Prenups for American Expats
March 29, 2016 8:38 AM Subscribe
My soon-to-be-spouse suggested we should look into whether or not a prenup makes sense for us. Complication: we are global nomads.
Facts:
* My fiance and I are both American citizens, long-term living and working abroad as expats. We intend to get married in country X, but we will live in country Y by next year. I doubt we will ever live in country X again. We move every 3-4 years, though we expect this will eventually slow down with kiddos.
* We have agreed that one day we both want to return to the U.S., and if and when we do, we would probably settle in Washington, DC.
Fiance raised the question of a prenup - wanting to discuss whether one makes sense for us. (To be clear, he's not settled on the answer, he just thinks we should explore whether it is prudent). I was not thrilled about the idea for the usual reasons, but want to be constructive. I don't think we are obvious candidates for a prenup (no kids from other marriages, and while he has far more assets than me, we are not talking orders of magnitude). However, given that we have no real idea what state or country we might be in should we one day decide to divorce, perhaps it is not a terrible idea to pre-empt the whims of chance by thinking this through ourselves? To ensure we have some settlement that seems fair no matter what random place we might find ourselves in if we decide to split up? We also may have circumstances with one of us putting career / earning potential on back burner for the other, which is potentially something that could be captured.
My questions:
If we pursue this idea, I will need to secure independent legal counsel. Where on earth do I find someone who can advise on our borderless circumstances and the "fairness" of any proposed terms? US-based? Country-where-we're-wedding?
Does a prenup really even make sense in our circumstances? We are aware that not all countries consider them legally binding, nor could we reasonably prepare one to suit all possible jurisdictions for divorce. (As fun as that sounds amidst happy wedding planning!)
If we do not pursue this option, are there any significant risks I'm not thinking of that are particular to our circumstances? Besides the standard uncertainty of leaving yourself open to the outcome of a divorce negotiation?
Facts:
* My fiance and I are both American citizens, long-term living and working abroad as expats. We intend to get married in country X, but we will live in country Y by next year. I doubt we will ever live in country X again. We move every 3-4 years, though we expect this will eventually slow down with kiddos.
* We have agreed that one day we both want to return to the U.S., and if and when we do, we would probably settle in Washington, DC.
Fiance raised the question of a prenup - wanting to discuss whether one makes sense for us. (To be clear, he's not settled on the answer, he just thinks we should explore whether it is prudent). I was not thrilled about the idea for the usual reasons, but want to be constructive. I don't think we are obvious candidates for a prenup (no kids from other marriages, and while he has far more assets than me, we are not talking orders of magnitude). However, given that we have no real idea what state or country we might be in should we one day decide to divorce, perhaps it is not a terrible idea to pre-empt the whims of chance by thinking this through ourselves? To ensure we have some settlement that seems fair no matter what random place we might find ourselves in if we decide to split up? We also may have circumstances with one of us putting career / earning potential on back burner for the other, which is potentially something that could be captured.
My questions:
If we pursue this idea, I will need to secure independent legal counsel. Where on earth do I find someone who can advise on our borderless circumstances and the "fairness" of any proposed terms? US-based? Country-where-we're-wedding?
Does a prenup really even make sense in our circumstances? We are aware that not all countries consider them legally binding, nor could we reasonably prepare one to suit all possible jurisdictions for divorce. (As fun as that sounds amidst happy wedding planning!)
If we do not pursue this option, are there any significant risks I'm not thinking of that are particular to our circumstances? Besides the standard uncertainty of leaving yourself open to the outcome of a divorce negotiation?
A prenup is a good idea especially becuase it will give you two an opportunity to talk about this because this is a lot that you're taking on.
To illustrate, I have friends in a similar situation. Both of their careers are tied to working abroad (international education and development). Over the years they've faced a challenge time and time again that there is an opportunity for one of them in a new country but not the other. So the trailing spouse takes a career hit while one makes a career gain. And they did this for over a decade, moving every few years, step forward, step back. I'm sure other things were going on, but one spouse was really tired of this and didn't want to move to the next country opportunity.
