This week, Maggie sits down with Broke Millennial's Erin Lowry to talk about why you should get a pre-nup before you get married.
Planning on getting married someday? Already married? In this episode, Broke Millennial’s Erin Lowry breaks down what pre-nups and post-nups are and why you should get one before you get married.
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Erin Lowry is the author of Broke Millennial, Broke Millennial Takes On Investing and the forthcoming Broke Millennial Talks Money: Scripts, Stories, and Advice to Navigate Awkward Financial Conversations. Erin’s style is often described as refreshing and conversational. She’s appeared on BBC, CNBC, CBS Sunday Morning, Cheddar and quoted in The New York Times and The Wall Street Journal. In addition to talking all things money, Erin enjoys defending her generation from the ridiculous stereotypes that refuse to die no matter how old we get. Erin spent most of her childhood living in Asia, but now settled in New York City with her husband and their rambunctious dog.
To learn more about Maggie and her coaching and speaking services, visit www.maggiegermano.com.
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Maggie Germano 0:07
Thanks for listening to the money circle Podcast. I am your host, Maggie Germano and I’m a financial coach for women. I’m passionate about helping women improve their relationship with money so that they can take better control of their futures. Part of that journey is making personal finance education more accessible and less judgmental, which is why this podcast exists. Each week we’ll discuss a new financial topic to help you explore how you can make a difference in your own financial life or in society as a whole. If you’re interested in diving deeper into issues like income inequality, debt or money, shame, check out my new money circle community. In the safe feminist space women gathered to talk about money without fear of being judged or shamed. We will break down shame and build community and safety for everyone so that you can find the support you need to gain control over your finances. Visit Maggie germano.com slash money circle to learn more and to join the community today. I can’t wait to see you there.
Maggie Germano 1:11
Hey there and thanks so much for listening. I am your host Maggie Germano, and today I’m talking to Erin Lowry, also known as broke millennial, about prenuptial agreements. So if you are like me, you probably have grown up having somewhat negative experiences or hearing negative information about prenuptial agreements and really thinking that there’s something that only celebrities are very rich people get. But in my conversation with Erin, I learned that that is really not the case. And it really shouldn’t be the case. And so we talked about what a prenup is, what a postnup is, why you want to get that and how to go about doing it and a little bit into the detail of what prenups tend to encompass and why they can be so helpful. If you do eventually end up needing to get a divorce, but we also talked about why they are so important to get even just for the conversations that they bring up between you and your partner about money, and the future, and the things that you’re most comfortable with. So, I really love this conversation. And I know that this is a topic that Erin really loves as well. So if you are already married, planning on being married, or hope to get married someday in the future, this is definitely an episode for you.
Maggie Germano 2:37
So welcome, Erin, thanks so much for being here today.
Erin Lowry 2:40
Thanks for having me.
Maggie Germano 2:42
So why don’t we just start by having you tell us a little bit about who you are and what you do?
Erin Lowry 2:47
Well, I’m Erin Lowery, author of broke millennial and broke millennial takes on investing and the forthcoming broke millennial talks, money stories, scripts and advice for navigating awkward financial conversations. Longest subtitle Ever. But hey, got to pack it all in. And I think the last book title really sums it up. I love just talking about the intersection of money and all the things in our life. And it started with kind of that foundational how to get it together. Then we progressed on to investing, but truly I love, love love talking about how to talk about money, which I’m very excited for today’s topic.
Maggie Germano 3:23
Yeah, me too. And I mean, you talk about relationships a lot. You talk about, even you know, just talking with your family and your friends and just anybody generally, and I’m a huge fan of that as well. But before we launch into that, why don’t you tell us a little bit about what brought you to this line of work? Was this what you plan on doing you know what brought you here?
Erin Lowry 3:46
I fell backwards into it. I usually like to say and nothing that made sense brought me to where I am today, which is a full endorsement for the liberal arts major. I have to say. I was a double majored in journalism and theater in college, and I graduated in 2011. So you know, that recession life, which Hey, oh, back in it, let’s go. And I really, at the time didn’t really know what I wanted to do. I kind of wanted to be more in the acting theatrical realm. I spent my early years I moved to New York City very shortly after college about three weeks after I graduated, and I worked for the Late Show with David Letterman. And that was a one year gig. And then I ended up in public relations. And I’m giving you all this backstory for a reason, don’t worry. And as I was working in PR, it just wasn’t a great fit for me. And I was getting creatively a little bored. So I wanted to do something to feel more creatively fulfilled, and I really miss writing at the time, is 2013 by now. Well, actually, she wasn’t 12 but I came up with this idea. Blogging was still kind of trendy. And so like, most people who had a little bit of spare time, I started a blog. It started as brokemillennial.com. And the reason I started that was because I began realizing how uncomfortable everyone around me was with talking about money. And I am that person who, at any sort of family function at a party, if somebody says something that I think is really interesting, I’m like, lock in on them. And I just want to go down the rabbit hole in a very potentially uncomfortable to everyone else. But I find fascinating conversation, not debating not fighting, I just want to know more. So it gives you a little insight as to why I want to trade about money because everyone seems so uncomfortable talking about it. Even people who came from a very privileged background or really weren’t like necessarily stressed about money, they just didn’t want to talk about it. And I at the time, had just come off of earning $23,000 my first year living in New York. Now I was earning a whopping $37,500 plus benefits guys, i was so rich, and I wanted to share some stories about how I was surviving on that kind of money in New York City. As well as just share funny stories. of my childhood and how my parents taught me about money, which is a huge part of my backstory, and really how I weave stories into all of my books as well.
