I am going to marry an amazing man. When we were dating, I built a 23-unit portfolio. Now we are questioning how prenuptial agreements are made.
In a hypothetical prenup, he would keep the new The house and my second largest investment property: $1.5 million. (He needs the investment property to be able to afford the new mortgage.) In another scenario, I’d get the lesser value of the house he bought, keeping my largest investment property and my smallest investment property: worth 235 Ten thousand U.S. dollars. Another option is that all the properties will be jointly owned and we will distribute the profit percentage in perpetuity. Nothing can be sold for cash unless the parties agree to sell it, and we predetermine how the profits are distributed. I will have the right to manage the portfolio and convert any investment property to a larger investment property at 1031 if I wish. In this case, I would get two-thirds of the business and he would get one-third. What do you think about this? I know I’m signing a prenup that basically gives him a lot of money, but I do feel like he’s entitled to something to help me build it. Property Manager
Dear Property Manager,
Let’s get one thing out of the way first. You wrote, “I wouldn’t be able to do this without him.” It feels like it would be harder to do without him, but I have no doubt you would do it anyway. The adventurous spirit, entrepreneurial drive and good judgment to choose these properties at the right time are on your doorstep. Give yourself the credit and respect you deserve for what you have accomplished. You also have a down payment, I think, a mortgage. This should be taken into account when making calculations. You bought these properties with your own money, so he if not you. Your fiancé provides support, but the property belongs to you. I don’t think a split would be fair to you, and I’d be careful to transfer too much of your business to him. I hope you live happily ever after, but 50% of marriages end in divorce and you may regret being so generous. It took many years and work to build this portfolio. It only takes a minute to sign a large portion to a third party. It is wise to write everything down. The marriage contract is one of the most important contracts you will ever sign. Couples should be prepared for a lot of things that could happen, including what will happen to the business if you break up. About 15 percent of married couples have signed a prenuptial agreement, up from 3 percent a decade ago, according to a recent Harris Interactive poll. For married couples between the ages of 18 and 34, that number rises to 40 percent. Prenuptial agreements force couples to be completely transparent about their finances.
I hired Homrich Berg, CFP and CPA, Atlanta, GA. Tricia Mulcare comments on your letter. She is also more cautious. “A simple solution might be to record the current value of the various properties on the wedding date and note that if you split, the current value of your assets at that time will be split based on the initial ownership percentage,” she replied. “If you want to Give ‘credit’ for helping with maintenance and renovations over the years, and you can increase his percentage accordingly.” “One way to do this might be to try to quantify how much your fiancé has spent on maintenance and renovations over the years. Hours spent, not the cost of hiring a professional,” she added. “Arguably, the time you spend identifying, buying and managing your portfolio is also valuable and can offset some of his contribution since you could have hired an outside management firm.” Mulcare also recommends outlining your rental income during your marriage plan. Will that be split 50/50? Or 75/25? What happens if you die before your fiancé? If you jointly own these properties, he will automatically inherit, and your family will not see a penny. “In any case, it would be wise to document your shared desire to maintain the property until you both agree that now is a good time to sell,” Mulcare added. “It’s also important to have a plan for how the proceeds of any sale will be distributed. It probably wouldn’t hurt to further specify that you would be a portfolio manager with access to a 1031 exchange.” I don’t want to give you Plan to pour cold water. It looks like you’ve both taken a responsible and positive approach to your marriage, which bodes well for future negotiations. You also talked openly about your options and had difficult conversations. Getting married is a very exciting time and it is never a good idea to let your emotions rule your finances, especially after years of hard work on these properties. It’s too much for one person to make this decision, the weight of the relationship rests on your shoulders. Hire a lawyer and/or mediator to help you reach an outcome that is fair to both your boyfriend and ) yourself. Take at least some emotional responsibility from your lap and hand it over to a cool, dispassionate independent third party. Remember this: Once you sign up for half of your real estate portfolio, there’s no going back. Check Monetaryist’s Private Facebook group, we are here to find the most Answers to tough money questions. Readers write to me with all kinds of dilemmas. Post your questions, tell me more about what you’d like to know, or participate in the latest Moneyist column. Monetaryists unfortunately can’t answer the question alone. By emailing your questions, you agree to publish them anonymously on MarketWatch. By submitting your story to Dow Jones & Co., MarketWatch’s publisher, you understand and agree that we may use your story or versions thereof in all media and platforms, including through third parties . READ ALSO : How much should I tip the housekeeper? My husband said we should tip the minimum. I said give her 30%. who is right? “She will sail to sunset with my father’s belongings”: My father died and my stepmother is moving to France. There is no memorial. what can I do? “She never explains anything”: I’m an elderly person and I lost $100,000 in the stock market this year. Can I sue my financial advisor?
