Best way to protect assets’ prior to marriage?

[Mr. Fabulous]

thrashoholic
When you wote the post about the female taking the 100% of the house and not to get hitched are you saying that was a result becauce there was no finanical agreement made?? as I could only seeing that happen if one of the parties didnt make a finacial agreement.

Woah woah! I didn't say that. I don't know the particulars of the exact story. All I know is that one person had a house that they had fully paid off stolen from them under the full support of the Family Court by their ex-spouse for the express 'privilege' of having been married to that person.

I have no idea if an agreement was in place or not. I just look at that example and others like it as a great reason to never get married, hence never putting my own assets on the line like that. People on here are saying that you should trust your partner and blah blah, well just tell the guy that lost his fully paid off house that....

Trust is a potentially expensive gamble and I'm not a gambling man.

Mark

 

[GoAnna!]

Woah woah! I didn't say that. I don't know the particulars of the exact story. All I know is that one person had a house that they had fully paid off stolen from them under the full support of the Family Court by their ex-spouse for the express 'privilege' of having been married to that person.

I have no idea if an agreement was in place or not. I just look at that example and others like it as a great reason to never get married, hence never putting my own assets on the line like that. People on here are saying that you should trust your partner and blah blah, well just tell the guy that lost his fully paid off house that....

Trust is a potentially expensive gamble and I'm not a gambling man.

Mark

Mark,

Maybe you should only consider women with significanly more wealth than you? That would improve the odds

 

[Mr. Fabulous]

Anita,

Hahaha, maybe you're rght! No like I've said before, I'm quite happy living alone and with my trainwreck of a personality, I don't think I've got much choice *wink*.

Mark

 

[BayView]

Woah woah! I didn't say that. I don't know the particulars of the exact story. All I know is that one person had a house that they had fully paid off stolen from them under the full support of the Family Court by their ex-spouse for the express 'privilege' of having been married to that person.

I have no idea if an agreement was in place or not. I just look at that example and others like it as a great reason to never get married, hence never putting my own assets on the line like that. People on here are saying that you should trust your partner and blah blah, well just tell the guy that lost his fully paid off house that....

Trust is a potentially expensive gamble and I'm not a gambling man.

Mark

One of my mates summed up marriage this way:

"just marry some b!tch you hate and buy her a house".

Funnily, he is very happily married again now.

 

[Mr. Fabulous]

Hey LAA, I've heard that one before a few times. It's not the marriage bit that worries me, it's the divorce bit that is frightening.

Mark

 

[GoAnna!]

At the end of the day, you can be arrogant and have a prenup, or you can be ignorant and lie to yourself and say all is going to be ok. choice is yours... I belive its a must.

let me ask.. who drives their car uninsured? or doesnt have insurance on their house? we dont plan to die in accident or think our house is going to burn to a crisp however it happens, and its best to protect yourself. At the end of the day, noone has a more vested interest in your wellbeing then yourself.

Goodluck with the wedding!

Maybe is more like tax minimisation than insurance? If you focus on tax minimisation you may miss achieve less profit. Unless you are going to have a whopping tax bill and in that case you might want to look at the possibility of minimising it.

When you look at the cost of a marriage you need to look at all the elements and then make up your mind.

If you want to avoid losing money then I would suggest you avoid the following - having children (if accidents happen just adopt them out), big spending partners, non or low earning partners (don't even cover their own costs), divorce - hey maybe avoid marriage or cohabiting altogether - looks too risky.

If you want to make money I would suggest you select a high yield low maintenance spouse with instant equity. If they insist upon staying home as child carer just insist that they offset it with the growth of a sizable portfolio. Give them love, attention and support to minimise the possibility of divorce. Educate children so that they are able to give rather than take. Forget the prenup and focus instead on maximising assets and yields. Use you and your partner's skills to best effect and become each others cheer squad. make so much money that you can't even remember how much you brought into the relationship. Laugh when people call you naive. Enjoy life.

 

[tubs]

I dont recommend against marriage.

I do, however, recommending against divorce!

Someone I know was selling his house when he separated. Tried to remove the ex from the house, but she went to family court and got a ruling that allowed her to stay.

A guy buying a house, and then a girl taking it from him is very common.