Maggie Germano 6:09
I love that. And I totally agree with you on the liberal arts side of things. I was a political science major, I was not planning on getting into the financial field or anything like that. And I feel like if you’re, you’re working on, you know, the different majors that you know, can kind of applied to lots of different things. You’re not pigeon holed in what you end up having to do that’s really helpful.
Erin Lowry 6:33
It’s so true, and learning how to write well and learning how to speak in front of an audience and how to present our skills that really no matter your field are going to go a long way. So I highly endorse liberal arts degrees. And if you don’t find any interest in that, and if you’re like all stem or whatever, take a theater class or an improv class. At some point. It does so much for you, I promise. That’s really good advice. And I also love that you like you said you fell backwards into it. Like a lot of people in this field that I talked to have had that experience where they were either struggling with something or they were seeing some kind of issue that was important to them or that they wanted to help fix. And then they that’s how they basically just found themselves in this line of work. Yeah, I always say and I will continue to say if you told 18 or even 21 year old Erin, hey, and under a decade, you’re gonna have three books out about money, I just would have laughed straight up on your face. Cuz also, to dispel any myths about math, I hate math. I’ve always hated math. It was never my strong suit in school. Money and math are not the same thing. You don’t have to be good at math to be good at handling your own money. And so that for me also in the beginning was a huge part of the narrative was You don’t have to be a savant and finance in order to be good at managing your own personal finances.
Maggie Germano 7:55
That’s such a good piece of advice and the commentary, honestly, because math is Always one of my worst subjects, I had to drop out of physics in high school because I just couldn’t understand the math that went along with it and didn’t want to fail. And so, yeah, I think because that is something that I hear from people as a pushback is like, Oh, well, you know, I’ve just never been good at math. I don’t really understand numbers. It’s like, well, it’s pretty simple math when it comes to managing your day to day budget, and a lot of it has to do with habits anyway.
Erin Lowry 8:25
Yep. So much more of this is psychology than is math. Because guess what, we’re not rational creatures, we make emotional decisions.
Maggie Germano 8:33
Exactly. So that’s a good kind of segue into today’s topics. As we talked about a little bit earlier. We are getting into relationships and money and why that is so important, and specifically prenups and post ups and so before we start launching into all the many questions that I have for you, can you tell us a little bit about what a prenup actually is? And maybe the difference between a prenup and a postnup.
Erin Lowry 9:03
Well, the pre and post is very easy to delineate pre as before post is after the prenup is your prenuptial agreement is an agreement that you put in place prior to getting married. a postnup bit of a tougher sell is an agreement that you put in place after you’ve already been married. Both of these documents determine how assets would be split up in the case of a divorce.
Maggie Germano 9:27
Mm hmm. Which is a totally sexy talking conversation to have when you’re planning your wedding together.
Erin Lowry 9:34
It is critical. And I’m going to use the line that I’ve used in every conversation about this and in everything that I’ve written about this, as my attorney said to me, everybody has a prenup. And it’s just the default laws of your state. So the point is, if you want to take control back from what the default laws of the state are, or you want to make sure that what those laws are in your mind and your partner’s mind are fair, you need to come up with your own prenups agreement. Now it has to be within the confines of law. Like you can’t just be making things up left and right. And if you put a lot of the kind of lifestyle social clauses in there, for instance, the horrible things that you hear that are sometimes in celebrity prenups, like, you have to, you know, be intimate with your partner X number of times a week, or you can’t gain X amount of weight, those kind of things actually can void a prenup pretty quickly. So fun fact.
Maggie Germano 10:26
that’s really good to know, actually. And we’ll get more into that too, about like, what can go in there. But that’s also really good to know about how well you just said about how like your state is determining what your prenup is, anyway, because you’re gonna have to go along with what they’re saying. And so, I think framing it around that control, like you’re deciding together what you’re actually going to align with, rather than being forced into what your state is telling you.
Erin Lowry 10:56
Yeah, and I think it’s important to make some of the case for prenups early on in these conversations because I totally empathize if you are listening right now. And this is causing, perhaps a visceral reaction in your gut, like you might be just thinking, Oh, I think prenups are the worst. I can’t believe people have them. You should only be marrying somebody if you love or trust them. These are the narratives that we tell ourselves. And if you get a prenup, the prevailing myth is that that indicates that you do not love and trust your partner. Here’s why that’s wrong. First of all, again, you technically have a prenup. It’s just whatever the state law indicates which you need to educate yourself on what that is before you get married, just to make sure that you think that that’s fair. The other thing is, I like to reposition it as an insurance policy. When you get into your car, you are not assuming that you’re going to get into a car accident, you’re not hoping that you’re going to get into a car accident, but you have auto insurance just in case that happens because it could potentially happen. And I also bring that up because when The other things that I get in terms of pushback, is this whole idea of well, I will never leave my partner in my mind. Marriage is a lifelong commitment. No matter what happens in my marriage, I am not leaving because I made this commitment. If that is your mentality, that is fine. My point is you can’t control the other person. Maybe you won’t leave no matter what happens, but that person could leave you. And I hate to be a downer. But it could happen and to me, the prenup is one of the best conversations that you can have before you get married. And what I encourage everyone to do is go to one of those online template makers download a prenup template and have the conversation of all of the questions that it asks you and have that very open very honest, completely bare here’s all the details. I call it full frontal financial nudity. Here’s all the details about my finances and your finances because Going into a marriage eyes wide open about that as one of the strongest footings that you can be on. And if you decide at the end that you don’t want to hire lawyers that you don’t want to notarize it that you don’t want to officially have a prenup. That’s your call, but at least have the conversation that’s required before signing that document.
