Speaker 1: Welcome to Had to Money. I'm Joel and I am Matt.
Speaker 2: And today we're talking why prenups are for lovers with
Speaker 2: Aaron Thomas.
Speaker 1: Yeah.
Speaker 3: So, I'm guessing that the title of this episode may
Speaker 3: have come as a shock to a lot of folks
Speaker 3: out there. If you've been listening to the show for
Speaker 3: a while, you may have picked up on the fact
Speaker 3: that Joel and I were not actually big fans of
Speaker 3: the prenuptial agreement. But maybe our guest today can change
Speaker 3: our minds. We are joined by Aaron Thomas. Aaron is
Speaker 3: a graduate of Harvard Law who also happens to live
Speaker 3: in our old neighborhood back in Atlanta. Little eav shout
Speaker 3: out there. Aaron has decades of experience in his clients
Speaker 3: range from NBA Hall of Famers to the little couple
Speaker 3: that you know who lives down the street. He founded
Speaker 3: prenups dot Com, and he's recently published a new book,
Speaker 3: The Prenup Prescription, where he argues that a proper prenup
Speaker 3: can not only protect, but actually improve your relationship. That's
Speaker 3: what we're going to be talking about today, So Erin,
Speaker 3: thank you so much for joining us on the podcast.
Speaker 4: Thanks so much for having me really happy to be here.
Speaker 2: Yeah, no, we're excited to have this conversation. Aaron, And
Speaker 2: like Matt alluded to, it's been something that when we
Speaker 2: get asked about it, we don't necessarily have the same take,
Speaker 2: but I will say I was convinced in many ways
Speaker 2: reading your book and hearing what you your arguments. But
Speaker 2: the first question we ask everyone who comes on this podcast,
Speaker 2: we want to know what your craft beer equivalent is.
Speaker 2: Matt and I we like to splurge on tasty craft
Speaker 2: beer that could be expensive, but we're also doing the
Speaker 2: right thing. We're saving and investing simultaneously. So what's that
Speaker 2: splurge look like in your life?
Speaker 4: Yeah? Yeah, for me and my wife, our big splurge
Speaker 4: would definitely be travel. We set money aside for it
Speaker 4: specifically every year, try to really make an effort to
Speaker 4: take trips. And we you know, are frugal in a
Speaker 4: lot over the ways we drive our cars until they're
Speaker 4: dragging down the street. And you know, we're not big shopper,
Speaker 4: but yeah, I'm a brown bagger you know when it
Speaker 4: comes to lunch. But travel, Yeah, our that's our one
Speaker 4: big thing.
Speaker 3: Aaron, as a man after my own heart, taking those
Speaker 3: left over still work.
Speaker 1: That's right, Matt.
Speaker 2: Literally, that's his number one money saving tip is each
Speaker 2: your leftover.
Speaker 3: Sy It's just such a there are so many unnecessary
Speaker 3: expenses that occur, and maybe a little bit less as
Speaker 3: more folks are working from home. But you go out
Speaker 3: to the office, and then you are trading the most
Speaker 3: affordable way to enjoy lunch, which is eating the food
Speaker 3: that you've already purchased and that's already been prepared for you,
Speaker 3: to the most expensive way, which is going out to
Speaker 3: lunch with folks.
Speaker 1: But I love it, Erin, thanks for sharing that.
Speaker 3: And let's go ahead and just completely dive into talking
Speaker 3: about prenups today. I'm actually not sure what this says
Speaker 3: about the romantic sensibilities of Americans, but there's a growing
Speaker 3: acceptance of prenups. I'm sure you probably saw and have
Speaker 3: seen this data, but there is a Harris poll. They
Speaker 3: found that exactly fifty percent of Americans now say that
Speaker 3: they at least somewhat support the use of prenups, which
Speaker 3: has risen quickly compared to previous years. Millennials are five
Speaker 3: times more likely to get a prenup than twelve years ago.
Speaker 3: Why do you think this perception is shifting so fast.
Speaker 3: Why are folks just so much more open to the
Speaker 3: idea of prenups.
Speaker 4: Yeah, I think there's probably a few things at play here.
Speaker 4: One is for millennials and you know, kind of the
Speaker 4: cohort of people who are getting married today, they saw
Speaker 4: their parents go through probably the biggest, you know, the
Speaker 4: highest divorce rate period of the nineteen eighties here in
Speaker 4: the US, and saw the strife that came from that,
Speaker 4: all of the you know, money spent, you know, how
Speaker 4: long the litigation lasted, and they're saying, you know, no
Speaker 4: way am I going to you know, end up in
Speaker 4: that kind of position that I saw, you know, my parents'
Speaker 4: older generations. And then I think there's also just kind
Speaker 4: of like a difference in a generational difference in the
Speaker 4: way that they look at marriage and that you know,
Speaker 4: not that it's not romantic or not that they're you know,
Speaker 4: expecting to get divorced, certainly, but that you know, practicality
Speaker 4: kind of wins out, and that it's just kind of
Speaker 4: the smart thing to do. A lot of the stigma
Speaker 4: has resided when it comes to prenups.
Speaker 2: Part of that has to do with the fact that
Speaker 2: young folks are getting married later and later in life, right,
Speaker 2: and so they've built up more assets. So when you
Speaker 2: get married at twenty six versus thirty six, there's a
Speaker 2: big difference in kind of what you've been able to
Speaker 2: achieve in your career. Maybe you've got a rental property
Speaker 2: or two. You've certainly got more money, hopefully it sucked
Speaker 2: away in your retirement accounts. So does that kind of
Speaker 2: change in stage life stage of when people are getting married,
Speaker 2: does that impact kind of how I don't know how
Speaker 2: they feel about prenups and their willingness to partake in
Speaker 2: one totally.
Speaker 4: That's that is a huge part of the difference. You know,
Speaker 4: when you look at kind of the difference of last
Speaker 4: generation in this generation, like you said, it is right
Speaker 4: about ten years difference in the age that we're getting
Speaker 4: married in today's day and age than our parents, our grandparents' generation.
Speaker 4: So you know, in the nineteen sixties, when a couple
Speaker 4: got married, the average age of marriage was about twenty
Speaker 4: one years old, and a couple back then had very
Speaker 4: simple finances, so they were likely to have you know,
Speaker 4: zero maybe one bank account between the two of them.
Speaker 4: Credit cards didn't really exist. Four to one k's hadn't
Speaker 4: been invented yet. You could still work your way through school,
Speaker 4: so there wasn't kind of the six figures of student
Speaker 4: loans type situations. So, you know, the couple getting married
Speaker 4: in you know, say the mid nineteen sixties or nineteen seventies,
Speaker 4: it was like a startup you know, you're starting from
Speaker 4: completely from scratch, and two people were coming together and
Speaker 4: moving in together and building their life together. Whereas you
Speaker 4: compare that to today's couples who get married on average
Speaker 4: at age like thirty, and each spouse is likely to
Speaker 4: have four or five bank accounts, three or four credit cards,
Speaker 4: a retirement account or two, a car with an against it,
Speaker 4: maybe a conda with some equity, maybe a small business, right,
Speaker 4: and so it's so much more complex. You know, if
Speaker 4: if the couple in the sixties was a startup company,
Speaker 4: the couple getting married today is like a corporate and merger, right,
Speaker 4: and you just you wouldn't do something of that magnitude
Speaker 4: without taking little more seriously and putting some more thought
Speaker 4: and planning into.
Speaker 3: It, which I totally get, and I'll readily admit I
Speaker 3: think that's a part of my own personal bias. The
Speaker 3: fact that my wife and I we were she was
Speaker 3: twenty one, we were very young, had basically nothing to
Speaker 3: our names and everything that we have created, it's something
Speaker 3: that we did together. Let's we want to talk a
Speaker 3: little bit about marriage. I guess that's what prenups are
Speaker 3: all about to a certain extent. But marriage is generally speaking,
Speaker 3: like you talk about just the legal realities of it.
