BEAUTY IN THE FRIDGE

Why Every Couple Should Consider a Prenup—or a Postnup

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A lot about dividing up assets has to do with homes. Sometimes the partner who has more money has a home, and the couple is going to be living in that home when they get married. And maybe the partner who’s not the breadwinner is going to be putting time and energy into decorating that home and making it look beautiful. They might say, “Well, gee, this isn’t my house, but I’d like some kind of a buy-in as time goes on, say, every year or every five years, so that I feel that we are a real partnership. So if we ever did split up, I would get half of this house or half the value and appreciation of this house.”

“While you can always change a will—that’s why you see people in the last days of their lives all of a sudden devote their entire estate to their caregiver—you can’t change a prenup.”

Another thing that I’ve seen come up again and again is high-value gifts. People buy gifts for each other during marriage. If it’s not something like a ring or a piece of jewelry—let’s say it’s raw diamonds or a piece of art or a Bentley—and the partner giving it says, “Oh, baby, this is for you. It’s a birthday present.” And then they get divorced and suddenly that partner is like, “No, no, no, no, this wasn’t a present. Of course I’m not going to buy a $1 million Basquiat for you for your birthday. I bought this for us. This was an asset that I was buying for the community.” We have seen more and more cases like this, where one partner gave a gift and then later contends that it was bought for investment purposes and wasn’t really a gift. So what we will put in prenuptial agreements a lot now is that if a gift is given, it has to be accompanied by a one-page acknowledgment that says, “Under the terms of our prenup, I am denoting this as a gift.”

I’m also starting to see a lot of estate terms or provisions regarding wills. While you can always change a will—that’s why you see people in the last days of their lives all of a sudden devote their entire estate to their caregiver—you can’t change a prenup. If an older person is marrying a younger person, the older person may not want to agree that if they get divorced, they’re willing to give the younger person half of everything they earned or created during the marriage. But they might be like, “If I die and we’re still married, even though I have adult children from a former marriage, I’m going to put it in our prenup that you can continue to live in my house for the rest of your life. And then when you die, it’ll go to my kids.” Or the younger or healthier spouse might want to put that in the prenup, knowing that their partner could always change their will.

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