Maggie Germano 13:17
I love that advice. And what what do you think some of those conversations kind of encompass like I have not seen one of these prenup templates. And so what are what are some of the things kind of included on there that we should talk about?
Erin Lowry 13:30
Oh, there’s a lot that you have to talk about. And full disclosure, I went through this process. I do have a prenup. I’ve been married for almost two years now. And the very first thing I want you to do, especially if you want one is to have this conversation with your partner early. I started it before we were even engaged. But if you are already engaged, you want months and months and months and months. You do not want to at all put your partner under the gun in terms of Hey, we’re getting married in six weeks and this needs to happen and if it’s not, I’m not walking down the aisle. There. should be no amount of pressure on your partner. The other full disclosure is you are going to get into disagreements, perhaps full blown arguments and fights, especially if you’re planning a big wedding because Lord knows that’s already a pressure cooker as it is no matter how strong your relationship going into it. There’s just so many emotions and dynamics. So the type of things you’re going to talk about in a prenup varies, but first, you’re going to assess stuff like the state law says how assets would be split up, you need to assess the assets that you’re bringing into the marriage. That can include things like if you own property already, if you already have money in the stock market. Definitely be considering your retirement plans. A lot of people don’t think about that. But that’s one of the huge issues in divorce as people with retirement plans can just get gutted in the divorce process. Also divorce can be very, very, very expensive. And a prenup is sort of like an insurance policy on the cost of a divorce. Of course no one is hoping that that’s how it’s going to end. Love cycles and marriage. cycles vary. It could be a 20. year, in all intents and purposes, successful marriage, and you just change and you grow in separate ways. And that’s what happens. I think this idea of, actually, and I know I’m getting a little far afield to the point, I’ll come back to it, don’t worry. But I heard Dan Savage say on a podcast recently that we keep thinking of marriage as a successful marriage, the only way to be successful is when someone dies. And that’s kind of a tragic way to think about it. You know, if you had a loving, successful relationship for whatever period of time, but it worked for the two of you, it still can be deemed a success. Okay, off my soapbox. You want to look at the assets. You also want to look at debts that are being brought into the marriage and have an understanding of whether or not one of you is going to be liable for the other person’s debts. Typically, if it’s debts brought in unless you cosign on it, generally you are not responsible debts, a mass in the marriage, depending on state law, you could be responsible. So you want to make sure you understand that you want to know what that alimony situation is in your state, what is the formula that gets used? Particularly, if you think perhaps that you are the one that is the breadwinner or that is more likely to be paying alimony that’s something that should be discussed. You should talk about an inheritance. Even if you don’t think you’re going to get one year you’d be surprised how many people at least get a little something whether it’s because parents own some assets like a car or a house that gets sold or if there’s you know, a life insurance policy anything like that. You want to talk about if you are going to get an inheritance is that marital asset property does that remain one person’s what happens if those and this is how technical can get? Let’s say that you get an inheritance from your parents and then you use part of that inheritance to buy a home with your spouse. Now, is that home? Yours? Is it both of yours? Do you buy the other person out? Do you own a more of a percentage like there’s only These things you have to think through that these documents are going to make you discuss. And you’re going to be really surprised how differently you might think about certain things and your spouse. And that’s one of the reasons it’s good to have these really healthy, important conversations. And if you are going to get a prenup, have these conversations as well before you sit down with lawyers, because getting on the same page with your spouse before you start the billing hours on a lawyer is a way to keep the overall cost of the prenup down as well.
Maggie Germano 17:30
That’s a really good point because yeah, you don’t want to be paying a lawyer to watch you argue over opinions.
Erin Lowry 17:37
Maggie Germano 17:39
So related to that, how much does it typically cost to get a prenup? And like what is that actual legal process look like?
Erin Lowry 17:46
So it can it varies a lot in costs depending on how complicated your prenup is, generally a more prenup. Generally a more complicated prenup, if maybe you can From a wealthier family, there are certain trust or estate plans that are already in place, you want to have that money protected, whatever it is, or maybe you own a bunch of companies and a bunch of properties. And you have to account for all of that. If it’s more of kind of a cut and dry, generally people ballpark between about $3,000 and $6,000, depending on the cost of attorneys in your area. I live in New York City. You know, lawyers here are not cheap. It was a little bit more on the expensive side. But I like to think of it again, like you’re paying an upfront lump sum on an insurance policy, if you prorated it out over decades. It’s a bargain. It’s a great deal. And so I would consider between three and six grand The other reason why is you both need your own lawyer, you can’t share a lawyer because a lawyer can’t ethically give you the same level of counsel, if not that you’re fighting against each other, but they can’t represent both interests if the interests are not always exactly aligned. So you both need your own attorney. Which is why it’s I try to get on the same page as best you can before you get into those rooms, to reduce the billable hours, and to have those fights. And I hate to say fights to have the conversations, perhaps debates, before you actually proceed to the lawyer. And I did mention earlier, there are templates online that you can download. I would still go to a lawyer, you know, it’s fine if you want to use that as a template to initiate and have the conversation. But even if you got those and had them notarized, it may or may not it’s easier to probably get that dismissed in court if you both weren’t represented by legal counsel.