Speaker 3: And I'm curious if any part of you just thinks that,
Speaker 3: like going through the legal marriage process, like, does any
Speaker 3: part of you feel that that's kind of outdated or
Speaker 3: that things are better off now that fewer folks are
Speaker 3: getting married.
Speaker 1: I'm kind of us to hear your thoughts there.
Speaker 4: Yeah, I think my I think my views on this
Speaker 4: have evolved a little bit. You know, I always looked
Speaker 4: at marriage kind of you know, traditionally. My my parents
Speaker 4: just celebrated fifty seven years together. My wife's parents are
Speaker 4: still together, and so, you know, I've always, you know, personally,
Speaker 4: looked as that marriage is like a lifelong commitment, as
Speaker 4: a positive thing for society and for myself personally. I'll
Speaker 4: tell you though, you know, being a divorce lawyer will
Speaker 4: scare you a little bit when it comes to marriage.
Speaker 4: I mean, I started practicing family law, you know, many
Speaker 4: many years ago, and after a few years of watching
Speaker 4: what divorce really does to people and does to families,
Speaker 4: I started warning friends and family and anybody who would
Speaker 4: listen against marriage. You know, I not the commitment. You know, sure,
Speaker 4: get committed, you know, have a have a big party,
Speaker 4: wear a white dress, change your last name, move in together,
Speaker 4: but don't go through the actual legal relationship, you know,
Speaker 4: the legal step of getting married, because people don't know
Speaker 4: what they're signing up for, you know what the legal
Speaker 4: you know, aspect of it is. Obviously, I've you know,
Speaker 4: changed my view on it. I'm now, you know, happily
Speaker 4: married myself, and I think that there is a way
Speaker 4: to do it correctly. I just think that it is
Speaker 4: much more complex than it used to be.
Speaker 2: So what are people signing up for that they don't
Speaker 2: know they're signing up for? Then, I guess, because I
Speaker 2: think you're right. Like reading your book, thinking through all
Speaker 2: this stuff, I was like, why do people get married
Speaker 2: in the first place?
Speaker 1: Then, and You're like, you're right.
Speaker 2: Part of me wants wants to say all these other
Speaker 2: benefits of a lifelong partnership, but why does it have
Speaker 2: to be marriage, at least in the state specific sense
Speaker 2: of fact, you're signing up for all these kind of
Speaker 2: legal obligations.
Speaker 4: Yeah. Yeah, So I mean what getting married is and
Speaker 4: I call it the biggest financial decision that you'll ever make.
Speaker 4: You know, a lot of people think it's you know,
Speaker 4: buying a house or starting a business, but getting married
Speaker 4: touches so many parts of your financial life. It really
Speaker 4: is the biggest financial decision you'll ever make. And from
Speaker 4: the day that you get married forward, every dollar that
Speaker 4: you earn, that very first paycheck that you get after
Speaker 4: the day of marriage is considered marital property, and so
Speaker 4: it no longer belongs just to you. Everything belongs to
Speaker 4: you as a couple. And this it really doesn't matter
Speaker 4: whose name is on a bank account, whose name is
Speaker 4: on a piece of property, whose name is on a
Speaker 4: retirement account or a credit card. It's all considered, you know,
Speaker 4: one pile of finances from the day that you get married,
Speaker 4: and a lot of people don't figure that out until
Speaker 4: they are in you know, unfortunately, a divorced lawyer's office
Speaker 4: years down the road and they're saying, what do you
Speaker 4: mean he wants half of my retirement? What do you
Speaker 4: mean she wants half of the house. I kept it
Speaker 4: in my name only, and I paid the mortgage review month.
Speaker 4: And I would have to explain to people that, well,
Speaker 4: once you were married, that was no longer just your money.
Speaker 4: It was y'all's money. You can come from the South,
Speaker 4: it was you know, that's money belonged to the two
Speaker 4: of you. And so there was a lot of unintended
Speaker 4: consequence and things that people own prior to marriage getting
Speaker 4: commingled accidentally, and so you know, people are really in
Speaker 4: need of like some clarity in terms of what it
Speaker 4: is they're signing for, signing up for in.
Speaker 3: Mind, Yeah, I think there probably does need a good
Speaker 3: bit more counseling pre marital counseling, right where folks do
Speaker 3: they are able to enter into those relationships with their
Speaker 3: eyes wide open. And it's interesting too, though, how you've
Speaker 3: sort of changed your tune a little bit. And I'm
Speaker 3: curious if you if you're a fan of marriage now
Speaker 3: that you are happily married, and you're like, well, I've
Speaker 3: got you know, I got a root for the home team, right,
Speaker 3: It's so there's that, But then I'm curious too, have
Speaker 3: you seen the Melissa Kearney. She's an economist and a
Speaker 3: lot of research has come out recently regarding just the
Speaker 3: power the advantage that two parent households have in particular
Speaker 3: when it comes to raising up children. Right, it's and
Speaker 3: it's not only it's not only like a financial advantage,
Speaker 3: it's also kids don't get in trouble at school, they're
Speaker 3: less likely to be arrested, they're they're more likely to
Speaker 3: actually complete school. So some of those behavioral issues kind
Speaker 3: of melts away a little bit as well, because I
Speaker 3: feel like that, you know, faced with this new research
Speaker 3: and data, which surprisingly there hasn't been a ton of
Speaker 3: up until recently, it kind of, in my mind, puts
Speaker 3: marriage in particular in a new light. What are your
Speaker 3: Do you have any thoughts on that?
Speaker 4: Yeah? Absolutely, Yeah, And I am familiar with Kearney's work,
Speaker 4: the new book about the two parent household and all
Speaker 4: the advantages that come from that. I mean, I think
Speaker 4: a lot of this we know kind of anecdotally and
Speaker 4: intuitively how many advantages there are, but seeing the data,
Speaker 4: it really is compelling. And you know, my kind of
Speaker 4: reluctance when it came to marriage didn't have anything to
Speaker 4: do with you know, being scared of the lifelong commitment
Speaker 4: and all the advantages that come from an intact household.
Speaker 4: I wanted those things for myself. It was really fear
Speaker 4: of messing it up. It was fear of ending up
Speaker 4: in a divorce. And you know, in my view, a
Speaker 4: messy divorce was best avoided at pretty much any cost.
Speaker 4: You know, I don't think that's that controversial for a
Speaker 4: statement to say that you should do whatever you can
Speaker 4: to avoid a messy divorce. And you know, there's two
Speaker 4: ways to do it right. One is not to get married,
Speaker 4: and two is trying to try very very hard to
Speaker 4: keep your marriage together. And then you know a third
Speaker 4: would be, you know, put yourself in a position so
Speaker 4: that if your marriage does come to an end that
Speaker 4: it is not kind of the expensive nightmare year and
Speaker 4: a half of litigation in a very public courtroom that
Speaker 4: I witnessed as you know, a divorce litigator.
Speaker 1: Yeah.
Speaker 2: Now, I mean the older I get, the more I've
Speaker 2: seen couples that I thought I would have like bet
Speaker 2: money early on, there's no way that that marriage is
Speaker 2: going to dissolve, and things happen right, and it's it's
Speaker 2: really sad to watch as a friend but it's also
Speaker 2: sobering right to say, like I'm doing my best here
Speaker 2: in my marriage, but and I'm hoping and praying right
Speaker 2: that like we're able to stick it out for the
Speaker 2: long run, just like that's what you want, Aaron, But
Speaker 2: you also see the sad reality of kind of what
Speaker 2: happens in our culture. And it's not half of divorces,
Speaker 2: but it's somewhere close to half of marriage is to
Speaker 2: end in divorce. So I guess my question to you
Speaker 2: is what do you do on the front end, right
Speaker 2: the getting financially naked sort of thing, at the very beginning,
Speaker 2: What sort of things need to be discussed as you're dating,
Speaker 2: as you're like working towards engagement, thinking about marriage, starting
Speaker 2: to talk about that stuff. What needs to be put
Speaker 2: on the table on the front end.
