Top 7 reasons women doctors need prenups

Editor's Note: Welcome to Medical Economics' blog section which features contributions from members of the medical community. These blogs are an opportunity for bloggers to engage with readers about a topic that is top of mind, whether it is practice management, experiences with patients, the industry, medicine in general, or healthcare reform. The series continues with this blog by Rebekah Bernard, MD, a family physician at Gulf Coast Direct Primary Care in Fort Myers, Florida. The views expressed in these blogs are those of their respective contributors and do not represent the views of Medical Economics or UBM Medica.

Lady doctors, if you’ve taken Beyonce’s advice to heart and “put a ring on it,” then I have another message for you: Get a prenup. 

Rebekah Bernard, MD

I know, I know, there is nothing romantic about prenuptial agreements. Prenups require a visit to an attorney, cost money to have drawn up, and worst of all, make you think about unpleasant things like relationships failing right when you are supposed to be celebrating your happy moment.

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I’m sorry to be the one to throw cold water on the bridal shower, but here are the facts. Women physicians are at a higher risk for divorce than male physicians, and our rate of divorce actually increases with the number of hours that we work.[i]  

In other words, the harder you work at your job and the more money you earn, the higher the chance that you are going to end up divorced, and worse, writing an alimony check to your ex. And believe me, that one burns.

Since we know that we are at a statistically higher chance of divorce, especially if we are hardworking and dedicated, we must protect ourselves by planning ahead and obtaining a prenup before the wedding day. It’s not romantic, but it’s absolutely necessary.

Jeff Landers, an expert on woman and divorce, points out that every marrying couple is already subject to a default prenuptial agreement-the current state law. He argues that marrying without a prenup is similar to dying without a will. Instead of deciding in advance how you want your assets distributed, your property will instead be subjected to the rules of the state, since “in the eyes of the law, your marriage is a contract, very much like a business arrangement.”[ii] Unfortunately, the laws of the state can be arbitrary, biased or sometimes left to the whim of a judge who might be having a bad day on the morning you show up in court.

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In the average divorce, most state laws will require that marital assets, including your home, bank accounts and retirement plans be split 50-50 between partners. But there are other financial considerations that may be left to the discretion of the court. A divorce judgment can grant temporary or permanent alimony, can declare a medical practice as a marital asset and can even require the higher earning spouse to pay the legal bills for the entire divorce. And if you make it to court without settling, a process which can drag out for months to even years, those legal bills can start to approach numbers that look an awful lot like your medical school debt.

Next: Top reasons to get a prenup

Still not convinced? Here are the top reasons that women physicians should get a prenuptial agreement.

1.     Avoid paying alimony (in most states). A prenup can spell out whether or not a spouse will receive alimony or financial payments in the event of a divorce. This is especially important if your partner works part-time or not at all. The higher earner in the relationship-usually the physician-could potentially end up paying alimony to a partner to keep him “in the lifestyle to which he has become accustomed.” Believe it or not, that terminology is not just a cliché-it’s real, and it’s in the law. And so even if he is the one who wants the divorce, you may end up writing him a check to keep him comfortable for the rest of his life. Sound crazy? Welcome to our legal system. 

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2.     Keep your own property. While property that a spouse brings into the relationship (premarital property) remains the sole property of that individual, any gain in value during the marriage can be considered a marital asset, unless otherwise specified by a prenup. This can apply to family property, inheritances, jewelry, club memberships or any other items of value. You may have to sell the property in order to pay off the increase in value to your spouse, or offset the gain by cashing in other assets, which can result in a double loss if tax penalties apply. 

3.     Avoid paying debt incurred by your spouse. On the same token, any debts or losses that your spouse has incurred before or during the marriage can become your responsibility during a divorce. This could apply to a spouse who develops a gambling problem, takes out large credit card bills, or doesn’t pay business expenses. In addition to a prenuptial agreement, finances have to be kept separate-avoid co-mingling bank accounts and properly title businesses and properties-to completely protect yourself from your spouse’s creditors. 