Maggie Germano 19:36
Yeah, that’s good to know, too. Because I think most people if they hear like, oh, download a template online, you can get it notarized. Like that’s obviously going to be the more affordable option that people and the easier, less time consuming option for people to go towards. So understanding that it might not be as legally binding is also a good thing to know.
Erin Lowry 19:56
Yeah. And if you’re comfortable talking about the fact that you’re getting one Ask for recommendations from people about attorneys. To be honest, I mean, I’ve recommended mine to several people. There are a lot of people, you will also be surprised about the number of people that actually have a prenup, a lot of people just are not comfortable talking about it. Once I got very open about having one I had women come to me and say, Oh, I have one. But they do not publicly disclose that they have one.
Maggie Germano 20:25
That’s funny. And and I’m sure it’s because the way that we think and hear about prenups is like you were saying, related to celebrities and like people, you know, screwing over their partner or like having these distrusting, you know, opinions or beliefs ahead of a marriage. And you know, assuming that that means things are going to end anyway. And so there’s just this air of distrust around them.
Erin Lowry 20:52
Yeah. And if you even just look at pop culture, how its presented in TV shows, I mean, famously, Sex in the City episode was Charlotte with a buddy MacDougall when you know, I’m only worth X amount of money, I’m only worth x if I give you a son. I mean, there’s just all this horrible stuff that you hear. The average basic Primo doesn’t look like that there aren’t provisions for Hey, if you bear an heir to this empire, I’ll give you 100,000 more dollars. But if you give me a girl, you only get 20. I mean, also, it’s again, those kind of clauses make it easier to avoid in an actual divorce. But I do want to also point out this idea of if you know yourself, person listening to this, I know myself, I know that if we were going through a divorce, I would not be the kind of person it would get probably acrimonious fairly quickly. And having a prenup is a way that I can protect my husband whom I call peach that I can protect him from a vengeful version of myself and I can make sure that I’m dragging out the process just to be spiteful and losing time. have money. Because I mean, obviously some marriages end in really horrific, tragic dramatic ways. And people are spiteful for all for all sorts of reasons. But when you create the premium, hopefully you’re in this place of love and generosity and you look fairly at Okay, based on x, this is what you should get, you should get why? And I’m not going to be nitpicking at you. And I’m not going to try to be ringing every penny out of you. In the end, I’m going to be fair and benevolent, because we’ve already put this structure into place.
Maggie Germano 22:36
I think that’s something that’s so important to remember. And this is something I talked to a couple clients about because they had a prenup, and that was a difficult process for them to go through. And they were kind of like should we have done that? And we talked about how they were, in theory, the best versions of themselves and the best version of themselves as a couple while going through that process, even if it was difficult and emotional and They wish that they didn’t have to do it. At least it’s not you know, in however many years when there’s maybe children involved and a lot of money kind of up in the air and like you said, negative emotions and a lot of conflict potentially. And so thinking about it in that kind of way, where you know, I’m we’re approaching this in love and trust and care, rather than having to sort this all out when we’re actually separating.
Erin Lowry 23:29
It’s true. And, you know, my attorney said to me, we signed the papers and he handed it to me and peach was there and he goes, you know, put it in a drawer. Let’s hope you never have to look at this again. And that’s really how we think about it. I we only really think about having a prenup because I talk about it all the time in the media and we’ve done interviews together about having it feel listened to that this is uncomfortable podcast. My husband is with me on the interview talking about the process of getting a prenup. And I guess I’m also so vocal just because I don’t think it needs to be that big of a deal. I think of it Not only kind of in that terms of insurance, but listen, when you get married, of course, it’s about love and trust and all of this, but it’s also a contractual obligation and agreement that you are assigning, and you can’t walk away from it without going through the court system and having somebody tell you how to split up your assets. In what other contexts, are you going to allow that to happen to yourself without protecting yourself? No one would expect you to sign an employee contract without reading through the terms and making sure that it’s fair. And I as much as marriage is about love and trust. It is also you have to acknowledge the fact that this is a legally binding agreement that has to go through the court system to get dissolved. This isn’t breaking up with a partner.
Maggie Germano 24:47
Yeah, and I think that that tends to get lost in in the conversation around weddings and marriage and love is your right like you have to go to City Hall and get a marriage license. You have To have someone who’s ordained or you know, otherwise, you appointed by the government to do this for you, and then send it in to the courts and all that. So it’s not like, it’s just a happy, whimsical process. It’s also a legal process. Yeah. And I don’t like other people telling me what they think is fair and my relationship. I like to decide that for myself, thank you. It’s so true, because a lot of our laws and processes are still not super modern, and they’re not always caught up to what maybe us as individuals thing is fair and how things should be, and they’re not going to be equitable and reflective of what’s right. So I think that’s a really good point.