Speaker 4: Yeah, yeah, great question, I am. And that's where you
Speaker 4: have to start, is at the very beginning, you know,
Speaker 4: before you even get married. And I am an advocate
Speaker 4: of full disclosure. Due diligence is what a lawyer might
Speaker 4: call it. Right where you get completely, you know, financially
Speaker 4: naked with your spouse, which is sometimes more difficult than
Speaker 4: getting physically naked with your partner. But by literally putting
Speaker 4: everything on the table in writing in black and white.
Speaker 4: That means creating a net worth statement for yourself and
Speaker 4: for your spouse so that there are no surprises trading
Speaker 4: that information. And I find that just that step alone,
Speaker 4: you know, number one, it's something that a lot of
Speaker 4: couples haven't done because there's there's no kind of natural
Speaker 4: time to say, hey, by the way, i've got twenty
Speaker 4: grand a credit card debt, or you know, I haven't
Speaker 4: saved as much for a retirement and as I wish
Speaker 4: I had. But it's kind of you know, you get
Speaker 4: a little bit of an amnesty because Okay, we're planning
Speaker 4: our life together. We need to you know, be completely
Speaker 4: transparent in terms of what we're bringing in. But it
Speaker 4: will also spawn what I think are very necessary conversations
Speaker 4: about your habits. You know, how you view money, what
Speaker 4: your kind of relationship was money growing up in your household.
Speaker 4: You know, do you like to carry debt on credit cards?
Speaker 4: Do you pay everything off you know month to month?
Speaker 4: What's your investment strategy? And you know, we talked about
Speaker 4: how much more complex people's finances are when they get married,
Speaker 4: because we're getting married older But the other aspect of
Speaker 4: that is we're coming in with a decade or more
Speaker 4: of financial habits that we've built up on our own
Speaker 4: since we left our parents' household, and sometimes that can
Speaker 4: be the more tricky thing to combine than just the
Speaker 4: bank accounts and the credit cards.
Speaker 3: Yeah, I mean kind of, I guess on that note,
Speaker 3: this is kind of earlier on in your book, But
Speaker 3: you say the financial dynamics within a marriage actually dictate
Speaker 3: the personal dynamics of that marriage.
Speaker 1: Can you talk about that for a little bit.
Speaker 4: Yes, The you know, how your your financial structure is
Speaker 4: set up can say a lot about what your marriage
Speaker 4: looks like. And so, you know, I'll give you an example.
Speaker 4: You know, I did a divorce for a couple where
Speaker 4: the husband worked, had a good job, made you know,
Speaker 4: two and a grand year, and his wife was home
Speaker 4: helping raise their two children. And he made that kind
Speaker 4: of money, he made two hund a grand a year,
Speaker 4: and he gave her an allowance of three hundred dollars
Speaker 4: a month. And without knowing anything else about that couple,
Speaker 4: you could probably intuit some other aspects of their relationship.
Speaker 1: Yeah, allowance.
Speaker 2: When we're talking about a husband spouse relationship there right
Speaker 2: exactly exactly.
Speaker 4: I mean, there was this really unequal power dynamic. She
Speaker 4: felt powerless, she felt trapped. He was lording over her.
Speaker 4: And you know, there's one thing that I've learned, it's,
Speaker 4: you know, two spouses living in the same household but
Speaker 4: in different socioeconomic classes is a recipe for disaster. That is,
Speaker 4: that is not going to work.
Speaker 3: It feels so weird, even just the way, I mean,
Speaker 3: everything about what you said about that couple, yeah, felt bad.
Speaker 3: The allowance, the actual amounts, the fact that there might
Speaker 3: be a couple and they're in essentially different classes does
Speaker 3: not It's gonna breed resentment. Something about that doesn't seem
Speaker 3: real quick for sure.
Speaker 2: I know too that you talk about how different states
Speaker 2: have different rules when it comes to marriage and when
Speaker 2: it comes to divorce. And one of the things actually
Speaker 2: that brought me because I came into this conversation a
Speaker 2: little more skeptical about prenups, But one of the things
Speaker 2: that brought me around the most was that you basically
Speaker 2: argue for the fact that we all have a prenup
Speaker 2: even if we didn't sign one, and it's the divorce
Speaker 2: laws in our state. It's the default essentially that we're
Speaker 2: going to come up against no matter what.
Speaker 1: So I don't know.
Speaker 2: It seems to me that coming up with our own
Speaker 2: bespoke prenup is just way to create a more set,
Speaker 2: fair set of rules than just kind of throwing caution
Speaker 2: to the wind whatever my state dictates or whatever. Like
Speaker 2: talk to us two about this. In many states, it
Speaker 2: can be like what the judge had for breakfast, how
Speaker 2: they're feeling that day, how they determines, how they rule,
Speaker 2: and how the assets get split out.
Speaker 4: That's absolutely correct. And you know, if we define a
Speaker 4: prenup for a moment, you know, a prenup is really
Speaker 4: just it's a set of rules that dictates how your
Speaker 4: finances are treated, yes, in the event of divorce, but
Speaker 4: also during the marriage itself. But when it comes to
Speaker 4: you know, the possible end of your marriage and the
Speaker 4: division of assets, you are signing up for whatever your
Speaker 4: state's laws happen to be, and if you move, your
Speaker 4: contract has changed. And very few of us, if any
Speaker 4: of us, read the quote unquote contract the default prenup
Speaker 4: meaning the law because of your state as it pertains
Speaker 4: to your assets. Prior to getting married. Almost everyone only
Speaker 4: figured these things out in the context of a divorce,
Speaker 4: and so I think that the real there is real
Speaker 4: power in deciding what works for you and your spouse
Speaker 4: and your marriage based on where you are in your life,
Speaker 4: rather than accepting this kind of one size fits all,
Speaker 4: cookie cutter approach. And you are putting yourself in the hands,
Speaker 4: potentially where of a judge who is randomly assigned to
Speaker 4: your case, who could have views on life and marriage
Speaker 4: and family and money very very different from yours. And
Speaker 4: I have seen firsthand, you know, situations where you walk
Speaker 4: into one courtroom and one judge looks at the situation
Speaker 4: that says, well, you aren't all the money, and what
Speaker 4: did you do? So, yeah, you're gonna get eighty percent
Speaker 4: of the assets. And you go to the very next
Speaker 4: courtroom down the hall and a judge says, I'm going
Speaker 4: to split everything in this in this case fifty to fifty,
Speaker 4: no matter what, and that that kind of uncertainty is
Speaker 4: just unnecessary. When you can choose your your own rules
Speaker 4: and kind of voluntary commit yourself to a situation that
Speaker 4: you and your spouse personally agree.
Speaker 1: To, it makes a lot of sense. I think you're
Speaker 1: making a good case for it.
Speaker 3: Aaron, you know, like the ability to have rules that
Speaker 3: you know that you're playing by ahead of time.
Speaker 1: I think that can always be helpful.
Speaker 3: It makes me think of like sitting down and play
Speaker 3: play one of the nerdy board games that we play,
Speaker 3: and then like all of a sudden.
Speaker 1: Halfway through the game, the rules shift.
Speaker 3: Well, that wouldn't be cool, yeah, But being able to
Speaker 3: agree to a set list of rules, I guess it
Speaker 3: makes a whole lot of sense. And we're gonna continue
Speaker 3: talking here right after the break. We're gonna ask you
Speaker 3: some more specifics about pre nups, what it is that
Speaker 3: they govern, how they work.
Speaker 1: We'll get to all of that right after this.
Speaker 3: All right, we're back from the break.
Speaker 2: We're still talking about pre nups pre nuptial agreements, and
Speaker 2: we've got expert Aaron Thomas with us here to dive
Speaker 2: into the details.
Speaker 1: And again.
Speaker 2: Us something I've been a little skeptical, but man, I
Speaker 2: really am kind of coming around, as you know, listening
Speaker 2: to Aaron talking and just reading his book has really
Speaker 2: kind of shone some light on the necessity of prenups
Speaker 2: in so many cases.
Speaker 1: But Aaron, I have this question for you.
