24/7 Insights

• A prenuptial is a difficult discussion for future spouses. 
• The Redditor is worried about an imbalance of wealth. 
• He wants to protect his assets while being fair to his fiancee. 
• Also: Are You On Track to Retire? Take This Quiz and Find Out (Sponsored) 

When you get married, it is for better or worse, till death do you part. At least, that’s how it’s supposed to be. However, when it comes to finances, it is no surprise for most people to learn that this subject is one of the most difficult in any marriage. This is especially true when one or both parties have a significant net worth. 

This is the case here, as a Redditor posted in r/fatFIRE and is exploring a prenup with his fiancee. He currently has a net worth of $8 million, and his fiancee’s net worth is $1.6 million. What’s surprising about this post is that the poster thinks a prenup that says whatever you came into the marriage is still yours upon exit is unfair to his fiancee as his net worth is four times hers. 

What I like about this post is that this individual is truly admirable in wanting to do right by his fiancee, especially since it goes against conventional thinking. 

The Scenario 

Okay, so with some basics out of the way, let’s break down the details. Our Redditor is in his mid-30s and “won the startup lottery” a few years ago. As a result, he has a net worth of approximately $8 million, 95% of which is equity and mostly in taxable accounts. His current income is around $700,000, and he is focused on retiring early. Out of the prenuptial agreement, he wants to preserve his financial freedom while being fair to his betrothed. 

His fiancee has a net worth of around $1.6 million, comprising $300,000 cash plus illiquid startup equity. The Redditor notes that her company is well-funded and performing well and has the chance to create wealth for her and their family. It’s also important to note that the fiancee loves her job and isn’t looking to retire early.

According to the post, the fiancee looks at the prenup, which helps avoid a scenario where they stay together because of money and can walk away without owing the other person anything. 

The Recommendation 

First and foremost, I’m not a lawyer or financial advisor, so it’s hard to give official advice. That said, I can give my personal take on this case. According to the poster, the default prenup setup, where both parties enter with their own assets and leave with the same money, is unfair. 

He believes that if he retires, he will get half of what they have saved together based on her income. In his mind, her net worth will accumulate slower than his while married, and he’s already entering the marriage in a stronger position. 

Separately, he has thoughts about her company IPO’ing in a couple of years and that their net worth gap could close. However, because this would happen post-marriage, he would get to keep 50% of her earnings while keeping 100% of his pre-marriage earnings. 

Ultimately, the most important thing is finding an agreement they can both live with before talking to an attorney. This said, I also don’t see any mention of spousal support here, which feels like something they should talk about if her company goes belly up and the hopeful big exit they think will happen doesn’t happen. 

Another option, and the one most recommended, is that they both enter into the prenup with a mutual understanding they both get back precisely what they entered with. Any money on top of the initial starting point would be split 50/50, which feels like a win-win for both sides.

The Takeaway

Any prenuptial discussion is a hard one when millions of dollars are involved. You don’t want to feel like you are alienating your partner while also not surrendering your money. It’s a tough call for everyone, so I think the last option works best. Both parties should keep their existing assets while splitting whatever is earned post-marriage. 

This ensures they both walk away with something extra without worrying that they will walk away with less than they started. It feels like a win-win all around. Most importantly, they should agree before conversing with an attorney. Once an attorney gets involved, it could muddy the waters, so have your ducks in a row and then speak with a professional. 

 

 

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