They have multiple kids. They're now informally separated and living in two different hard-to-reach countries. One parent only see the kids every few months and it takes multiple days and a lot of money to get to the kids. And then when other parent visits, they are staying in the home of the other parent, and the kids don't know that parents are separated and it is awkward for everyone. Yet it is hard enough to convince someone you're in love with to move to a place, you can't force someone to move somewhere even to be with their kids. And any employer assistance in partner placement likely doesn't apply to an ex.
Then when it comes to the financial settlement of their divorce, things are a mess. They're Americans, they have some assets in America, but they haven't lived in the US in a long time. They now reside in different hardship placements with legal systems that don't match their values. They have no idea where to file their divorce.
Their incomes have been unstable for over a decade. Sometimes they've been employees, sometimes consultants or contractors. Sometimes one or the other didn't work for a year or two (especially when kids were born or small). Sometimes they'd bear tremendous relocation costs. And this should continue for the foreseeable future.
So when they should set up a financial settlement, this will be a total mess.
And then with future child support or alimony, since their incomes change so rapidly as well as the location (and how does one set the child support amounts in random developing country, especially if kids are going to pricy international school, but maybe that's covered by the employer?).
It is such a mess for them and I feel terrible for them.
If they could have gone back in time I bet that they could have/should have had very frank discussions about career goals in very practical terms. And I don't know what else they could have done before getting entangled, but maybe something could have been done.
I suspect that these friends will end up staying married on paper because it is far too complex to sort through this.
Also worth discussing - do you think that you'll retire in the US and what financial plans should you be making for that.
So don't think about a prenup as protecting your pre-marital assets, but about organizing your thoughts about life and money.
posted by k8t at 9:43 AM on March 29, 2016 [6 favorites]
To illustrate, I have friends in a similar situation. Both of their careers are tied to working abroad (international education and development). Over the years they've faced a challenge time and time again that there is an opportunity for one of them in a new country but not the other. So the trailing spouse takes a career hit while one makes a career gain. And they did this for over a decade, moving every few years, step forward, step back. I'm sure other things were going on, but one spouse was really tired of this and didn't want to move to the next country opportunity.
They have multiple kids. They're now informally separated and living in two different hard-to-reach countries. One parent only see the kids every few months and it takes multiple days and a lot of money to get to the kids. And then when other parent visits, they are staying in the home of the other parent, and the kids don't know that parents are separated and it is awkward for everyone. Yet it is hard enough to convince someone you're in love with to move to a place, you can't force someone to move somewhere even to be with their kids. And any employer assistance in partner placement likely doesn't apply to an ex.
Then when it comes to the financial settlement of their divorce, things are a mess. They're Americans, they have some assets in America, but they haven't lived in the US in a long time. They now reside in different hardship placements with legal systems that don't match their values. They have no idea where to file their divorce.
Their incomes have been unstable for over a decade. Sometimes they've been employees, sometimes consultants or contractors. Sometimes one or the other didn't work for a year or two (especially when kids were born or small). Sometimes they'd bear tremendous relocation costs. And this should continue for the foreseeable future.
So when they should set up a financial settlement, this will be a total mess.
And then with future child support or alimony, since their incomes change so rapidly as well as the location (and how does one set the child support amounts in random developing country, especially if kids are going to pricy international school, but maybe that's covered by the employer?).
It is such a mess for them and I feel terrible for them.
If they could have gone back in time I bet that they could have/should have had very frank discussions about career goals in very practical terms. And I don't know what else they could have done before getting entangled, but maybe something could have been done.
I suspect that these friends will end up staying married on paper because it is far too complex to sort through this.
Also worth discussing - do you think that you'll retire in the US and what financial plans should you be making for that.
