Transcript
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This episode is sponsored by Prenupscom.
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The truth is, every married couple has a prenup a set of rules that defines your legal and financial relationship with your spouse.
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You either choose your own rules or use what your state gives you.
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At Prenupscom, they write prenups that actually help couples stay married.
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Their specialty is fair prenups that help couples plan for a healthy financial relationship.
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Don't let the state decide your marriage rules.
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Make your own.
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Visit prenupscom.
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Slash sugardaddy to learn more.
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That's prenupscom.
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Backslash sugardaddy and get the prenup that helps you stay married.
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Already married?
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No worries, they do post-nuptial agreements too.
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That's what Brandon and I did after eight years of marriage.
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In today's episode, brandon and I will be discussing what we put into our postnuptial agreement.
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We will have been married for almost nine years this year and we decided on a postnup for our financial portfolio.
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It made sense after talking to Aaron Thomas, our family law attorney and the founder of Prenupscom, and so, if this is of interest, we hope you'll stay tuned.
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Hey babe, what are we talking about today?
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Today we are talking about what we put in our prenup.
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Yes, yes, oh no, our postnup.
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Oh sorry, okay, let's start I'll say we've been married for almost nine years now, so it was kind of a little bit late for a prenup.
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Yes, well, you know the prenup.
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Apparently we don't know the difference, but apparently is maybe an easier process since you haven't already combined assets.
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But for us, the process of getting the post-snap was actually extremely easy.
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It took less than 60 days.
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We actually the whole family had the flu during the process, but I think had we not had the plague, we could have easily knocked it all out within a month.
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So it was painless.
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What did you think?
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No, I definitely thought it was painless and it also helps that Aaron Thomas' process is very thorough and he's very consultative in regards to how he goes about the process, because obviously a lot of us don't know what a post-nup or a pre or prenup should entail.
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So they walk you through their process and there was a lot of things that, like we didn't even think would be talked about during the postnup.
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We very quickly realized that it's really just about creating your own rules, right, and so every state that you get married in has a prenup already in place.
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So when you sign that marriage license, you are signing a prenup, and I guarantee you you didn't read what it said, because I know we did not read what it said.
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No, no idea what North Carolina's is.
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Yeah, and I'm pretty sure that the rules that we have now come up with in this post-nuptial agreement process are much more in line with what we actually value, what's important to us, than what the state of North Carolina in our instance, whatever that document says that we signed many, many years ago.
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So for us it was really more about understanding the importance, kind of we're designating it as insurance for our love, right, we hope to never actually need it, but now we feel better having it in place and, honestly, part of it was we wanted to help educate our audience about what the prenup and post-nup process is like, what kind of things you can include, what we included.
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It's all about honest and open conversation for us, and so we wanted to give you some insights into what is actually in our postnup and why we decided on those things.
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Yeah, and if you're a new listener, you haven't listened to other previous episodes that we have.
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We had Aaron Thomas on a while back and that completely opened our eyes and changed our viewpoints when it comes to post-nups and pre-nups.
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Yeah, so it's kind of a progression.
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You can listen to the full episode with Aaron that we did a few years ago.
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We'll make sure to link it in the show notes.
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Then we did a kind of a hey, we're in the middle of the process, here's what's come up for us, and now that we have a, you know, signed, sealed and delivered document, so to speak, we wanted to do a follow up to let you know you know high level what is in our post map and why it was important, and some things that we learned along the way that we think would be important for others to know about as well.
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And I definitely want to emphasize that.
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You know, if you're listening to this episode and you're thinking like, hey, I don't have a lot of assets, me and my wife or husband or whatever partner are not going to break up, blah, blah, blah, blah, blah all the head trash that we had before I highly encourage you to listen to that episode with Aaron Thomas because, like Jeff said earlier, you know you already have a prenup for each state that you live in.
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There's one already written, so his biggest take was why not write your own?
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Also, through the process of creating a post-nup or a prenup, you talk about a lot of the financial stuff that a lot of people don't talk about before they get married or even during their marriage.