4.     Protect your medical practice. In addition to having to share half of your income, assets and retirement plan, physicians may lose part of the value of their medical practice to a spouse, as some states consider a physician’s practice to be a marital asset. A judgment could potentially require the physician to “buy out” their spouse’s interests in the practice with cash, and can even take into consideration the potential growth and future success of the practice when calculating its financial value.[iii] The more successful the practice, the higher the potential payday for your spouse during a divorce proceeding.

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5.     Clarify financial responsibilities in a marriage. Studies show that clear communication in a relationship decreases burnout for women physicians.[iv] A prenup allows you to outline the finances of the relationship-like who pays for what household bills, how you will save money for retirement or education or plan for buying a home or starting a business. This is also the place where you can agree to settle future disagreements using a mediator/arbitrator rather than the court system.[v]

6.     Decrease attorney fees during a divorce. Attorney bills can be a rude awakening for physicians, who are used to performing routinely uncompensated labor, like filling out forms or returning calls from patients. Lawyers operate on a whole different level. Unlike physicians, lawyers get paid by the hour (or six-minute increment) and they bill every time they pick up the phone or answer an email. Heck, they even bill you for the time they spend billing you (try submitting that invoice to Medicare). During a divorce, physicians quickly learn the word “replenishment,” as you watch your pot of retainer money dwindle with every case management meeting or mediation appointment. It is not unusual to spend $15,000 to $20,000 on a divorce, with some contested divorces costing well over six figures when you have to start paying for items like business valuation or forensic accounting.[vi] Having a prenup can drastically reduce the cost of a divorce by avoiding unnecessary litigation.

Next: Concerns

7.     Speed up a divorce transition so you can get on with your life. Divorce is painful, no matter what. But the pain is compounded when it drags on and keeps you from moving on with your life. While an uncontested divorce takes about three to four months to finalize, a contested divorce averages 12 months but may require up to 24 months.[vii] Imagine spending a year or more living under the same roof and paying shared bills when the only thing you want to do is to start over. Often, the emotional exhaustion of extended litigation will encourage a physician to simply settle a case, no matter how unfair it seems to “get it over with.”

Getting a prenup isn’t hard. It’s not very expensive, especially compared to the cost of a complicated divorce, and it takes far less time to arrange than a divorce proceeding. All you need for a prenup is to visit an attorney (actually two attorneys, as each partner must have independent legal representation to ensure a complete and fair understanding of the agreement) and should be done well in advance of the wedding date. While there is no definitive time frame for signing a prenup, the longer the better, says Juan Mendoza, an attorney in Bonita Springs, Florida. “It’s important that neither side can argue during a divorce that they were pressured into signing. This could potentially void the agreement.”

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Of course, the biggest hang-up in getting a prenup is the emotional aspect, including normal concerns:  Am I setting up the relationship for failure? Will I be less committed to the marriage if I have an “out?”  Will my partner be upset with me for suggesting a prenup? These are issues that should be talked about openly with your future spouse. The best relationships are built on caring compromise. If you can’t have a discussion and come to an agreement now, while you are madly in love and planning your wedding vows, how can you hope to have an amicable ending to a relationship in the event of a divorce? 

So in between showing off your gorgeous engagement ring and planning your beautiful ceremony and honeymoon, take the time to get a prenuptial agreement. Hopefully, you will never need it, but why take the chance? Because situations can change, and if one day if you face a divorce, you will wish you had one. I know I did, and the second time around I was smarter. Although the fact that he agreed without hesitation tells me that this time, I probably won’t need it.

[i] BMJ 2015;350:h706

[ii] https://www.forbes.com/sites/jefflanders/2013/07/17/skittish-about-a-prenup-like-it-or-not-you-already-have-one/#1659fc9d4957

[iii] https://www.myfloridalaw.com/are-doctors-doomed-to-divorce/

[iv] Understanding the Medical Marriage: Physicians and Their Partners Share Strategies for Success Perlman, Rachel L. MD; Ross, Paula T. PhD; Lypson, Monica L. MD, MHPE Academic Medicine: January 2015 - Volume 90 - Issue 1 - p 63–68

[v] http://www.nolo.com/legal-encyclopedia/prenuptial-agreements-what-law-allows-30283.html

[vi] http://www.divorcemag.com/articles/how-much-does-a-divorce-cost

[vii] https://www.myfloridalaw.com/divorce/how-long-does-a-divorce-take-in-florida/