What to do with the portfolio if you break up..?

[Shonnie]

Me and my boyfriend are just about to purchase our first house together- and even though its not the nicest thing in the world to talk about- we have to be realistic..

We COULD break up in the future- its certainly not foreseeable at the moment coz everything is running smoothly- but being only 21 it can be assumed that lots of things are going to change as the years fly by..

We were thinking about what are our options are going to be if we build this portfolio together (like we plan to do)- and thing stuff goes sour and we break up..

I was just wondering if any of you guys have backup plans in case this happens..??

I know I wouldn't want to sell them just to cash in- and he kind of agreed with this but then he said it wouild be okay if I bought him out..

What are other options- could u possibly keep them under both names? Split the properties down the middle? (don't know how to do that- yield based or growth based)..?

Its confusing to talk about but I figure MAYBE if we have a plan now and something does happen in the future, we will have a better idea of how to deal with it..

anybody else thought about stuff like this??

 

[Mr. Fabulous]

Shonnie,

Great to see your thinking about contingencies. My girlfriend (now ex) and I also discussed these issues when we started investing together. We had decided that when things got serious (as in we actually started to purchase props we would go to see a solicitor and get contracts drawn up (or if that was too extreme at the very least get some good legal advice).

Fortunately, it didn't get to that point when she decided to leave and we simply split the cash we had saved up to that point (which was quite a sizable amount). Real pain in the ar.se in turned out to be - it's definitely harder investing on your own - a double income comes in really handy. Such is life.

Anyway yeah, keep heading the way you're heading, you both doing a great job!

Mark

 

[Xenia]

If my marriage ever broke up (and it never will), I would not care about the property portfolio, that's just like someone stealing the fish you just caught.

I know how to fish

In those circumstances there are things in my life that is more important than properties! They can be accumulated again easily!!!!

 

[Francesco]

If my marriage ever broke up (and it never will), I would not care about the property portfolio, that's just like someone stealing the fish you just caught.

I know how to fish

In those circumstances there are things in my life that is more important than properties! They can be accumulated again easily!!!!

Nice to know that there are committed fisherman. Hubby must be the catch of your life!

 

[DaleGG]

Hi Shonnie

I agree with Xenia. If you understand how and what to do then losing the portfolio will not be a problem for you as you will replace it quickly having already conquered your fears and "what if's" to do it in the first place.

For what it is worth, I ahve always said that Sue can have the lot and I will simply start again.

I know that emotions will run riot if you do go your own separate ways, but, if you can avoid solicitors niggling away at you you will save a great deal of angst and a great deal of money.

Good luck

Dale

 

[Aceyducey]

For what it is worth, I ahve always said that Sue can have the lot and I will simply start again.

Hey Dale,

Please make sure Sue lets the forum know if she ever becomes available - all those properties....

I reckon that pre-structuring for a potential breakup is ok to some extent, however personally I'm dead against pre-nuptuals or similar as you're basically planning for the relationship to fail.

best is to stay conscious of the possibility and don't get emotionally attached to the properties - all they are is a method of generating cashflow and capital growth, who cares what type of asset they are.

Whether the worst cases are selling the lot and splitting the difference, or handing them across to your ex and not paying maintenance, your skills and experience remain - and it's the skills and experience you gain through investing that makes you successful. The physical assets can be replaced.

Cheers,

Aceyducey

 

[grossreal]

hi Shonnie
the other post are correct.
but if you are worried you can setup a structure that the property is owned by the structure and then if you do decide to split the one that wants out of the structure buys out or finances the other half of the structure.
you can split and it maybe financial for both to keep the structure as is and depending how the structure is set up it can be internally done without selling any thing.
I would not give you advice on this structure because you need to get it made for your requirements but there are people here that do trusts and these structures.
one thing I would do and we still do now ( 24 years married) is have separate legal advice I have my legal and the wife has heres.
why
you just never know whats around the corner and her getting her own legal advice does give us that separation from a legal point of view and what she signs for she understands
might sound funny but the number of soups that the wife of a departed person says
I had no idea we owed that or we even owned that and I shake my head.
you can have separate structures if really worried
( jessica simpson, paris etc I think marriage to them is just to throw a party and get in the star news paper,
for them multi structures
but I think paris has people that can do that)
I hope you have a great time together and it is good to work stuff like this out remember as most don't to organise wills also again with your solicitor and held by him/her for the same reason
you never know whats around that corner.
my .002

 

[Xenia]

I truly believe that in life you will always get what you are focused on (that may not be the same as what you want!).