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So it really helps you to actually iron out and have these conversations around money that you should be having, or you should have had, prior to getting married, and it gets you on the same page as far as how you want to actually navigate your finances.
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Now, obviously, it's a little bit different for Jeff's, not because we have these conversations all the time, but it definitely brought some things to light that we hadn't actually thought about.
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All right, real quick, I want to speak to the person listening who feels like they can't work with a financial planner yet because they're carrying a lot of debt.
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If this sounds like what you've been needing, go ahead and schedule a call with me.
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The link is in the show notes.
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Let's take the first step together.
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Well, and one thing that I think that was really important and eye-opening for us that we talked to Aaron about is, let's say, we would have done this in our 20s, right?
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Or if you're first getting married and it is a prenup, but maybe you're a young professional, you don't have a bustling 401k, whatever that is.
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It's not necessarily about what you have right now.
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It's about what you are building in the process of your marriage, and so if you're thinking about your career progression, what you're able to contribute to your retirement accounts and the money that you're making over time, that's where the significance comes in, because you're building and growing your wealth individually and together, and so you want to protect those assets yeah, definitely.
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So you start the process by detailing your assets and your liabilities as an individual.
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So I basically wrote down everything that I own, so all of my accounts, my retirement accounts, my savings, my checking, my debts, etc.
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Brandon did the same and then, basically, a net worth statement is created from that.
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So that is just the baseline of, as of this date, what do you have in these accounts and are these accounts yours?
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So that was very simple.
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This is something that we were able to put together pretty quickly Again.
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These are conversations that we have all the time, numbers that we are aware of and look at all the time, and so for us nothing came up that we weren't already aware of in either category when it comes to assets or debts.
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But this is something you might want to consider as you go into the process that you will be disclosing what you have, so you know if you haven't been very honest, if you've got some secret accounts.
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This is the time to have that conversation, before you put it on paper, because it is going to come out.
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In all honesty, if you have secret accounts at this point in time and like you're getting ready to get married or you're already married, I would say that there's some other issues that probably also need to be addressed as well.
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Yes, absolutely.
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We've always been on the record to say we believe in having separate accounts, not secret accounts, and that's something else that we talked to Aaron about is how do we want to structure the money in our home, and that, I think, is a really interesting conversation, regardless of if you're a new couple, you know, or you're planning your life and your you know your marriage together, or you're established, because we go through different phases of how money comes into the home, right.
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So I work a corporate job, so I have a steady income.
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You know, I have my 401k, my match, health insurance, etc.
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Brandon is a business owner, so he puts a lot of the money that he earns back into his business.
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I would say that, no, two months are the same.
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You know, sometimes he's onboarding multiple clients, sometimes there might be a lull, and so for us it works well that I have a consistent income and he has a flexible income.
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So those are things that we wanted to also kind of point out, because money flows differently, and so we decided to go with the what is it?
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The inside out right, where you put everything into one pot and then you take out what you need for your own individual kind of spending.
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Yeah, that's what it was.
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Okay, I know Sometimes I twist it up in my mind, but inside out you dump it all into one pot and then you pay your communal living bills from that, your groceries, your home expenses, etc.
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And then you separate out whatever you, if you decide on this, what you want for your individual spending money.
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That then goes into your own account.
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Yeah, so basically the structure of that is is that we have a joint checking account together and the money that we're, you know, making, you're getting paid on a you know, whenever you get your paycheck, it goes into the joint account and then that's divvied up in regards to how the bills are going to be paid there and whatnot, and then you separate out, like any additional spending money that you want to have for yourself.
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So let's just say hypothetically you know bills come to $5,000 for the for the month, our money goes in there.
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But if we put in, say, $8,000, then maybe Jess takes out an additional $2,000 for her spending and everything like that and I take out an additional $1,000 on my end.
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Yeah, so you can do this.
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We talked about doing it based on a percentage.
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We talked about it based on just equal amounts.
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I am the higher earner, and so we also talked about me getting more spending money for myself in my personal account than Brandon.
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So those are those conversations that you want to start thinking about.
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Right?
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Does it make sense to split things 50-50 if one partner is earning significantly more than another?
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Right?
