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Marriage downside protection


JBird
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Irrevocable trust?  Most of the wealthy folks I know have their assets held in a trust.  But the best way to protect yourself is to learn to be a good and loving husband.  If the wife leaves with half, it'll only take a savvy investor about 5 years to make that back assuming he can compound at 15% annually.  So I'd would let the wife take half if the marriage is going south.  You'll probably end up fighting in court for several years too.  Not worth the time and stress in my opinion.

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How does a man with an ultra high net worth protect himself financially from a wife who'd like to leave with half? Are billionaires protecting themselves financially with anything other than a prenup?

 

...serious replies only.

 

Searching for "prenup alternatives" seems to point to Domestic Asset Protection Trusts.

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Are you already getting divorced, or is this something pre-marriage?  This is a really tough question, when I got married all we had to our name was debt.  Any and all wealth came after our vows, so if we were to split I don't see why half wouldn't be hers.

 

But let's frame the question a different way.  You're worried about marrying someone who's going to take half your money.  How would you feel trust-wise if the situation were flipped?  So you meet someone and they say they love you, say they want to spend the rest of their life with you, except that just in case it goes south they have a little stash of cash you can't get.  And they get to control the strings.

 

Marriages where one person 'controls' the other don't last long.  So if you're in a situation where you want this money and you want to dole it out as an allowance or something and control it you will encounter problems.  Part of the deal with love and marriage is there's a risk involved.  You're trusting your life and all your stuff with someone else.  I get it, divorce happens, but it's so rough because this trust is broken.  I just don't see marriages that work where one person domineers over the other. 

 

Maybe this is a gut check.  If you have legitimate concerns about this person divorcing you then maybe there's a trust issue, or maybe you need to re-think marriage.  I couldn't imagine the horror of living my life with a cloud of doubt about my spouse all the time. 

 

I know you were probably looking for a clever financial structure that lets you do whatever, but I'd encourage you to step back and look at this from a wider angle. 

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He might be asking for a friend, client or just out of curiosity.  Not sure he said he's asking for himself.

 

Sure, not sure if this applies to JBird or a friend or whatever, but I'd say the thoughts still stand regardless of who this is.  I guess the only situation it wouldn't matter is if JBird is some sort of divorce attorney or works in that field building new products.  Then he only cares about how to hide assets verses the actual divorce.

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Are you already getting divorced, or is this something pre-marriage?  This is a really tough question, when I got married all we had to our name was debt.  Any and all wealth came after our vows, so if we were to split I don't see why half wouldn't be hers.

 

But let's frame the question a different way.  You're worried about marrying someone who's going to take half your money.  How would you feel trust-wise if the situation were flipped?  So you meet someone and they say they love you, say they want to spend the rest of their life with you, except that just in case it goes south they have a little stash of cash you can't get.  And they get to control the strings.

 

Marriages where one person 'controls' the other don't last long.  So if you're in a situation where you want this money and you want to dole it out as an allowance or something and control it you will encounter problems.  Part of the deal with love and marriage is there's a risk involved.  You're trusting your life and all your stuff with someone else.  I get it, divorce happens, but it's so rough because this trust is broken.  I just don't see marriages that work where one person domineers over the other. 

 

Maybe this is a gut check.  If you have legitimate concerns about this person divorcing you then maybe there's a trust issue, or maybe you need to re-think marriage.  I couldn't imagine the horror of living my life with a cloud of doubt about my spouse all the time. 

 

I know you were probably looking for a clever financial structure that lets you do whatever, but I'd encourage you to step back and look at this from a wider angle.

 

Reasonable, yet as wiser men than me have said (hah! beat that!), that's a base rate bias.  Consider the divorce rate (base rate) now consider your statistical chance to "not divorce".  Everyone who marries including yours truly ignores this number which does not even include all the "not divorced, just miserably living together until we die". It's not pretty when you think about it. It's also reasonable to stash some money away as on your divorce day your spouse might see you nothing more than the lowliest dog and try to get far more than half (so I'm told).

 

Personally, I don't care about the money, a far more important question IMNSHO is how to guarantee a joint custody of the kids in case of a divorce. Giving away half your asset is nothing compared to having no part in your kids' lives.

 

EDIT: just to be clear, I wrote the above as per my own personal experience as a yacht partying billionaire. In addition, this post will be updated as soon as I can Google up some Buffett quote relating to this subject.

 

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Are you already getting divorced, or is this something pre-marriage?  This is a really tough question, when I got married all we had to our name was debt.  Any and all wealth came after our vows, so if we were to split I don't see why half wouldn't be hers.

 

But let's frame the question a different way.  You're worried about marrying someone who's going to take half your money.  How would you feel trust-wise if the situation were flipped?  So you meet someone and they say they love you, say they want to spend the rest of their life with you, except that just in case it goes south they have a little stash of cash you can't get.  And they get to control the strings.

 

Marriages where one person 'controls' the other don't last long.  So if you're in a situation where you want this money and you want to dole it out as an allowance or something and control it you will encounter problems.  Part of the deal with love and marriage is there's a risk involved.  You're trusting your life and all your stuff with someone else.  I get it, divorce happens, but it's so rough because this trust is broken.  I just don't see marriages that work where one person domineers over the other. 