So don't think about a prenup as protecting your pre-marital assets, but about organizing your thoughts about life and money.
posted by k8t at 9:43 AM on March 29, 2016 [6 favorites]
I like pre-nups for the reason that it allows you to plan for a statistical crapshoot outcome at the thime when you have your partner's best interests at heart. However, if you have no debt and own no home or other significant assets, I don't see the point when your assets are straightforward but your life circumstances are very complex. This is just about the exact opposite scenario ideal for an entry-level prenup IMHO, but note IANAL.
posted by DarlingBri at 10:48 AM on March 29, 2016 [1 favorite]
posted by DarlingBri at 10:48 AM on March 29, 2016 [1 favorite]
When you get legally married you're already agreeing to a legal framework for your relationship, including how things will be distributed if you get divorced or when one of you dies. A pre-nup is just setting your own set of ground rules, instead of accepting the state's default rules. You're not preparing for divorce any more than any other couple entering legally binding marriage, you're just setting what the terms will be.
posted by katemonster at 11:56 AM on March 29, 2016 [3 favorites]
posted by katemonster at 11:56 AM on March 29, 2016 [3 favorites]
Best answer: There's no 100% solution to this problem.
Your pre-nup can really only be drawn up by reference to where the marriage is (or will be when solemnized) domiciled. And if that domicile changes, important parts of the pre-nup can easily become unenforceable.
County Y, the place you intend to make your marital home, is the country that most lawyers would say should provide the relevant law. You can certainly build in provisions to amend the agreement by post-nuptial agreement(s) should you change domicile, including to Washington DC. But you probably can't be compelled to actually DO those post-nuptial amendments, and thus the pre-nup might end up going away to a great extent if you moved.
(If we assume that Country Y has similar laws to prevailing US laws on pre-nups, then what's "fair" is basically this: your husband and you can initially protect all of your respective "separate" assets and income from work from the other, with an increasing sharing ratio over the length of the marriage especially in favor of a wife who becomes a stay at home mom, and NO protection whatever for child support or child custody (which US prenups can never attempt to govern.)
In addition to paying for your lawyer, your future husband should also be paying for an accountant for you and should be making FULL disclosures of all of his assets and liabilities and reasonable career expectations. (Or, in case you want to be able to break the pre-nup, should NOT be making those disclosures to you ...)
posted by MattD at 12:41 PM on March 29, 2016
Your pre-nup can really only be drawn up by reference to where the marriage is (or will be when solemnized) domiciled. And if that domicile changes, important parts of the pre-nup can easily become unenforceable.
County Y, the place you intend to make your marital home, is the country that most lawyers would say should provide the relevant law. You can certainly build in provisions to amend the agreement by post-nuptial agreement(s) should you change domicile, including to Washington DC. But you probably can't be compelled to actually DO those post-nuptial amendments, and thus the pre-nup might end up going away to a great extent if you moved.
(If we assume that Country Y has similar laws to prevailing US laws on pre-nups, then what's "fair" is basically this: your husband and you can initially protect all of your respective "separate" assets and income from work from the other, with an increasing sharing ratio over the length of the marriage especially in favor of a wife who becomes a stay at home mom, and NO protection whatever for child support or child custody (which US prenups can never attempt to govern.)
In addition to paying for your lawyer, your future husband should also be paying for an accountant for you and should be making FULL disclosures of all of his assets and liabilities and reasonable career expectations. (Or, in case you want to be able to break the pre-nup, should NOT be making those disclosures to you ...)
posted by MattD at 12:41 PM on March 29, 2016
It's worth taking into account the odds that random country Z, where you divorce, will ignore your pre-nup. Many places do not allow you to reject the state legal framework in favor of your own.
posted by the agents of KAOS at 9:20 PM on March 29, 2016
posted by the agents of KAOS at 9:20 PM on March 29, 2016
Response by poster: [We finally both decided that a pre-nup didn't make sense for us, and dropped the idea. But thank you for those who pointed out useful issues to consider such as domiciliation. On the side issues that people raised - we feel we're in a good place and have had many discussions on how we hope to handle careers, finances, and support one another through the ebbs and flows of international moves. I feel we have a very good understanding and are starting off on a strong footing.]
posted by oneaday at 6:28 AM on September 1, 2016
posted by oneaday at 6:28 AM on September 1, 2016
This thread is closed to new comments.
posted by cacao at 9:36 AM on March 29, 2016 [7 favorites]