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I feel like you see things like that on different social media posts all the time, like, why are we splitting all the bills down the middle when my partner makes four times as much as me?
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So, again, we're not here to tell you what your rules should be, but these are the things that you can start thinking about as you potentially prepare for a pre or a postnup, because it's going to be an important part of the conversation how do you want your money to work in your household?
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Also too, is doing a deeper dive into some of the quote unquote discretional spending which are needs, but they're not the same amount spent each month.
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So, for example, a lot of the stuff that the kids need, like clothes and stuff of that nature, just buys.
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So obviously she also like she makes more, but then also she needs more money.
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More money for that anyways, because she's the one that's handling those transactions.
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Yeah, I mean I'm the one replenishing the kids' clothes, buying birthday presents for when we go to parties, booking vacations.
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I naturally, in our relationship, am the quote unquote spender, which obviously we don't like that term because it's dumb but I spend the money because I'm the one handling a lot of those just expenses, naturally, you know, buying things for the classroom party at the end of the year and teacher appreciation and all of those things.
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So it makes more sense in our household for me to have quote unquote more spending money, because I spend more, I need to spend more because I handle it all Exactly.
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I don't do.
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Exactly.
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One of the other things that we basically said is our retirement accounts are our own, but we will be contributing the same amount.
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So Brandon obviously is an entrepreneur.
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That doesn't mean that he can't have his own retirement accounts.
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You know, I get a company match and so whatever he puts into his retirement account percentage-wise, I'm going to put into my retirement account and vice versa, and we'll decide on that on an annual basis.
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We just want to make sure that we are both equally contributing to retirement, regardless of the fact that I get a match and he works for himself.
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So that was something important that we wanted to put in there.
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Well, the biggest thing there is that God forbid something happens and we do end up getting divorced is that that's already been established, that her retirement account is hers and my retirement account is mine.
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That's what the postnup was for, because, as I have said in previous episodes, I started my finance career working for Fidelity and what's called a defined contribution so your 401k plans, 403b, stuff of that nature, and what I would often see sometimes come across on calls is what's called a quadro.
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I can't remember.
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The top of my head it's an acronym.
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I can't remember what it stands for.
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The top of my head it did come up in our meeting though, but basically what?
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it is is that when you don't have those postnups or prenups in place to say, hey, if we were to separate, then your retirement account is yours and my retirement account is mine, then what happens is to say, traditionally the man might be the one making more money, he has a larger retirement account.
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Say, you have a wife that's a stay-at-home mom.
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She didn't have a retirement account, so now she's entitled to half of his.
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As she should be.
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I'm not disputing that, but I could tell you that when those calls come across, I'm talking to the person who's the owner of the account and they're having to split theirs.
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They're not necessarily happy.
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Yeah, no, and I get that.
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And that's where we wanted to come in and just say what's yours is yours, what's mine is mine.
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We're not splitting it.
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We're also in the age you know.
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Our parents are getting older, they're boomers, and so, you know, eventually there will likely be some sort of inheritance coming, and so we also designated that your inheritance is yours and mine is mine.
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Now, one of the clauses that we put in which I thought was really good and Aaron suggested this is that if you put money from some sort of a windfall inheritance, big bonus, whatever it might be into your joint account, that it needs to have a document attached that says this is now becoming joint property.
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And so if I get an inheritance and I put it in my account, brandon can't say anything about that.
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It's my inheritance, it's already defined.
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Now, if I choose to use that on family vacations or home improvements or to buy him whatever I want, that's totally fine.
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But if I put it in our joint account, we need to have a statement notarized saying that this is now joint property, and I do think that that could help eliminate any kind of confusion of well you know, when everything was good, I put down this deposit on the house or this or that and now you owe me half.
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No, we're not doing that right.
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I mean, that's come up in my own family with a down payment on a house that was my mom's inheritance and my parents then got divorced and I still have to hear about it to this day, like I'm tired of it.
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I don't want to have those conversations.
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If I'm contributing something from a windfall, a bonus, a whatever, and it's going into our joint account, we will have a statement notarized that says this is now basically our community property, this is our joint property and we can't bring it up later.
