A Prenup Is the Latest Must-Have for Tech Startup Founders in Love
bloomberg.com
bloomberg.com
Legal marriage is a lifetime obligation where the terms aren't decided until after you sign. It's anachronistic and ridiculous. You wouldn't sign a job contract where if you got fired or quit you would face unspecified financial and personal penalties, but for some reason everyone wants to do that despite a 50% divorce rate. Insanity.
But business is business. You can’t afford to have a spouse who knows nothing about the business end up taking over the reins and making decisions that affect the business.
(where the worst case is probably being in an 'alive but not being able to make decisions' state, which can freeze all decision power and financial control)
There are other tangible advantages that you’re overlooking. Immigration and medical proxy are two that come to mind. I also find it convenient that my wife cannot be compelled to testify against me, or I against her.
And you can play it safe by regularly declaring you are not married in front of witnesses as a couple.
That's part of the point - customary marriage vows are usually something like "to be true to you in good times and in bad, in sickness and in health, for better, for worse, for richer, for poorer, to love you and honour you until death do us part". There's a recognition there that life is uncertain and you can't predict exactly what the terms will be for the remainder of your life. But like most contracts, marriage is an exercise in giving up freedom to build trust - it's a way of aligning incentives so that two people can each know that the other has their back, even when they don't know exactly what that means.
If you're not interested in making that contract or don't feel you could possibly be ready for it, then by all means, don't get married. It's not for everyone. But there's stuff you miss out on with that choice too.
But it doesn't align incentives. Instead, it creates unaligned incentives.
In most relationships, one person is more of a spender and one person is more of a saver. Marriage is one big F-U to the saver.
As far as I can tell, the real reasons to get married are the medical decision making and visitation rights. That's about it.
Perhaps there is something more to an arrangement developed all over the world spanning a variety of cultures. Yes, one aspect of marriage is the business partnership. But there are other aspects to a marriage relationship that can’t be codified in law. Maybe it’s not as necessary with women now having just as much economic power as men.
I have nothing against the cultural institution of marriage. It's probably a good idea for most people.
However, most people are unwilling to participate in the cultural institution of marriage without also having a legal marriage.
At this point in the US, the laws surrounding marriage and the cultural institution have almost nothing to do with each other. For example, almost all of the laws around the sexual aspects of marriage: for cause divorce, alienation of affections, etc. are gone in most places.
So when people are evaluating marriage, the most important thing to evaluate is the law, because that's what affects people lives the most.
I don't think it's a lack of willingness, I think it's social pressure. If someone told me they were "married", but hadn't actually been legally married, I would find that odd.
I'm ambivalent on the whole thing; I tire of people gossiping about how so-and-so are "finally" getting married (if they're together and are both happy, that's enough), and I would be fine being in a long-term, unmarried relationship, but I don't feel so strongly anti-legal-marriage that I would make it a showstopper for a relationship of my own.
It’s about trusting someone to merge legal entities with you, and trusting someone to pull the plug on your life support at the right time, and all the cultural baggage that entails.
If you want a roommate you coparent with, that’s awesome. Go for it. But that’s not a marriage.
For instance, a friend of mine married his gf so he could get a visa to follow her after she got a job in the US (they had a child already, but didn't plan on getting married).
That's fair
> tax benefits
I don't think marriage is a net positive if you were to do an "expected value" calculation and included the risk of divorce. However, I could be wrong.
Based on a Bay Area tech salary of let's say $200,000 per year, you would save about $5,000 on taxes assuming your partner earns very little and you enjoy almost the maximum tax advantage.
If you get divorced after 10 years, you've saved $50,000 in taxes, half of which will belong to your partner, so you've gained $25,000 assuming you kept your half so far.
A cheap divorce might only cost $5,000 and so you'd come out ahead, but a high conflict divorce could cost $100,000, or $200,000.
And on top of that if you were actually getting "tax savings", that means your partner earns much less than you, which means you'll be paying a lot of alimony to them for possibly the rest of their life, or at least half the length of the marriage.
