Well this evening didn’t quite turn out like I expected, so I wanted to get some additional thoughts on this topic. I opened up a discussion about a marriage contract with my girlfriend. As we are already over 7 years together and kids + marriage is around the corner (probably within the next 2-3 years), it made me think more about a marriage contract. Turns out it’s not even a question for her as she wouldn’t want that. Either we’re both all in or not, no room for discussion. But is that really fair in my situation?
She has a normal job and earns about 60k gross while working 100%. There is basically no potential for a higher income. I’m working in the banking sector and earn 120k gross right now. It’s very likely that I’ll earn 150-200k within the next 10 years. So I’ll probably top out at a 3x higher salary than hers and I’m already earning twice as much as her. That’s totally fine for me! She isn’t career-oriented and her biggest goal is to start a family and rise 2 kids. She’ll have to reduce down to 20-60% anyway and I’ll bring in 80-90% of the total income anyway. What’s mine will be hers and what’s hers will be mine. I’m totally ready to share everything of it as long as we are married and a family.
My issue is my high financial risk if it doesn’t work long-term. She’ll get the kids, the house to live with them and I’ll just be her paycheck. Not only that but she’ll get half of everything I’ve earned in that time we were together including all my retirement assets. This just doesn’t work for me. Of course it’s not romantical to think about those things, but I want to be rational when it’s about money.
I suggested that it would be fair, in the event of a divorce, that she would get 50% of my 1st/2nd pillar (as already required by law) and 33% of the assets we accumulated while being married within the 3rd pillar and our taxable accounts (cash, IBKR etc.). I rationalized that if we wouldn’t marry and wouldn’t have kids, so just staying together and both working 100%, we would end up with a net worth split of around 25/75. So by marrying she is already getting 50/50 in terms of my 1st/2nd pillar and 33/67 in terms of all the other assets.
I’m I really so wrong thinking like that? Am I being unfair to her and should I really share 50% of everything what we earn and save while being married? Despite having a higher education and a much higher salary? Thus totally justified that I’ll be sleeping on the couch tonight?
I’m probably not the best person to answer since I haven’t had a reason to think about it more deeply but mariage, to me, is less about money and more about personal commitment. In financial terms, I would look at the total returns of what each brings to the family rather than just the money aspect.
You raise an interesting point that, contrary to mariage, divorce often is all about money (and children guardianship and, when all went very, very wrong, just hurting the other as much as possible). Trying to protect yourself against that is understandable.
From her point of view, thinking about divorce may mean you are already planning not to give your all to making things work. A bit like how Schwarzenegger sees plan B (illustrative motivational video below).
I think the best way forward is for each of you to clearly state your expectations and fears in personal terms and try to work the differences out. There’s no silver bullet. My own naive romantic feeling would be to go with her but your fears are valid too and you need to be both onboard to make it a successful and worthy venture.
As an addendum: I think the perfect model is one where each of you supports each other and finds in the other the motivation to bring out the best you can give. By you stating “here are my career prospects and here are your career prospects”, what she might hear (might, I know nothing of her and very little of you) is “you have no career prospects and it is all set in stone”. From her perspective, she could launch her own business and it could be very successful, she could have a side hustle that dwarfs your financial contributions by an order of magnitude or what she provides to the family matches or goes beyond your own contributions.
As an aside, other things could happen. You could suffer a terrible debilitating injury and loose your wage earning capacity while becoming a heavy burden for her, or the opposite could happen. These are all scenarios that have to be taken into account too in my opinion.
After having seen my two cousins getting financially screwed after a divorce I had the same thoughts and there was no question of my getting married without a contract. I insisted and my now wife accepted to do it. The paper sits in a drawer and we never discussed the matter again. If shit hits the fan you can be sure that you will be squeezed, a divorce is free for all.
From your description I think you are looking at marriage the wrong way.
It is now your own situation. Marriage is explicitly about making it a shared, future situation with your partner.
Exactly! So, shouldn’t that mean 50:50 split of the total income? How do you align that with your 33/67 proposal? You seem to look at this in a way that an eventual divorce should lead to a recalculation of the income, and she should only be entitled to what she might have had without marriage in the first place. You are looking for a retrospectively applied exit, and asking for such a Plan B is understandably troubling for your partner.
