Episode 403: Protecting Love with Finances: How Prenups Strengthen Relationships w/ Aaron Thomas

Aaron Thomas 0:02

These are the types of things that are going to help you navigate your financial relationship, whether you ever get divorced or not. And so it's not just about protection from a divorce. Obviously, that's super important, but it's protection against the most common arguments that couples have during their relationship as well. T

Jamila Souffrant 0:20

minus 10 seconds, welcome to the journey. To launch podcast with your host Jamila Souffrant as a money expert who walks her talk she helps brave journeyers like you get out of debt, save, invest and build real wealth. Join her on the journey to launch to financial freedom in 54321, 4321,

if you want the episode show notes for this episode, go to journey to launch.com or click the description of wherever you're listening to this episode. In the show notes, you'll get the transcribed version of the conversation, the links that we mentioned, and so much more also, whether you are an OG journey or brand new to the podcast, I've created a free jump start guide to help you on your financial freedom journey. It includes the top episodes to listen to, stages to go through to reach financial freedom, resources and so much more. You can go to journey to launch.com/jump start to get your guide right now. Okay, let's hop into the episode. Hey, hey, hey, journeyers, welcome to the journey to launch podcast today I have on Aaron Thomas, who is a three time winner of Atlanta's best divorce attorney and nationally known as a family law expert. He graduated from Harvard Law School and has represented over 1000 clients, including NBA Hall of Famers, Super Bowl winners, Grammy Award winners, and just a range of people who are looking to basically protect themselves in a divorce. And after years of helping clients navigate difficult divorces. He launched his own company called prenups.com to help couples establish a solid financial foundation during the engagement so they could prevent common marital disputes. He also is the author of the book The prenup prescription, and I'm so excited to have you on the podcast. Aaron. I'm

Aaron Thomas 2:19

so excited to be here. Thanks for having me. Jamila, yeah. So

Jamila Souffrant 2:22

we met at FinCon this year. We both attended, and when I think it was, janelly was introducing us and saying, like, how awesome you were with like, what you did, I was like, Okay, tell me more. Tell me more, because I've had on people who we talked about just prenups and protecting yourself in a marriage, and I thought that you really were able to explain and put into, like, just real words, why a prenup and postnup and all the things that we probably know we should do are important. And so I definitely want to get into all of that for tips for our listeners and journeyers, but I do want to take it back a little bit and learn more about your journey. Because I find that people who listen to this like they're definitely gonna hopefully be inspired to take some action with getting a prenup or post up. But I also know that there are listeners who are in the field of study, who are in careers, maybe lawyers, and maybe they're not happy with what they're doing, or they're looking for something different. And it seems you've carved out a pathway for yourself as an entrepreneur and niche down into the space. And I would just love to learn how you got to this point, and to learn more about that journey.