If you are focused on breaking up and making sure that you dont lose all yor material things guess what you may be attracting into your life......

 

[Shonnie]

Hmmm okay- I can see what your saying- to tell you the truth we haven't thought about breaking up EVER (well not seriously anyway) - and the thoughts about what to do if we do break up have honestly never really crossed my mind.

I just had a two friends come to me and say maybe its a good idea to think about what would happen if it doesn't work out- I asked trav about it and he didn't really have any idea either so I thought maybe other ppl had contingency plans?

haha

I guess not! As much as you can try to plan the what if's - when it comes down to it you really dont know what is going to happen.. if stuff goes bad we will jsut have to deal with it when the time comes, and I guess no amount of goodwill planning is going to solve it.. especially if someone gets spiteful and vicious..

Anyways thanks for the insight guys, I'm going to ignore my mates and just say - "we aren't going to break up and if we do the properties are going to be only a small part of the emotional problem.."

Thanks heaps guys! been very helpful.

 

[coastymike]

I'm with Dale on this one. I used to be a great proponent of pre-nups and in fact two relationships which could have led to marriage did not do so because I insisted on a pre-nup. Well i'm single because of those decision.

I've slowly, and i can tell you it has been a slow progress, come to the view that the next person I meet and decide to marry will be a case of for better or worse. If it all goes in a divorce I couldn't really care now. I'd just start over again. The great thing about accounting is that you can do just that.

Do think through those sort of things but don't ruin your relationship because of them. Instead concentrate on the positives in the relationship and work through the problems. If you are both committed to each other, love each other and are willing to admit you are wrong at times (not just you but your partner) you have a good chance of a strong relationship and the possibility of separating will be low.

I've learnt that one of the best things in life is sharing it with someone. Don't miss out on that because of a few properties.

 

[Les]

G'day Shonnie,

and the thoughts about what to do if we do break up have honestly never really crossed my mind.

And may it ever be so, Shonnie.

But if the worst were ever to happen, just don't try to fight for everything - as there's only one winner then - your Solicitors !!

I tend to be with Dale on this. My other half can keep 80% (I can't be quite as generous as Dale, as I am a helluva lot closer to retiring age than he is - I'd need 20% to "get going again"). She's worth at least that, though, after 36 years... and she should be well cared for with that 80%.

Regards,

 

[alexlee]

I'm still tossing over a prenup. Sure I don't intend to use it, but I don't intend to die in an accident either but I'm still planning to buy insurance. I don't plan on my tenants trashing my place, but I still buy landlords insurance.
Alex

 

[coastymike]

You will have to make your own decision alex. Ironically I have to advise my clients to consider them. And in seminars I recommend them. That's my professional opinion.

But my two ex's, and 99% of my female friends, have all said that pre-nups are a sign that you are planning on things not working out. When they see a guy risk his life climbing rocks, or risking his finances entering into a new business adventure but aren't willing to risk loosing it all over love then they question whether you will really stick it out to the end and whether money is in fact more important than them ("i mean if you are willing to risk loosing it all by leaving work and starting your own business and you don't need any protection then why need it when it comes to our love" - true comment). Appreciate the females thoughts on this matter but most women I speak (and even many of my wealthy female clients) to find the concept quite repulsive.

 

[Aceyducey]

Alex,

Toss up about a prenup as much as you like.

At the end of the day two people have to agree on it, so if your mind is made up you may well end up in Coasty's shoes - losing the girl in favour of the contract.

I've yet to find a contract that I could have a meaningful relationship with.