Also this: How do you value her contribution? You seem to have a clear valuation on your income stream, but not on her giving up her income and the value of her raising the kids to a higher degree than yourself. So even if you want to look at this purely rational, you must also value her contribution to the marriage fairly.
Based on your rationale, I suggest not to marry before you have or want to have kids, because a divorce without kids might indeed end up unfair to the disadvantage of the higher income partner. But once kids are in play, your lives are intertwined for many years, even in divorce. And that should justify the risk of a divorce with 50:50 split of income during the marriage years, as Swiss law demands without a deviating marriage contract.
What about if you aspire to some indépendance for your investment in the future?
Once married, you will have to do everything in both name and not own anything in your own.
Having a mariage contrat will allow you to borrow money on your own and do not expose your wife and kids to those risky investments (foreign rental property, creating a company for a restaurant or something else…).
Split up Statistics are on your side even if most women hate this idea.
However a marriage contract will protect you a little once you have kids.
It is best to decide this contract once the relation goes well. Once everything turn salty, you won’t recognise your loving partner.
Very good point. What screws you financially is not typically the wealth split at the time of the divorce, but the many years of paying alimony for your kids and ex-wife. And court decisions in the past years have really not been nice to the high income partner.
Also from experience from a friend of mine:
A marriage contract must be stored with a lawyer or in a safety deposit box only you have access. Otherwise it will conveniently be lost prior to a divorce. Arranging that is of course again a very strong sign of distrust to your spouse.
Yes, currently I‘m paying for 65% of all our joint expenses like apartment, food, internet, insurances etc. I don‘t know any couple which does this. All my colleages at the bank do a 50/50 split of joint expenses. So I think I‘m being extremely fair to her as she already profits from my higher income. Of course, if I would earn 180k and she would still earn 60k, I would cover 75% of our joint expenses.
But am I not entitled to a higher net worth even in marriage? She just went to school, had average grades in Sek E and works as a naildesigner today. You know my personal story (I shared it in a thread where I asked if I underachieved in life). It was a tough ride to get where I am today. I work hard everyday to achieve more and more. I‘m very focused and determined. I know that I‘ll eventually earn something close to 200k if I keep going like that. And it was all my hard work. Is her giving up on her 60k job to rise a family with 2 kids really equivalent to that in terms of money? She won‘t give up any career and it‘s very likely that she won‘t ever earn more than that anyway.
I‘m also ready to quantify the additional stress and work that comes from rising kids. Because it‘s not a 42h/week job. Lets say that‘s worth another 20k. So her lost income of 60k (if she really would stop working) combined with the 20k would be 80k. I‘m still earning way more than that. So it wouldn‘t be fair to split the net worth 50/50 in a divorce? She would even make a great deal with the proposed 2/3 1/3 split as she would get 50% of my 1st/2nd pillar on top of that?
Guys, we are in Switzerland not in the states. Don‘t expect magic from a marriage contract.
Legal Marriage is best described as „Risk Pooling“. Instead of covering your employment, health and wealth risk alone, you to the full extent share it. And this to the rest of your lives. Whats the point of risk pooling if the other side can step out, as the risk materializes?
If there are neither kids nor a health/economic outlook that prevents that one can live on their own feet again, you divorce MAY get you out of such risk pooling again. But this is not ensured. It only takes one accident, physical health issue, … and you pay hefty allimony. Reason beeing is that upon dissolution, the risk is assessed that one side would later on require social security and in case this risk was there, the other side will need to step up and cover for this.
In such setup - a marriage contract is nill and void. No matter what you agree re. Financial split; the judge can (and will) simply ignore it if either side had any health (incl. mental) issues, employability risks and could either no more sustain a sensible lifestile (not based on minimal standards but in contrast to the prior lifestyle you shared before) or was at risk of needing social security.