Erin Lowry 25:43
That’s true. And you mentioned the word postnup. Already, I think that’s the other important factor to bring up is that when you create a prenup, you know, it’s a snapshot in time of where you are when you got married and life is going to change. And my husband and I, for instance, currently don’t have kids. If we do have kids We might go in and amend certain parts of our prenup, especially if somebody takes the backseat in terms of a career, because in our prenup, we waived alimony. But then if somebody steps out of the workforce, that’s not really a fair thing to do anymore. So then it needs to get amended to, to reflect our new reality. And those are really important things to consider. I would also say if you don’t have a prenup, and you have started a family, and you or your spouse are choosing to exit the workforce, get a postnup there needs to be a conversation about what is then deemed fair, because my husband was the one who brought it up to me, he’s a public school teacher, I’m the breadwinner in our family. And he said, you know, in all reality, I would probably be the one that would kind of take a step back in my career. And if I opt out for five, seven years before going back to the workforce, it could take a long time for me to get a job and what happens if we got to divorced in that time period, how am I supposed to provide for myself and that have waived alimony? And that’s a very fair point.
Maggie Germano 27:08
That’s huge. And I think a lot of people struggle with that. I mean, I’ve seen a ton of women, just people that I’ve known, but also stories that I’ve heard of women who they’ve either taken a step back from working or they’ve stopped working completely, or they’re very financially dependent on their maybe male partner. And then if the marriage dissolves, they’re screwed financially in a lot of different ways. You know, maybe they haven’t been saving for retirement during that time. There’s just so many things that get affected from taking that step back from having an income and the marriage agreement and potentially divorce agreement really needs to reflect that.
Erin Lowry 27:48
Especially the retirement thing. That’s one thing that I really encourage people to protect and prenups are your retirement accounts that mine is mine and yours is yours when it comes to retirement accounts. And also if you are in Stay at home spouse, primary caregiver, whatever the reason may be, have a spousal IRA, your spouse can contribute to you having your own retirement account independently of your spouse’s. So that is really an important thing to consider to make sure that your retirement is also being taken care of and so that your spouse’s retirement doesn’t necessarily get cut in half at the time of the divorce so that you’re both in a stronger, healthier financial position. That’s a good that’s a good point. And that’s I hadn’t heard of a spousal IRA. So that’s really helpful. And I’ll put information about that in the show notes too, so people can look at that.
Maggie Germano 28:37
So you obviously are very passionate about this topic. You said that you have your own prenup. What made you want to take that step and what why do you recommend it to others?
Erin Lowry 28:49
You know, what’s funny, I can say a double negative here my English professor grandfather’s gonna cringe but I didn’t think about not having one. You know, to be that it just was the natural thing of course, you should get a prenup, you’re signing a contract when you get married, of course, I should protect myself. And, you know, I was in a place career wise and financially that I had some things to protect at that point as well. For me, too. It’s more of a unique circumstance where I am self employed. And my income is volatile. And I wanted to make sure to protect the assets that I had built coming into a marriage to make sure that if we were ever to get divorced, and I can’t predict the future of my income, that I was protecting what I had already built. And my other big thing is that I had to well one book that was on the shelf, one book that was in process, just shy of getting published when we got married. And I earn royalties. That’s part of how I earn money. And I wanted to say, hey, royalties that I earn before are mine royalties that we earned in the marriage. I am fine to split but in the future royalties that I earn after divorce are mine and mine alone, I’m not splitting that profit with you. Because it’s a huge source of income for me. They’re just little niche things for me that are, like, wildly specific to our personal circumstances and how I earn money. But everyone, if you think about your unique situation is going to have something. And I also just wanted to make sure that we were both protected, and that we were being really fair to each other. And I, you know, I it’s just so funny, I get asked a lot not to well, kind of to justify the decision sometimes, but also, to me, it doesn’t seem like it should be an opt in, it seems like it should just be the default. This is everyone should just do this and have this conversation and sign this document. And, you know, it shouldn’t be bonkers and expensive either, but it just should be the common thing that we do.
Maggie Germano 30:55
Yeah, I agree. It makes so much sense that that would be true and Not only for both people to be protected financially but also to be having those conversations about money and understanding kind of where you’re disagreeing. If you’re fundamentally compatible even I be curious of how many people end up not getting married after having some of those conversations. But it’s it’s important to have them beforehand and continuously.
Erin Lowry 31:24
I’m sure it happens. I’m sure it happens that people start to go through the prenup process. They’re like you’re not the person I thought you were. I think statistically is probably pretty low, but I’m sure it does happen from time to time. My other big thing too, for anyone listening who comes from a moneyed background where your parents or grandparents might have said, Oh, whoever you’re married has to sign a prenup. Don’t tell that person that that’s why you want a prenup. That I think is a huge mistake. And today my parents want you to my grandparents want you to sign this because that’s really just going to sour your partner’s relationship with your parents with your grandparents with him. Remember it is this needs to be something between you and your spouse and this needs to be something that both of you want and that both of you are aiming to make fair one person should not be strong arming the other one into this agreement. Even if an inheritance is on the table that doesn’t just get to be a template This is what everyone in the family has signed type document it needs to be what is fair for how the two of you handle your money.
Maggie Germano 32:24
Yeah, I think that’s a really good point. And that can bring so much drama into the picture to me I I’ve heard that just from friends anecdotally of like, yeah, so and so is going to get an inheritance someday. And so their parent their dad, like forced them to get a prenup, and it brings just so much tension and drama into the situation that really doesn’t need to be there.
