ConversationsPostnupsPrenups

Prenups 101: What Your Mother Never Told You–But Don’t Blame Her, No One Knows This Stuff

Posted at 2017-08-14 | By : | Categories : Conversations,Postnups,Prenups | 0 Comment

A great marriage is not when the ‘perfect couple’ comes together. It is when an imperfect couple learns to enjoy their differences.” – Dave Meurer

 

So, What Exactly Is a Prenup?

 

According to Black’s Legal Dictionary, a prenuptial agreement is:

A written contract between two people who are about to marry, setting out the terms of possession of assets, treatment of future earnings, control of the property of each, and potential division if the marriage is later dissolved. These agreements are fairly common if either or both parties have substantial assets, children from a prior marriage, potential inheritances, high incomes, or have been “taken” by a prior spouse.

 

LegalZoom, a site that supports people in navigating legal matters, explains prenuptial agreements this way:

 

A prenuptial agreement is entered into before marriage. This agreement can set forth what will happen to your and your spouse’s assets and income in the unfortunate event of divorce, separation, or death. Most importantly, a prenuptial agreement can preserve the nature of property in the event the marriage ends. In other words, separate property can remain separate instead of being subject to community property or equitable distribution laws.

 

(Note: Those of you who are living together and don’t intend to get married, but still want the benefits of a prenuptial agreement can enter into a cohabitation agreement, which covers the same areas. And for those of you who are already married, you can draw up a document called a post-nuptial agreement.)

 

The prenup conversation can begin in many ways: you may bring it up, your future spouse may bring it up, or the conversation may originate from your parents or grandparents, or even your family’s legal or financial advisor. No matter how it originates, I believe every couple should have a prenup conversation as a way to strengthen your marriage and bring you closer together as you discover how to navigate stressful, difficult, embarrassing, challenging topics with ease, grace, respect and love—especially in the area of money.

 

Research tells us that money is most often cited as the predominant reason for conflict in relationships and is the number one cause of divorce—the number one cause! To be clear, money is neutral; it is not the cause of anything. It is our inability to have healthy, relationship-affirming conversations with each other about money that creates ongoing conflict and dissatisfaction. When you have the prenup conversation before marriage, you are creating healthy patterns around money, which help you build a foundation that will serve you for your entire marriage.

 

Two Prenup Misconceptions

 

As we begin, let’s start with two often-overlooked premises in the world of prenups. The first, whether you like it or not, is that there is no “happily ever after” when it comes to marriage. Even the most loving and satisfying marriage ends – due to death, disability, divorce, or disinterest. This can sound pessimistic and morbid, but when you embrace the truth that every marriage ends, you realize your prenup planning is not only for divorce; it’s for the end of a relationship, however that may occur. The second misconception is that you don’t need a prenup since you know you are not going to divorce. Since a prenup covers way more than divorce, it helps you articulate and plan for all possible outcomes at the end of your marriage.

 

Here’s one more that isn’t a misconception, but rather a misunderstanding. Many people fail to realize that the moment you get married, you already have a prenup. How your finances will be divvied up has already been established by the lawmakers in your state through the codes that cover family law and estate planning. If you never have a prenup conversation, they’ll step in and make all the decisions. You already have a prenup, one that you have absolutely no say in, so there’s no point in getting defensive about the topic at all. Taking on this conversation will empower you to make your own choices and make joint decisions what matters to you right from the get-go.

 

If you’re ready to know more about a prenup in your situation, make an appointment here: https://calendly.com/emily-61

 

Prenup Stats

For those of you who can’t get enough of facts, here are a few data points about divorce, marriage, money and prenups:

  • 15% of people who have been through a divorce regret not having a prenuptial agreement in place
  • There’s been a fivefold increase in prenuptial agreements over the past 20 years
  • The “great wealth transfer” of assets from baby boomers and their beneficiaries is expected to exceed $30 trillion over the next few decades—that will precipitate more than a few prenups.
  • The three top reasons for a prenup are protection of separate property, alimony/spousal maintenance, and the division of property.
  • Steven Spielberg settled for $100 million after a prenup on a napkin was considered invalid.
  • Only 5% of divorces that occur in the United States have a prenup

 

These statistics further highlight that getting on the same page about money at the beginning of marriage is of ultimate importance. Why then is it so difficult?

 

Avoiding Cracks in Your Foundation

 

“Contempt is the sulfuric acid of love.” – John Gottman

 

When building a new home, the most important, and often the most labor-intensive part of the process is pouring the foundation upon which the house will stand for years to come. Imagine for a moment that when you got engaged, you began to mix and pour the cement that will be the foundation of your marriage. The cement mixture needs to have the right blend of ingredients to allow it to be smooth, have the right consistency, and harden completely and evenly so that it can last a long time, no matter what earth-shattering events you both encounter.

