Money Milestones: How can you ease discussing a prenuptial agreement?


MICHAEL LIERSCH: Hey humans. I'm Michael Liersch, and this is My Next Move podcast, presented by JPMorgan.  I'm a behavioral scientist, which is just a fancy way of saying I help humans understand their behaviors to make better money decisions.  Each episode, I take a look at our interactions with money and consider science-based techniques to help you move closer to your financial goals. 

This is the Money Milestone series, where over the course of several episodes I’m going to talk about moments many of us encounter over the course of our lives and the related financial implications.

In this episode I’d like to welcome Gigi Orta back to the show. You may remember that last time Gigi gave us her expert view on the complexities and the dos and don’ts of divorce and how splitting up can affect the family unit, sometimes even in positive ways. This time around we’ll talk prenuptial agreements, sometimes called prenups. These legally binding contracts are a really good way to gain alignment in case a divorce happens, way before it happens.

When we think about entering into marriage, there are a lot of things that one could consider doing with their potential future spouse or partner.  Do you have any ways in which people should frame this idea of entering into a marriage?  What should they be thinking about?  What should they be doing, Gigi?

GIGI: So I think when you're entering into a new relationship that is going to be legalized as a marriage, I think the couple needs to be thinking about some of the most obvious things. Everybody knows they should be thinking about children, religion, finance, money.  Divorce, potentially, is the other big one.  And it's a topic a lot of people are afraid to talk about.  And my goal is to make that a positive experience for people.

MICHAEL LIERSCH: So how would you possibly make positive the idea of talking about divorce when you're about to enter into a marriage?

GIGI: It's not easy to do, Michael. But I do think there is a way to approach the reality that there's a chance that the marriage is not going to make it through till death do they part.  But I don't think that has to be such a bad thing.  And I think that when a couple is thinking about entering into a marriage and protecting their assets, typically, that’s the obvious thing that they're trying to protect, which is going to be dictated by a premarital agreement or a prenuptial agreement. 

I think you can have that conversation in the context of if the worst happens, we should protect each other and our children.  If the best happens, we should, at the same time, be talking about what happens if we die happily married.  I am an estate planning lawyer by trade.  So talking about what happens on death is very normal to me.  I like to talk about what happens on death.  If you have that conversation at the same time of what happens if we divorce, I feel like it makes it a little bit easier.

MICHAEL LIERSCH: Interesting, because what you might be doing is really creating almost a decision tree of potential future things that are going to happen. And let's just navigate what those potential future things could look like rather than focusing on this idea of we might get divorced or we might die.  Well, I guess that that is going to happen, to your point, Gigi.

GIGI: That’s right.

MICHAEL LIERSCH: So we are going to die. What happens next?  You're really taking into account future possibilities that span a spectrum of potential outcomes rather than just focusing on one that might be particularly upsetting or depressing at the time.

GIGI: That’s right. And the ability to have this first really difficult, likely difficult conversation that’s pretty adversarial at its core is a challenge that the couple should embrace.  How did we handle that as a couple?

MICHAEL LIERSCH: And when you think about how you approach the discussion then of marriage but in the context of what happens if you were to get divorced, what would be your key recommendations to keep that in a positive domain rather than shifting into that more disruptive or negative domain?

GIGI: Well, I think the first thing that every potential spouse needs to understand is what the rights and obligations of marriage involve. So before you can begin to start having a conversation about what would happen on divorce to this, that or the other thing, understand what your rights and obligations are already.  Then, I think, you should understand... and I should back up.  That is different state by state.  So having a really good understanding of what you are already entitled... would be entitled to by law is a good place to start. 

I think language is really important.  When we begin to talk about prenups, in California, where I'm from, they're called premarital agreements, we get into the language of what I will deserve or what I will get.  And I want to...

MICHAEL LIERSCH: What I'm entitled to.

GIGI: What I'm entitled to. What you're going to give me.  I like to be really thoughtful around language because I think it helps frame the conversation and the tone.

MICHAEL LIERSCH: So when you think about this framing, and I want to highlight we have a global audience, so you're talking about California and the United States of America. And we have listeners in Asia, in the Middle East, in Europe, in South America.  So in a lot of different domains, even Australia.  Those ideas are different, I would assume, across a lot of different countries.  So if you're just looking in the United States of America, they could be different state by state, but they're also different globally as well.

GIGI: Absolutely. Yeah, absolutely.  I think one thing that people don't understand also, speaking globally, is the concept of a common law marriage that you cannot be legally married, but the law could view you as married in terms of the rights and obligations I've been talking about.  Even though you never legally get married, you may still have the same consequence upon splitting.

MICHAEL LIERSCH: So how would people understand? So you’ve talked about this idea of common law, kind of implicit marriages all the way to the explicit version where we actually get into contract where there may even be a prenuptial agreement, which is essentially a contract that’s looking into the future if we are to divorce.  How does someone really get a handle of this information within their own specific state or country?  Who do they go to?  Where do they turn to for that type of information or advice?