Even in the case of a "cheap divorce" of $5,000, the alimony will surely eat up far more than the remaining tax savings. If you're earning let's say $200,000 and your spouse was earning much less, you're paying $1,000+ in spousal support per month for several years at least.
So yeah, the math definitely doesn't work out.
I understand that if there's a conflict you need a court to resolve, then yes, you need a lawyer. But there has to be a significant number of divorces that are amicable, both parties agree to divorce, and you can divide your shared assets 50/50 in a fair way that both parties agree on, right?
Do you need a lawyer in those cases?
Or are those cases so incredibly rare because of cultural reasons that everyone just assumes a divorce costs money?
You don't need a lawyer for a divorce in the same sense that you don't need a lawyer ever.
Plenty of people succeed at pro se law all the time.
There is a good reason why people recommend lawyers, though, and that is because the law is very complicated.
I think lawyers are great at a few things:
1. They'll help you dot your i's and cross your t's. Even if the divorce is amicable, it's probably a good idea to do up the paper work and then take it by a lawyer just to make sure everything is done up right.
2. They'll keep everything above board. A decent lawyer will tell you about what is achievable in a divorce, which is a much better starting place for amicable negotiations than what feels right.
3. They'll help you protect yourself. Is it a good idea to move out of the marital home? What happens if your spouse incurs debt during the separation? These sorts of questions are often quickly answered and very important to get right.
> Or are those cases so incredibly rare because of cultural reasons that everyone just assumes a divorce costs money?
The breakup of personal relationships, such as a marriage, often result in very strong, negative emotions. I don't have any data on how frequent divorces are contentious, but it would not surprise me to learn that most are.
My guess is that part of your perception, however, is anchored in media - both social and traditional. There, contentious and expensive divorces are simply more interesting and are probably over-represented.
Also, if there's kids involved, you need a shared custody agreement which might result in one party paying child support to the other, but that's a thing that's triggered by the divorce, it's not part of the divorce itself.
> it's probably a good idea to do up the paper work and then take it by a lawyer
How hard can divorce paperwork be? "We're done, signed: A, B" How can you screw it up? If you get confirmation from whatever government body that keeps track of it, you're divorced, right? Otherwise you're not divorced?
> what is achievable in a divorce
What? You split your assets 50/50 and then you're done? What else is there to argue about?
> What happens if your spouse incurs debt during the separation?
Wait, what, how long does a divorce normally take in the US?
> My guess is that part of your perception, however, is anchored in media
No, no. I was specifically responding to some grandparent poster that claimed a "cheap divorce" only cost about $5000. I think that's an outrageous amount of money, and I don't understand why people in the US seem to be ok with divorce having to cost any money at all?
In the US, child support is not automatic. If either party goes to court, court ordered child support can be arranged, but otherwise, it is left up to the parties involved (I could be wrong about this, and it might vary from state to state).
> How hard can divorce paperwork be? "We're done, signed: A, B" How can you screw it up?
Honestly, I'm not a lawyer, and I've never been divorced, so I don't know. But I do know that something as "simple" as a will is pretty easy to screw up. I can't imagine other aspects of family law are any different.
> You split your assets 50/50 and then you're done? What else is there to argue about?
1. Sometimes assets are not so easy to split. Partnerships in small businesses, pensions, membership in a family business, etc.
2. There are 2 property systems. One is "community property", where everything is considered to be jointly owned by the couple. In the other, people own what they own. I'm not very well versed in the difference.
3. People generally are not expected to split property they came into the marriage with or gained via inheritance. However, if it becomes co-mingled in certain ways with marital property, then it becomes marital property.
4. Sometimes people want to keep certain pieces of property (e.g. heirlooms). Properly valuing these can be difficult.
There are probably other issues that I'm not familiar with - this is just the stuff that comes to mind.
> Wait, what, how long does a divorce normally take in the US?
It varies from state to state. Some states require 1 year separation before a divorce is granted. If lawyers and money are involved, it could be very long indeed.
The whole marriage/divorce system is (unintentionally) designed such that conflict is likely, and there are also plenty of lawyers and maybe-or-maybe-not-well-meaning friends to stoke the flames.
