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Post: The Moneyist: ‘I came into the marriage with a lot more money’: Is it ethical to distribute cash from my pre-marital investment accounts to my kids — without telling my second wife?

Dear Quentin,

I am struggling with the ethics of a highly personal situation. I am in a second marriage and have been married for 13 years. We signed a prenup and agreed that any financial accounts created before our marriage would remain separate property, and go to our respective families and kids.  

I came into the marriage with a lot more money, and these pre-marital investments have grown significantly for me. I am thinking of starting to give monetary gifts from these accounts to my family. If I do this, my current wife will be very upset, even though this honors our agreement.  

Ethically speaking, can I start giving money from these accounts to my family and kids without telling my current wife? I want to start reducing the size of my estate. I would also like to state that we have three types of accounts — mine, hers, and ours — and I would obviously only dip into accounts that are mine. 

What do you think?

Second Husband

Dear Second Husband,

Through your prenuptial agreement, your pre-marital assets remain separate. In most states, assets acquired before a marriage remain separate property. But if you predecease your wife, you have made sure that these assets go to your own children. That’s forward-thinking estate planning. Plus, it works both ways. Thus, you are entitled to do with them what you wish. You can donate them to the dogs and cats home if you want. 

From your letter, I assume that you are both financially secure. It’s responsible, compassionate and, yes, ethical — to ensure that your wife has enough money to live on should you pre-decease her, given that you have been together for 13 years and you are a team. As part of those estate-planning discussions, it would be transparent and confident and, well, nice to also mention your plans for these separate accounts.

Is it unethical to begin distributing money from those accounts to your first family without informing your wife? No. You both signed a prenup and you agreed they would not be part of each other’s inheritance. To assume that you needed your wife’s consent or input would suggest that this legal document was not worth the paper it was written on. It would be unethical to assume that this issue of separate property is still up for debate.

Not telling her, however, implies there are reasons you should not distribute the money as planned. It also leaves you open to accusations of shadiness such as, “If you didn’t see anything wrong with gifting this cash, why didn’t you tell me?” It’s always better to operate in the open, with confidence and conviction. Stick with your original plan, but do so in the open where the sun shines a warm light on you, your wife, and the prenuptial agreement that you both signed.

Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

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My friend got us free theater tickets. When I got home, she texted me, ‘Can you get our next meal or activity?’ Am I obliged to treat her?

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