack it out when we would both be completley out for ourselves. It gives me peace of mind.
Even if you have no assets right now, if you expect an inheritance from family members or others, you can add that to a prenup as well. That is the majority of mine and my FI’s prenup. Both of our familys have land that has been in the families for generations (great grandparents on both sides). Our prenup basically says that the inheritance bi-passes the spouce and goes to our children. The only access we would have would be in conservatership for our children if one of us would die before they are 18.
Post # 30
@KristynGuelph: This happened to a friend of mine. She refused to sign it. She figured he wouldn’t call her on it. Well, he called off the wedding. It was about a month before & they lost all sorts of deposits and he went on their “honeymoon” trip with a friend.
Post # 31
- Wedding: July 2012 - Baltimore Museum of Industry
A prenup can also protect spouses from having to incur the other’s medical expenses. I’ve read about couples with signifcant illnesses, whom end up divorcing and continuing to live together so that the other one doesn’t end up bankrupt.
I agree with PP who advise to have a lawyer review this document before you sign. They may have suggestions which make it a little more in your favor. And I also like the above mentioned idea about making sure you’re covered by a will, as well.