If you view relationships in these win/loss terms they are never going to make sense. The same kind of logic can be used to tear down other types of relationships—like founder/cofounder relationships, business/employee relationships, or business/vendor/contractor relationships.
All of these relationships will have unequal benefits to the two parties.
The legal structure around these relationships promote, rather than attack the alignment of incentives. The legal structure cannot be a replacement for trust, but it does have an effect (which is why it exists at all).
> If you view relationships in these win/loss terms they are never going to make sense.
Everyone views relationships in this way. The more intimate and trusting the relationship (e.g. marriage), the more advantage there is in decreasing legibility [1] in order to enhance stability. However, people still track contribution in low legibility relationships, just more fuzzily. If there is an imbalance that is too great for too much time, the relationship will tend to fail.
___
1. https://www.ribbonfarm.com/2010/07/26/a-big-little-idea-call...
This is obviously false.
The degree to which you track contributions is germane and you cannot dismiss it from the conversation by saying that “everyone tracks contributions somewhat”, because the degree is important. It’s also not true that everyone tracks contributions, people in relationships are notoriously irrational and blind (especially if you define rationality relative to some “homo economicus” standard).
If you cannot imagine how people could have aligned incentives in a marriage then I think your model of marriage is incomplete. If you think that marriage is a big F-U to the person in a marriage who tends to save money, I simply don’t think I have a basis to argue that point, because your model of marriage and relationships is so completely alien to mine that I don’t know where to begin to find common ground. Your viewpoint may be somewhat incomprehensible to me.
I'd argue that marriages that're based on alignment on money, kids, and lifestyle tend to do much better than ones that are based on passion, attraction, and wish-fulfillment. Unfortunately the popular image of love, dating, and marriage doesn't really reinforce this. (As a side note, I think pop conceptions of dating are seriously broken: there's this idea that it's about impressing the other person and making yourself more desirable, while you're significantly better off if you just be yourself and continue letting people reject you until you find the one person who doesn't reject you.)
Woody Allen joke:
(Girlfriend leaving him for good): It's over. You weren't like this when we first dated. You were passionate and attentive
(Allen): I couldn't keep that up - I would have had a heart attack.
I think there are heuristics to help find a good partner (the above idea is a doozy, and then the well known secretary problem). But in the end this is just helping you get past the, say, 80% of people who don't match you.
Getting from 80% to The One is probably impossible - and after twenty years of marriage I would say not needed - marriage is about growing together, working on the problems and fixing things.
If you marry literally the most perfect partner on the planet, and then fail to spend 20 years understanding or working on the relationship you will probably be in worst state than picking the first person on plentyoffish and putting in the effort.
Only if the order relation is total, which I'm pretty sure is not the case for romantic compatibility.
It's much more so an act of trust for only one side of the deal, and for the other side it creates a ton of misaligned incentives.
That places all the burden of uncertainty on one partner. Will they just walk if their partner decides to be unfaithful? Their entire life hinges on them.
Not marrying is fantastic if you do not intent to rear children and just both keep up with your jobs, but otherwise...
1) Most married women with husbands who would be worth something in a divorce don’t stay home.
2) Why do you assume she gave something up? Suppose she wanted to be a stay at home mom for ten years, then took a job in marketing at a tech company making decent money, but not as much as him?
3) Divorce laws often say she is entitled to the lifestyle she was used to. This is crap. Two households now, both can’t live “how they’re used to”. Why does she get to? Btw, he’s used to sex every night, the court doesn’t grant him that.
4) The consequence of women having access to the broad workforce is expectation to participate in it. I don’t get a choice, why should she? She can stay home for a short amount of time and then go back to work. This way she’s can’t complain she’s dependent on him, so she should feel free right?
What people fail to understand is when there is little advantage in something because of poor treatment by the courts or whatever, people will stop participating. Women got divorced in droves when it became legal. It was their right. They walked away from it. Now men are often seeing little advantage and are walking away.
Wow that's a very deluded view, no one has a right to sex, married or not.
1) Exactly
2) Someone who does not participate in the workforce for 10+ years is giving up some career advancement and therefore lifetime income. Potentially quite a lot.
