November 26, 2009

Structuring Personal Transactions: A Case Study in Marriage

I like to think of personal interactions as corporate transactions. It's less emotional that way. Bid, negotiate, sign, withstand regulatory scrutiny, and close (or in my case, fail at one or more of the above). Who wouldn't rather talk in terms of intercreditor agreements than feelings, right? But, as much as that should be obvious to all except the most steadfastly stubborn, alas, it is not. For the sake of those for whom silly emotions still rank supreme, I now undertake a brief example of how this brilliant approach to life can reap rewards far greater than delusional obsession with sentiments.

The easiest place to begin is with the most costly personal transactions in which people engage—marriage. Now, as long time readers are well aware, I have often focused on this topic, first in considering ways to (legitimately) avoid taxes; then in discussing criteria for tying the proverbial noose; and finally in categorizing potential partners in terms of tax benefits. Today I take it to the next logical step: having established criteria and categorized partners, how does one structure said entanglement to maximize one's personal utility?