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And I think that that just avoids some of those things that just come up because people are emotional about their money and we want to avoid all of that emotional you call it head trash that comes with giving money when you're in a good place, but then when you're not in a good place, then you want to be pissed about it.
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Yeah, it's just one of those things where nobody goes into marriage with the preconceived notion that they're going to get divorced.
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But the reality is is that around 50% of marriages end in divorce.
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So the idea behind this is is like any of the minutia when it comes to the splitting of money, let's get that out of the way in the beginning, while we're happy with the hopes that we never need to use it, but if it does come to that day, then we've already taken care of it and even that scenario.
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So especially with us, like you know, since we do have kids, I think, if you got to the point where a divorce happens, that if you could take all that stuff that could potentially lead to you guys not liking each other during the divorce process take that out of the table since it's already settled then that could be will lead to a better relationship post-divorce, which obviously would be helpful when you have kids involved in the scenario.
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I feel as though, like for people that get divorced when they have kids, a lot of the stuff happens during the divorce that makes things just even worse, yeah, and then that leads into negative interactions between the parents when it comes to co-parenting as divorcees.
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Yeah, and you can't put.
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We do have almost like a clause about our children in the post-snap and we'll talk about that momentarily, but you can't actually put any kind of custody or child support information into your post-nup, so it can only pertain to the two people that are married.
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It cannot contain information about any other people and or minors.
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But we basically put in a clause of like here are the things that, while we love each other, while we respect each other, while we're happy, we expect, in the event that we do dissolve this marriage and so we'll get into some of those things From a high level we put in there that we're going to have an annual money meeting where we talk about how much have we spent, how much have we saved, what our retirement accounts look like.
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It's basically like a mini state of the union right Of like our household We'll have more than one a year, but our postnup does have that.
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You know, we at least have one year.
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Yeah, so we'll talk about our assets, our debts, disclose any changes in income, review the previous year spending, budgeting for the upcoming year, discussion of retirement contributions, subscriptions, reoccurring expenses, insurance policies for auto home, reoccurring expenses, insurance policies for auto home, health, medical disability, identifying large expenses that are coming up, and then upcoming travel budget conversations.
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So those are things that we talk about anyways, but if that is not something that you're currently doing, you can put in there that at least once a year you will have designated time, and you could even put in there that you're going to sit down, maybe with your financial advisor or financial coach or whoever you might be working with, to make sure that that happens and you don't just keep putting it off.
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So I thought that was something good to have in there.
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No, I agree.
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The other thing that we put in is that, aside from the inheritance belonging to the receiver, is that anything above $500 taken out of the joint account needs to have a discussion first.
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But then we also, because I said listen, if I'm at Costco shopping for the annual family barbecue, I'm going to spend more than $500.
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I don't need to stand in line to call Brandon to make sure that I can buy these burgers and hot dogs.
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So we put in there that that is aside from the general household expenses.
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It's also like a single item, like you're going to buy one item itself that costs $500 or more as compared to like oh, you went shopping.
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Or you went grocery shopping.
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You're going to buy multiple items.
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Yeah.
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But again, if you're not used to maybe sharing the expenses, looking at the accounts together, you don't want large amounts of money, whatever large is to you.
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You don't want large amounts of money coming out and then somebody goes to swipe a card and then you're surprised because you know there's thousands of dollars missing.
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So we just put that little clause in there.
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That way we're encouraged to have those conversations and if one of us wanted to spend 500 or more out of the joint account, we would just either send a quick text message or pick up the phone and have a quick conversation and then decide how to move forward from there.
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One thing that was interesting that came up for North Carolina, because we put in there that we are not going to, in the event of us dissolving our marriage, we are not going to pay each other alimony.
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I've said that from the very beginning.
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I'm like I'm not paying a grown man.
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It's just not going to happen.
00:21:15.335 --> 00:21:36.378
But the state of North Carolina does not actually allow that to be in a post-snap, and so we have a clause in there that states that we are taking our own financial responsibilities and that we have enough assets and means to cover our own expenses outside of alimony, so we would hope that that would pass in a court of law.