Thankfully, we have progressed beyond this.
But divorce is ~50% likely. So the entire contract is fraudulent, and cannot be binding.
1.) It measures the chance that a given marriage will end in divorce, not the chance that a given person will get divorced (which was closer to 40%). The stat is skewed upwards by a few serial divorcers: 60% of second marriages end in divorce, and 73% of third marriages. [1]
2.) The divorce rate has fallen: Millenials are 18% less likely to get divorced than Baby Boomers are (largely because they're less likely to get married in the first place unless they're in a stable relationship). [2]
3.) It's heavily class-based. College educated professionals have only a ~20% chance of getting divorced, while unskilled blue-collar laborers have a ~50% chance of getting divorced. [3]
[1] https://www.wf-lawyers.com/divorce-statistics-and-facts/
[2] https://time.com/5434949/divorce-rate-children-marriage-bene...
[3] https://qz.com/1069806/the-highest-and-lowest-divorce-rates-...
(For that matter - it's not actually possible to compel someone to do something. Even laws can be broken; it is physically pretty easy to say run over a crowd of people with a car. But that's why laws are structured as a social contract: if you break the law, then you can expect the full force of the state to come down on you, leading to a long prison term or even execution. So you have a pretty strong incentive to follow them.)
From this POV, divorce being expensive, time-consuming, and costing you a whole lot is a feature, not a bug. That makes it a strong disincentive on both parties to cutting and running when things get hard.
For what it's worth, my wife and I have both been married three times. My first marriage lasted five years, my second lasted 10 years, and my third has lasted 20 years, so far.
Still, I've always been fundamentally a single guy. But I'm also agreeable, so I keep getting married. However, I don't recall that I ever said "until death do us part". You gotta be realistic.
Edit: By "fundamentally a single guy", I mean that I'm extremely independent. I've learned how to be social, but I don't get lonely. And I resent commitments that distract me from whatever I'm currently focused on. Also, I've never wanted to have children.
So I shared that with my wife, and apologized. And that transformed our marriage. I stopped pretending to be someone I'm not, and resenting her for it. And I gather that she stopped expecting me to be someone I'm not.
I think it shows how social pressure and traditions are very powerful forces. That, and an incapacity to project themselves in the future. Humans are optimistic by nature. If we weren't, we'd be constantly anxious about getting old, declining, dying...
If my partner is in the ICU and we're married, I can sit with them and have a say in the care they receive. If we're not married, I often can't sit with them, nor can I get most details about how they're actually doing (HIPPA laws; you can get around this if you put waivers in place before needed), nor have any influence on their care.
Yes, the world would be a better place if family always accepted your choice of partner, regardless of marriage. But that's often not the reality we live in due to religious beliefs, cultural norms, etc.
I don't believe everyone should get married. I don't believe there should be any social stigma surrounding marriage--either positive or negative. But I do think it has value.
I'll be the first to admit that I was not expecting marriage to cause any sort of change in my mentality, the way I approached the relationship, or the relationship dynamics in general. But it happened.
I fundamentally believed I was 100% committed and marriage was a waste of time and money. But there was a "voice" in the back of mind always saying "you can just leave if you don't like a thing"; and I didn't recognize it was even there until I got married and it stopped.
And same could be said about many other aspects of life together. It made things better between us when I didn't expect they would, not just like that. It brings people closer. I couldn't care less about financial risks, I won't be taking money to the grave and life is damn short. There are far more important things in my life than zealously watching out and calculating cost/benefits.
Child producing relationships work better with two consistent parents. Divorced parents still frequently share custody and are forced to deal with each other. The idea that you can be truly divorced with kids is a strange one.
Couples without marriage cannot truly divulge the deepest secrets, go into the deepest of exiled places with someone else without a binding relationship. Not that marriage seems to mean that anymore, with the societal expectation that both sides will leave when it doesn't work for them anymore.
The children will do better when the father isn’t broke because the mother took him to the cleaners and spent $200k on lawyer fees and then had him thrown in jail for lack of child support payment that he couldn’t afford. Then he can keep going back to jail because as a “felon” he will never be able to afford the payments.
