Sunday, March 24, 2013
TING AND I, Pre-Nups and Trusts and Trust
My first marriage, like most first marriages, did not involve a pre-nuptial agreement, even though my wife, C, could be expected to be worth tens of millions of dollars eventually. My second marriage, unlike many second marriages these days, didn’t involve a “pre-nup,” either—despite there being children from Tina’s first marriage and some moderate net worths involved. Where children or substantial fortunes, or both, are present, some agreement on what to do in the case of another divorce seems prudent, though terribly unromantic.
I have observed the downside of such agreements among our contemporaries. In one instance, it seemed to me that the fussing over relatively small matters reached the point where one or both of the parties became disillusioned with the other, although they did marry anyway, a sad result of an excessive concern about money and things. With so much else at stake in marriage, it is a shame to put such an emphasis on material things. Granted, with divorce now as common in second marriages as in first, all too common, some provision for that possible outcome does need to be made.
To protect her from herself or from me, my first wife’s resources were largely tied up in a “trust,” some of which became available when she turned twenty-five. An arrangement like this seems to make sense, in that you do not want to make an immature person prematurely rich, for her own well-being, if nothing else. Still, note that “trust” really means “distrust.” For my part, I did not look deeply into her financial situation, never wanting to be beholden to others or wanting to be awaiting a payoff sometime in the future. When a big check did come in one year, we celebrated that her “ship had come in.” We may have taken a vacation that year. I still worked at the university over the summers.
Money bequeathed by parents for a severely handicapped offspring raises similar issues. The person controlling the money must be someone who can be trusted to have the trustee’s interests at heart and to have the knowledge and wisdom to do what is actually for the best. The implied distrust of those involved in the care of such offspring creates something of a psychological problem for them. What makes sense rationally has, again, its emotional drawbacks.
If I react toward you as though I think you are likely to cheat me, you will probably behave differently from how you would have responded if I acted as though I trusted you. Depending on my character, one approach is better than the other. You have to decide whom you are dealing with.