Speaker 2: Does the process of getting a prenup does it ever
Speaker 2: come back to bite couples, right, because I guess part
Speaker 2: of my reason for not loving prenups as a way
Speaker 2: forward is, I don't know, maybe it starts off your
Speaker 2: marriage in this adversarial process. Is that like you're trying
Speaker 2: to protect what's yours, it could come across as selfish
Speaker 2: or a road trust in that relationship. Does does just
Speaker 2: the act of getting a prenup ever kind of result
Speaker 2: in a failed relationship?
Speaker 4: Yeah, I mean, great question. I think that a lot
Speaker 4: of it comes down to your approach, right, And I
Speaker 4: will be the first to concede that some of the
Speaker 4: bad reputation that prenups have is deserved, right, because there
Speaker 4: are a lot of people who have used pre nups
Speaker 4: to kind of solidify a disparity in wealth, to solidify
Speaker 4: a disparity in access to finances over the course of
Speaker 4: the relationship. You know, prenup is really a contract like
Speaker 4: any other contract. There can be good terms that are
Speaker 4: you know, that are great for your relationship, or there
Speaker 4: can be bad terms that are a huge red flag.
Speaker 4: So a lot of it is in your approach. I
Speaker 4: think that you know, if if it is done as
Speaker 4: a collaborative process where you and your partner come together
Speaker 4: and sit down and talk about what do you want
Speaker 4: your financial marriage to look like? You know, should you
Speaker 4: be transparent on the front end? Should you both have
Speaker 4: equal access to money during the relationship? Do you both
Speaker 4: have a say in kind of spending and investment decisions
Speaker 4: that and it? Can you agree what would be fair
Speaker 4: if you know, God forbid the relationship comes to end.
Speaker 4: Can we agree will be fair while we love each other,
Speaker 4: while communication is high, while we trust each other, then
Speaker 4: it can be a real positive for your relationship. If
Speaker 4: the only thing you're doing is protecting what you had
Speaker 4: from your spouse going in, then yeah, I can see
Speaker 4: that having a negative impact on your relationship. So you
Speaker 4: know the devil's in this.
Speaker 3: That's when it seems like the terms are bad, right
Speaker 3: because if it's only there to protect you, it seems
Speaker 3: fairly one sided. But I guess, like my thoughts are,
Speaker 3: if you can agree to these terms, then is it
Speaker 3: necessary to have them down in a contract. Because a
Speaker 3: lot of what you actually talk about in your book,
Speaker 3: just the actual prescription part of the prenup are great
Speaker 3: things that we recommend for folks to do all the time. Right,
Speaker 3: Like you're talking about making financial goals for yourselves. You're
Speaker 3: talking about how it is that you're going to achieve
Speaker 3: those things. It's establishing healthy communication. It's just that you
Speaker 3: are doing it inside the bounds of a contract as
Speaker 3: opposed to, I guess, just a conversation that, in my
Speaker 3: mind feels less I don't know, less loving, I don't.
Speaker 3: I guess when you think about it from the standpoint
Speaker 3: of counseling or goal setting or a couple's retreat, it's
Speaker 3: to me that it seems more edifying as opposed to
Speaker 3: the contract.
Speaker 4: Yeah. Yeah, so I think there are a couple aspects
Speaker 4: to you know, putting in writing that give it a
Speaker 4: market benefit over just having the conversation.
Speaker 1: You know.
Speaker 4: One is it's legally enforceable, right, that may be obvious.
Speaker 4: But locking yourself the same way that you can kind
Speaker 4: of lock yourself in to, you know, a disparity in
Speaker 4: net worth or wealth with a prenup, you can lock
Speaker 4: yourself into a fair situation as well and really kind
Speaker 4: of protect yourself against your future self or your spouse's
Speaker 4: future self. There are many people who would agree, yeah,
Speaker 4: you know, we're in this together. Everything we're doing is
Speaker 4: fifty to fifty on the front end. Unfortunately, you know,
Speaker 4: when marriages dissolve, people are no longer in that same headspace,
Speaker 4: and they're much more likely to act out of anger
Speaker 4: and think you know that they should be you know,
Speaker 4: shooting for the majority of the assets. And there's also
Speaker 4: kind of this this weird thing that I've noticed even
Speaker 4: in you know, good relationships like mine. You know, if
Speaker 4: you're in a relationship and each of you are doing
Speaker 4: fifty percent of the work, percent of the labor in
Speaker 4: the relationship, it feels like you're doing seventy percent of
Speaker 4: the work, right because because we only see what we
Speaker 4: ourselves are doing. You know, I don't see what my
Speaker 4: wife is doing when I'm not around, so it feels like, yeah, right, right, right,
Speaker 4: But you didn't you didn't see me take out the trash.
Speaker 4: So you know, I think that there's you know, a
Speaker 4: protective mechanism there. And also, you know, putting in writing,
Speaker 4: you know, there's something about making it formal, making the
Speaker 4: process formal. One you've got something you can look back
Speaker 4: on and say, hey, you know, we agreed, for example,
Speaker 4: that we're going to sit down, you know, once a year,
Speaker 4: we're going to make sure that we've disclosed all rassets
Speaker 4: and debts and updates, and we're going to go through
Speaker 4: an agenda of things and talk about, you know, our
Speaker 4: spending from last year and where there any surprises, and
Speaker 4: you know, what do we want to plan for next year?
Speaker 4: Should we put away some money for travel or is
Speaker 4: this year that we you know, buy an investment property?
Speaker 4: And having that in writing, you know, reduces or eliminates
Speaker 4: any confusion about what you agreed to on the front end.
Speaker 4: But there's also the ceremony of it as well, you know,
Speaker 4: I mean, we we do do vows when we get married.
Speaker 4: We walk down and we pronounce what we want to
Speaker 4: do in front of everyone that we know, and there
Speaker 4: is real power in the ceremony of it. The same
Speaker 4: way as putting something down on paper and you know,
Speaker 4: taking ink you know, to the page and putting your
Speaker 4: signature on it and saying this is what I'm willing
Speaker 4: to commit to in writing, that I think makes people
Speaker 4: want to stick to it. It gives them clarity and
Speaker 4: they know that you know, you can't go back on it,
Speaker 4: you can't change your mind. We've committed to this in writing,
Speaker 4: and it's going to be enforceable.
Speaker 2: Sense of protection as well, right for both for both parties.
Speaker 2: You talked recently about Michael Jordan's prenup with his wife.
Speaker 2: I'm curious to hear can you like tell us about
Speaker 2: that structure a little? But I also want to know,
Speaker 2: right if you think that like normal folks, non famous,
Speaker 2: non wealthy people, do they need like a similar sort
Speaker 2: of prenup or like, uh, yeah, how should people think
Speaker 2: about that? I think the most famous stories are often
Speaker 2: ones of the rich and famous, but is that what
Speaker 2: our prenups should kind of look like too?
Speaker 4: Yeah? Yeah, So I will put this caveat out there
Speaker 4: that you know, when people hear about the celebrity prenups,
Speaker 4: you know that is part of what creates a lot
Speaker 4: of the misconceptions because you're going to hear it and
Speaker 4: you're gonna think this has nothing to do with me.
Speaker 4: You know, Michael Jordan has a prenup with his current spouse.
Speaker 4: He went through his first divorce with his with his
Speaker 4: first wife and paid out a settlement of one hundred
Speaker 4: and seventy eight million dollars.
Speaker 1: I believe a lot of money.
Speaker 2: It is a lot of money, and I guess he's
Speaker 2: a billionaire. So we're you know, we're talking in in
Speaker 2: terms of percentages. Still he's keeping the majority of.
Speaker 1: A lot of money. Yeah, a lot of money.