Erin Lowry 32:48
No, it doesn’t. And I also think, if you’re inheriting a sum of money, it’s also ultimately not your parents decisions, how the money that you inherit gets spent and What you think is fair with you and your spouse? But that’s a whole other conversation that you need to have with your parents. No, I agree maybe in a future podcast episode. Oh, another big one too that I forgot to mention when when people get a prenup. The other thing to consider is if there’s debt coming into the relationship, and you are aggressively helping your partner pay that off, you can account for that. So let’s say that your partner brings in X amount of student loan debt and you either pay it off in full The minute you get married, or you help pay it off very aggressively. You can create whatever system you want that is, you know, legal within the eyes of the law, to say, Well, if you leave me after a year, you either have to like pay it all back or X amount of this comes out of the settlement we would have and work out whatever feels fair to the two of you. But you also hear those horror stories like they got married and she paid off his loans or he paid off her loans and then she left in the next month. You know, that kind of clickbait stuff you see at least once or twice a year. But it does happen. And you can account for those kind of things as well.
Maggie Germano 34:06
Yeah, no, I think that that’s really important. So you mentioned earlier that you know, if circumstances change where maybe someone leaves the workforce for a period of time after having kids or even if you do have kids, and you want to maybe add something about custody arrangements and child support and things like that, how do you go about making changes to a prenup? Does it automatically become like a postnup?
Erin Lowry 34:32
Technically, basically, you kind of just override your prenup by adding another clause you can have certain kind of a kill clause essentially in your prenup that if certain circumstances happen and you don’t create a postnup it voids this particular part of the prenup or whatever. But what what would be smarter especially not to potentially put your whole prenup at risk is to just create a postnup that accounts for the new reality that you have I would also say, for people who are wondering is a prenup right for me, or is a postnup right for me, but more specifically with a prenup, not only should you consider assets and you know, we’re getting married later and later in life in a lot of cases, so you both might have amassed something to protect at that point. You also need to think, if you, for instance, have already been married before, and or if you have children from a prior relationship, that’s a situation that you just automatically should be going about getting a prenup, because you need to account for things like guardianship if something should happen to you, but you’re married a trust should get set up for your child. All of those kinds of things need to be accounted for in a prenup is a really great way to do that as well. That’s good to know, too, because I think that’s not something I’ve heard where like that can be kind of built into that rather than it being something completely separate. You could also have you I mean, you should have an estate plan. Anyway, if you have a child that’s a four year get pregnant, you should have Well, and then definitely once you have a child, you need to make sure you have an updated estate plan. But that is something that can also be accounted for, in addition in a prenup to make sure that there’s understanding around how different children will be cared for, because let’s say that you had a child, you get married or married again. And then you get divorced again, you don’t want your child’s inheritance or your child’s money tied up in that particular divorce, either. You want to make sure that things are being set aside for your child early on, especially things like a college fund if your kid is young, all of that.
Maggie Germano 36:33
Yeah. Oh, definitely. It’s it gets complicated, I guess as life kind of gets more complicated. Yep, it sure does. And so what are some of the arguments maybe that you and your partner had or disagreements, maybe debates that you had during the process or that you’ve heard other people have like things that are just they’re not as straightforward when you’re having those conversations.
Erin Lowry 36:59
I mean, for us, I think a conversation I don’t share all the ones that we had because you know, you got to keep some things personal and sacred. But I’ve a big one for us was definitely around the whole conversation about alimony and what is fair. I will also say there’s only so much that you can really account for in terms of custody and child support. Once you bring kids into the mix. The court does tend to be like, Listen, if this is like a very unfair structured agreement and a postnup, like we’re not playing here, so just know they’re not going to let you just get completely slighted in a postnup or even prenup scenario. But you know, it’s just a tense conversation at some point because what also is coming to play here is your different emotional relationships to money. Because what you see is a cut and dry. Obviously this is fair reality in your own mind is not necessarily how you’re Partner receives money. And I personally think inheritance is definitely the biggest battle that people tend to have. And for us and one thing that we shared, I can’t remember if it actually made the cut into this uncomfortable episode or if I just talked about it, but we talked about if either one of us were to receive an inheritance, and you know how that would get structured. And I remember feeling and saying, and this is a little insight into a potential vengeful version of myself. I said, if we, if I got money from my parents, and let’s say we use that money to buy a house, and then we got divorced. Under no circumstances would I be okay with you continuing to live in that house, especially with a new woman? It’s not happening. And it’s almost an irrational reaction. Like my dead parents didn’t buy us that house but if it was money that came from my parents, knock on wood or any Help. But if I got money from them, and if and this is all such hypothetical abstract probably is ever going to happen versions of reality, but you get so entrenched in these feelings and these viewpoints, and it comes up, it feels like it’s real, in the moment, these very hypothetical scenarios. And those are the moments that you need to just take a beat from each other. You need to be like, okay, I am feeling this type of way, I need to step out of this conversation for at least 30 minutes and take a breather, and we can come back to it. The other huge relationship conversation tactic that you need to use is, this is what I’m hearing you say, you need to repeat back to your partner, if you guys are in some sort of debate that where you’re like locked in, you’re not hearing each other. Have your partner tell you what they say, or what they’re feeling. And then you say what I am hearing you say is and repeat it back how you’re interpreting it, because that might not be at all what they actually are saying and you’re just not picking up exactly what they’re putting down. You’re picking up something else.