The family court is biased towards women. I have my own theory about this:

If you think about how many divorces and separations there are each year, and each of them was contested in court for children, then how many cases would there be. Only a small % of cases go to a full case. Its less than 5%.

Its not because couples work it out for themselves. Its because the family court have created the expectation that the mother will always win. If cases are a true 50/50 chance, then everyone will try their luck and the family court would need to be 10 times the size. There just arent enough resources (or judges for that matter) to handle that.

So, the system is designed to discourage people to fight, and to settle instead.

 

[windsor]

This is such a sad and depressing topic that I started, but I can’t help to think everything your parents have worked so hard for to be taken right from under you from someone who has never contributed a dime.

And anyone that doesn’t like this, think of it this way. Try to think you had kids and built up a large portfolio of assets and you were to pass away and everything was to go to your daughter or son and they were married, would you like to know that the other party could take half of your hard earned work that you worked so hard for to pass onto your children ""NO"" no one on this planet would want that.

I wonder why so many of the 200 BRW Rich list get married overseas in countries like Europe. I’ve heard and could be wrong that they have really tight binding financial agreements that cant be contested in anyway shape or form. That’s maybe why James Packer wasn’t married in Australia..

Becauce there are so many loop holes here and no one I know of or even heard of that a Binding financial agreement has stood up in Australia courts.

 

[Raddles]

Hi again Windsor
once again I would like to put your comments in context.
As far as I am aware there are probably 4 main decisions on binding financial agreements that have got to a court hearing - the agreements are out there but because of the jurisdiction issue - you will likely not hear about them.
I think the greater problem is overcoming a legal practitioner's reluctance in using them. A lawyer is potentially trying to see into a crystal ball what may happen in the future for these high net worth individuals. There is a potential timeline of 20 years or more before these agreements might start to come under scrutiny. It is an issue for professional indemnity insurance.
The legislature has definately provided for them since December 2000 and it is an option for you - even when the formalities have not been followed closely, the courts do have a discretion to uphold them (that arises from the Black full court decision) - so if your agreement is pretty reasonable and tries to consider the needs of both parties whilst preserving some of the assets of the high net worth individual - I don't see why an Australian court won't uphold them.
thanks

 

[wylie]

..... so if your agreement is pretty reasonable and tries to consider the needs of both parties whilst preserving some of the assets of the high net worth individual - I don't see why an Australian court won't uphold them.

This is the bit that intrigues me and particularly regarding some of the answers to this thread. In my case, if a court looked at our lives, they would say that I have not contributed in a "paid" sense for the past 15 years. However, I am the driving force behind our investing, and do all the legwork involved in sourcing and maintaining our IPs.

When we do work on them, I spend from 8.30am when I drop the youngest to school until sometimes 8pm at night painting, shovelling dirt etc. Hubby is in there with me if he is not at work. Apart from IPs, I do 90% of what is done at home, children to and from school, sport, part time jobs, washing, ironing, cleaning etc etc. I just happen not to get paid for it in the traditional sense. Does that mean I am not contributing to the wealth we are creating TOGETHER?

Say hubby came to the marriage with more than I, and though I have not contributed in a "paid salary" sense, I gather that some people believe I should not benefit from the part I have played in our financial success, just because I have not earned a salary to support the loans.

In the case of Windsor, if you protect the assets you bring to the marriage, would you be prepared to split whatever you make while you are together in the event of a split? If your wife stays at home to care for any children you may have together, would you consider that she has "contributed" and would, therefore, be entitled to half of what you have accumulated whilst in the marriage. If not, why not?

Say you end up with a house together, part ways, and she has to house your children but doesn't have a "whole" house in which to house them. Would you think it unfair that she gets the house, even if she has to go back to work to pay you out part of the cost of that house?

Would you want your kids placed in long day care so she can go to work to pay you for half of the house just because she has not made a "financial" difference to what you build up together?

Would it make a difference if you didn't have millions safely tucked away that she cannot get hold of?

I am not baiting you or anybody, but I am just curious how others think. After giving up my career (salary AND superannuation) to bring up our kids I would be pretty annoyed to find I don't have anywhere to live.