Speaker 4: Yeah, yeah, it's it is relative. But you know, one
Speaker 4: hundred and seventy eight million is a pretty penny no
Speaker 4: matter what. And so with his current spouse, they have
Speaker 4: a prenup that says, you know, for the first you know,
Speaker 4: ten years of the marriage, if the marriage were to
Speaker 4: come to in end, she receives a million dollars per
Speaker 4: year of the marriage. And if the marriage gets to
Speaker 4: the tenure market and goes beyond that, every year of
Speaker 4: marriage becomes worth five million dollars. And you know, people
Speaker 4: hear it and they may have some kind of visceral
Speaker 4: reaction to it. I think it is something that for
Speaker 4: them was probably fair. It probably works for them because
Speaker 4: Michael Jordan gets the knowledge that he is going to have,
Speaker 4: you know, the protection for his assets, which you know,
Speaker 4: trying to value interests in Nike and you know NBA
Speaker 4: teams and clothing lines would be a nightmare disaster. I
Speaker 4: mean you're talking about multi year litigation that he'd be
Speaker 4: drawn up in, you know, regardless of the amount of
Speaker 4: payout that it would eventually come. And for his wife,
Speaker 4: I think she gets some protection of knowing, you know,
Speaker 4: if anything happens, I'm going to receive enough money that
Speaker 4: you know, I can I can take care of myself.
Speaker 4: You know, she is giving up, you know, kind of
Speaker 4: her privacy for life by being married to one of
Speaker 4: the most recognizable athletes on the planet. And you know,
Speaker 4: you know, other people may have their own, you know,
Speaker 4: views on you know how much it's worth, and it
Speaker 4: feels very you know, so you can feel a little
Speaker 4: icky because it feels very economic. But it is something
Speaker 4: that for them gives them both a sense of security
Speaker 4: that they clearly wanted. And so while that kind of
Speaker 4: prenup is likely not going to work for you or me,
Speaker 4: it is something that I think does work for their situation.
Speaker 2: Okay, let's talk about I don't want my wife getting
Speaker 2: hundreds of millions, you know, like, although that's not gonna happen,
Speaker 2: that don't happen. But Eric, I wanted to talk about,
Speaker 2: I guess the structure of prenups because like they're not
Speaker 2: just about dividing up assets when the divorce papers are signed, right, Like,
Speaker 2: there are other like non compliance and trigger clauses. There
Speaker 2: are contingencies that you can include can you share some
Speaker 2: of the different examples.
Speaker 4: Yeah, yeah, absolutely, So, you know, I kind of look
Speaker 4: at it in three stages.
Speaker 1: You know.
Speaker 4: The first is kind of before the marriage, so that's
Speaker 4: the transparency aspect of putting everything down in a net
Speaker 4: worth statement. Then you have during the marriage, and then
Speaker 4: finally you've got you know, uh, you can call it
Speaker 4: end of marriage. I call it akad the contingency compations
Speaker 4: with might, which might be a euphemism. But during the
Speaker 4: marriage itself, I think, you know, the first step is
Speaker 4: to talk about how you're setting up your bank accounts,
Speaker 4: and you know, not the same thing isn't gonna work
Speaker 4: for every couple. But what I recommend is having kind
Speaker 4: of three categories or three buckets of accounts mine, yours,
Speaker 4: and hours and sitting down and thinking through what qualifies
Speaker 4: as a joint expense for us. You know, so for
Speaker 4: most couples, their mortgage or their rent, their utilities, their
Speaker 4: grocery bill, the meals they eat out together, insurance, those
Speaker 4: things are gonna fall, you know, pretty squarely into the
Speaker 4: hour's bucket. And then there are things that you know,
Speaker 4: I think can clearly fall into these separate buckets, you know,
Speaker 4: things that you could pay from your own spending money.
Speaker 4: So if I go, you know, out and have a
Speaker 4: meal with my buddies and wife's not there, that's something
Speaker 4: I would pay for my own expenses. And what that
Speaker 4: does for a lot of couples today who are getting
Speaker 4: married later in life. You can know that the joint
Speaker 4: expenses are being paid, but you also maintain some level
Speaker 4: of autonomy over your own spending and don't feel like
Speaker 4: every time you stop by Chick Gilay is being scrutinized
Speaker 4: by your spouse because it's coming out of you know,
Speaker 4: the joint bank account. And setting things up in that way,
Speaker 4: I think can prevent a lot of arguments over things
Speaker 4: that are otherwise, you know, unnecessary. There's a couple different
Speaker 4: ways that people will do it. My wife and I
Speaker 4: do what's called the inside out plan, where all of
Speaker 4: the income for the household goes into our joint account initially,
Speaker 4: and then we each get an allotment or disbursement from
Speaker 4: that allowance, if you will, but it's equal amounts for
Speaker 4: both of us that comes out of that joint account
Speaker 4: and goes into our separate accounts that we can spend,
Speaker 4: you know, without any oversight of our spouse, and I
Speaker 4: think that's helpful, you know, in my situation. It allows
Speaker 4: us to do some spending that our spouse might not
Speaker 4: agree with, you know, without having to worry about it.
Speaker 4: You know, like I like to get my daughter, you know, nikes,
Speaker 4: even though she's gonna outgrow them, you know, in three months,
Speaker 4: and my wife probably wouldn't spend the money on those
Speaker 4: kinds of shoes, but I get to do because it
Speaker 4: came out of my money. And my wife has similar
Speaker 4: things that she would spend that I might see, as
Speaker 4: you know, potentially frivolous, but she can do it because
Speaker 4: she's spending it from her money. And then when it
Speaker 4: comes to the joint account, we have a rule that
Speaker 4: says neither one of us can spend more than five
Speaker 4: hundred dollars from the joint account without without agreement from
Speaker 4: the other spouse. And you know, some people say, oh,
Speaker 4: you got to get permission, you know, from your wife,
Speaker 4: and I don't look at it like that. I look
Speaker 4: at it as a mutual respect thing.
Speaker 1: You know.
Speaker 4: If I'm spending learn from the joint account, that is
Speaker 4: something that impacts my wife. She needs to know about it.
Speaker 4: And you know, rarely are we going to say no,
Speaker 4: but it is something that we've ingrained into our relationship.
Speaker 4: You know, this practice, this habit of communication that I
Speaker 4: think yields benefits in other areas of the relationship as well.
Speaker 1: And that just makes sense.
Speaker 3: I mean, having those larger expenses is kind of like
Speaker 3: having a couple sets of keys or whatever, like the
Speaker 3: to the nukes. You know, it's not just up to
Speaker 3: one person to make the decision. It's like, this impacts
Speaker 3: a lot more folks, and we make sure you need
Speaker 3: to make sure that there's a review process here. We
Speaker 3: need to make sure everyone's on board at at the
Speaker 3: same time. You simultaneously go there and turn those keys
Speaker 3: at the same time. I think that can be healthy
Speaker 3: for sure. I think one of the other things Aaron
Speaker 3: that really kind of put me more on on board
Speaker 3: with with your argument was was how much money a
Speaker 3: prenup can save you. So, yeah, a prenup costs money
Speaker 3: on the front end, and you got to go through
Speaker 3: that setup process. But from everything I've I've heard, divorce
Speaker 3: is just about one of the hardest things you can endure.
Speaker 3: And even if your marriage ends amicably, it can be
Speaker 3: it can be a really difficult process. Even if you're
Speaker 3: still and still remain friendly. But how how bad can
Speaker 3: a divorce be for your finances? And like a ton
Speaker 3: of lawyers fees stuff like that. And how much is
Speaker 3: that pre nup although it's you know, cost some money
Speaker 3: in the beginning, how much can that potentially save you?
