Welcome to the Bogleheads Chapter Series. This episode was jointly hosted by all the Life Stage Chapters and recorded February 4th, 2025. It features Adam Cordova, a specialist in collaborative family law, presenting the topic, how to use prenuptial and postnuptial agreements as financial planning tools. Bogleheads are investors who follow John Bogle's philosophy for attaining financial independence.

This recording is for informational purposes only and should not be construed as personalized investment or legal advice. So hello everyone. I'm Alan, one of the coordinators for the Retired Life Stage Chapter, but tonight's topic will be relevant for many Bogleheads, regardless of life stage. Statistically, over 40% of first marriages and 60% of second marriages end in divorce, often with significant financial impact to all involved.

Unfortunately, the potential role for pre- and postnuptial agreements as financial planning tools remains somewhat taboo in everyday conversation, and is only occasionally discussed in the forum with virtually no mention, actually, in the Bogleheads Wiki. For that reason, we scheduled this meeting to provide a current overview of the topic.

And we're very fortunate to have our guest presenter this evening, Adam Cordova, who's a Boglehead and a Florida-based lawyer specializing in collaborative family law and an expert on the topic. Rather than me muddling up his bio, I'll let Adam introduce himself and proceed with his presentation and questions and answers.

Thank you very much, Adam. I'll turn the mic over to you. Well, Alan, thank you so much. Let me share my screen and, okay, so Alan, can you see the screen? Yes. Everybody else can see it? Right. All right, perfect. So, we're going to be talking today about how to use prenuptial and postnuptial agreements as financial planning tools.

But before we do, I'd like to provide just a few disclaimers. Disclaimer number one, I'm a lawyer. I like disclaimers. If you don't like it, well, sue me. And disclaimer number two, please don't sue me. You see, Alan, that's what we in the industry call a lawyer joke, okay?

I just want to make sure. Okay. Anyways, disclaimer number three, I am a lawyer, but I am not your lawyer. As Alan mentioned before the recording, this is not legal, financial, or tax advice. This is for educational purposes only. And disclaimer number four, I am only licensed in Florida.

So, I hope to make this broad enough to be generally applicable and I think regardless of where you actually live, you'll find something that could be helpful. But just please keep in mind, if you don't have pythons swallowing alligators and iguanas falling out of the sky nearby, I don't know your state's laws.

So, a little bit about me. My name is Adam Cordova, as Alan mentioned. I'm the Managing Attorney at Family Diplomacy, a collaborative law firm. We're a Florida-based law firm with offices in Tampa, St. Petersburg, and Sarasota, and we represent clients virtually throughout the state of Florida. Our website is FamilyDiplomacy.com.

Few other things about me, I practice exclusively in out-of-court dispute resolution. I stopped taking court cases in 2015 because I found that for the most part, we were pitting husband versus wife and parent versus parent. That didn't align with my values, so I stopped litigating in 2015. We've actually grown our practice quite a bit since then.

I'm the co-editor and co-author with an LA attorney known as Forrest "Woody" Mosten, building a book called Building a Successful Collaborative Family Law Practice, published by the American Bar Association in 2018. I'm also the recipient of the Florida Academy of Collaborative Professionals Inaugural Visionary Award for establishing their Leadership Institute.

But probably more pertinently, I started reading Dave Ramsey books a few years ago, probably like many of you all, to get rid of my damn student loans. But that led me down a course of reading JL Collins' Simple Path to Wealth, of listening to a few podcasts, Choose FI, White Coat Investor, and Sound Investing, and finally to some Boglehead YouTube videos, where I got a little bit more familiar with Rick Ferry and the conferences.

And that led me to joining the Tampa Bay Bogleheads chapter last year. That's how I got to know, that's how I met Alan. So let's start off with a question for you all. When you hear the term prenup, what is the first thing that comes to mind? I ask that you please write your answer down in the chat or feel free to feel free to raise your hand.

So when you hear the term prenup, what is the first thing to that comes to mind? Protect money, finances, okay, good, yeah. What else? My partner loves their money more than they love me for our first marriage. Sure. Yeah, I've heard that. Protect yourself and your children. Someone is not going to like it.

That can oftentimes be the case. Yeah. We'll talk about ways that we can help deal with with that. Good. Good. Agreement before marriage. Yeah, I'd say that that's a pretty good definition of a prenup. And I'll give a definition in just a moment and also protect your assets, potentially an unromantic conversation.

Gosh, I'd love to have a candlelit dinner over prenups and postnup, wouldn't you? I mean, anyways, well, I'd say that's that's probably fair. Let me pull my screen back up. So so let's just talk, run through what we're going to be talking about today, and maybe we can answer some of those ideas, those those questions that were in the chat.

First off, we're going to be providing some definitions talking about what is a prenup and a postnup. How can they say how can they serve as financial planning tools? Who would most benefit from a prenup or postnup? Are there ways to make them more binding in case you need to enforce them?

And is there a way to make it a better or more fair experience or maybe as some people would like to think who wrote in the chat, is there a way we can make the experience suck a little less? We'll talk about that. Here's here's the thing to know, though.

Not everyone needs a prenup. As the guys on ChooseFI like to say, this is just another tool for your toolbox, another lever for you to pull. Some of this stuff you may find really interesting and applicable to you, and if so, you should explore it more. And if not, that's OK, too.

Not everybody needs one. We're going to talk about who it may be best for, but in some circumstances, who may not need the prenup. Here's one thing to know, a prenup is not a new idea. There's the Jewish concept of a ketubah, which is a Jewish marriage contract. It's a practice that has existed for over two millennia.

And similarly, in the Islamic faith, there's the nikah, which is said to be traceable back to the Prophet Muhammad. Both are contracts that address property rights in the event of during a marriage. And also, both of them address, oftentimes, what happens if a marriage ends. So this is, again, not a new or novel concept.

I want to briefly, before we go into other topics, just kind of talk about the various different types of agreements that you may hear. And first off, there's the prenuptial agreement, and here's how I like to define it. It's a written and binding plan signed by a couple before a marriage that usually addresses how they want to manage their finances during and after a marriage.

And we know that marriages tend to end one way or the other, either by divorce or slightly more hopefully by death. So just something to keep in mind. Prenuptial agreement is actually known by a few different things. Your jurisdiction may call it one of several different things. It can be known as a prenup, a premarital agreement, an anti-nuptial agreement, and an anti-marital agreement.

And I just bolded A-N-T-E. It's not A-N-T-I, which would mean against nuptials or against marital, but A-N-T-E, which means before the nuptials, before the marriage. But we do come across some agreements that have those as their titles. So they're all the same thing, means the same thing. It's just something to know is that Florida and 27 other states and the District of Columbia have adopted what's known as the Uniform Premarital Agreement Act, which is just a uniform way of discussing, accepting, and interpreting agreements.

I'll leave that screen on for just a moment so you can see if your state is on there. Even if your state is not on there, that does not mean that your state does not allow prenups or post-nups. It just hasn't adapted or adopted a form of the UPAA.

I'd say that some of the discussion here is probably going to be most relevant to the UPAA states, but as I said, even if your state has not adopted this Act, I think you're going to find some things that will be relevant anyways. Then there's the idea of a post-nuptial agreement, and the truth is it's pretty much the same thing as a prenuptial agreement, but it's signed during a marriage, and it also can be called a post-nup or a post-marital agreement.

We're actually going to be talking a little bit later in this presentation about times where it actually may make more sense to enter into a post-nuptial agreement and may actually be more binding to enter into a post-nuptial agreement as opposed to a prenuptial agreement. There's three other agreements I just want to very briefly mention, although I'm not going to spend too much time on them.

There's the Cohabitation Agreement, also known in some cases as a domestic partnership agreement. This is simply an agreement that establishes contractual rights between unmarried people for quite some time before marriage was legal between people of the same sex. Instead of having rights that were allowed by statute by their states, instead they created contractual rights by these types of agreements.

