When Carol’s Check is Larger Than Jim’s
Carol and Jim (names changed) connected via their love of entrepreneurship, Carol as a professional service provider and Jim in software as a service. They met at an event and chatting in the hall discovered they read the same books and shared the love of building something from nothing. Their love grew and Jim, the more mobile of the two, moved to California’s Bay Area to be closer to Carol and to tap into the networking and funding opportunities there. Jim’s kids were grown, but Carol still had two teenagers at home. They decided not to add the stress of living together and step-parenting to the mix so Jim rented a place close to Carol’s and they continued building their lives and businesses together.
Now Carols’ last kid is heading off to college on the East Coast and Jim and Carol are ready to combine their lives, but their lives are much more complex and involve many more people than the first time they got married. They agree on the wedding guest list, venue, and even the passed hors d’oeuvres, but know that there is more they need to discuss.
Jim has taken on some personal liability to grow his business and he wants to be sure it doesn’t effect Carol. While his business is still in its infancy, Jim wants to be sure he has the freedom to make the decisions and take the risks he feels are necessary to make it grow.
For Carol the considerations are a bit different. Her business is well established and the bulk of the income and assets are hers. One of her children would like to join her in the business after graduate school. Carol would love to see her business become multi-generational and her assets be used to send her grandkids and great grandkids to college.
Jim and Carol know they need a prenup, but aren’t sure how to begin talking about it. While they often talk business and all its variances, it feels uncomfortable and even unloving to shift the talk to what feels like planning for divorce.
A few things shifted the conversation and allowed them to feel like they were on the same side discussing how they wanted to plan their lives rather than being adversarial and hurting the person they loved the most.
1. They were planning for life, not divorce. They were planning for when things went awesome and when they went not so awesome. Just like the buy/sell agreement Jim had with his business partners and how they dreamed and planning for the future, the prenup was putting down in writing their vision for their future and their family.
2. They realized that they already had a prenup. No matter what happened, disability, death, or divorce, the legislature had it covered and the courts would apply the law to them and make a decision—one they had no say in. If they decided now, it would be their choice. Just like estate planning which they had each already engaged in separately, it was just them making the decision themselves rather than a separate and disinterested party trying to make a good decision years later.
Despite what may have appeared to be a very touchy series of discussions, particularly because Carol was ostensibly the more financially successful partner, the respect and love Jim and Carol shared made the conversations and memorializing their desires in a prenup with their attorneys as easy as picking the wedding flowers.