00:21:36.378 --> 00:21:45.599
It's not something that I think we're super concerned about, but legally we could not add the statement in North Carolina, so something to keep in mind.
00:21:45.961 --> 00:21:53.884
Yeah, essentially, the clause was to provide context of what our wishes were at the time that we did the posting up.
00:21:53.884 --> 00:21:59.494
So, like she said, hopefully if it ever came to that point of a divorce, then the court would be like.
00:21:59.494 --> 00:22:02.432
You know, this is what you were talking about, this is what you wanted this time.
00:22:02.432 --> 00:22:06.471
You might be angry now and want something different, but this is what you wanted.
00:22:06.750 --> 00:22:06.971
Right.
00:22:06.971 --> 00:22:24.576
Um, one thing that I think and I, as I've talked to some people about this, I really was more interested in the logistics of, like, what happens if we were to split up right, Because we do have children, we do want to, of course, be happy co-parents, we want to.
00:22:24.820 --> 00:22:25.409
We own a home.
00:22:25.670 --> 00:22:32.071
We own a home, we want to minimize the amount of disruption they have in their life, and so we talked a lot about.
00:22:32.071 --> 00:22:33.516
Well, who moves out?
00:22:33.516 --> 00:22:34.698
What does that look like?
00:22:34.698 --> 00:22:36.883
How much time do you get to move out?
00:22:36.883 --> 00:22:39.734
Let's say we dissolve our marriage.
00:22:39.734 --> 00:22:49.003
I mean, brandon probably can't go out within the next week and find another apartment, right, so how much time does he have, or do I have, to move out?
00:22:49.109 --> 00:22:50.150
Like what's a reasonable time.
00:22:50.170 --> 00:22:51.613
We decided Brandon's moving out.
00:22:51.613 --> 00:22:52.675
That's in the post-nup.
00:22:52.675 --> 00:22:58.539
So Brandon, according to our post-nup, has 60 days to find a new residence.
00:22:58.950 --> 00:23:16.313
And also just to be clear to those people out there like for our situation I don't speak to everybody else's situation, for our situation I put in the post-nup that I would move out because that was my choice, that I think, from a structure standpoint, to keep things as normal as possible for the kids.
00:23:16.313 --> 00:23:29.122
And I think from a structure standpoint to keep things as normal as possible for the kids, I think as a father you can try to do as best as you can to quote unquote be 50-50 with a mom, but the reality is that majority of the time that's not the case.
00:23:29.122 --> 00:23:38.468
So I wanted them to be there stability-wise with her more if we went through that process of transitioning.
00:23:38.867 --> 00:23:46.824
Yeah, so Brandon has 60 days to move out and another 30 days after that to remove all of his things from the house.
00:23:46.824 --> 00:23:48.095
Let's be serious.
00:23:48.095 --> 00:23:49.970
Brandon has a laptop and some clothes.
00:23:49.970 --> 00:23:51.676
Like that's all he's getting.
00:23:51.930 --> 00:23:53.532
I am not, I am not like.
00:23:53.532 --> 00:23:58.761
So everything in our house from a design standpoint, I have not put any input.
00:23:58.761 --> 00:23:59.383
I shouldn't say that.
00:23:59.383 --> 00:24:00.644
I wouldn't say I haven't put any input in.
00:24:01.210 --> 00:24:05.334
I've always asked you, she always asked me, but I'm not good at that, so I'm like whatever you want.
00:24:05.334 --> 00:24:17.624
If I have something where I'm adamantly like, no, I do not want that, she's like okay, you don't have a lot of opinion, so I'm going to listen to you on that one, but 99.9% of the stuff she's done, so like it wouldn't necessarily be anything for me to take.
00:24:17.624 --> 00:24:28.442
However, we did put in there like a reasonable amount of our joint assets would be specified, would be given to me to purchase furniture for a new place.
00:24:28.829 --> 00:24:31.237
Yes, so Brandon gets a $5,000 allowance.