This story was told to me by a woman whose mother did that to her father. The woman was slightly annoyed her mother kept getting the father thrown in jail because then she couldn’t see him. It never even occurred to her how horrible of a person the mother was for what she was doing to the father.
I've heard horror stories in AU of guys getting kicked out of their own house by their ex-girlfriends after living together for a few months.
It's only like that in the US and perhaps some other Western countries. Other societies put up front the cost involved in case of divorce in the marriage contract itself.
The blast radius and destruction of value of treating a startup as community property affects many people not in the marriage.
The lesson I took from it wasn't to get a pre-nup, it was to invest time in your relationship even while doing the startup, and get your spouse on-board with it. That's somewhat incompatible with the Silicon Valley image of a maniacal laser-focused startup founder, but then, a large number of them have a wreckage of a personal life that ultimately ends up costing them a lot of what they've made in startups.
For example, they may need to top off the founder's equity to maintain an acceptable level. This either requires unplanned dilution for no additional benefit to the company or reallocating equity from somewhere else. Basically, other people with an active interest in the company may have to eat a loss due to the conversion of founder stock to dead equity, it isn't just the founder that loses. Investors avoid cap tables with a lot of dead equity in any case, so it will also make it harder to raise money in the future.
You can't negotiate attraction, therefore marriage (in the legal sense) is at best negligible, and at worst very dangerous. Socially and spiritually, it can still be very positive and important.
Furthermore, if we are to embrace feminism, we must cast aside the concept that marriage helps ensure the wife is financially stable after divorce. They are working and saving for themselves as well, right?
Ultimately, it would be neat if the government didn't recognize marriage at all. Things like permission to make medical decisions, child care, or immigration would be bound by specific legal documents. (This would also have completely avoided the issue some people have with the government recognizing non-heterosexual marriages.)
We could debate if desirable or not, but it seems that a modern modification would maintain this without being anti-feminist:
"Marriage helps ensure that both partners are financially stable after divorce."
Which is generally what the law provides. It allows for the flexibility for the couple to allow for one partner to prioritize family care, while the other prioritizes financial matters, without discriminating based on gender. Sure there are still stereotypical gender roles in play that create biases, but the basic framework can persist.
A quick search seems to indicate that more and more men are suing for and receiving alimony[0]. The reason it's still not super common is probably due to traditional notions of masculinity being pervasive; men think "it's for women" or have too much masculine pride to ask for it[1].
[0] https://www.williamstrachanfamilylaw.com/2012/11/alimony-men...
[1] https://www.huffpost.com/entry/why-dont-more-men-ask-for_b_3...
We can tell that your advice is made out of ignorance by your obvious error in the second part: There is no state in the US where one can accidentally enter into a common law marriage. In the few where any kind of common law marriage is still possible at a minimum the parties must intend to be married and hold themselves out to the public as married.
The idea that you could accidentally be married is the sort of absurd paranoia that comes along with many other messed up misconceptions about marriage.
> is at best negligible,
Yes, marriage can end. And so what?
Marriage is a partnership, each of the parties going into it forsake other opportunities for the same of their collective benefit. It is useful to make the terms of that partnership explicit to protect everyone's interest for exactly the same reasons that you formalize ownership of a business.
In particular, marriage matters specifically because it might end--- just like the legal structure of your business matters because eventually you might part ways. If the participants in a marriage (or business) don't know that their interests will be protected in the event of a dissolution then their ability to have a true partnership is inhibited.
For example, if your spouse had the opportunity to become CEO of Microsoft or whatever, it might make tremendous sense to abandon your own career as (say) a mid-tier programmer to support her by maintaining your home, family fiances, and acting as an occasional assistant. But that would be extremely foolish to do if your partner could just drop you with nothing and no job 5 years later after their success paid-off and their success caught someone younger's attention.
That doesn't mean that the default terms of marriage are right for everyone, just like every business doesn't have the same ownership structure. But if the terms of the relationship don't guarantee people a fair share from the fruits of efforts produced with the aid of their own labors or forgone opportunities, then the terms are no good.