Cheers,

Aceyducey

 

[GoAnna!]

I have no back up plan. And as far as I know he has no back up plan either

I think you are best off focusing on creating wealth rather than focusing on protecting wealth. A partnership, generally speaking, is far more effective for wealth building than doing it solo. So I say go for it and if you do end up splitting then you've have much more loot to share. I suspect that if you invested with one eye on a possible breakup that you would not have any where the same success.

That being said my then boyfriend (now husband) and I did have a contract between ourselves for our first ever purchase which proved to be a very worthwhile expercise as it forced us to talk through what would happen in different scenarios (such as one person failing to pay their share of the mortgage, the relationship splitting etc). Once we had reached an agreement on all matters (far easier when you are doing it theoretically rather than reacting to a real situation with all the emotions that inevitably involves) we put the piece og paper aside and never referred to it again.

 

[kathryn d]

For my husband and I , this is both a second marriage.

His divorce was nasty, she got everything...except the child.
My was civil....we split everything in half...except the children, I got them physically , even though it is joint custody.

We both came into this marriage with the same amount of assets. We had no intention of being property investors at that time.As time when on I shared my dream of rentals with him. The rest is history.

We don't have a prenup. If he or I had asked for one, neither of us would have had a problem with it (I just asked him again).

That being said, the fact we had the same amount of assets may have a lot to do with it. Also just look at your partners personality. Are the vindictive?
My husband knows how I handled a divorce, and I know how he did.

My opinion if a woman is against a prenup...hmmmm....gold digger?

I would advise any marriage where there is an inequity of assets to have one.
Yes, you may be able to make a great portfolio again, then again, what if you can't. We don't know the future. The past can on be a predictor, but it doesn't come with a timetable.

 

[geoffw]

For what it is worth, I ahve always said that Sue can have the lot and I will simply start again.

FWIW, a friend did this exact thing when his first marriage ended- many years ago now. She got all the assets, and he started again, from scratch. But he had all the knowledge.

I don't know how his ex went. But he has done very very well for himself since. A new marriage, lovely children, and all but retired, very early.

 

[Bargain Hunter]

Goanna,

I'm with you on this one, don't have a plan and expect I never will need one.

Discussed the thread with Skater and she implied that if I should leave I wouldn't need to make arrangements to distribute the assets to any more children


Regards

Andrew

 

[Annie]

Thought I'd stick my tuppenceworth in here, as I am presently separating from hubby, so can probably give some 'insider' thoughts.
We were together for 21 years & obviously the thought of splitting never crossed our minds...but it's now happened & we have a fair sized portfolio of properties which will be very complicated to split (some in my name, some in joint names, & some in a family trust)
For the time being, we have decided to keep a 'business' relationship with various conditions (as has been mentioned before, the double equity helps with future projects!), as we have a couple of developments in the pipeline & that would hurt to see them sold just yet!
The only thing that worries me is potential future partners putting pressure on to release cash for lifestyle reasons, or to sell all (with all the CG implications....plus I HATE selling!)
It's something that we're going to have to monitor closely.....watch this space!
Annie

 

[our obsession]

We have discussed the possibility of hypothetically going separate ways....quite an easy decision for both of us, "don't disturb the circles"...keep an investment relationship and the properties going together, we work together really well, except when he gets too bossy.

Pre nups, (we have talked about these too), we talk about everything, not a problem...we don't have them with each other, but if we separated and had new partners, yes, it would be a very logical step.

Would I be offended if asked to sign a pre nuptial agreement? Absolutely not, if a new partner has worked his butt off securing his future in wealth terms and assets, he has every right in my opinion to insure that...to me, a pre nup is an insurance policy...my partner has said he certainly would want a pre nup.

We have matured enough that we have developed good communication skills with each other, that has helped us, personally, heaps! If he didn't think that he was Captain of the mainland Malleee Army sometimes and try (note: "try") to order us all around to time and distance and routine it would be close to the perfect relationship....but in our opinion, yes, negotiate, talk about what if's, pre nups if you both feel the need...why not.