Aaron Thomas 3:32

Yeah, absolutely happy to share. So family law as a niche, you know, obviously now I do a niche within a niche, just, you know, prenups and post nups, but family law kind of chose me. I was originally practicing criminal law. I was happy doing it. I was a public defender here in Atlanta, and loved my work, but those pesky student loans weren't going anywhere, and that public defender salary wasn't really eating into them, and a big time family law attorney here in the city approached me. He was looking for somebody who had trial experience, which I did, and he offered to double my salary to come on board and do family law in family law, just so you just to be clear, it is a euphemism. Most people are going to say divorce lawyer when they hear family law. Obviously, family law does include other things like custody, child support and prenups and postnups, but I didn't know anything about divorce at all. I didn't study it during law school, and I dove in. My parents are still together. They just celebrated 58 years together, so I didn't know anything about it. Even in my personal family, I wasn't married yet, most of my friends weren't married, much less divorced. I was thrown into this world of divorce, and didn't really know the first thing about it, and was just shocked at how bad divorce really was for my clients. I mean, obviously I didn't think. It was great, but I didn't realize how long the cases dragged on, a year to a year and a half on average, how much they cost, 15 grand per spouse is kind of the average. But the more money couples would have, the more expensive their divorce cases would be, because all of a sudden, if you're fighting over a million dollars, it's worth a little bit more to let the attorneys fight it out than if you're filing over $1,000 right? And it struck me that so many of the clients that I worked with could have avoided so many of the fights they had, not just in the divorce, but during the marriage itself, if they had laid down some basic ground rules of what is our financial relationship going to look like. And I know that's strange for some people to think about, just you know, my financial relationship like separate from the rest of our relationship. But yes, you have a financial relationship with your spouse, and there can be healthy ones, there can be dysfunctional ones, there can be all areas in between. And at first, I was scared off of marriage. You know, for myself I was I said, Don't get married. Avoid it at all costs. Throw a big party. You could change your last name, if that's your thing, but don't actually go through the legal relationship. And then I met the one I wanted to spend the rest of my life with, and and I had to temper that view a bit. And she's also a lawyer, and we sat down and thought about what would it look like if we were to get married and try to put everything possible in place to avoid the pitfalls that I saw my clients experience over the years. And we wrote all kinds of things into our prenup to what I thought was the perfect prenup, and a little bit of a light bulb went off, especially when I started telling friends and family what we'd done. And people said, You need to make this available. You need to communicate what this looks like to the general public. And that was the birth of the idea for prenups.com. Okay,

Jamila Souffrant 7:01

wow. I do want to go back a little bit into your story, because you said you were a public defender. How long did you do that?

Aaron Thomas 7:07

I was three years. I was a public defender three years. But

Jamila Souffrant 7:11

you realized, okay, I'm not earning enough money. And you got offered, or at least you saw this pathway to doing something different. Was that change difficult to make. Were you tied to this idea of being a public defender, as you giving back to, you know, society and your community, and now you're going into for profit? I guess law was that hard, because I just feel like there's a lot of people who are pursuing careers, or find themselves in careers, and maybe it is like, this intrinsic and this like, feel like they need to, or they've already committed to this thing, and there might be some reservations of like, making more money for whatever reason. So did that occur for you? Or how did that transition happen? Yeah,

Aaron Thomas 7:51

it's interesting. I did struggle with what that was going to mean. I did get a lot of satisfaction out of trying to give basically poor people the same chance in criminal court that rich people have. That's something I strongly believe that just because you don't have a lot of resources doesn't mean that you shouldn't get a fair shake in our criminal justice system. And then I went and left and worked for a firm that not only did divorce, but we represented the richest of the rich, I think that once I actually got into it, I realized that these kinds of problems hit everybody the same. It doesn't matter how much money you have. That's not going to protect you from heartbreak or the types of issues that go into a divorce case custody, having to figure out what a parenting plan looks like, divvying up your assets, divvying up debts. And I saw that a lot of good could be done in that industry as well. But yeah, it was a significant change.

Jamila Souffrant 8:51

And two, it sounds like you yourself weren't doing maybe that well financially. And so it was this matter of, I always say, like, how can you help other people and give to the point where you yourself are not pouring from a full cup that doesn't help like you as being a martyr and being the example of not being abundant or successful just because you're trying to help other people, you can be abundant and successful and help other people. And I know that's just a mind block or a block for some people in terms of their career and how much money they make and all that, 100%

Aaron Thomas 9:24

I totally get Now, why they say put your own oxygen mask on first. And it does allow you, I think, to have the resources, both economic and emotionally, spiritually, even to give back if you have put yourself in a more solid position. So, yeah, my own financial journey was, was a big part of going through that mindset shift, too.

Jamila Souffrant 9:51

Yeah, so let's talk a little bit about prenups. And you know, I know I feel like for a lot of people, they know it's the logical, smart thing to do. Yeah. And I think there's two things, well, there's a lot of things, but let's just say two scenarios in which you are discussing, like a prenup or postnup, and the prenup happens before you get married, correct? But I guess let's go back a little bit. Let's just define basically what the prenup is and what a postnup is. And then I want to talk about, like, bringing up those conversations and those situations and how hard that is for people to do?