Speaker 4: Yeah, yeah, yeah, I'm glad you asked this. You know,
Speaker 4: the cost of a pre nup, you know, is usually
Speaker 4: going to be around a few grand. You know, my
Speaker 4: office doesn't for you know, flat fee of thirty five hundred,
Speaker 4: which is pretty going to be pretty standard. And a
Speaker 4: divorce case last, first of all, it lasts on average
Speaker 4: a year that was creeping up to closer to eighteen
Speaker 4: months during the pandemic with some of the delays in
Speaker 4: the courthouses. And the average cost is fifteen thousand dollars
Speaker 4: per spouse. It means a lot of people pay a
Speaker 4: whole lot more than that, So you know, if you're
Speaker 4: talking about thirty grand for a couple, you know, and
Speaker 4: there are certainly cases that go into you know, the
Speaker 4: hundreds of thousands. I've worked on a case before where
Speaker 4: just our client alone paid over a million dollars in
Speaker 4: fees over the course of four years. Of litigation, and
Speaker 4: the way that it kind of works is the more
Speaker 4: money that you have at the time of the divorce,
Speaker 4: the more likely you know your divorce is going to
Speaker 4: be more expensive itself, because if you think that, you know,
Speaker 4: taking your case to court can win you two thirds
Speaker 4: of the assets instead of half, the more money you have,
Speaker 4: the more it's worth to spend that money on the
Speaker 4: lawyers to get you there. And so a lot of people,
Speaker 4: you know, this is important when it comes to a
Speaker 4: lot of people say well, I don't need a print
Speaker 4: on because we don't have anything. Well that's coming into
Speaker 4: the marriage. What makes the divorce expensive is what you've
Speaker 4: got on the back end, which you can't know, you know,
Speaker 4: until you get there.
Speaker 3: And your goal is probably you're going to have Yeah,
Speaker 3: you're going to continue to throw your net worth and
Speaker 3: you will have yeah.
Speaker 2: Actually, like if you're taking a vowel of poverty, then
Speaker 2: maybe you two don't need to But okay, another question
Speaker 2: for you on that front. So when we're talking about lawyers,
Speaker 2: typically an individual hires a lawyer to represent their interests.
Speaker 2: The when when we're talking about a couple who are
Speaker 2: going into this marriage, they have a lot of the
Speaker 2: same interests, but they also have individual things to protect.
Speaker 2: Do They each need to hire their own lawyer to
Speaker 2: get this to get this prenup done.
Speaker 4: So a lawyer can Yeah, a lawyer can only represent
Speaker 4: one side of a transaction. In most states in the US,
Speaker 4: it's not required that the second spouse hire their own lawyer,
Speaker 4: but they have to have had an opportunity to hire
Speaker 4: a lawyer. So that means, you know, not doing it
Speaker 4: at the last minute, making sure that there's money there
Speaker 4: for both people to hire their own attorney. Me personally,
Speaker 4: I will never discourage someone from having a lawyer on
Speaker 4: the other side of this kind of transaction because you
Speaker 4: need to talk about you know what your fears are,
Speaker 4: you know what keeps you up at night, you know
Speaker 4: what worries you when it comes to, you know, making
Speaker 4: these kinds of decisions about what your financial life with
Speaker 4: your spouse looks like, and have somebody that can advise
Speaker 4: you just from your point of view. So certainly it
Speaker 4: should not be adversariable. You don't want to get into
Speaker 4: a situation where it's a lot of back and forth.
Speaker 4: You know, most of my clients will kind of, you know,
Speaker 4: waive their attorney client privilege, so that everything that I
Speaker 4: talk to them about is shared with their spouse, so
Speaker 4: everything's done out in the open. This ideally should be
Speaker 4: a collaborative process. You don't want, you know, you don't
Speaker 4: draft an agreement and hand it to somebody a week
Speaker 4: before the marriage. That's you know, icky thing to do.
Speaker 4: It's not fair and it's not the right way to
Speaker 4: start off a relationship that you hope will last forever.
Speaker 4: But legally.
Speaker 3: Right, yeah, according to your book, judge might even deem
Speaker 3: that to be unconscionable.
Speaker 4: Yes, a judge is likely to throw it out if
Speaker 4: you try to that last minute again.
Speaker 2: Anyway, All right, eron, we got a few more questions
Speaker 2: to get to with you, including what if you're already married.
Speaker 2: There's such a thing as post nups. Should should all
Speaker 2: of us married folks be be considering that? Well, we'll
Speaker 2: get to questions on that and more right after this.
Speaker 1: We are back from the break.
Speaker 3: We're talking about how pre nups are for lovers, and
Speaker 3: we are talking with Aaron Thomas.
Speaker 1: Aaron, in your.
Speaker 3: Book, you devote an entire chapter actually to the title
Speaker 3: of that chapter was tact timing and talk and uh,
Speaker 3: you know, prenups. They can obviously be a touchy topic
Speaker 3: for a newly in love couple. But what are some
Speaker 3: ways that they could start talking about pre nups without
Speaker 3: completely ending the relationship.
Speaker 4: Yeah, great question. Yeah, it's it's important one, right because
Speaker 4: you know, we know that if a lot of people
Speaker 4: go to their their loved one and say, hey, babe,
Speaker 4: I want to prenup, the reaction might not be the
Speaker 4: most positive. And so, you know, the advice I give
Speaker 4: might be a little bit counterintuitive, and but it is,
Speaker 4: don't lead with the word prenup. I think we all
Speaker 4: can admit that that word carries a lot of you know,
Speaker 4: it's kind of heavy. But instead kind of leading with
Speaker 4: what it is that you want to accomplish. I have
Speaker 4: found that most people don't object to the the you know,
Speaker 4: the terms of the prenup itself as much as they
Speaker 4: do the the word prenup or the idea of a prenup.
Speaker 4: And so you know, if you start with kind of
Speaker 4: the component parts, you know, Uh, I think that we
Speaker 4: should be transparent. I think that we should write down
Speaker 4: all of our assets and debts and share it with
Speaker 4: each other. I think that it's a good idea for
Speaker 4: us to decide how we want to set up our
Speaker 4: bank accounts and how the money is going to flow,
Speaker 4: you know, through our joint bank accounts and our separate
Speaker 4: bank accounts. I think we should have kind of some
Speaker 4: ground rules for spending and budgeting and saving. Uh, you know,
Speaker 4: can we agree that if either of just wants to
Speaker 4: go to counseling, that we're going to go to counseling,
Speaker 4: no questions asked. Can we agree on, you know, an
Speaker 4: annual meeting where we discuss and update each other on,
Speaker 4: you know, our financial lives and make sure that things
Speaker 4: are still working because you can't just set it and
Speaker 4: forget it for life, right? And then yes, can we
Speaker 4: talk about, you know, God forbid if things came to
Speaker 4: an end? Can we agree what would be a fair
Speaker 4: way to you know, have our our money split up
Speaker 4: that we decide and that you know, keeps us from
Speaker 4: spending a year or two in a courtroom slinging mud
Speaker 4: at each other and making lawyers rich instead of doing
Speaker 4: what is best for the two of us. And if
Speaker 4: you can agree on those kinds of things, then what
Speaker 4: you're talking about is really the same thing as as
Speaker 4: getting a prenup. Even if you know the the word
Speaker 4: doesn't reflect that in your mind when you first hear it.
Speaker 2: My wife and I can definitely agree on not making
Speaker 2: lawyers rich, by the way, that's something we can come together.
Speaker 1: As you're talking to a lawyer, right.
Speaker 3: Sorry, sorry, Well one of the things you talk about too,
Speaker 3: is to do this sooner rather than later. You kind
Speaker 3: of touched on this earlier, but kind of explain why
Speaker 3: this is better to do essentially ahead of time as
Speaker 3: opposed to after the fact.
Speaker 4: Yeah. So there's there's a couple of reasons, you know.
Speaker 4: One is it is so much easier when you were
Speaker 4: talking about potential issues that could come up as a hypothetical.
Speaker 4: You know, it's much easier to say, okay, you know,
Speaker 4: can we agree that if family members ask for money
Speaker 4: that you know, we're going to limit it to one
Speaker 4: thousand dollars, you know, as a contribution, and we both
Speaker 4: got to agree. Or spending limits, you know from the
Speaker 4: joint bank account. Those are easy things to agree to,
Speaker 4: or easier when they are a concept rather than when
Speaker 4: something has you know, has happened and it feels punitive
Speaker 4: because they're saying, oh, you spent five hundred dollars from
Speaker 4: now on, you can't you know, you can't touch the
Speaker 4: joint account without my approval. That tends to be the
Speaker 4: wrong time to, you know, have these kinds of discussions.