So it hasn't only been used for folks who are in the LGBTQ+ community. I had a client who was going to marry their fiancee in a religious ceremony, but for whatever reason, they did not want to actually go through a civil ceremony. They just didn't want to have anything to do with the state, with registration, anything like that.

So instead of doing a prenup, we did a domestic partnership agreement, which laid out all of the rights and even said that in the event that at some point they did get married, this agreement would convert into a prenuptial agreement. There's also a Marital Settlement Agreement. This is an agreement that is entered at the time of divorce.

I'm going to be providing a few different tips throughout this presentation. So here's tip number one. It's usually better to address financial issues before you are angry at each other. So this can be in a prenup or a postnup, but just something to keep in mind. Finally, there's a topic known as a Collaborative Marriage Planning Agreement.

So this is actually a very, very, not many people know about it, not even many attorneys know about it. This is a very novel approach, which I've helped develop. It's a new type of agreement, some elements of which are binding and some not, and they help couples create three to five year strategic plans for their marriage.

When I say some parts are binding and some parts are not, some parts of the agreement can actually serve as a binding prenuptial agreement, but other parts may delve into areas that can't be enforced by an agreement, like what are your parenting styles? What are your views on how you want to eventually leave money for children and grandchildren that may not be there?

So it really takes a holistic view of planning your marriage, and this can be something that supplements marriage counseling or financial counseling, and just if anybody has interest in it or they know of an attorney who'd like to learn more, I wrote a chapter about it or I have a chapter about it in my book, Building a Successful Collaborative Family Law Practice, published by the American Bar Association.

So enough about that, because this discussion will focus primarily on prenups and postnups. So this section, we're going to focus on how can prenups and postnups serve as financial planning tools? Of course, that's the main topic of our discussion, and we're going to really examine five different ways. First off, how they can be used for divorce prevention, for asset protection, for asset management, debt responsibilities, and for inheritance planning.

Before I continue on, let me just mention that I have provided a copy of these slides to Alan. I understand Alan is going, or somebody is going to send them out to everybody who registered. So these are yours for free, so you don't need to take vigorous notes if you don't want to.

Okay. Let me just clarify, what I'll do is have Lady Geek post a link on the forum, and there's a Boglehead file repository. We can't email it, or I don't have a list of who registered, but we'll make it available. Thank you, Alan. Thank you for that clarification, and actually, before I continue, because we went through a bunch of definitions, I just wanted to check in to see if there were any questions, and if there was anything in the chat, or if anybody wanted to have any questions yet.

I don't think so. I haven't seen anything, but Alan, this is going to be recorded and put out on Boglehead's YouTube also, correct? Okay. All right. Sounds good. It'll be on YouTube, Alan, or Adam. Okay. I've been called a lot worse things, Miriam, so, all right, Alan and Miriam, sounds good.

Let's talk about divorce prevention. Here's just a fact. Divorce is one of the biggest financial challenges that you can face. In fact, I tell families all the time, even though that's a big part of my practice, collaborative divorce, even in the best of circumstances, even in collaborative divorce, a process I very much believe in, divorce is very tough, and if you can avoid it, you should.

If that means by a therapist, by speaking together with a friend, with a minister, please do so, and really, divorce should be a last result, but prenuptials and post-nuptial agreements can help. We'll talk about some ways that they can help, but it's important to know, Alan cited a statistic.

What I know or what I've heard is that nearly 50% of divorces or 50% of marriages end in divorce, and so here's a question, and again, feel free to put the answer down in the chat or feel free to raise your hand or just shout out the answer if you know it.

What is one of the biggest causes of divorce? What is one of the biggest causes? Yeah, I think Jeannie and JC and Mohammed got it right away, money problems, money issues, finances, absolutely. Here's one thing about prenups and Monique as well. Prenups and post-nups require financial disclosure, so from the very beginning, you get to know each other's finances, so there's a bit of transparency that is actually a requirement for an enforceable prenup or post-nup, and both of you get the opportunity to see each other's finances, so that at least starts the base of an important conversation.

Prenups and post-nups, in my opinion, should provide an opportunity for challenging but necessary conversations, and here's a few that I suggest, that I suggest that even before we start drafting anything, that my client engage with their spouse with my help as needed. What is each of your histories on saving, spending, and investing?

What are your current views on these? During the marriage, to what extent do you want financial integration or financial independence, and the truth is that most people are on somewhat of a spectrum. Yes, there are some people who want total financial integration, and there are others who want total financial independence, but most people fall somewhere in the middle, and if you can have these conversations up front, especially before the marriage for a prenuptial agreement, you'll be setting yourself up for a stronger marriage, in my opinion, and by the way, if both of you say that really you don't want any financial independence whatsoever, that both of you are on the end of the spectrum where you both want total financial integration, you may not need a prenuptial agreement.

There may not be things that you need to separate out, so just something to keep in mind. What does financial security mean for you? How can it be achieved? And one thing, and by the way, financial security means different things for different people. One of the things that I suggest, because obviously there's a lot of focus on alimony, how much is it going to be, is it being waived, what types of it, all these sorts of things that are on people's minds, but I like to generally ask first off, well, why?

Why are you asking that? Because I'm truly curious, and usually that gets down to what is financial security for you? And here's just another tip, a clause that I do tend to put in prenups and postnups during the times where a client may be totally against any type of alimony.

Something that I may suggest is to fund separate Roth IRAs and HSAs as an alimony alternative. If there's one spouse who just says, I want a total and absolute waiver. By the way, we're going to talk later about why that may not be the best idea to have an enforceable agreement, but if that's the case, here at least is an option that you all can consider.

I want to talk about another way that a postnuptial agreement especially can serve as a divorce preventative. There are times, interestingly enough, I was actually listening earlier to one of the White Coat Investor podcasts, it happened soon after COVID, I think in May 2020, and they were talking about financial infidelity and somebody just had a terrible experience and they ended up getting divorced.

I see cases like this a lot, where there is some sort of financial infidelity. What I mean by that is either gambling or having an affair and spending finances on that affair. It could be not just a financial infidelity, it could be physical, romantic infidelity as well, where people are just on the brink of getting divorced and they just can't think of any alternative.

One thing that I suggest to them is that a postnuptial agreement could be an alternative to divorce. Here's why I say that. In many of those cases, especially with financial infidelity, one of the big issues is a total lack of financial trust. Again, as part of this, the process requires financial disclosure and it can help bring about a binding agreement that allows for financial security and it can put that in place and have it ready in the event that there is a divorce.

I find that a lot of times, once these challenging conversations, and yeah, they are challenging conversations, once they're over, there can be a bit of relief on the shoulders of both of their clients and that may just open up the space for then the folks to engage in therapy or again, go to a rabbi or imam or priest or minister and see if they can repair their marriage.

So, just an option that is different than divorce. Again, I do divorce, that's most of my practice actually, but I want to make sure that people know that post-nups can be an alternative. Okay, so we talked about divorce prevention. Let's talk about how the tools can be used for asset protection.

Just a few concepts, this applies in Florida, but it applies, I understand, in most other jurisdictions as well. There's usually a division between premarital assets and marital assets and premarital assets are generally separate things that are purchased or acquired prior to the marriage. Marital assets, at least in Florida, and again, in many other jurisdictions as well, are assets that are purchased or acquired during the marriage, regardless of who purchased or acquired it, regardless of whose name is on titling.

And so, these are the definitions that apply by default without an agreement. But some people run into issues and don't recognize that there can be a premarital asset that can be converted or even have a portion become a marital asset. And so, here's a couple examples, a home. Let's say somebody purchased a home before the marriage and titled it solely in their name and the mortgage was also solely in their name.

Well, to the extent that they pay off the mortgage during the marriage, without a post-nuptial or pre-nuptial agreement, that creates a marital portion of a premarital home. And again, people are just shocked to hear this. When they come to me for divorce services, they think just because it was titled separately, it would be totally their premarital assets.