Maggie Germano 40:00
Yeah, that’s such a good piece of relationship and but advice in general, that’s something we learned in like a pre prenuptial, like counseling thing we did. And it’s it’s kind of amazing how different our own perceptions of what other people are saying can be.
Erin Lowry 40:17
Because it’s all layered with just how we think. And it’s all being filtered through our own brains. And those, you know, a person that you choose to spend your life with might be vastly different than you, which can be great in so many ways. But in these kinds of conversations, that can be really tough, because you just don’t see things the same way. Like my husband did not at all have the emotional reaction to a potential inherited scenario that I did. Like he was not territorial about stuff like that, like I don’t, it’s just money. It’s just a house. And I’m like, No, this is like, Oh my gosh, this is like, a weird trigger for you. And I can’t even tell you why. I don’t know why that’s a trigger. In the hypothetical scenario, that probably will never happen.
Maggie Germano 40:57
Yeah, I mean, to me personally, that makes sense. I feel like I would have a similar reaction, but everybody’s different.
Erin Lowry 41:03
Maggie Germano 41:05
So fast forwarding to an eventual hypothetical divorce scenario where, you know, you do have a prenup or a postnup. And then you do end up getting divorced, how do those agreements ended up being enforced during the process?
Erin Lowry 41:23
So great question because I haven’t gone through it. So I can’t speak from firsthand experience on this one. But basically, it’s meant to get used as sort of the playbook for how assets get split up. So instead of necessarily having to go through a ton of mediation or having a judge come in and do what is fair based on the laws of your state, the lawyers take a look like based on this agreement, you get x you get y everybody good. Is there anything that we could use to overturn this prenup in case it’s some sort of a contention situation maybe they’ll go down that rabbit hole, but assuming that you just kind of want to cut and dry we still think the screen off is fair. This is still holding up situation, it should be a pretty quick and tidy divorce. And that should also save you so much money. The other thing to think about in terms of a postnup is that if you already had a prenup, you might want to check in on it every couple of years just to say like, hey, do we still think this is fair? And if we don’t, why don’t we go ahead and get a quick postnup to amend whatever we don’t think is fair, just to again, in case you ever got divorced, then you’re not trying to slug it out in that scenario and trying to overturn it, or whatever. The I will say the one thing about a postnup because I do get asked like, how do I ask my partner for a postnup? If there’s not a qualifying event, like you know, stepping out of the workforce to raise a kid type scenario. It’s a pretty tough sell because it definitely sounds like you’re planning to divorce them like, Hey, I was thinking, why don’t we get a post up, or if you had laid groundwork for a prenup, and then ran out of time. It’s an easier sell. But if it’s coming out of left field, you’re going to need to have a real good reason because your partner’s definitely going to think that you’re planning to file for divorce.
Maggie Germano 43:10
That’s a really good point. So maybe timing it around life events.
Erin Lowry 43:15
Yep. Or just lay the groundwork for a conversation and then like, it could be a year long play before both of you get on the same page about a postnup.
Maggie Germano 43:23
Yeah, that makes sense. And now I’m like, I do not have a prenup. And I, like ever since I’ve heard you having these public conversations about it. I was like, oh, shoot, should we have had a prenup? And so now I’m like, you should probably get a postnup which I think because of how entrenched I am in the money conversations, my husband probably wouldn’t be too freaked out by it. But I will be curious to see how that ends up going.
Erin Lowry 43:47
That’s true. It’s all circumstantial. I don’t think my husband would have been weirded out if I you know, went at it if I didn’t want a prenup and then was like actually never mind. I think this is a good idea. I don’t think it would have weirded him out a ton, just like you wasn’t particularly sure When I asked for a prenup, right, and of course, the other big thing too is I didn’t ask for it like, hey, I want a prenup. Before we even got engaged, I asked what are your feelings on prenups? And we started more in that language. How do you feel when you feel that way? I will also say for a lot of people relationships to prenups are grounded in religion. And I respect that. But you also need to consider the fact that it’s not your church that dictates your divorce. It’s your state. So it’s the laws of the state that matter in that case.
Maggie Germano 44:38
Hmm, that’s a really good differentiation
Erin Lowry 44:41
It is and i and this is not to gun for anyone’s religion at all. It’s just to say, it is still important to protect yourself and to understand that this is not only a contractual obligation under God, if that is the mindset that you’re having, but all So with the state that you’re married in, and should things change? One, I bet God will forgive you. And two, you need to just make sure you know what the rules are.
Maggie Germano 45:13
Yeah, I think that that’s one of the biggest takeaways that you’ve said is like just understanding what the rules of your state are, so that you and your partner can decide if that’s fair. And if you want something different to apply.
Erin Lowry 45:24
Yeah, everybody handles their money so differently. I think that’s one of my favorite things about interviewing people, like how do you handle money and relationships? There is not one blueprint on how to handle money, and even people who like seemingly do it the same, like let’s say there’s five couples, and everybody thinks totally jointly, they still all do it differently in some degree at the end of the day.
Maggie Germano 45:46
Yeah, I mean, I’ve definitely seen that with clients of mine. I’ve worked with lots of different couples, and even if the general structure is similar, it’s always different.