Speaker 4: And given you know how important your financial life is
Speaker 4: to your marriage, I mean, I think you guys would
Speaker 4: probably recognize given your industry that you know, the fights
Speaker 4: over money is one of, if not the biggest reasons
Speaker 4: that couples break up. And so you know, being aligned
Speaker 4: when it comes to your finances is mission critical to
Speaker 4: the success of your marriage. And so this is something
Speaker 4: that has to be done with a lot of forethought.
Speaker 4: You've got to give it more time then you do
Speaker 4: the guest list for your wedding. You know, this deserves
Speaker 4: the kind of import that you would give any other
Speaker 4: major decision in your life, like starting a business or
Speaker 4: buying a home. If you agree that getting married is
Speaker 4: one of the biggest financial decisions you'll ever make, then
Speaker 4: you've got it. You've got to give it at least
Speaker 4: as much forethought.
Speaker 2: All right, So let's talk to the folks out there
Speaker 2: who are currently married, right, and so neither Matt nor
Speaker 2: I have prenups in our marriages with our wives. Is
Speaker 2: that is that something like it's called the post up, right,
Speaker 2: So is that something that more people should be considering
Speaker 2: And how do you approach that because that seems like
Speaker 2: it's maybe an even more delicate conversation, especially since we
Speaker 2: just like my wife and I just celebrated thirteen years,
Speaker 2: that's a long time kind of considering everything equal for ourselves.
Speaker 2: Do we need to put something down in writing? How
Speaker 2: do you talk to people who are currently married about
Speaker 2: this idea.
Speaker 4: Yeah, there's there's a few instances when people will consider
Speaker 4: getting a post up. You know. The first kind is
Speaker 4: kind of simple. You know, somebody who wanted to get
Speaker 4: a prenup, but they maybe got caught up in wedding
Speaker 4: planning or they drugg their feet a little bit, and
Speaker 4: you know, it's knuck up on them, and so they
Speaker 4: are doing it after the date of the wedding. That's
Speaker 4: still you know, considered a post up. There are other
Speaker 4: situations where people so to speak, read the contract of
Speaker 4: marriage years into their marriage and they realize that they've
Speaker 4: been living a way that is different than the law
Speaker 4: would treat their finances. So, you know, there are couples
Speaker 4: who have gotten married and decided okay, you know, I
Speaker 4: you know, had a rental property coming in and you
Speaker 4: had a house coming in, and I'm gonna pay for
Speaker 4: my property, You're gonna pay for your property, and we're
Speaker 4: gonna keep those things separate. And then they're married for
Speaker 4: a little while and they recognize that a court is
Speaker 4: not going to honor that kind of informal agreement between
Speaker 4: the spouses and they want to just go ahead and
Speaker 4: put it in place, or protect each other from debts
Speaker 4: or when you know, one spouse has a business and
Speaker 4: they want to make sure that that's kind of outside
Speaker 4: of the marital estate, both in terms of, you know,
Speaker 4: the value of it as well as the debts or
Speaker 4: potential liabilities of it. And there are some couples who,
Speaker 4: you know, they're on the ropes and they want to
Speaker 4: give it another go, but they've had financial issues that
Speaker 4: are part of their problem, and they want to correct
Speaker 4: it with a prenup that defines, you know, kind of
Speaker 4: their access to money so they're not in that kind
Speaker 4: of situation where one spouse makes two undred grand the
Speaker 4: other one has a three hundred allouns. They want to
Speaker 4: fix some of the problems that I've gotten them to
Speaker 4: this space while also saying, all right, if things don't
Speaker 4: work out, can we agree now it's Fairwell, we've still
Speaker 4: got some communication and some trust alive, so that we
Speaker 4: don't end up in a situation like we've all seen
Speaker 4: some of our friends go through, where you know, things
Speaker 4: devolve and all of a sudden they're not speaking to
Speaker 4: each other and everything is going through the lawyer, and
Speaker 4: those hourly rates are starting to stack up, not to
Speaker 4: mention the impact on kids and family and your lives
Speaker 4: and the stress and everything else that comes from it.
Speaker 3: Sure, yeah, yeah, so better to do it ahead of time,
Speaker 3: but better late than never, it sounds like, is what
Speaker 3: you're saying. Erin so, there seems to be more cost
Speaker 3: effective ways to actually go about getting a prenup these days.
Speaker 3: Our prenups just generally more accessible. Are they just easier
Speaker 3: to facilitate? Have loss changed or is it because different
Speaker 3: services are coming around like yours right where folks can
Speaker 3: easily find a prenup attorney. It's like somebody who specializes
Speaker 3: in the creation of these. I would love to hear
Speaker 3: your thoughts there.
Speaker 4: Yeah, yeah, I mean I think it's I think you
Speaker 4: nailed it with that that last one where because they
Speaker 4: have risen so much in popularity and people are more
Speaker 4: interested in getting them. There are a lot more attorneys
Speaker 4: who who are starting to specialize in them, you know.
Speaker 4: Before you know, fifteen years ago, the average family law
Speaker 4: attorney would probably do fifty to one hundred divorce cases
Speaker 4: for every one pre nup that they would do, and
Speaker 4: so they just weren't seeing as very profitable. You know,
Speaker 4: you make a lot more money off of a divorce
Speaker 4: than you do off of a pre nup, and people
Speaker 4: just didn't have a lot of experience with them, so
Speaker 4: it took people longer to give people what they wanted.
Speaker 4: And over the years we've started to figure out, you know,
Speaker 4: what are the best ways to help couples set up
Speaker 4: their finances and what are the kinds of things that
Speaker 4: couples want to see in their agreement, So we can
Speaker 4: do it a lot more efficiently, and as a result,
Speaker 4: it's a lot more accessible to people.
Speaker 2: All right, question, So I know, on some things like
Speaker 2: a will, right, you could hand write a will and
Speaker 2: you don't even necessarily have to have it notarized as
Speaker 2: long as you have a couple of witnesses, right, and
Speaker 2: then that will is legally enforceable. Right, you can submit
Speaker 2: that in a court of law. There's a lot of
Speaker 2: nuance to that, I know, but like, could you do
Speaker 2: the same with a prenup? Is it possible? Do you
Speaker 2: need necessarily the services of a blower? And I don't
Speaker 2: want to sound overly cheap, but I guess I'm curious
Speaker 2: to know, Like, have you seen people do IY a prenup,
Speaker 2: write it down in like magic marker on construction paper
Speaker 2: and have that actually work out for them? Or is
Speaker 2: it like, no, you definitely need a third party to
Speaker 2: help you figure this out.
Speaker 4: Yeah, yeah, you know. During my legal career, you know,
Speaker 4: I've probably done more than a thousand divorce cases, and
Speaker 4: I've seen plenty of DUIY prenups, and they're almost always
Speaker 4: legally insufficient, unenforceable, So you know, I think one of
Speaker 4: the differences with a prenup and a will is you know,
Speaker 4: if your will is written poorly, you can always redo
Speaker 4: it later, whereas you know, you get one shot to
Speaker 4: do the prenup correctly. I mean, yes, you can get
Speaker 4: a posting up later on down the line. But the
Speaker 4: problem is a lot of people don't know that it's
Speaker 4: not enforceable until they need to actually enforce it, and
Speaker 4: they're in front of a judge, and so it's risky.
Speaker 4: You know, I don't want to pay lawyers. I'm a
Speaker 4: lawyer myself. I don't want to pay lawyers anymore than
Speaker 4: I have to. But when I need something done correctly,
Speaker 4: then I, you know, I go hire a lawyer myself
Speaker 4: that is an expert in that thing. You know, you can,
Speaker 4: you know, if you want to do some of the
Speaker 4: leg work, you can. You can read the book and
Speaker 4: learn kind of some of the steps to make it
Speaker 4: easier for the lawyer that you approach, or if you
Speaker 4: draft something on your own, I think you would be
Speaker 4: well advised to at least take it to an attorney,
Speaker 4: pay that attorney for one hour of their time, and
Speaker 4: tell them to look it over and make sure that
Speaker 4: the basics have at least been covered.
Speaker 1: Okay, Yeah, I like that.
Speaker 3: Get that professional review at the very least, Joel. Don't
Speaker 3: just scribble it down chick fil a napkin.