That's just not the case. Similarly, without a pre-nuptial or post-nuptial agreement, if you have a brokerage account or 401(k) or really any account that was acquired and funded prior to the marriage, but you contribute to it during the marriage, then there will be at least a marital portion of that separate 401(k) or brokerage account or depending on your state, it could convert the entire account to a marital brokerage or 401(k) account.

There are some other assets that may be worth protecting. For example, if you get an inheritance during the marriage, if it's kept separate and it's left alone, it would be considered separate property in most states. Similarly, a gift from family that you received during the marriage, if it was kept separate and not touched.

And when I say kept separate, meaning like if it were funds in a separate account or separately titled and not touched, then it could be considered completely separate and you may not need a pre-nup or post-nuptial agreement. But there are things that can be done which could convert a premarital account or inheritance or gift to a marital inheritance or gift, so co-mingling.

If you earn funds during the marriage and you place it in an account that includes an inheritance or includes funds from a family and you don't have a pre-nup or post-nup, that could convert a portion or the entire account to marital. Is that? Is that? Yeah, Alan. >> No, I'm curious.

So if you have an account, you receive an inheritance, child receives an inheritance, they're married, but they have a pre-nup that specifies that that inheritance is left. It's left or intended for that one individual. If they subsequently co-mingle monies in that same account, is that still fully protective of at least the initial balance from that inheritance legally?

>> Yeah, great, great question. So I was just talking about what happens if there's not a pre-nup or post-nup. Most pre-nuptial agreements or post-nuptial agreements will address that if funds go into the account, whether or not it would be those funds that were put into the account, whether the account itself would be affected.

So that's definitely something to speak with a lawyer about that particular thing. Some agreements are pretty comprehensive and include not just titling and what goes in or out of that account, but also address whether income earned during the marriage, if earned by one person, whether all or a portion of that would be considered marital or non-marital.

By default, without a pre-nuptial or post-nuptial agreement, it all would be considered marital. But some agreements say, look, if I have an income during the marriage and put it into an account that is titled separately in my name, that will remain separate. And something else, in the event that you didn't have a pre-nup or post-nup and you used separate funds for marital purposes, so let's say your grandma Sadie ended up leaving you a nice chunk of money during the marriage and you kept it separate, but you ended up using those funds to pay for your expenses throughout the marriage, that very act, depending on your state, without a pre-nuptial or post-nuptial agreement can convert a portion or the entire account into a marital account.

So again, the pre-nup and post-nup can help prevent those types of issues from happening. So a lot of the folks that we see are folks who have extensive gifts from families or inheritance, or as we discussed before, pre-marital assets. A few other things about asset protection that pre-nups and post-nups can help.

Private businesses, most people don't realize that without a pre-nup or a post-nup, a business that is established during the marriage is actually a marital asset. And even if you're a one-man shop and don't have an inventory things, maybe you're in the service industry, you may be wondering, well, how the heck could my business be considered an asset?

How would it even be valued? Well, there's an entire industry of folks who value businesses of all kinds. There's even a designation of it, accreditation and business valuation. So that's something to keep in mind. Using a pre-nup or post-nup can prevent a business from being considered marital and keep it as separate.

Similarly, and we kind of similar to the discussion on the houses or the accounts. If you have a business that is established before the marriage, but it grows during the marriage, and again, this depends on your jurisdiction and without a pre-nup or post-nuptial agreement, that growth can create a marital portion of your pre-marital business.

So that's something to keep in mind, the pre-nup or post-nup can prevent that. Alan, I see your hands up. - Yeah, there's JC posted a question in the chat. If one party has an investment property acquired prior to the marriage and a brokerage account funded prior to the marriage, and during the marriage pays the mortgage and upkeep of the investment property only from that previously funded brokerage, does the other party have any ownership of the investment property?

- Yeah, so that's a great question. And so I'm gonna give you the ultimate lawyer answer, which is, it depends. It depends totally on your jurisdiction, 'cause one state may treat that scenario very, very differently than any other state. But what I can tell you is in most states, you can have a pre-nuptial or post-nuptial agreement that addresses that very scenario.

All right. But good question. I'm sorry I couldn't be any more specific than that. For retirement or deferred compensation, again, sometimes people think because they have income that's not part of their regular income, that that income doesn't necessarily count when, in the event that they go through divorce and they don't have a pre-nuptial agreement, and things such as alimony or child support are being calculated, deferred compensation and sometimes even retirement can count as income for those purposes.

Pre-nup or post-nup can carve those out so that in the event of a divorce, those types of things may not be included. So we kind of talked about those situations where you may wanna protect assets as being separate rather than joint, but I think there are situations that are kind of the opposite of that, where you may wanna designate some assets where by default under your state, they would be considered separate.

You both may decide that you want them counted as joint. And so an example of that might be because of, say, a credit issue or other issues. A couple before the marriage decides to purchase a house together, but only titles it in one person's name and the mortgage is only in one person's name, but during the marriage, they plan on moving together and for all intents and purposes, they just both consider it marital property even though it's titled in one person's name.

A pre-nuptial or post-nuptial agreement can actually say, you know what, even though that's titled separately, in the event anything should happen, that should be considered a marital asset for all intents and purposes. I did wanna actually go back just for a moment on something that I mentioned in terms of brokerage accounts and commingling in 401(k)s, and this may be especially relevant to this group.

You may have heard the concept of tax loss harvesting, and that's just an idea, a way of saving on taxes if the market goes down and let's say that VTSAX is worth less than what you initially purchased for. You may decide to sell VTSAX to get a loss and to be able to save on taxes, possibly for this year, possibly for future years, and then purchase something else that's kind of similar but not the same thing, let's say VOO, which is the S&P 500.

So you sold VTSAX, which was the total stock market, and then you purchased VOO, which is the S&P 500, and a lot of folks know that those kind of go on similar trajectories, so you're basically having pretty much the same thing, but you're able to get some tax advantages for doing that.

The thing to know, if you did that in a premarital taxable brokerage account, just that active trading could convert a portion of that premarital account into a marital account. So I just wanted to mention that, that just came to mind for those who might be engaging in tax loss harvesting.

Yeah, Alan. Yeah, there's another question from Monique asking, "If someone inherits money from a parent who dies during a marriage, I presume they inherit, like the spouse dies during the marriage, how does that affect the assets and who do they belong to?" Yeah, another really great question, and I've got to put my phone down, so I'm going to put my lawyer hat on again, and say it really depends, it really depends which jurisdiction that you're in, and what I can tell you is that in my home state of Florida, what happens is that if it's kept in a separate account, and not touched, not actively traded, not really used for any purposes, just kind of allowed to sit and grow and kept separate, then it would remain separate property, you know, even if you don't have a prenup or post nuptial agreement, but as we discussed, at least in Florida, and I think in a lot of other jurisdictions as well, if you start doing things by putting it in different names or using it for different purposes or actively trading it, that could create portions that may be marital, and again, whether or not it's joint property depends on the state, in the state of Florida, if somebody receives an inheritance, and it's an inheritance just to that one particular person, then it's considered that person's separate property, if it's an inheritance or something to both of you, then it would be considered joint or marital property, but if somebody did something like put an inheritance into a joint account, or put the inheritance into an account owned by the other person, or put that inheritance in an account that is their own separate account, but it's generally used for marital purposes, then that can change the entire nature of that inheritance from premarital, or sorry, from non-marital to marital.

So again, it really just depends on your jurisdiction. And so, this asset purchase together before the marriage, this can also be used in situation where there's longtime partners, and again, I've mostly seen this in same-sex couples, I believe it was 2015, where the right to marry was established throughout the United States, and so there are people who've been together for many, many years, but only married in 2015, and so without a prenup or postnuptial agreement, the court will only look at what happened during the marriage, but with that prenup or postnuptial agreement, you can count all of the time that you were together as marital time and marital property for all purposes, for calculating alimony in case that's an event, but also for establishing which property should be considered joint and which property should be considered separate.