 

[Raddles]

Hi Wylie
your contributions do matter and are taken into consideration by a court. If a housekeeper, bookkeeper, taxi driver etc had to be employed to do the work you do - imagine how much out of pocket your family would be.
Once again I am making comments concerning the agreements I have seen, but normally there are assets from a previous relationship that the parties want to preserve for a first family.
A second relationship - where there are contributions both financial and non financial will be considered in context - of the new partners needs and the new family's needs. The longer the relationship - the closer to the 50/50 split of assets accumulated during that relationship will occur should the relationship end up dissolving.
Other factors the courts consider is the ability of each party to look after themselves, to work (e.g someone who has not worked for years would be disadvantaged in the workplace should they have to go back looking for work), someone with health issues would also likely get more of the assets given an inability to work.
The reasons there may be a slant in a woman's favour is the statistics which show women still get paid less than men - and they usually do bring up the children in the event of a split - given these considerations the courts are actually obliged by legislation to consider them.
thanks

 

[wylie]

Thanks Raddles. I agree with what you say and don't have a problem with it.

I was just curious about Windsor (who started the thread) and whether he would want his future wife to have half of what they build together in their relationship. If they split in the future, would he be happy to keep his millions and let her have a house they had lived in together?

I am all for protecting existing assets brought to a relationship and would do the same myself, but I get the feeling some people would begrudge half of what is made during the relationship going to the partner in the event of a split, particularly if the wife doesn't work, but chooses to stay at home bringing up the children.

And I was thinking of our particular situation whereby we would have zero IPs if it was not for my planning and managing them, even though I have not "earned" any salary for 15 years.

I know that in our case, if hubby and I split, he would just walk away. I would not have to fight him for anything, and I would not do so anyway. But our kids are nearly grown, so perhaps I would feel differently if they were little, and I couldn't easily go to work if I needed to.

 

[Raddles]

Hi there Wylie
hopefully Windsor will get some good advice from the legal practitioner he is seeing - but I do know that even the stay at home Mum's role is valued by the court and is considered when the assets are divided.
I actually can't see the point in people spending so much money fighting (one friend told me her matter cost $300K to get resolved) - the only winners are the lawyers. The process is emotionally draining and so many of the hard fought matters I have seen have settled on the court steps because the parties have had enough - and can't face a full hearing with the barrister's questions and the uncertainty of how the judge or magistrate will deal with the matter. Wouldn't it be better to resolve some of these issues when you are on good terms at the outset of your relationship?
thanks

 

[wylie]

Agree entirely about sorting it our prior to getting hitched. If I was to enter into a new relationship now, I would want my assets protected from the outset. Once protected, I could then be as generous as I wished down the track without feeling like I was pushed into a corner and forced to hand over something that the new partner didn't contribute towards, just on the basis that he had shared my house for a year or so.

 

[The Y-man]

When you look at the cost of a marriage you need to look at all the elements and then make up your mind.

This is such a sad and depressing topic that I started, but I can’t help to think everything your parents have worked so hard for to be taken right from under you from someone who has never contributed a dime.

....

I wonder why so many of the 200 BRW Rich list get married overseas in countries like Europe. I’ve heard and could be wrong that they have really tight binding financial agreements that cant be contested in anyway shape or form. That’s maybe why James Packer wasn’t married in Australia..
.

There was a fascinating discussion in a seminar I went to last year.

It was put forward that one of the great obsessions of the extremely wealthy is in fact "dynasty". In other words, the primary reason for marriage was to have children. While it is likely they have complicated prenups and various means of enforcement, the main point was this: the spouse was expected to bear children, and would be (more than) adequately remunerated for this. The deal is that as long as they agreed to provide the dynastic link, and bring them up suitably, they could pretty much do whatever they wanted within the financial means of the main "breadwinner".

Perhaps at this level, divorce with money as a driver becomes less of an issue as
1. the spouse has access to all the money needed
2. a divorce will only complicate/delay access to money

Where it does happen, the spouse will most likely get a decent payout, even if it may represent a small portion of the other party's assets. Anna Torv's settlement for her divorce from Rupert Murdoch is reputed to have been worth US$1.2~1.7 billion (of which US$110 million was in cash).