 

Maybe this is a gut check.  If you have legitimate concerns about this person divorcing you then maybe there's a trust issue, or maybe you need to re-think marriage.  I couldn't imagine the horror of living my life with a cloud of doubt about my spouse all the time. 

 

I know you were probably looking for a clever financial structure that lets you do whatever, but I'd encourage you to step back and look at this from a wider angle.

 

We were also very poor when we got married. Still are, as it wasn't that long ago. I'm really glad that was the case. I imagine it being stressful having that psychological inequality going into a marriage.

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Serious question, why get married? Pressure from family or your girlfriend? Religious beliefs? It seems like a terrible decision to get married if you are a guy. Why do you need some piece of paper that can potentially ruin you financially, and presents no upside at all unless your religious to help you keep your relationship?

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Serious question, why get married? Pressure from family or your girlfriend? Religious beliefs? It seems like a terrible decision to get married if you are a guy. Why do you need some piece of paper that can potentially ruin you financially, and presents no upside at all unless your religious to help you keep your relationship?

doesn't the same thing come in to play after 2 years of cohabitation?
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In addition, this post will be updated as soon as I can Google up some Buffett quote relating to this subject.

;D

 

 

Rule 1, don't lose money...........

 

Rule 2, don't forget rule 1.  8)

 

Rule 3, can only be whispered in Becky Quick's or Liz Claman's ear.

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But let's frame the question a different way.  You're worried about marrying someone who's going to take half your money.  How would you feel trust-wise if the situation were flipped?  So you meet someone and they say they love you, say they want to spend the rest of their life with you, except that just in case it goes south they have a little stash of cash you can't get.  And they get to control the strings.

 

Why would this be an issue if you marry for love/with the intent to stay married? If I met a billionaire woman, I wouldn't take offense if she wanted to make some arrangement to protect the bulk of her networth from me going after it, just in case. I can't see the good argument for not taking precautions here (the issue is somewhat different if you marry "poor" and then one of you go on to make lots of money; then it's down to to in which terms you view your partnership). Surely, everyone who marries realizes that they can't see the future? I don't see how recognizing reality is detrimental to trust in the relationship.

 

If you are an awesome rock climber, you don't skip the security line just because a slip-up almost never happens.

 

For me the answer is pretty clear-cut. I would never, ever marry someone of significantly lower means than me without a prenup or the equivalent. In fact, I think I would insist upon it even if I married someone richer than me, because to me it seems the fairest thing no matter what. 

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Are you already getting divorced, or is this something pre-marriage?  This is a really tough question, when I got married all we had to our name was debt.  Any and all wealth came after our vows, so if we were to split I don't see why half wouldn't be hers.

 

But let's frame the question a different way.  You're worried about marrying someone who's going to take half your money.  How would you feel trust-wise if the situation were flipped?  So you meet someone and they say they love you, say they want to spend the rest of their life with you, except that just in case it goes south they have a little stash of cash you can't get.  And they get to control the strings.

 

Marriages where one person 'controls' the other don't last long.  So if you're in a situation where you want this money and you want to dole it out as an allowance or something and control it you will encounter problems.  Part of the deal with love and marriage is there's a risk involved.  You're trusting your life and all your stuff with someone else.  I get it, divorce happens, but it's so rough because this trust is broken.  I just don't see marriages that work where one person domineers over the other. 

 

Maybe this is a gut check.  If you have legitimate concerns about this person divorcing you then maybe there's a trust issue, or maybe you need to re-think marriage.  I couldn't imagine the horror of living my life with a cloud of doubt about my spouse all the time. 

 

I know you were probably looking for a clever financial structure that lets you do whatever, but I'd encourage you to step back and look at this from a wider angle.

 

Reasonable, yet as wiser men than me have said (hah! beat that!), that's a base rate bias.  Consider the divorce rate (base rate) now consider your statistical chance to "not divorce".  Everyone who marries including yours truly ignores this number which does not even include all the "not divorced, just miserably living together until we die". It's not pretty when you think about it. It's also reasonable to stash some money away as on your divorce day your spouse might see you nothing more than the lowliest dog and try to get far more than half (so I'm told).

 

Personally, I don't care about the money, a far more important question IMNSHO is how to guarantee a joint custody of the kids in case of a divorce. Giving away half your asset is nothing compared to having no part in your kids' lives.

 

EDIT: just to be clear, I wrote the above as per my own personal experience as a yacht partying billionaire. In addition, this post will be updated as soon as I can Google up some Buffett quote relating to this subject.

 

+50

 

Base rate ignorance is a highly underrated as a source of significant cognitive error.

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Thanks for the replies everyone. I'm just asking this question out of curiosity. I'm not married and haven't considered it yet.

 

If you're really ultra high net worth, I'm available. I'll have to ask my wife if it's ok first, though.

 

I think he wants to marry a woman...... just a hunch.....

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The laws are very geographically different, so it really depends on where the person gets married and where they get divorced.  Both are important, I believe.