These are important factors that are apply independently and additionally to the social ones. I can say first had as someone who has spent >15 years in a committed and exclusive married-like-but-not-married relationship that third parties have significantly less respect for your relationship if you're not married and at times this becomes a nuisance and a source of practical logistic complications.
Unless your relationship never was and never is intended to be a partnership between equals. But if so you owe it to yourself and your partner to be clear about that.
By all means, set things up so that an acrimonious divorce won't require selling an illiquid business or whatnot. But if you go into thing with entirely a whats-mine-is-mine then there are real questions as to the purpose of your relationship in the first place.
I agree with this --If a prenup is creating/enforcing a large power imbalance, at least one (likely both) people need to seriously consider what they're getting into.
I disagree with the rest of the things you said after that though:
> true partnership which is necessary for a successful relationship
> Unless your relationship never was and never is intended to be a partnership between equals. But if so you owe it to yourself and your partner to be clear about that.
> to the purpose of your relationship in the first place.
This argument seems like it is very subjective. To be fair I do think most societies have generally gotten to consensus on what successful relationships looks like in broad strokes, but I think that kind of consensus falls apart when you really start looking closely at it. Even simple things like "how is the burden of child rearing split" start to create huge fractures.
The phrase "partnership between equals" does not preclude prenups -- the details of the partnership are between the people entering into it. It's quite possibly extremely naive but ideally both people have a clear understanding of the nature of the relationship and agree on the future enough to put that into written terms they agree with. If someone is creating a lopsided prenup in an attempt to hoard wealth on one side because of a lack of trust... Maybe you shouldn't bind yourself to that particular person for life?
People get into relationships for lots of reasons. Some cultures pair people up for social advancement, others try to pair for love, others pair with a sense of duty/obligation/necessity, and some cultures don't pair up at all.
Marriage is a covenant -- saying/writing what you expect down is the best way to make sure another person knows it, whether finances are involved or not. I'd say a prenup is a really good indicator to both sides of the potential power imbalance -- just like a proposal, it shouldn't be a surprise.
Indeed, it doesn't. But a lot of the "prenup" discussions I see on the internet are absurd-- stuff like marital assets will be split on the ratio of incomes during the marriage or even worse.
I've frequently seen people fail to realize that highly imbalanced agreements aren't actually in their favor even if they're nominally in their favor because of the power issues they create.
Some traditional marriage arrangements simply don't make sense in a modern western civilization where women treated in a much more economically and socially equal way...
Are you saying she should be able to control the fate of his company just because she’s married to him? You think this remotely makes her qualified?
Attitudes like this are what force people to marry within their class which is bad for society in the long run. By being able to marry outside your class without fear of being wiped out, a (usually) woman can move up (in addition to all the other ways available to her) and likely her family gets access to some of that.
To see what happens when people must marry within their class, look no further than European nobility.
Seriously, say I am building a company worth 100m on paper. You think if I marry someone she should be entitled to a large fraction of that? Why? Let’s assume she doesn’t do anything with the business. Say she was an accountant when we met and continues to be one after. Sure, she can’t tell me what mansion to buy, etc, but those are things to work out. Am I a guy to totally ignore her desires? If so, she shouldn’t marry me.
Flip this around. Suppose I’m a lowly programmer. I marry a super rich supermodel. Am I entitled to her money just because?
Alternatively, say you are building a company worth 100m on paper, and as a result, when she ends up pregnant with kids, you insist that she should work less hours, or maybe stop working altogether, in order to take care of them. (After all, you are busy building a company worth 100m on paper).
You don't think she is entitled to a large fraction of that? Why not?
Marriage isn't meant for you to protect your winnings from the Silicon Valley startup lottery; it's meant to allow for partnership, which includes earning your way in the world together and making choices together, to benefit the family, with security for both partners in the worst-case event of a divorce.
It shouldn't be in the long run. You might go in fairly imbalanced but that imbalance should shrink over time.
Just like one co-founder might bring more capital into a business, but they both work at it and become more equal over time.
If not, that's not really a partnership-- it's employment.