 

Now imagine that as your relationship’s foundational cement is poured, leveled and beginning to set, you have your prenup conversation. It starts out well enough, but some things are said that are hurtful or confusing. You each become defensive and begin to do what anyone who is feeling attacked does: defend yourself by attack back. Perhaps this takes place in subtle passive-aggressive ways: a sarcastic comment, a hurtful look, or the ever popular “whatever,” or perhaps in more direct ways, by pointing out flaws, debts, or poor choices. Every time you go the route of hurting one another, you begin to plant seeds of resentment, resignation, and regret into your wet cement.

 

Over time, those painful seeds take root and cause cracks in your foundation. You trip over them every time you have a conversation about money in your marriage. Each time money talk begins, the same complaints arise, the same attacks occur, the same emotions emerge, all of which fertilize those roots to grow even deeper and make the cracks wider.

 

In an attempt to keep further damage from occurring, one or both of you will likely end up resorting to the seemingly logical, but highly detrimental, choice of avoiding money conversations altogether. Avoidance can be a useful short-term tactic, but, as marriage researcher John Gottman, who can predict with over 90 percent accuracy if a couple will stay married or not, discovered after researching over three thousand couples, how you avoid and to what degree, can have long-term consequences leading to your marriage ending and you both being thoroughly dissatisfied. The avoidance tactics that do the most damage are “stonewalling” and “emotional disengagement”.

 

Gottman’s research, outlined in his groundbreaking book The Seven Principles for Making Marriage Work, reveals that avoidance, or “stonewalling,” happens when the first three adaptive strategies of criticism, defensiveness, and contempt don’t work and conflict continues. The resulting stonewalling gives you no one to relate to at all and can create major problems in your relationship and with your finances. You have serious issues to address, but you cannot talk to each other.

 

You can see how obvious it is that these behaviors, if left unchecked, all fertilize those initial seeds of hurt and resentment planted in your foundation, and create deep cracks that are hard to mend. We are committed to showing you how to talk about money in ways that shore up your foundation and give you a great future.

 

Three Essential Ingredients to Building a Solid Foundation

“When there is trust, conflict becomes nothing but the pursuit of truth, an attempt to find the best possible answer.” Patrick Lencioni

 

When you think about getting started with the prenup conversation, you will most likely be thinking about the CONTENT of the conversation – who gets what? Who will own what? What’s mine? What’s yours? What’s ours?

 

We suggest that you will be much more successful by starting out with the CONTEXT of the conversation – Why are we together? Why is it important to talk about this? How do we each think and feel about money? What are the things we value the most about each other and our future life together? In what ways to do we know we can count on each other and trust each other?

 

The foremost ingredients to having a strong, firm, solid foundation as you speak about your future, and your needs and wants related to financial support, are the building blocks of Core Values, Loving Acknowledgments, and Authentic Trust. We will got over each of these in detail in upcoming blogs on August 22, August 29, and September 5. Until then…

 

If you’re ready to know more about a prenup in your situation, make an appointment here: https://calendly.com/emily-61

 

Introducing These Ideas to your Fiancé

 

You know your beloved better than we do. With that in mind, we aren’t going to tell you how exactly to approach him, but here are a few approaches we know to be successful (depending on how open he is and how “alpha male” he is) are:

 

  1. The Ninja Approach: Instead of asking him to read this book, pull out some ideas and try them. Start with one thing you think he’ll be most open to, and take baby steps.
  2. The Aikido Approach: Have it be his idea. Be curious about how he wants to approach the conversation, and offer one of the ideas as something that might further HIS thinking.
  3. The Straightforward Approach: Imagine simply reading this together and getting going with your marriage right now.

 

The Future

 

“There is no more lovely, friendly, and charming relationship, communion or company than a good marriage.” – Martin Luther

 

When you take the time to make sure these ingredients of Core Values, Loving Acknowledgments and Authentic Trust, are measured, refined, and thoroughly mixed together, you are much more likely to have a smooth start to the prenup conversation.  The most important thing is to connect on what you care about, and assure each other that you are taking into consideration what your beloved cares about as well! Keep a win–win attitude as much as you can.

 

The Next Step on the Journey

 

This blog was designed to help you dip your toe in the water and give you a chance to get started from the best position possible. I wanted to give you some great resources you can use as you begin to embark on your prenuptial-agreement journey. This is indeed a journey, so as you traverse it, think of us as trusted guides who have helped many couples successfully navigate some of the tricky spots on the river ahead.

 

If you’re ready to know more about a prenup in your situation, make an appointment here: https://calendly.com/emily-61

 

About Emily Chase Smith

I’m an experienced attorney and entrepreneur. With my background in bankruptcy, I’ve seen the end of the business lifecycle and use that knowledge as a lighthouse to help others avoid the rocks. I counsel with entrepreneurs to provide custom solutions to help you get back in the game. You can contact me at (949) 391-6063, Google+ Twitter emily@emilychasesmith.com