Again, depending on which jurisdiction that you're in. So we talked about divorce prevention, we talked about asset protection, there's also, briefly I'll touch on asset management. Without an agreement, your state may limit how you manage your assets. Maybe that you need to title things a certain way, or that you can only have certain beneficiary designations on different types of policies or different types of accounts, and many of these states allow you to change that if you have a prenuptial agreement or a postnuptial agreement that says so, and I'm going to get a little further into this a little bit more in depth when we talk about inheritance planning, but I just wanted to mention that these agreements can help you title things or designate beneficiaries in a way that you would prefer that might not otherwise be allowed in your particular state.

So now let's talk about debt responsibilities. So here's something to know, in many states, without an agreement, any debt incurred during the marriage is the responsibility of both spouses, and this is regardless of who, excuse me, who incurred the debt, who knew about the debt, whether it was in joint names or separate names, it doesn't matter if a debt was incurred in many states, then both of you are responsible for that debt.

So prenups and postnups allow you to address a few different things. It allows you to address, first off, what happens to debts associated with premarital property, and a lot of people think that, hey, if it's premarital property and we take out a debt, so for example, if there's a premarital house and you take out a home equity line of credit or a second mortgage, that because it is associated with the premarital property, that it should be considered a premarital or separate debt as well.

And so a prenuptial or postnuptial agreement will allow you to designate that. Debts associated with private businesses, similarly, if somebody has a business that they are owning and managing during a marriage, the debt incurred in that, even if it was a premarital business, the debt could be considered marital.

And so a prenup or postnup allows you to designate that as solely that one spouse's responsibility, whoever is associated with that business. Agreements can also include any knowledge or notification requirements, and I see this quite common, that the only way that a debt could be considered marital or joint during the marriage is either if both people are knowledgeable about it or both people consent to it, or there's at least some sort of notification that the debt was being incurred.

Again, without these agreements, it doesn't matter if you knew about it or not, if it was incurred during the marriage, in a lot of states, it would be considered marital debt. And then also debts incurred together prior to the marriage, you know, depending on your state. For example, you know, I talked about my, you know, I got into this whole thing in the first place because of my own student loans, student loans can be a big part of people's debt base.

And so a prenup or postnup can help specify in your particular state, whether those debts should be considered marital or premarital, or if one spouse pays the other spouse's debt off, whether there should be some sort of credit for that or not. Now let's talk about inheritance planning. So with an agreement, your state may limit how you distribute your assets when you pass.

So for example, in my home state of Florida, you are required to pass at least a certain percentage of your estate, and this is calculated in ways that are too complicated to address right now. But you're required to provide a certain percentage of your estate to your spouse and provide certain other rights to your spouse.

Even if you write them out of your will, it doesn't matter that writing out would be considered null and void and your estate when you did pass would still have to provide certain minimum things to your spouse. And you may think to yourself, well, yeah, that makes sense. You don't want to write your spouse out of your will.

And that offers a lot of protections. And for the most part, I absolutely agree with you in most situations. But there are certain situations where that may not make certain sense. And let me give you an example. I had a client who was in his late 70s. He actually had married his spouse 25 years ago.

So it's a long-term marriage, but it was also a second marriage for both of them. And my client was independently financially secure and his wife was also independently financially secure. But you know who was not independently financially secure? Each of their children, their adult children, were not independently financially secure.

And so what they decided upon is that neither of them really needed those minimum requirements under Florida law. And so they both decided that they wanted their inheritances not to go to each other, but to their respective children. And with a prenup or postnuptial agreement, you can waive those requirements that are otherwise binding under Florida law.

And again, you may be able to do this in your jurisdiction as well and provide things the way that you want for inheritance planning purposes. Now keep in mind, this agreement is not going to address the specifics about what happens to your inheritance. You still need Will's Trust and other documents for that, but at least this can waive the rights or waive the requirements under your specific jurisdiction's laws.

So with an agreement, you can decide to what extent your state's limitations may make sense or not, given your particular circumstances, whether and how to protect children from a prior marriage or relationship. And also, and this may be a good tip, if you are having a prenup or postnup, whether your agreement should include a life insurance requirement, and again, it's going to that interest of financial security, and this may be a way to enhance the financial security for all involved by including life insurance.

Alan? >> Yes, regarding the last comment you made about the states, I saw a video once that was interesting, a comment whereby he said that every marriage has a prenup, either the one that you craft yourself as a partner or the one that the state crafts for you. >> Yeah, yeah, no, I think that's very well put.

Thank you so much, Alan, for sharing that, and it's true, whether you like it or not, there's a default, and in essence, your state's default law can be considered your prenup, and part of the question may be do you want to be a little more proactive in making your own prenup rather than the default law, so thank you for sharing.

So let's talk a moment for who would most benefit from a prenup or postnup. So first off, people who are already established or older couples, again, who are financially independent and indultant are not necessarily relying on the assets or income from the other spouse. People who are in second marriages or blended family, especially those with children or adult children, I had a case where I represented a client in his collaborative divorce, and then afterwards, he ended up getting engaged.

There wasn't any affair during the marriage or anything like that, it's just that's kind of how things progress, but he had an adult son who had severe anxiety disorder, and the son was really, really worried about what would happen to not just the father, but also the son himself in the event things kind of went sideways, and so in this situation, I represented this former collaborative divorce client as a new prenuptial client to help create a prenuptial agreement to, if nothing else, soothe the anxieties of the son and to help make my client's life a whole lot easier.

These owners, we discussed the protections that private businesses can have with a prenup or postnuptial agreement, those with large inheritances, again, there's different unique reasons why LGBTQ+ families, that's lesbian, gay, bisexual, transgender, or queer and other families who may need a prenup or postnup, and going to Alan's point, people want to make their own rules and not just go by the "default" prenup.

There's also, I think more and more these days, a healthy skepticism towards people in black robes and those otherwise in authority, and so rather than leave it up to them, people want to make their own rules, and similarly, there are those who want to put a premium on privacy, and so if you can have some touchy issues addressed ahead of time and make it less likely to have to have these issues resolved in court in the future, you're going to have a lot more privacy protections.

Okay, all right, so here, this next topic is on how to make your prenups and postnups more binding, and just a tip, one thing to know, prenups and postnups are found unenforceable all of the time when not done properly, and one of the things that I like to tell clients is don't think of a prenup or postnup as a document, that's how people naturally think about it, it's agreement, it's just a document.

Don't think about it as a document, because the document may not be worth the paper it's written on, if not done properly, think of it as a process, make sure that you are meeting every step of the process, and I'll talk about some particular steps in a moment. So if you have a prenuptial agreement, I advise clients to begin the process four to six months prior to the wedding, and the reason that I say this is a lot of prenups or postnups get thrown out because a court finds that it was negotiated and/or executed way too close to the wedding, and that leads to the idea that it was signed under duress or without fully understanding each of your rights, and so if you are at the point where you realize that you do need a prenup or postnup, but you're getting close to the wedding, one thing that I tell clients all the time is that a postnuptial agreement may be a much better idea and may be much more binding than going through with a prenup, because a lot of times people feel in a rush, they're like, "Oh, I need to get this done before the marriage," you don't need to get it done before the marriage, you can wait, and in fact, it may be more binding if you do it.

So let's talk just for a moment, well, what if you don't wait? And what if it is too close to the wedding? Is there something that you do afterwards to then make it binding? And yeah, there is something that you can do, again, it's jurisdiction dependent, but I think in many jurisdictions, what you can do is sign something known as a reaffirmation after the wedding is over, after the honeymoon is over, after you've had a little time to think, and the reaffirmation generally says something like, "We've now had sufficient amount of time to think it through, and we reaffirm that we want to be bound by all of the terms of the prenuptial agreement," and generally that should be done using the same thing to, the same way to execute that would be the same way that you executed a prenup or postnup, and we'll talk about how a prenup or postnup should be executed, at least in many jurisdictions.