 

I had a pre-nup.  It was super easy, no stress whatsoever.  I believe it made my marriage better because we never ever fought about money.  Many marriages end because of financial stress and this eliminated all of that, for the most part.  We kept our bank accounts separate.  I had my responsibilities and she had hers.  She was the one actually asked about the pre-nup as her parents told her she should get one because they had bought her a house.  I agreed to her (parents) request as my net worth was 3-4x's her's at the time of getting married.  I didn't own a house, so her parents thought I was poor :-)

 

I think if a potential future spouse won't agree to a pre-nup, that is a potential problem, not the other way around.  If a person isn't willing to be in the same place they are in before they get married as after getting divorced, then they are entering a marriage for the wrong reason too.

 

I disagree with others posters opinions on not worrying about the money because you shouldn't be getting married if you don't trust them and are already thinking about divorce, etc.  In my opinion, those posters live in a bubble.  People change over 3, 5, 10, 15, 20 years.  Some marriages and couples are meant to be together forever but not everyone is made that way.  Just because a marriage only lasts 5 or 10 years and then ends, doesn't make it a failure, in my opinion.  Don't fear divorce or a relationship ending or you might never have a good one because you might avoid all possible candidates. 

 

We are all value investors here.  Imagine one of our investee companies not having a rock solid employment agreement with the CEO's, CFO's that are hired or are founders?  Imagine not planning for the day they might leave, in advance?  The reality is, about half of marriages end before a person dies so the reality check is, there is a good chance it is going to last forever.  Be prepared, just in case.

 

Do you know how many unhappy rich people there are out there that stay married because neither of them want to see half their networth disappear?  A LOT!!!

 

The tricky part is if you have kids.  In Canada, a person can't sign away a kids rights so if you get out of paying your fair share of child support, that may change after your kids grow up.  I am told, they can come after the other parent for their fair share of support because they never agreed to anything in advance, because they were minors (this is applicable to step kids - getting married to someone who already has kids).  I think natural kids would be eligible to their fair amount based on parents income, under most circumstances.

 

 

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Just a thought here.  Sometimes you do run into that girl who is seemingly out of those cheesy chick flicks.  She loves you unconditionally for who you are, all your flaws and all your quirks, along with all your strength and resolves.  She doesn't mind that you decided to quit your job, she doesn't really know how much you make anyway.  She just knows that you're driven and you're passionate.  You tell her that you're going to start a hedge fund and you won't have income for potentially a few years.  In a worst case scenario, you may even lose your savings.  She tells you to "Go and do it, we're young and if everything fails, we've still got each other and a lot of years ahead.  We can afford this."  She gets upset because her girlfriends tell her to "smarten up" and don't make her life revolve around you.  They tell her that she needs to love herself, pamper herself, travel, and enjoy herself while she's young.  They tell her that she works too much.  She's upset because they are life long friends.  She hangs out with them less often now rather than question herself "is this all worth it?" 

 

There will be days when you've sunk to the abyss because you've asked people close to you about investing in the fund.  The conversation turns awkward, before you know it, e-mails and phone calls have stopped.  You've seemingly lost a friend.  You're upset not because they won't invest, you're upset because they do not bother to learn about whether investing in your fund is a good idea or not.  You start to figure out who truly considers you a friend during this "unique time" in your life.  She's had bad days at work.  But she puts that aside and she reaches down and lift you out of that deep mental abyss.  You don't really know how she does it, but she just does.  She tells you "if you build it, they will come"  Sooner or later, people will realize you're pretty good at this compounding capital sort of thing.  She's tired and stressed out, but she prioritize  your needs above hers.  You constantly wonder how you would climb out of that abyss if she wasn't there.   

 

Sometimes in life, you get lucky and stumble upon someone like that.  You have to be smart enough to realize that this is the "no brainer" and "one foot hurdle" that people talk about.  You forget about the pre-nups and etc.  You choose buy and hold for the long run and put a ring on it.   

 

Serious question, why get married? Pressure from family or your girlfriend? Religious beliefs? It seems like a terrible decision to get married if you are a guy. Why do you need some piece of paper that can potentially ruin you financially, and presents no upside at all unless your religious to help you keep your relationship?

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yeaa... Remember that scene with Robert deniro, his wife and the bank manager in Casino? He trusted his wife blindly, she was a complete maniac. I think most of the time you are too biased to really judge wether its a good idea. Better to just not sign the contract... If she leaves you because of that, she wasnt all that to begin with.

 

And besides, with your dream girl scenario, why the hell put a ring on it anyway? If she is so amazing, why do you need a contract to keep her with you?

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yeaa... Remember that scene with Robert deniro, his wife and the bank manager in Casino? He trusted his wife blindly, she was a complete maniac. I think most of the time you are too biased to really judge wether its a good idea. Better to just not sign the contract... If she leaves you because of that, she wasnt all that to begin with.

 

And besides, with your dream girl scenario, why the hell put a ring on it anyway? If she is so amazing, why do you need a contract to keep her with you?

In his case the girl had a hand in his success- in a way that is difficult to quantify.

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