Cheers,

The Y-man

 

[Mr. Fabulous]

Hey Y-Man,

I'm guessing Singo never heard of that theory - he's on his sixth marriage! Or just got divorced for the sixth time or something.

Mark

 

[windsor]

Thanks Raddles. I agree with what you say and don't have a problem with it.

I was just curious about Windsor (who started the thread) and whether he would want his future wife to have half of what they build together in their relationship. If they split in the future, would he be happy to keep his millions and let her have a house they had lived in together?

I am all for protecting existing assets brought to a relationship and would do the same myself, but I get the feeling some people would begrudge half of what is made during the relationship going to the partner in the event of a split, particularly if the wife doesn't work, but chooses to stay at home bringing up the children.

And I was thinking of our particular situation whereby we would have zero IPs if it was not for my planning and managing them, even though I have not "earned" any salary for 15 years.

I know that in our case, if hubby and I split, he would just walk away. I would not have to fight him for anything, and I would not do so anyway. But our kids are nearly grown, so perhaps I would feel differently if they were little, and I couldn't easily go to work if I needed to.

Hi Raddles, I have no problems splitting 50/50 when both parties contribute to the assets, but that would make it hard if the wife is taking care of the children and cant work so you would need to place in the agreement that you would pay your x partner for the years of lost income during the years of marriage while taking care of the children and child support which I would gladly pay, schooling, clothes, health insurance, etc, etc. till the children turned 18.

I think if you don’t put this in your agreement it would be open for attack as then the agreement can be looked at the courts that you did it for financial gain. As to the house well splitting a house worth 2mill plus 50/50. I’m not sure, have to wait to see the solicitor who specialises in these agreements to see what she has to say as it's very complicated.

 

[Raddles]

Hi there Windsor
I think you are failing to consider that Mum's with kids at home are contributing. If they weren't there to look after your children, you would have to pay for a nanny or family day care etc. If they weren't looking after your children, you may have to be at home to look after them - and be unavailable to work. Just think of some of the things your Mum used to do for you - and possibly still does - she cooks, cleans, balances the family finances, remembers diary dates like birthdays, anniversaries, is a psychologist (listens to the complaints), a health care worker (patches you up when you have an accident), provides cash to you (when you studied), kept your Dad off your back (if you didn't study) etc - you then expect her to hold down a part time or full time job as well. Perhaps you need to look at your expectations and talk some of these things through with your partner.
thanks

 

[windsor]

Hi there Windsor
I think you are failing to consider that Mum's with kids at home are contributing. If they weren't there to look after your children, you would have to pay for a nanny or family day care etc. If they weren't looking after your children, you may have to be at home to look after them - and be unavailable to work. Just think of some of the things your Mum used to do for you - and possibly still does - she cooks, cleans, balances the family finances, remembers diary dates like birthdays, anniversaries, is a psychologist (listens to the complaints), a health care worker (patches you up when you have an accident), provides cash to you (when you studied), kept your Dad off your back (if you didn't study) etc - you then expect her to hold down a part time or full time job as well. Perhaps you need to look at your expectations and talk some of these things through with your partner.
thanks

That's a good point that you raised, if the mother decided to work then the children would require day care, or the grandparents. Then yes I would definitely pay for childcare as they are my children.

But I would compensate her in case the marriage did break down for her staying at home and taking care of the children if she did that for time and money lost.

But any inherntance are off limits to her if the marriage was to end in a divorce.

But I do get what you are saying and were you are coming from... But to say that if I had to stay at home and look after the children that my wealth would suffer and not continue to grow well thats easy, work from home and all assests are tied in with your parents and the properties are all managed by REA.

Once I see the solicitor and this solicitor has worked for the family law courts for a very long time, I will know more what you can and cant do and if there are any loop holes that they could attack later. Its only a days away and it will be interesting as this is my 2nd appointment which we will go into this matter alot further the do's and donts, and what could happen and what can happen, etc as Im no expert on this matter.

 

[The Y-man]

Hey Y-Man,

I'm guessing Singo never heard of that theory - he's on his sixth marriage! Or just got divorced for the sixth time or something.

Mark

Rupert Murdoch is on his third....

Cheers,

The Y-man