So, Alan, I see your hands up. Yeah, sorry to interrupt again. If somebody is in fact signing a prenup, yeah, somebody in a couple decides they do want to proceed with the prenup, but it's close to the time of the wedding, is there any utility in having it assigned with a video affirmation at that time, showing that they are not, neither party is acting under duress?

I saw that suggested in an actual Boglehead's thread that's currently active. So, you are just a few points ahead of me, and so I will, I promise you I will address that, Alan. Great, great question. So just one other thing on, actually there's a few different points here, gives both spouses a reason to want it to be binding.

Again, if there's a situation where one spouse is insistent on no alimony, is insistent on separate all, and especially if they're the higher earning spouse, of wanting everything that is earned during the marriage to be their separate property, to have essentially almost all the assets be their own separate assets, then that causes a few different problems.

Number one, a court may find that it is unenforceable, especially if it goes against the public policy of your particular state, and let me give you an example in the state of Florida, it would be against the public policy if due to a prenuptial agreement, one spouse were to end up with all of the assets and with all of the income, and the other spouse were to end up on government assistance or welfare.

The courts would essentially throw out the prenuptial agreement, and they would say, all right, it's better that you pay rather than the state pay and order alimony even though it was waived. So that's one thing, but another thing as well, a practical point is you want to give your spouse a reason not to fight it in the event that it needs to be enforced in the future.

And so a tip for how to make that happen is to provide for some amount of immediate payout of lump sum alimony, or for some immediate division of property that goes to them. And once that is done, in many states, that will basically be seen as an acceptance of the terms of the agreement, another reaffirmation of the terms of the agreement, and prevent them from later on trying to get it thrown out.

So you want to give your fiance or spouse a reason for it to be binding. Don't let it be a totally one-sided agreement. I also think that's just a terrible way to start a marriage if it's completely one-sided. Similarly, don't expect a take it or leave it agreement. In fact, when I'm reviewing agreements for a client that their spouse's attorney has received, has provided them agreement, or their fiance's attorney has provided with them agreement, the first thing I tell them is these agreements are rarely, if ever, take it or leave it, and your attorney probably told your fiance to expect some suggested changes.

And I don't want you to be afraid if you receive a prenuptial agreement to say, to think to yourself, "Well, it's in writing, so I have to sign it." You don't have to sign it as is. It can be negotiated. In fact, it should be negotiated. In fact, the spouse who wants it done in the first place should want it to be negotiated because if it's negotiated, it shows that it was less likely to have been done by duress.

And so it makes it less likely to be thrown out. Another way to make it binding is to hire a separate lawyer for each fiance or each spouse. I know there are jurisdictions that may allow one attorney to write a prenuptial or post-nuptial agreement for both spouses. I just don't think that's a great idea.

In fact, there are states, including my own state of Florida, which say that that is strictly prohibited for one attorney to do that. And the reasoning behind that is because they want to make sure that each spouse gets independent legal advice and make sure that each spouse or fiance's interests are being independently looked after and represented.

And you just can't do that with one single lawyer. But here's also one thing as well. You may have a lawyer who is used to doing wills, trusts, and other estate planning, and you may be used to doing documents with them together. And so there are many estate planning lawyers who will do wills for both spouses or do a trust for both spouses.

And that's great, and that works for those types of documents. But then sometimes the client will ask that same lawyer to then do a prenup or post-nup, which as we've seen, does have some touches on estate planning, on inheritance planning. But especially if it's an attorney who doesn't know what they're doing and says yes, if it's one attorney who's doing that for both spouses, depending on your jurisdiction, it just may de facto be thrown out without question if one attorney tried to do it for both.

So it's just something to keep in mind. So you must have full financial disclosure in most jurisdictions for it to be binding. So that generally means you must totally disclose your income, your expenses, your assets, and your debts. And you also generally must disclose, again, depending on your jurisdiction, major financial documents like tax returns, pay stubs, statements for brokerage accounts, 401(k)s, HSAs, IRAs.

Pretty much all of it. And so it is a total pain in the ass to go through all of that financial disclosure. I will admit that up front, but again, what I generally suggest is that it can be used as an opportunity to open up the conversation, to get to know each other's finances and to talk about how you want to plan for each other.

And something else as well, this may not apply to Bobo Heads as much, but if you are dependent on a financial advisor, for example, then one good thing about having a financial advisor is that they may be able to disclose or provide a lot of those documents so that you don't have to.

Separately, some people are more dependent on a CPA, especially if you've got a private business. So your attorney may be able to communicate with that CPA and just get a bunch of the documents from them to lessen the stress on you as you're trying to put all of this together.

There's something else, again, I very much believe in a collaborative process and specifically an interdisciplinary collaborative process. And that means using experts, not just from the legal field, but also from other fields that may be helpful. And when doing a prenup or postnup, it actually is helpful to have somebody who has a financial background or a mental health background.

So in this interdisciplinary collaborative team approach to prenups and postnups, each spouse has their own separate collaborative lawyer who can't be hired to litigate in the future in case something happens to each other. So they don't have an incentive to put all these things in play in the hopes that in the future, they're going to create a lot of issues, a lot of problems for the clients then be able to make a lot of money in trial work later on.

So there's that, there's oftentimes the use of a financial neutral for financial education and to ensure and document financial disclosure. Financial neutral is usually a collaboratively trained CPA or sometimes a financial advisor. And again, their purpose is to help level the playing field in many relationships, both before marriage and during a marriage.

There's oftentimes a big gap between the understanding of finances from one spouse to the other. So this person can help level the playing field and also help to make your agreement more enforceable because they can document all of the financial disclosure and they can document all of the financial education and show that both were actively participating in the prenuptial or post-nuptial drafting process.

And finally, like this, the use of a neutral facilitator. And in your jurisdiction, it's called different things. It's sometimes called the collaborative coach or neutral mental health professional. It's somebody who is a licensed mental health professional, although they're not actually doing therapy as part of the process. They're there to help ensure that both fiancees or spouses voices are heard during the prenuptial and post-nuptial process.

And from an enforcement perspective, they can help document that there was no duress as part of it and both people were actively participating. I do see JC has a question in the chat. How much do these sorts of collaborative processes cost? All right. Again, everybody can now repeat it with me.

Use the lawyer answer. It depends. Yep. That's right. It depends. It depends very widely where you are. It's going to be a lot more expensive to do this in a higher cost of living area than a lower cost of living area because lawyers tend to charge a lot more in those higher costs and opposite on those lower costs.

So it really just depends. I can say that it probably will cost you a bit more than having the lawyers do it up front and just having lawyers do it because you are paying not just for the lawyers, but for the financial neutrals involvement and the neutral facilitators involvement as well.

So it could cost more up front, but it could save you a whole lot of money down the line and it could save your marriage as well. So just something to keep in mind. Allen. Yes. Are you inferring that most collaborative lawyers doing prenups will advocate for the use of a financial neutral and a facilitator versus just a couple of lawyers basically representing each of the potential clients or spouses?

Yeah. Great question. So typically they will maybe not advocate, but provide the option or maybe depending on the circumstances, they may advocate strongly, especially if there are a lot of assets and there's a very clear gap in knowledge or some other issues as well. Or it may be that it's done not in an interdisciplinary collaborative team, but just through the collaborative lawyer.

So that's an option as well. I do it both ways, but I do make sure to provide those options and some take me up on it. Some don't, but especially when it's a lot of money that we're dealing with. And so a lot of protections and also big gaps in education, I then really highly recommend it.

Especially it's up to the clients. Yeah. I would think in some cases the collaborative approach might be cheaper because it's not basically confrontational that you might have more of a straightforward give and take, whereas if you have two typical lawyers who are very confrontational in their style, they could drive the cost up in the time spent negotiating back and forth ad nauseum.