> Seriously, say I am building a company worth 100m on paper. You think if I marry someone she should be entitled to a large fraction of that? Why? Let’s assume she doesn’t do anything with the business.
Building, not already have built. If you are the sort of person who could build a $100m business and your prospective partner isn't someone who amplifies your potential substantially then you are selling yourself short.
I think many people underestimate how enabling a good spouse can be to their business success when the spouse isn't directly helping in the business. Even if they do nothing more than consistently provide emotional support and stability, provide you with intimacy without the drama potential of dating, and offer you an occasional outside perspective that you can trust to not turn on you-- then that alone is a tremendous value that would be difficult to buy at almost any price (or at least at any price you could afford _before_ you built the $100m business). And that alone is a pretty low bar.
Often one spouse or the other takes a major career setback in order to manage the household and children, in many relationships your spouse is a trusted advisor that helps you navigate the politics of your industry or by giving you the confidence to make extremely risky moves by letting you know that even if everything goes wrong they'll still be there with you. A great partner enhances your success by adding additional meaning to your life and reasons to be successful in the first place, they coach you, and pick you up and dust you off when you're down.
If you're actually capable of building a $100m business you deserve a spouse of a similar caliber-- with at least complementary skills. And if they're actually enabling you, then -- sure they do deserve a decent chunk, perhaps not half, and perhaps it would be reasonable that they shouldn't be able to force you to liquidate your position.
And since you haven't built that $100m business yet there is a extremely high risk that you won't succeed in at all. The vast majority of businesses fail. Your spouse takes part of that risk too, so they should also get part of the payoff.
Someone who loses the financial standing that you built as a couple isn't someone who had their class elevated by your relationship-- they're someone who just temporarily had the ability to make use of the benefits of your class by proxy.
As you said,
> gets access to some of that
That sort of thing easily becomes toxic-- resulting in people staying with people they can't stand because they'll be financially screwed if they separate.
Going back to the business analogy... you and a partner create a business together and you manage to get them to accept an agreement that gives them only a tiny portion of the equity you received because you provided some initial business contacts or capital or whatever excuse. But after that, you both worth hard at it. When down the road your position is worth $10m and theirs is worth $200k, whats that going to do their loyalty and dedication to the effort?
When that business started perhaps on day 1 it was worth only the (say) $200k you put into it. Over time it grew to $10.2M in value, and both of you worked for that increase. So in the beginning your split should be 200/0 and towards the end closer to 5.2/5 or at least that's an outcome that won't produce loyalty and motivation problems.
> Flip this around. Suppose I’m a lowly programmer. I marry a super rich supermodel. Am I entitled to her money just because?
Her money from her 'super rich' status before your marriage? No-- and a no-prenup marriage wouldn't entitle you to it. Assets you owned coming into the marriage don't get split. A share of the assets she earned while you were married? sure! Presumably you were contributing substantially, even if not by bringing in piles of income yourself, or otherwise why the heck would she have married you?
The number one failure? Not properly disclosing premarital assets. Disclose everything, and let the lawyer decide if it's immaterial (and as a side benefit, if they strike something from disclosure which is later found to be material in a divorce proceeding that results in the prenup being pierced, then generally your lawyer's malpractice insurance will make you whole).
How should stock be disclosed? If it's publicly traded, you disclose the stock, type of shares, stock owned, and value at the time the disclosure was compiled. If it's not publicly traded, you list the type of stock restrictions on trading/owning if any, and estimated valuation based on the most recent one conducted by the company. If you're a C-suite officer of a VC-funded company, you generally also need to get an updated valuation, and if the company won't do one you may need a third-party valuation. (If you're not an executive, or it's a privately-owned traditionally financed company, no additional valuation needed.)
Is this just some old version of the title cached?
The weird thing is that the URL matches article heading.
Marriage is incidental to that, and there isn't much of a future for it outside religious societies anyway. The good news is the trend creates lots of opportunities for luxury products and consumption as the millennial generation ages out of prime child raising age and finds the hole in their lives money just can't fill, but that won't stop them from trying.
If you have ideas for what these people will want in 2025-2030, might as well start your financial plan now. Whether it's money or share votes, plan to maintain control.