Aaron Thomas 10:21

Yeah. So great place to start. I think a lot of people are confused about what is a prenup. So a prenup is essentially a set of rules that defines your financial relationship with your spouse, both during and, if necessary, after marriage. So a couple of things to unpack. There maybe a lot of people here during and they think, Wait, I thought that a prenup was literally just writing out your divorce settlement agreement before you get married. And they are surprised to hear that there are a lot of terms that go into a prenup that govern kind of how you manage your finances during the marriage itself. Certainly, we can dive into that, but just at a basic level, if you said, Okay, we're going to split everything. If we split up, we're going to split everything we have in joint names, 5050, and anything you have in your name you keep, and everything I have in my name I keep. Okay, Sounds straightforward, but that's a much different agreement. Depending on where your paycheck is deposited. Does your paycheck go into a joint account, or does it go into a separate account? Right? Is the house in joint names? Is the house going to be in the name of only the person who owned it prior to the other spouse moving in? Right? So a lot of the details are about how are you going to manage your finances during the marriage itself? And the second kind of big observation there is, if a prenup is just a set of rules that governs your finances during and after the relationship, then every married couple, in a sense, has a prenup. You are just choosing between the state's rules, what I call the default prenup and your own rules, or what you might call a customized prenup, going and getting your own prenup. And so I think when a lot of people are able to look at it that way, they say, Okay, who should have control over who owns what in my relationship? Should the state decide that? Or should me and my spouse decide that, ideally, at a time when we are getting along and love each other and are operating from a place of trust and furthering the relationship,

Jamila Souffrant 12:25

and then the post nup is what you so the prenup you get done before you get married. Post up is the same thing you just mentioned, but it's established after you're married.

Aaron Thomas 12:33

That's exactly, right, yeah, postnup is just a prenup that is done after the date of the wedding,

Jamila Souffrant 12:37

right? I love how framing it in you know, you have a prenup anyway, it's either the default one of your estate or the one you control. So that's actually like, good because it's happening. Just like I tell people your journey, your financial journey, is happening whether you participate in it or not, like money impacts your life, and so you might as well get on board and become more of the leader in the journey or the person that controls it, versus letting things just happen to you. So I love that perspective. But again, I know that all this is logical. I mean, you married a lawyer, so I'm assuming you both are very logical people who will come together and talk about these topics and not know that it's not personal, know that it's not like you're the other person is not trying to get over or that they don't love each other. And I think that comes up just a lot for people when they're thinking about prenups. Is that or postnups? Because like thinking that you're going to go to your partner app now and say, Hey, let's do this. While it's logical, it makes sense, your brain is telling you that it's perfect. I think the emotions and what you perceive your your partner will feel about it is probably what stops a lot of people. So let's talk about that. Do you find that that is a barrier for a lot of people, just like thinking their partner will be upset or not think they love them, or you're planning, you're almost anticipating a divorce, which is why you're bringing it up