You are absolutely correct. And actually I'm going to touch on that a little bit more in just a moment, talking about the process. But that's absolutely correct. And I'll do a little bit of a comparison in a collaborative approach as compared to maybe the traditional approach to pre-nuptial and post-nuptial agreements.

And then actually, Alan, to something that you said earlier, one of the things that we strongly recommend to help it be more likely to be binding is to have a signing meeting in person or possibly via video conferencing. It really depends on your state. Some states allow it to be done by video conferencing.

Some states would require a wet signature or physical signature with ink. But either way, I would suggest that it be recorded. Some lawyers go far as saying it should not only be recorded, but it also should be transcribed by a court reporter. I think that may be a little bit overkill, so long as it's being recorded by video.

And during this, it's not just a recording of the signing. There's usually some things that happen beforehand. So typically, we'll have a notary or somebody else who is able to put the clients under oath, put them under oath. And a lot of times, it'll sound just like you hear on Judge Judy or the People's Court.

You swear to tell the truth, the whole truth, and nothing but the truth. And depending on your jurisdiction, so help you God. And then there will oftentimes be some questions asked of the clients. And if you've got a good lawyer, they'll prepare you ahead of time for all these questions.

But there'll be things like, first off, have you read the agreement? Okay, good. Do you understand the agreement? Have you had the opportunity to review the agreement with your lawyer? Have all of your questions been answered on the agreement? And oh, by the way, did you have anything to drink this morning?

Did you have anything or do anything which would impair your judgment or impair your ability to enter into a legally enforceable agreement? And so all of that goes towards in the future. If there are any of these questions, are you entering, are you signing this agreement freely and voluntarily with the intent to be bound by it?

All of these questions go towards the binding nature. So going back, Alan, to the question that you asked earlier, what if it's like really close to the wedding and you didn't start the four to six months, but you had it, you know, recorded it and you had all these questions answered?

I would still, even if you did that, I would still recommend to my clients to get a reaffirmation afterwards after the wedding, after, you know, after time has gone by and after they've had time to reflect on it, after the craziness of the wedding is over with, to just reaffirm that they still want to be bound by that prenuptial agreement, just to be safe.

It may be binding, but if people are going through the trouble of getting it done and through the expense of getting it done, you really want to make sure it's binding. A few, a few other suggestions, place the fully executed agreement, financial disclosure and the recording of the signing meeting in a safety deposit box or other safe place.

Just in case you need it in the future, you know, a lot of people don't do this and then they hope that their attorney keeps a copy and most attorneys will keep a copy, but things happened. You know, before this recording, we were talking about hurricanes, you know, there are some people who are affected by the wildfires out in California.

There may be old agreements that got destroyed because of natural disasters or, you know, even if they're done electronically, glitches happen to systems. So I would make sure to keep a printed copy, digital copy, all of your financial disclosure, all of your recordings and put it in a safety deposit box or something someplace else that's really safe and someplace where you can access it in case you ever needed it.

Something else I like to do in pre-nups and post-nups is include a clause for periodically reviewing it, periodically revisiting the agreement to see if changes are needed. Circumstances change and it may be that what you thought was important before the marriage turns out 10 years later is not so important, or maybe that you've got a different view on how you want to do things.

So I'll oftentimes put a clause that if one of the spouses wants, you know, and sometimes it's, there's a time, you know, every five years or every 10 years, sometimes it's, you know, some sort of incident that happens. So, you know, once a child is born or once a wedding happens or, you know, any different things you may want to revisit it and see if your priorities are the same as when the agreement was initially signed.

In addition, if you move to a different jurisdiction, if you're in one of those jurisdictions that we discussed before have signed a version of the UPAA, the Uniform Premarital Agreement Act, then in all likelihood that agreement will be honored. If you're not in one of those jurisdictions, it may or may not be honored.

But either way, regardless of your, regardless if you move to another UPAA jurisdiction, I would still have it reviewed by a local lawyer because even if it's honored, it may be interpreted very differently than you both had intended and very differently than how the lawyers explained under the law of the state where you initially signed it and had it developed.

Now, in my agreements, I typically put in there that the agreement was signed in Florida, that in the event of any issue in the future, that it will be legally binding and it will be interpreted regardless of where the clients live by the laws and by the interpretation of the state of Florida.

The only challenge with something like that is that if you go to some place and ultimately you need it, you need to enforce it in a different state, they may not know what that means or they may not know how to interpret it. So one of a few things will happen, either they totally ignore it and they just interpret it by whatever the state that you're in, which may or may not be appealable error in your jurisdiction, or they, you know, alternatively, you can bring in an expert, somebody from Florida who knows how it would be interpreted in Florida, but that could create an additional expense later down the line.

So you may decide that you want to just review it with a local lawyer and see if there are any changes that need to be made for that new jurisdiction. Okay, so now we go to the next, and this is heading towards the final agenda item of the process.

Can the prenup or post-snuff process suck a little less? And I hope to tell you, yes, it can. Again, there are going to be challenging conversations. So I don't want to make, even if I use terms like collaborative, collaborative doesn't mean easy. Collaborative doesn't mean wonderful. It just is a different method of going about things where your professionals especially have a very different attitude than what traditional family law professionals may have in different training as well.

So kind of going to what Alan was saying, here's one suggestion. Don't hire divorce trial lawyers to draft your prenuptial agreement. Hire collaborative family lawyers, and this is for a very simple, practical reason. Trial lawyers are used to working within an adversarial system, and again, as we were discussing before, it is a system that by its very nature, by its very design pits parent versus parent, spouse versus spouse.

This is what the trial lawyers are used to working in, and by the way, it's well-intended. It's not like these are bad books. There's actually a reason why it's an adversarial system, and it goes way back into ancient history. The idea that in order to find the truth of something, you needed to hear all different perspectives, and so you'd hear, if you hear the husband's perspective, then you hear the wife's perspective, well, then you'll come to the ultimate truth, and the idea behind that is the judge will come to the ultimate truth.

But how it's done in practice is oftentimes it's, all right, let me tell you why I'm right. For example, let me tell you why I'm the most wonderful father in the world, and why there should be no alimony, and let me also tell you why they're the worst possible parent in the world, and why even if they had alimony, they would frivolously spend it because that's the type of person they are.

So that's kind of the adversarial nature of trial work and of the type of system within which trial lawyers are used to working. In contrast, collaborative family lawyers are used to helping people reach agreements without the threat of trial. In fact, once what's known as a collaborative participation agreement is signed, those collaborative family lawyers are prohibited, depending on your state, either by law or by contract, from ever engaging again in any type of trial work involving the client.

So their incentive is to help the clients reach an agreement, because in the divorce process, if they don't reach an agreement, and one of the spouses decide to then go to trial, then both of the collaborative lawyers are fired. And yeah, we may be lawyers, but we're also people, and we don't like to be fired.

So we're used to helping people reach agreements without the threat of trial. So I used to be a member of the board of the International Academy of Collaborative Professionals. There's pretty much, there are collaborative lawyers in pretty much all jurisdictions. You can find a collaborative lawyer near you by going to collaborativepractice.com, which is the website of the International Academy of Collaborative Professionals.

And similarly, within the collaborative method, this will oftentimes work with an interdisciplinary team. And let me tell you, when you bring on a mental health professional to deal with these tough conversations, this is true in divorce, but this is also very true when dealing with those challenging financial conversations with prenups or post-nups.

It makes the process so much more palatable, I would even say so much easier to go through from the client perspective, I have to say from the lawyer perspective as well. And as Alan was alluding to, it also makes it a lot less likely that there's going to be so much back and forth and so much fighting, and that can actually save you some money and also save you some frustration.

But these agreements, rather than being done the traditional way, which is one person writes up a prenuptial agreement oftentimes that is so one-sided and then sends it to the other person, their attorney, and their attorney then creates a whole bunch of red lines, which then may be one-sided to the other spouse, and they keep on going back and forth, and that can be quite an expense.