GIGI: Yeah. I think it's a good question.  Certainly, there's a lot of resources out there on the internet.  Obviously, you can do your own self-study in terms of the rights and obligations in your state, your country.  There are family law lawyers that will help you to understand that.  There are also premarital mediators, collaborators, counselors that understand what's going on in your jurisdiction.  And I would encourage everybody to learn on their own what's going on.  And then to have the conversation as a couple.

MICHAEL LIERSCH: So would you encourage then couples to learn together or separately and then come together and have this conversation? What's your advice there?

GIGI: I would think separately would be a good idea and then together.


GIGI: Because I think when you try to do something together and you don't yet know the framework, it could... you could already stumble upon a conflict without even knowing it.

MICHAEL LIERSCH: Ha, without preparation.

GIGI: Right.

MICHAEL LIERSCH: Okay. So if I found out that there is something involved in, for example, my, let's call it what I would want within a prenuptial arrangement based on my experiences or asset base, and my future partner or spouse disagrees with that concept, I could create a conflict unknowingly as I'm gathering that information.  So why not gather that separately first, have time to ruminate, or think on it and then come together and have a less charged discussion.

GIGI: Right, because I think goal number one is to determine your own personal goals. Step two is to determine the goals as a couple.  And if you don't have your own goals yet, it's going to be hard to determine what the goals would be, as a couple, about what happens if we're no longer a couple.  So it's very charged at the outset. 

That’s why I think if you get a lot of information on your own and you think, all right, I have a pretty good idea of where I want to go with this.  And then I can come to the table and say, "How do you feel about these things?  These are the three issues that I've spotted that I think are going to come up or the three assets that I think we're going to have to be worried about or the three things that concern me. How do you feel?"

MICHAEL LIERSCH: So let's take on a common example of a goal. So many individuals have a goal of keeping assets that their family holds within the bloodline of their family.  I hear that all the time.  How would you suggest if someone has that viewpoint but then the person that they're coming together with around a marriage has the opposing viewpoint?  How does someone have that dialogue?  So one person says, "My goal, my personal goal is to keep assets that I bring to the marriage within the bloodline."  The other person says, "Actually, I don't have that viewpoint.  I think we should just come to the table sharing everything."

GIGI: Well, I... let me... I'm going to back that up a little bit and say that when you're talking about a prenuptial agreement, you're really going to tackle three main areas on divorce. One is going to be the division of assets.  The second is going to be spousal support or alimony.  And the third is going to be child support. 

So where the division of assets comes into play is mine is mine, yours is yours.  Okay, that’s fine.  But spousal support has to be layered in on top of that.  And often, somebody will agree to a 50-50 division of assets without understanding that spousal support may apply on top of that, leaving what we would call the monied spouse with eventually less than 50%. 

So that’s why I think understanding your rights and obligations at the beginning helps you frame the conversation about our goals as a couple.  If my goal is to support my family even if we're no longer a legally married family... You're still a family.  If my goal is to support them, then I can begin to think about that as we're framing the prenup.

MICHAEL LIERSCH: Interesting. So within that concept, it really creates a situation where you need to find out what the common goal is then.  I see.  So you're not just coming to the table with your separate goals.  You're trying to find out what the overlap is here in terms of your desired future outcome should, let's say in this case, divorce occur and how would we want to unfold... that to unfold in a way that we both feel is fair and that represents our family situation in the most constructive and productive light.

GIGI: Right. Like I would say to you if you came to me and said, "I want to protect my family's asset, my family business." I would say, "That’s fantastic.  How do you feel about supporting your wife and your children if you're no longer married?"  And if you were to say, "Well, I absolutely want to do that," then that may lead me down the road of suggesting then maybe we have a different conversation about those family assets and how they could be used to support the spouse and the kids if needed.  It at least opens up the dialogue.

MICHAEL LIERSCH: I’d like to thank Gigi Orta for really helping us zero in on some crucial considerations when it comes to prenuptial aggrements. Remember, when it comes to creating a prenup, determine your own goals for the agreement, as well as the joint goals you have as a couple. That’s it for this episode of My Next Move, produced by JPMorgan. If there's a topic you human beings want me to discuss, email it to I read all of the suggestions myself, and there have been some very interesting ones so far.  Please keep them coming.  If you like My Next Move, please tell your friends and rate the show wherever you listen.  I'm Michael Liersch, reminding you to make your next move today.


Discussing prenuptial agreements, while important, isn’t easy. Wealth Advisor Gigi Orta and Michael Liersch explore ways to reframe it more positively in this episode of My Next Move. The first step: Learn your rights and obligations. Then think about your own goals. Finally, dialogue with each other, looking toward common goals and supportive outcomes. 

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