Aaron Thomas 13:55

Absolutely and that's that's totally fair. Before I got into this area of law, I thought the exact same thing about prenups, and I don't even think that it had anything really to do with me being a lawyer, even after I'd graduated law school before I got into family law. Specifically, I thought prenups were for people who didn't think they were going to stay together, and I still understood the logic of it half of marriages and in divorce, and certainly it's the smart thing to do, but I also understood the emotional element of it as well. I think that what I realized when I actually got into family law and started crafting some prenups and postnups is there's also an assumption that a prenup necessarily means you keep everything that's yours, and I keep everything that's mine, and there's nothing in the hours column, so to speak. And what I realized is most couples didn't want to do that. They wanted everything to be in the hours bucket, except for maybe a house that I owned before we got together, we used to. Share that if we don't make it, and I had a house that was paid off, it wouldn't make sense to split that. Or if you get inheritance, certainly I shouldn't get part of your inheritance that your parents left you, or you shouldn't be on the hook for my student loans that I had coming into the relationship when you didn't have student loans. And there were mainly common sense items like that. And it wasn't that somebody was trying to leave their spouse high and dry if the marriage came to an end. They were just trying to get clear about, you know, the very basics of what's mine, what's yours, what's ours. And we get on the same page and take that potential dispute in the future off of the table. And then, even for couples who say we want everything to be 5050 like we don't, that's something I often hear. We don't need a prenup because we're in it together. And literally, everything we have is 5051, when you peel back the layers, that's probably not true. There's probably something that is mine, like this cell phone is mine. It's not my wife's. You know, my wife's laptop is hers. We probably agree that our car is blown to us. So there probably are some things that fall in the mind in yours columnist. But even if you do agree that everything is 5050, guess what? You need to pre no more than anybody else, because in 41 out of the 50 states, that's not the rule. The rule is the court can take into account each spouse's contributions during the marriage when deciding how to split up an estate, and they can split it 6040, or 7030, based on a stranger's subjective interpretation of what your contributions were to your marriage, both financial and non financial. I mean, it's not difficult to see how messy that can get very, very quickly, like everybody thinks they do two thirds of the work in their household, also,

Jamila Souffrant 16:45

too. You just don't think you know you're marrying this person, or you're with this person, and you're just like, well, things don't work. Like you're talking from a perspective and a place of when things are going well. So you're thinking, well, if things don't work, surely I can just, we can talk about this like rational people, and you should know that I had this property before I came into the marriage, so it shouldn't be a problem for you to let that go with the divorce. Like I think a lot of people just think they expect their partner to do the right thing by them. But I also know emotions when something when a marriage goes wrong and things are hitting the fan, the worst comes out of people, and that's not what happened. So I'm sure you've also seen that, where it's like I thought I married a very fair, logical person, but now within this divorce, this person is not acting the way I expected or I thought they would. That

Aaron Thomas 17:32

is so perfectly true. And I've heard from my clients over the years, people say over and over that the person you divorce is not the person that you married. That is the other kind of big aha moment that I had when deciding between the default prenup and the customized prenup. Is the default prenup says you and your spouse have to decide who owns what at the time that you are least equipped to do it when the marriage has fallen apart, when you're on bad terms, when the trust is completely gone, when now you're thinking about self preservation and what your life looks like after when you can't stand each other is when you have to come to an agreement on the ownership and response of literally everything that you and your spouse own. And guess how that goes? You know, very predictably, not super well, right? And if you can't come to an agreement, start paying the lawyers that is your option or the customizable prenup. Your own prenup means you are making those decisions at a time when you're best equipped to do it. Everyone's willing to be fair on the front end, when you're planning a life together and you think that we're not going to ever need this document, everyone's everyone's totally willing to be fair. The prenups that that I draft are almost always objectively somebody would look at it and be like, That's a great that's a great setup that you guys have, that's something super fair, and you're taking it out of the court's hands, and you're you're protecting your relationship from your future self, even right, the the emotions that you may be going through at a bad time, you are protecting you and your spouse from that type of situation by addressing these kinds of things, ownership of assets, responsibility for debts, ahead of time, and taking that can I get 60% if I show the court what a jerk my spouse was, you're taking that potential off the table.

Jamila Souffrant 19:19

It sounds like too Right? Like there's courtship, where maybe the couple is dating and then an engagement, and then now they're ramping up to planning a wedding. So would you say, like, someone who's just dating to like, approach the level at which their partner would be willing to do a prenup as a measuring stick of compatibility? Because part of me feels that some people don't want to bring this up, like there are many reasons, right, but like to say one of them could be that I feel like if I bring this up, my partner will get upset. But it's almost like, if your partner gets upset and you are bringing this up in a very plain, respectable, practical way, it almost looks, feels like a red flag that maybe this is not the person that you should enter into the. This commitment with but you don't. Sometimes people don't want to know that. They're like, Okay, I actually don't want to like, see that yet, but then it, it eventually will come out if that person is who you think they are, right? Yeah,