This process oftentimes, it's done through a series of meetings so the clients can have open discussions about what exactly it is they're looking to do, and both of their voices can be heard. And so, again, I just personally think it's a better process. Just a few other items. Focus on interests rather than positions.

Listen to your fiance's spouse's concerns. And by the way, this is coming right out of the Harvard Negotiation Playbook. You may have heard of Getting to Yes, and the difference between interests and positions. Very briefly, positions are what you're looking for. Positions are why you're looking for those things.

So if you have a fiance that says, "Look, if something happens, I just want $10,000 a month in alimony," that's a position. And if I have a client who's saying that, and the other client is saying, "Well, I don't want to have to pay any alimony whatsoever," well, it's very possible that you're going to reach an impasse and this is going to blow up your marriage.

And so rather than focus on those positions, we highly suggest that you focus on interests. And so how we do that is ask the question with curiosity, "Why?" So if I have a client who says, "Well, I need $10,000 in alimony per month," then the question may be, "Why?" and the answer may be, "Well, because that's what I spent," and then the question may be, "Why on that?" And just kind of digging further and further, what you may soon realize is it's not that particular amount that they're looking for, but it's some financial security that they're afraid that if something should happen, they're not going to be able to pay their bills.

So once you know that, then you open up the possibility of options that you can then explore that go beyond just no alimony or the $10,000 a month in alimony. As I said before, I gave an example of what might be an option in that scenario, which may be, well, as financial security, it may be that you have a life insurance policy, or it may be that you have a disability policy, or it may be that you have the other person pay for a separate brokerage account or HSA or Roth IRA or other type of account for you, or maybe a certain alimony combined with one of these ideas.

So it just opens up some options. And again, rather than thinking of it as a terrible process, I hope that I've kind of shown that it can be used as an opportunity to have those challenging but necessary conversations to head off future problems, to learn about each other's views on spending, saving, and investing, and to create a better future for your family.

So let me just open up the floor and see if there are any questions. Thank you, Adam, for covering such a broad and difficult subject and really giving us a lot of insight into the positive aspects of approaching this difficult subject. It was fascinating. If people want to raise their hand, use the raised hand icon to ask a question on camera or submit a question via the chat.

We'll take them in chronologic order. I have one to start, Adam. I'm curious, if you recommend, should parents, especially for those of us who are older, maybe in the pre or early retired life stage, the retired life stage with children getting married, is it appropriate for us to bring up the topic of a possible prenup to our adult children when they get engaged?

Yeah, great question. So whether or not it is appropriate, it happens. It happens quite a bit. And so I think a lot of folks do come to us because a parent says something. And so it's not really for me to judge whether or not it is appropriate because everybody has different family dynamics.

And so there may be a problem in a particular family where it's totally natural. Or look, and there are parents out there who just have a true concern about their child and want to bring it up. Or there may be a family business or something where it makes sense to bring it up.

So whether or not it's appropriate, Alan, it happens. And so sometimes it's a good thing. And in fact, there are times where I will have a parent with an adult child who's coming to me in the first place just because the parent wants to know kind of what's going to happen and how it's going to work.

And if the adult child is okay with that, then I'm okay with that. Just so that all questions can be answered. And quite frankly, a lot of the times, especially if we're talking about younger adult children, they just don't know what questions to ask. And they may find comfort in their parent being there who's had a little bit more life experience to be able to ask, especially those questions which the child may feel challenging even to articulate.

Sarah, I do see that your hand is up and then we'll go back, Alan, to some additional questions. So Sarah, if you want to unmute yourself, I'd love to hear your question. Sarah, you're still muted? Sorry about that. It's only been five years since the pandemic, I'm still getting used to the computer.

So I wondered, first of all, thanks so much, it was a terrific, terrific presentation and grateful to you, Alan, too, for hosting this. My question is, in your experience, Adam, are there different sets of advice that you give for widows and widowers in this process here? And I say that just because I'm not looking to get married anytime soon, but I have experienced just that vulnerability and I've had kind of a predatory situation that fortunately worked out OK, but there's a vulnerability that I think widows and widowers have that maybe GenPOP doesn't.

And I wonder if you calibrate your advice differently. So I think that's a great question, and thank you, by the way, for being so open to sharing. I mean, that's because hopefully other folks can learn a little bit from that. And what I would say is that in some ways, I'll give the attorney answer, it depends.

But some of the different factors that I would look at is, was there a significant inheritance that was received? And is there a desire to keep that inheritance separate not only for the widow or widower themselves, but also for any children that might be there if children were in there.

So in that case, I might suggest that they have a prenup or postnup, if nothing else, make sure that that is protected. But also what I might suggest in any situation, especially if there has been a history or just out of curiosity, it's worth going and paying for a consultation with an attorney just to know about the laws in your particular state, to learn a bit about, you know, I was talking about really from my experience, though it might be broadly applicable, you know, I really only know Florida's laws, and I can, you know, I discuss with clients and answer particular questions for them, if they, you know, if they come and we have a consultation and answer their questions, and they may ultimately decide, and in fact, I may even tell them, hey, you really don't need a prenup given those circumstances, or postnup given those circumstances, but still, hopefully, it was helpful that you at least learned, you know, depending on what happens, what the law says.

>> Gotcha. Great. Thank you so much. >> You bet. You bet. Thank you. >> Thank you. Great question. >> Thanks. >> Allen? >> Oh, actually, let me ask a question that had been submitted, pre-submitted from the Google form. Are there differences in how pre- and postnup arrangements should be approached between couples of similar versus disparate net worths?

Is the approach different in that situation? >> Sure. So good question. I think it is, so there's a lot of different scenarios. I think the outcome may be different depending on the disparity, depending on who's asking for the prenup and why they're asking for a prenup. I'd say, you know, a lot of the times, it's because there is, because there's a private business, for example, and just if there's an issue, people want to make sure that the business isn't affected should something happen to the relationship, which could have a very big effect on personal finances or if there is a large inheritance.

If, on the other hand, there's a situation where both people are pretty financially secure, but they're looking to do it, for example, in the situation where I had a couple, a client in their 70s, and they were financially secure, and the other spouse was also financially secure, that prenup or postnup is going to look very different than when, you know, only one spouse really is looking to protect inheritance or protecting a gift.

So I think the approach, the outcome may be a bit different, but at the end of the day, you know, it all comes down to the question of why. Why are you looking to do this? What are you looking to protect? What are you hoping to happen as a result?

And then develop something that meets their particular goals. All right. We have more questions, either via the raised hand or chat. Yes, JC. So my question is that I understand that question about, like, commingling, where if you have a separate account, but then you put in money that you earned during the marriage, like, into that account, like, if you continue to invest in your retirement account or your brokerage account with marital assets, your income during the marriage, it at least, unfortunately, becomes commingled.

What about for debt? Like, if one partner has debt that was acquired prior to the marriage, if the other partner is using marital assets to help pay that down, does the rest of the debt become their responsibility as well? Yeah. So, great, great question. It probably would really depend on your state and the laws in your particular state.

And in some states, it would be considered basically a gift to that person or a gift to the marriage. And just, you know, if debt gets paid down, well, in the event of divorce, then that debt is no longer there, nobody gets any credit, and it's just dealt with.

There's nothing to do. In other states, it may be that if you paid off the other spouse's premarital debt, that at the end of the day, you get some sort of credit for that or some sort of reimbursement when otherwise dividing up assets and debts or some sort of special consideration.

So, it really just depends on the specific laws of your state. The only way to really know that for sure, well, I guess two ways would be to speak with a lawyer in your jurisdiction. But if you want to have control over the outcome, would be to get an agreement that addresses those particular circumstances.