Speaker 1: Okay, Eric. Last question for you.
Speaker 3: As a divorce lawyer, aside from getting a prenup, what
Speaker 3: is your your best piece of advice in your opinion,
Speaker 3: to keep a marriage healthy, to keep it alive and
Speaker 3: growing and just thriving.
Speaker 1: Basically.
Speaker 4: Yeah. Yeah, you know, I've given a lot of thought
Speaker 4: to this myself because I am a lawyer who desperately
Speaker 4: wants to stay married myself. And you know, there's a
Speaker 4: lot of debate over like what causes the most breakdowns
Speaker 4: in relationships. Some people say it's money, some people say
Speaker 4: it's infidelity. I think that, you know, at its core,
Speaker 4: the root cause of most divorces is a breakdown in
Speaker 4: communication that leads to the erosion of trust, it leads
Speaker 4: to secrecy, and so creating kind of a framework for
Speaker 4: your relationship where communication is your default. Whether it's about expenses,
Speaker 4: whether it's about going to therapy, whether you know it's
Speaker 4: about you know, what your needs are in your family life.
Speaker 4: You know, you can't go wrong with putting an emphasis
Speaker 4: on communication.
Speaker 1: In your marriage.
Speaker 4: I love it.
Speaker 3: Yeah, It's a good way to wrap things up. Eric
Speaker 3: like a happily married man right there.
Speaker 2: Yeah, Aaron, thank you so much for joining us today
Speaker 2: on the show. Where can our audience where can they
Speaker 2: go find out more about you? More about you know,
Speaker 2: creating a prenup that makes sense for them.
Speaker 4: Yeah, if you want to learn more, you can check
Speaker 4: out my website. It is prenups dot com. There's lots
Speaker 4: of free resources, you know, free ebook on there, and
Speaker 4: obviously you can go to Amazon and you can get
Speaker 4: my new book, The Prenup Prescription, which goes into much
Speaker 4: more detail.
Speaker 1: That's right, awesome, Well, Aaron, thank you so much for
Speaker 1: talking with us today.
Speaker 4: Thanks for having me on. It's been in an honor.
Speaker 2: All right, Matt, that's still a really interesting combo with
Speaker 2: with Aaron Thomas talking about a topic that you and
Speaker 2: I were probably reticent.
Speaker 1: To touch in a lot of ways, and when people
Speaker 1: have asked us in the past.
Speaker 3: We've touched on it before in the past, but not
Speaker 3: we haven't I guess, taken it on this straightforward sat
Speaker 3: on And most of the time when we get asked
Speaker 3: about it, we are a little more hesitant to say
Speaker 3: it's a good idea.
Speaker 2: We want to kind of we realize it is a necessity,
Speaker 2: a necessity for some folks, but it's also something that
Speaker 2: we're we hesitate to be like give the Joel and
Speaker 2: Matt how to money.
Speaker 3: See a level approval. Yeah, but yeah, I guess what
Speaker 3: was your big takeaway for this combo? There's a lot
Speaker 3: I guess that I'm thinking of now. But as you're talking,
Speaker 3: I guess what comes to mind is the fact, like
Speaker 3: the I think one of the reasons I've been hesitant
Speaker 3: personally is it is difficult for me to say, oh, yeah,
Speaker 3: this is a great idea, even though I personally don't
Speaker 3: do that right. And so even though I know that
Speaker 3: there are situations, but I didn't and I still don't
Speaker 3: think I will though. That's the thing, like, even after
Speaker 3: talking with him, like, well, you know, we'll Kate and
Speaker 3: I go and get a post up, I don't think
Speaker 3: we will. But that doesn't mean that it's not right
Speaker 3: for some folks. Right at the root of a lot
Speaker 3: of what he's basically talking about, Like I like at
Speaker 3: the end he talked about communication, and so much of
Speaker 3: what he is discussing, and so much of what goes
Speaker 3: into a prenup is actual communicating. It's figuring out those goals.
Speaker 3: It is, well, if this happens, what happens, then it's
Speaker 3: essentially a great Like it's budgeting, right, Like he's talking about, oh,
Speaker 3: I've got my money, she's got her money, and we
Speaker 3: have our money, the joint money, and he's talking about
Speaker 3: his the freedom he has to be able to go
Speaker 3: and go out with some friends or buy some nikes
Speaker 3: for his daughter.
Speaker 1: But if adding a layer of legal protection.
Speaker 3: Yes, but there are ways that you can do that
Speaker 3: within a budget, Like that's budgeting, that's coming up with
Speaker 3: a plan for your money. But like you said, yes,
Speaker 3: it puts it within the framework, it puts it within
Speaker 3: the package of it being legally enforcedable.
Speaker 2: So yeah, I think I've come around, and I totally
Speaker 2: even though I did not get a prenup, I think
Speaker 2: it is something I would suggest people strongly think about.
Speaker 2: And I think the biggest two reasons are the fact
Speaker 2: that it can save you a lot of money and
Speaker 2: a lot of heartache on the back end of things
Speaker 2: if things don't go as you hope and plan. And
Speaker 2: the other thing is just that you kind of have
Speaker 2: a prenup based on your state laws, and those state
Speaker 2: laws are different all over the place, and you know,
Speaker 2: whether it's a community property state or whether you live
Speaker 2: in a state where a judge gets to kind of
Speaker 2: decide the details of how things are div beat up,
Speaker 2: you might prefer to have some say over that on
Speaker 2: the front end then leaving it to chance. So I
Speaker 2: guess I have kind of come around to kind of
Speaker 2: Aaron's way of thinking on this one. My biggest takeaway though,
Speaker 2: was on approach and if you're going to talk about
Speaker 2: having a prenup so much, you're going getting married to
Speaker 2: this person because you love them, and so you need
Speaker 2: to approach a conversation about a prenup with care and
Speaker 2: with love. And so if you're going to have this conversation,
Speaker 2: if you're going to go in this direction, certainly make
Speaker 2: sure you're treating that person. You're not being defensive, being selfish,
Speaker 2: trying to protect yourself. You're trying to protect both parties
Speaker 2: in this whole endeavor.
Speaker 3: Yeah, and you said it's helpful to not use the
Speaker 3: word prenup. Yeah, but instend to focus on the goals
Speaker 3: and again just all the other things that you're trying
Speaker 3: to accomplish with the prenup. But maybe don't necessarily leave
Speaker 3: with the term prenup, which could be such a loaded term.
Speaker 1: But yeah, awesome. Let's get back to the beer.
Speaker 3: Then, you and I enjoyed a Southern Hemisphere. This is
Speaker 3: a pilsner by Second Street Brewery. What are your thoughts
Speaker 3: on this one? This one was clean, light and fluffy,
Speaker 3: is what I'm going to say. So I slightly on
Speaker 3: the bitter side. I feel like some pilsners are either
Speaker 3: slightly neutral or maybe even a tiny bit sweet, whereas
Speaker 3: I feel like this one it kind of leaned slightly
Speaker 3: more in that no better. Yeah, that being said, I
Speaker 3: just had a sweet apple on my walk right after lunch,
Speaker 3: and so I was wondering, is this having an impact
Speaker 3: on now I perceive this beer? Perhaps, but there are
Speaker 3: some biscuity vibes going on, I'll say, to very refreshing,
Speaker 3: great one. This is actually this is another beer that
Speaker 3: was donated to the show by Bob out there in
Speaker 3: New Mexico. So again, thank you so much for sending
Speaker 3: this one hour away.
Speaker 1: Yeah, appreciate you, Bob. Is that could be it for
Speaker 1: this episode? I'll do it.
Speaker 2: We'll put linksin in our show notes up on our
Speaker 2: site at howtimoney dot com, including a link to Aaron's
Speaker 2: book if you're like I want a deep dive on
Speaker 2: this subject now, this nerdy legal topic of prenups. We'll
Speaker 2: put that up there on the site. But Matt, that's
Speaker 2: gonna do it for this one. Until next time, Best
Speaker 2: Friends Out, Best Friends Out.