If it wasn't for some immigration laws and other areas where you're not equal unless you're married, there is little point in getting married at the present time.
You do have to pay taxes on half of the company's contribution though, which is not insignificant.
If I now feel that a another person is the most important person, that's it. Now it's so, for me.
(Will be 26 years with my Bride now... so still rookie numbers)
I read an interesting article years ago about a couple of idealistic, young artists who were against the idea of marriage. They lived together and had a baby together.
The guy began saying at parties "My wife is pregnant" rather than "My girlfriend is pregnant" so people would congratulate him instead of saying "Bummer, dude." They were having to jump through so many hoops to arrange wills, insurance, etc to cover things that would have been simple and automatic if they got married they began contemplating just getting married.
As my attorney in the matter said to me, "You can let the state decide in the future what happens if you get divorced, or you and your partner can decide it now."
You can contribute to them even during a marriage and you could be trustee and your ex-spouse would not be a creditor.
In this topic of shares in your startup though, it is more likely that your Foundation cannot be an owner of it (or maybe a percentage limitation of ownership if you are actively involved in the company), so don't donate shares of that company to that foundation. But for the fiat money earned you can donate unlimited amounts to that, with a 30% annual tax deduction against your annual gross income.
This may not be obvious, but its correct that you can't get money out of a foundation aside from 'reasonable salary' which will then be taxed as ordinary income, but you can use the foundation's nest egg to pump the value of other assets you own, as long as you aren't buying and selling direct to the foundation. Ideally an invigorated market will purchase from your personal orders above the price the foundation has pumped the market to with its tax free money. foundation just ends up owning a bunch of the asset from the pump, you personally just have a bunch of short or long term capital gains, which you can again offset by donating to the foundation or offset from prior donations above that prior year's AGI limit. illiquid markets are always ripe for this behavior.
Foundations can also support other causes you have in mind, as they were designed for.
Rich dudes have been getting prenups for like at least half a century.
https://www.divorcemag.com/articles/percentage-of-men-awarde...
Quote: "The [2010] census found that about 12,000 men receive spousal support, and 380,000 women receive it."
And if you think about it: generally when you have income disparity between wealthy spouses, its because the woman gave up her career to raise the kids (or more rarely these days, did not have a career at all).
The divorce rate has been dropping like a rock for the past few decades: https://www.insider.com/what-is-the-divorce-rate-2017-2
* Men still are more often the bread-winner in heterosexual marriages.
* Often men and women have comparable income upon divorce, so there wouldn't be any alimony anyway.
* Men don't realize they can get it.
* Men realize they can get it, but think "that's just for women, right?" and have a masculine pride aversion toward it.
... and so on.
And I think that's a big part of it, too: judges will often just award alimony to a woman as a matter of course; men have to ask for it.
The legal entanglement is perhaps the strangest part of marriage, and divorce.
Marriage has been a long-standing form of union between people, which is supposed to be the foundation of procreation, which in turn is the foundation of a lasting society.
Whether the regulations are outdated, it's definitely a very valid point of discussion, but the fact that there is regulation is significant.
It's like how nearly everything is a Delaware corporation, or how nearly every lease you sign is one of three or four templates downloaded off the internet with the names and addresses filled in.
The bottom line is raising kids as a stay at home parent is a huge burden. It's entirely unpaid (in money and career). The beneficiaries are both parents. To allow a man (or rich woman, the laws in California are fairly gender neutral here) to accrue the benefits, and disallow the woman any benefits from her sacrifice, well most people consider that to be unfair. And so do the courts.
Surely you mean no leverage? She can abort or put up for adoption, he can do neither, nor "financially" abort (nor prevent abortion if she wants it).
Or consider immigration, border guards, or any other number of more fluid situations. People, generally speaking, respect a married relationship and hold it up at a more privileged level. This is what the marriage equality fight was about, since people usually don't respond well to the clarion call of "but we have a legally binding registered civil relationship in the state of California!". That doesn't roll off the tongue as your partner is literally dying in the ER and you can't see them.
Here we're talking about alimony and how community property works.