00:24:31.237 --> 00:24:44.574
Again, my concern at this point, if we were to get a divorce, is not Brandon, but if our children are going to be with Brandon in whatever new living situation he's going to be in, I want them to have a home with Brandon.
00:24:44.574 --> 00:24:52.718
So we did put a clause in that you get to take $5,000 from the joint account to furnish your new place.
00:24:52.718 --> 00:25:02.407
So in my head I was like listen, I don't need this man on Facebook marketplace buying some old rank mattress, no like don't buy things on Facebook marketplace.
00:25:02.488 --> 00:25:07.160
I'm just saying again, this is like you know, we're happy and then now we're not.
00:25:07.160 --> 00:25:24.135
So I'm thinking about my children, our children in this event of no, they still they're used to sleeping in their own nice beds with nice bedding, and I mean they're spoiled right, their own nice beds with nice bedding, and I mean they're spoiled right, like we have a great life, so we need to maintain that, and so I didn't want to do the well.
00:25:24.135 --> 00:25:26.019
Who gets this bed and who gets this sofa?
00:25:26.019 --> 00:25:27.042
And what about this table?
00:25:27.170 --> 00:25:32.883
And no, just go to rooms to go furnish your place, get the kids what they need.
00:25:32.883 --> 00:25:39.059
Here's money from the joint account, and so those are the things that I'm really glad we talked about.
00:25:39.059 --> 00:25:40.462
We talked about them with Aaron.
00:25:40.462 --> 00:25:42.772
We said, well, what do what do people do?
00:25:42.772 --> 00:25:45.182
What is in your prenup or what's in your post up?
00:25:45.182 --> 00:25:51.046
You know we talked about these scenarios and now that it's outlined, I feel great Like again.
00:25:51.046 --> 00:25:56.220
We don't ever plan on using this, but in the event that we did, it's already written out for us.
00:25:56.220 --> 00:26:04.260
We don't have to now be pissed and angry and exhausted with each other and figuring out, well, when are you going to get your stuff out and how much time do you have?
00:26:04.260 --> 00:26:06.832
And well, no, I don't want you taking money from the account.
00:26:06.832 --> 00:26:07.974
It's already decided.
00:26:07.974 --> 00:26:12.092
We decided on it while we're in love, while we respect each other, while we're good.
00:26:12.393 --> 00:26:17.663
It's also like any planning that might be seen as like quote unquote a negative situation.
00:26:17.663 --> 00:26:26.493
You do the planning when the situation is not occurring and it makes it so much easier so that if that situation does occur, you already have the plan in place.
00:26:26.493 --> 00:26:28.592
I mean, it's like what's it like for?
00:26:28.592 --> 00:26:29.914
Like a business, like crisis planning.
00:26:30.296 --> 00:26:36.105
Yeah, yeah, and like um uh succession planning right, like um uh succession planning right, like I mean that's.
00:26:36.424 --> 00:26:50.582
I mean like important you think about anything like I mean even just like, think about from like a standpoint of, like you know, first responders, stuff like that they're running through this stuff they're running through this stuff and practicing when it's quote, unquote, not real right so that when it is real, they know what to do.
00:26:50.582 --> 00:26:53.500
Yeah, so this wasn't a morbid conversation.
00:26:53.500 --> 00:26:58.980
It wasn't anything that we got emotional about because, like I said, we're planning for something that we hopefully never have to use.
00:26:59.931 --> 00:27:06.044
I mean, I think we were probably the exception here, but we probably nerded out about it, because I loved this conversation.
00:27:06.044 --> 00:27:13.378
I loved this detail of, like, what happens, how much time do you have, how much time do we have to separate our bank accounts?
00:27:13.378 --> 00:27:15.534
How much money do you get to furnish your new apartment?
00:27:15.534 --> 00:27:19.963
Like I love that because now we know and we don't have to talk about it again.
00:27:20.410 --> 00:27:33.673
It also kind of like I'm trying to think of, like how I want to phrase this, but it also opens you up to understand the conversations on certain topics that maybe you haven't had before, and what your partner's thinking is.
00:27:34.193 --> 00:27:37.961
Yeah, I mean, was there anything that we weren't aligned on, though?