The important thing is that to a Swiss Marriage Contract, there are always three parties that need to sign it. The married couple (upon them executing it) and a few years down the line our society aka our social security system. The society will only „sign“ aka accept the contract upon divorce and only if there was no damage caused to society. If this was not the case (or deemed so by the judge), no matter what you agreed is nill and void.
Long story short: get married if you are willing to equally share all your current wealth and future income; this even if things go sour. If you are not willing to do so - just don‘t get married. Same, but a tad less severe, as well applies to the combination of kids and living together. Kids alone can cost you a bit for 25 years. But if you on top of this share a household together; you need to be willing to share your current wealth and future income.
When I read the above, I would say that you need to think about if you were truly ready for marriage yet, and I am not sure how I would attempt to fix the fallout caused by the 33/66% proposal. Even if not visible today, this could have de-railed something that will only become visible a couple of years down the line.
You are still young and believe that lives and careers could be planned and were predictable. You never know if UBS and CS go sour, banking only paid 60k going forward and you ended up with disability and a lower income than heirs. Just because your prospect is high and heirs low - this can change over a lifetime. Same if she wins the lottery (gifts, a nail design company that goes X100, litterally lottery)… should you then still get 66% of that wealth and she only gets 33%?
Such pre-defined splits neither make sense nor are they enforceable anyways.
My risk is a lot higher than hers if you are being honest. I mean what‘s the worst that could happen to me? We have kids, she has a new guy, wants a divorce, I get kicked out of my own house, I need to cover her living costs and those from our kids as she can‘t work and rise 2 kids alone, my income gets reduced down to a bare minimum on what I can survive and what would she be doing? Living like a queen and letting her new boyfriend sleep in my own bed. I‘m not saying that this might happen (she is far away from having a character like that). But those things happen in reality in Switzerland. I mean I see it firsthand in my job. The male high earner is always the one that loses.
How am I compensated for taking such a high risk where she has the power to basically ruin my life?
Either know, trust and love her that you don‘t care about the residual risk? Meaning that even if things go sour (which most of the time takes two sides; even in cheating cases I belief) that you then still want her to be economically safe.
If you don‘t feel like this - don‘t get married.
CURRENT Legal Martiage is a concept that comes from another economic reality. The question is whether it was fully compatible with current understandings of equality. I think there are feminists that are quite counter it as well. The system will change I guess, but these things take time, probably generations.
In CH you can just choose the marital regime in front of a notary, it costs around 300 CHF in Zurich. Unless you have a really complex situation you don t have to involve a lawyer. And yes the notary keeps a copy for you ^^.
Then it’s just a matter of keeping accounts in your own name to trace what belongs to each partner. Also for the real estate we bought together the ownership % of each is written in the register.
This only covers your assets, you will still need to pay alimony and child support, and share your retirement funds if things go south.
Or the other way round : she takes care of the kids, has no income because care work is not paid, has no pension/AHV since instead of working she took care of the kids and the household.
And then you dump her for a 30y old when she is 55.
I would still agree with Cortana, if so she will get child support and leave with some income that is not hers …
So it would be fair at some point. On the more if you sign a marriage contract you can still put a permanent order from your account to hers as a “thank” for taking care of the household.
Marriage contract is a must nowadays … and if she does not agree with both of you getting a fair protection within the deal that might be the biggest redflag ever. Means she has already tought about it…
Not true. 1st/2nd pillar will be shared 50/50 by law. So our retirement situation at the time of divorce would be close to identical. On top of that she would get 33% of our combined savings/investments, which she wouldn‘t have in the first place (only a fraction of it in reality) if she haven‘t married me.
On top of that I would still be forced/required to provide her with additional income as she would be entitled by law to keep her living standard that she had with me.
On thing to keep in mind is that without a contract dividends or revenues you made on the assets you owned before getting married will also be split. In addition you will have to prove source of funds on common assets bought before the wedding so that they do not get mixed with common ones.
I take the example from my family here, my cousin bought a house before marriage and part of the equity came from my grand parents but this was never put in writing and at the end when he got divorced the house was simply split although this was never a 50 50 deal. Of course his wife could not remember this top up from my grand parents and pretended it never happened although assets you inherit from your family should remain yours after divorce.