Erin Lowry 45:55
Yeah, I can’t even begin to totally explain the system that we have worked out just Because we have way too many bank accounts need to simplify. But it just feels like it for us and our brains. It makes sense. But if I were to try to like hand over our budget for somebody else to handle for a month, I think they’d be like, absolutely not. I’m not dealing.
Maggie Germano 46:16
I get that. I mean, we tend to just make things kind of work in a way that is hard to explain, like you can’t particularly articulate it. And it’s just and it’s over the course of years too, as things kind of shift and change and money goes in different places that it’s very hard to replicate.
Erin Lowry 46:35
It’s so true.
Maggie Germano 46:37
And so are there any situations where someone might not want to get a prenup? Like it’s not in their best interest?
Erin Lowry 46:46
Mm hmm. I mean, the only thing I would say is if both of you are coming in truly at zero and, you know, unequivocally nothing things coming from either set of parents or grandparents. Like there’s no money coming in from anywhere. And we are both at 100%. Zero like, and maybe you’re 23 getting married right out of college, you don’t even have 401k set up type scenario. Okay, I get it, like, What is there to protect? What are you really having conversation about? I still think you should download the template and have the conversation, because it’ll just give you insight as to how your partner ticks when it comes to money. But that’s kind of the one we’re like, yeah, I mean, Okay, I get it. I get not wanting to invest that kind of money into a prenup. But as soon as you get a little further along, as soon as there are things to protect, it does need to be a serious consideration. And, you know, maybe financially right now a prenup just isn’t the right move. But you should be having these conversations with your partner for the potential to get a prenup in the future, especially if income situations drastically change for either of you.
Maggie Germano 47:53
Okay, that’s good. That’s really good to know. So is there anything else that we haven’t touched on yet that you want? Make sure that people understand about prenups?
Erin Lowry 48:04
I feel like I always walk away from this conversation like I should have made this point. You know, I guess my other point would be just like with everything about money, we always have emotional reactions. If this whole time you’ve been mentally arguing with me in your head, every time I’ve said something, if you’ve like mentally Shopback a retort, that’s fine. But I would also challenge you to question why you feel that way. And I’m not saying I’m the end all and be all of this conversation. But that for the most part, our emotional reactions to prenups really have no grounding in the logic and the law that are what what a prenup represents. It’s mostly this idea of you know, it’s setting you up for failure, you’re manifesting something negative is going to happen. again to that I say you have auto insurance, you have homeowners insurance or renters insurance, you have health insurance, because things can happen. We’re not asking for them to, but they can. And we’re protecting you against a potential threat that does exist. Because you can control your own actions, you cannot control what someone else does. And I just want to also make sure everybody goes into their marriage and into this financial agreement that you are signing up for, with both eyes wide open and being kind and generous and fair and loving to each other. No matter who I think also, it helps strip away this idea of like one person is on a stronger footing financially and therefore like might be perceived as having the control. Hopefully a prenup helps level that because you should not be signing a prenup. If you are feeling strong armed into it. You should not be signing a prenup. If you don’t feel it is fair. Especially if it’s not fair compared to maybe your state would be Better than what the prenup is, please don’t be strong armed into anything like that that’s not a healthy marriage. That’s not a healthy dynamic. This should feel good for both of you. In the end, even if the process to get there can be tense at times, but talking about money in your marriage is going to be tense at times, and other things. Marriage is not a cakewalk.
Maggie Germano 50:21
Exactly. Just because a conversation or a process is difficult doesn’t mean that it’s the wrong thing to do.
Erin Lowry 50:28
Yeah absolutely. In fact, most of the time, I feel like it ends up being the right thing to do and the right conversation to have just because it’s not easy. And being able to be that level of open and honest with your partner really just does bode well for the future of your relationship and the potential longevity because being able to have tough conversations with a spouse is a critical part of making a marriage work.
Maggie Germano 50:51
Oh, I agree for sure. So is there anything you’d like to make sure to promote to listeners you mentioned your books and Anything else that you want to make sure people know?
Erin Lowry 51:03
I just say if you want to chat about this more if you have questions about it feel free to reach out to me You can find me on Instagram @brokemillennialblog on twitter @brokemillennial. My website is brokemillennial.com and that contact button at the top go straight to my inbox. So if you have questions that you want to ask about it, if you have feedback about anything I’ve said about a prenup happy to hear it.
Maggie Germano 51:25
Great. Well, thank you so much. This was a very eye opening for me. And now I want to run and go get a postnup. And so I really appreciate the conversation and I could go on all day, but I appreciate you taking the time.
Erin Lowry 51:40
Well, thank you so much. And thanks for letting me talk about one of my favorite things,
Maggie Germano 51:43
Maggie Germano 51:49
Thank you so much for listening to the money circle podcast this week. If you like the conversations we’re having here and you’d like to go even deeper. Join the new money circle community in this safe intersectional family in this space, we will break down money shame and build community and safety for everyone so that you can find the support you need to gain control over your finances. Visit Maggie germano.com slash money circle to learn more and to join. If you’d like to get more connected with me subscribe to my weekly newsletter at Maggie Germano comm slash subscribe to learn more about my financial coaching services, my speaking and workshop offerings or just to read my blog visit Maggie germano.com You can also follow me on instagram and twitter at Maggie Germano. I look forward to hearing from you. Bye
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