Miriam, did I see your hand up before? Yes. I have a question on retirement assets. Since they are individually owned, they are individual assets, and there are beneficiaries for when the person passes away, but in a divorce, even before the retiree can access his own retirement accounts, because there would be a penalty to access it before that, how would you put that into a divorce or into a prenuptial ahead of time passing of retirement assets?

Your 401(k) is yours, paid for out of your employment assets. Your traditional IRA is yours also, funded by your employment, you have to have employment. The actual money can come from somewhere else, but you have to have the employment that justifies it. With the Roth, you never have to take money out of it, ever.

How does this, it like forces you to do things, is that what it is? So great question, and very insightful that, for example, that alimony alternative where you might be paying a Roth IRA, of course, that's dependent on the other spouse actually getting, receiving income and being eligible for a Roth IRA on the one hand.

So I think that's a fair point, and I think it may be that part of that, and oftentimes arrangements like that, there is a private business or something like that, which may be required as well to provide some sort of income to that spouse so that they can then go and have an IRA.

So it's really, it's just a situation dependent, but I know that your question was also more broad than that about what happens in the event of a divorce to IRAs, to 401ks, there are other things that kind of go in that category as well, military pensions, for example, or other things, which if you withdrew from it early, that you may be subject to a penalty.

So I know based on Florida law, and I think pretty much all other states do it this way as well, but you need to speak with a lawyer in your particular jurisdiction, that there's an exception for tax penalties for most assets when you are dividing it pursuant to a divorce.

So for example, with an IRA or a Roth IRA, that that can be divided, put from money from one person, one person's IRA into an, it can be rolled over into another person's IRA, or on the Roth side, a Roth IRA rolled over into the other person's Roth IRA pursuant to a divorce without getting penalized for it.

Now, there are certain retirement accounts where it's a little bit more complicated than that. So for example, when we're talking about most employment based retirement accounts, a 401k, I think it's applicable to a 403b, a 457, and it's also similarly applicable to military pensions and other types of pensions.

There's a special type of order when you get divorced that you need to make sure is drafted so that these accounts can be split. In general, it's known as a qualified domestic relations order. Q, it's acronym is QDRO, it's known as QUADRO by those in the divorce profession and it basically says that those qualified plans can be divided without penalty if you go through a process and that process usually includes, first off, making sure that the plan is a qualified plan and there's a whole definition of what that means in the IRS code and then sending a proposed order splitting that to a plan administrator just to make sure that it can be split and then having a judge sign it off.

And so this is actually a very challenging, somewhat tedious process and you have to be very specific because the last thing you want to do is screw up the split of a 401k or other big thing, especially if you saved a lot of money in it. And so even though I do a lot of divorce work, I actually don't draft QUADROs.

There are specific attorneys day in and day out who all they do is QUADROs. Now that sounds like the most boring job in the world for me, but they, I guess, make some good money doing it or I guess they get some kick out of it. So that's what they do.

And then there are orders that aren't exactly QUADROs but are basically the same concept for some other assets like military pensions. It's usually called a military retirement order or something similar to that. There are certain other pensions, again, it just depends on your jurisdiction, but I know here in Florida, like there's certain municipal pensions that regardless of what you agreed upon, it just can't be divided.

And so rather than do that, oftentimes there may be some sort of buyout or some other way, some thing where, well, once the spouse receives the pension, then they're responsible for providing a portion of it to the other spouse. So again, attorney answer, it depends, but great question. Thank you.

Thank you. Nice answer. Thank you. So is that sort of thing, the QUADRO and similar type division of retirement assets or other assets would not necessarily be addressed in a prenup, perhaps in a post-nup, but is that the sort of thing you would actually anticipate and build into a prenup or post-nup or would that be something that basically is dealt with during an actual divorce?

Yeah. You know, I'd say the majority of the time it's usually dealt with at the time of an actual divorce in an agreement, reaffirming the prenup or post-nup, but there've been times where I've added it in because you just want to make sure that there are discussions not only about, you know, that both, even if they're at the point of divorce, even if they're angry at each other, make it binding that they're going to cooperate for all of the steps that are needed to complete that process.

And sometimes you also want to address how that QUADRO or other order will be paid for. So that, that can also be addressed in a prenup or post-nup. Any other questions? It would seem to me in the prenup, it might be there, I don't want to say accidentally, but it might be that all funds, all of our accounts, all of our retirement accounts might be put in as a general expression by an attorney, and then they didn't realize that they were including retirement assets.

Yeah, absolutely. And you want to make sure that it's done clearly and so sometimes it's helpful to address those items from the top, from the front end. Yeah, especially since some retirement assets, I'm sorry, some retirement assets could be put if the, if the person had, had, you know, megabath, you know, different, a certain kind of job where they could put a lot of money into the retirement accounts.

Yeah, yeah, I think it sounded like you were referencing if you have the option of a megabath door Roth IRA, which may, you know, for some of those, you may know that may be a way to have more than the typical limits. I think right now the, I think this year the limits for your regular 401k is $23,500 and there are certain retirement plans that allow for a larger amount.

I think maybe what $69,000 or $72,000 total, something like that. So yeah, that it may especially be a concern in those situations, but there is so much money that's saved up in a 401k. Thank you. Yeah. Allen. Yes. I was going to say one thing I want to emphasize a couple of points is that I think in the past, I think most people viewed the concept of conversation of prenup kind of in a negative manner that somebody is trying to control the future of the marriage.

But I think it's important that by opening the conversation amongst the betrothed couple, that it actually is setting them up on a better foundation with having their transparent finances in a shared vision for their future. And I wish and hope that over time that society will view it more in a collaborative fashion and building for the future and minimizing the risk of divorce certainly and getting them off on a stronger foundation.

As somebody who is in a blended family in a second marriage myself, I found that to be the case. And actually I did, we did get a prenup, not the first time around, but the second time around. And that opened up a lot of difficult conversations, but allowed us to share our perspectives, especially with a blended family with each of our own children.

And the process generally was helpful and positive. And I've been married happily for 25 years, I might add. Another thing I might add peripherally as having a daughter who's now engaged. One of the things I didn't want to bring up, I asked that question earlier about possibly bringing up the topic of a prenup to an engaged couple.

But one thing I did is tell my daughter and her fiance that I would gladly pay for them to meet with an independent financial advisor, fee only, to get themselves off on a solid financial planning life together and to build some of that transparency and understanding in before they get married.

And they took me up on the offer. I was happy to pay for it and they found it very helpful. And that's something that I think is another avenue with certainly with considering marriage yourself to approach your fiance, your future partner, about the sharing that process. Or as a parent of adult children that are getting married, to suggest that.

Not to force them, nor coerce them, but it's just something else to consider in having that transparency and planning together. Yeah, that's great, Alan, thank you so much for sharing that. And I think I'm glad to hear that it was a more positive experience. And again, I think it's got a very negative connotation again.

I think probably deservedly so, because I think people have seen kind of the worst of how it can be done. And so I hope to show that there are alternative ways in how it can be done, but also how it can be thought of in the first place. So just opening up the conversations.

I also like to tell clients, I hope that this is helpful enough that this becomes the most useless document that you're ever going to sign. And that you all have a lovely and wonderful future together with each other. And hopefully having these challenging conversations up front will allow you to do that.

All righty. Any final questions, folks? If not, let me thank you, Adam, for a wonderful presentation. Really opened up our eyes to all the aspects of this for consideration, and certainly familiarizing us all with the collaborative process, which many of us were not previously familiar with. Thank you, Miriam, for helping out as a moderator, and for everybody for participating.

In a moment, I'm going to end the recording, but after I end the recording, I want to do an exit poll just to get feedback from everybody. And I also want to encourage everybody to check with your local Boglehead chapters, as well as checking with the online in the blog on the Boglehead's website is the calendar of events for both other live stage and local chapter meetings that are upcoming.

And if you don't have a local Boglehead's chapter in your area, consider starting one. So thank you again, Adam. That was fantastic. And we'll make arrangements to share his slide deck in one fashion or another. . . . . . . . . .