Aaron Thomas 20:10

yeah. I think that a lot of the issue in having the prenup conversation stems from the stigma surrounding it, and it is a stigma that just doesn't exist in other areas of our lives when we're talking about financial protections, right? We have insurance for basically every type of financial catastrophe that come upon you. We have we have life insurance to protect against an untimely death. We have health insurance to protect against unexpected medical expenses or a medical emergency. We have car insurance to protect against the car accident. We have house insurance. A divorce, make no mistake about it, is a financial catastrophe for most couples who go through it. And for some reason in this one area, there is this stigma that makes it like gross to protect yourself against it, and so people avoid doing the logical thing for understandably, for these emotional reasons. And the best way that I have come up with to try to help couples have the conversation is don't start with the word prenup, because it carries so much stigma and weight that if it's the first thing that comes out of your partner's mouth, of course, you're going to think, uh oh, they're planning for the split. They're planning for the breakup already. They really love me, all these kinds of things. And instead, if you can approach it from what it is that you are trying to accomplish first, and then work backwards from there. So for example, you know, for prenup or post up to be enforceable, both balances have to disclose all of their assets and debts prior to signing. So I think that before we take this step, we move in together, we combine our financial lives. Do you think it's a good idea for us to be transparent with each other and put all of our assets and debts, but down on paper? Share it. Talk about it. Talk about what it means. Talk about our financial goals, most people are going to say, Yes. Should we be clear about, are our paychecks going into a joint account, or are they going into a separate account? And if they go into separate how are we splitting up the joint bills, our joint expenses, that type of thing, savings rates. Do you carry debt? Those types of conversations, what would happen if one of us left the workforce? What would happen, you know, and yes, God forbid, if we break up. What do you think would be fair, both in terms of dividing assets? Should one of us be paying the other one alimony? One of us? What if one of us isn't working at the time? What if one of us is a full time caregiver or disabled or talking through those types of things? Most marrying couples aren't going to object to any one of those individual conversations coming up, and what you're really talking about are the elements of a prenup or a post Nup. And I think if you then say not to spring it on them as a surprise, but if you then say, okay, let's address all of these issues. And you know, by the way, my uncle went through a divorce, and they spent 25% of their net worth on attorneys to fight over who got the remaining 75 of their assets. And I just think it would be smart for us to just decide ahead of time your retirement yours. My retirement is mine. Everything else is in the R's bucket. We're splitting 5050, no questions asked. Can we are we on the same page for that? And if you are, lock it in and take that potential case off the table forever. And if you're not on the same page, I mean, so much better that you learn that at the beginning of your marriage, rather than move forward 810, years into a marriage based on assumptions that turn out not to be shared assumptions between you and your partner.

Jamila Souffrant 23:35

Yeah, thanks for giving the language around bringing it up, because that's very helpful. And as you were talking about insurance, you know, it came to our mind that while people pay insurance for these things, and that's like, the one of the most important parts, like paying for a prenup, like they avoid, is like, I think most people will not want to pay insurance. They're forced to, like to drive a car, or to, like, get a mortgage. And so I think it's almost like this natural just disposition and the way humans work is like, you know, I'd rather not spend the money up front and take my risk later, even though it's going to be a higher risk if things go wrong, because they don't want to spend that money up front. It's almost like, to me, when I talk to people about saving and investing, it is that long term, like they're not seeing the benefit right away. So even though they'll have a lot more money in the future, they care about the money that they have right now. And I'm like, but you can have like, 10 times as much if you put it away. And they're like, No, but I want that money now. So I I do think that is part of just a universal issue, this having to delay gratification or upfront payment for things that they don't know it will happen or not, and feels like it's wasting money. Quote, unquote,

Aaron Thomas 24:45

yeah, that that observation hits for me, that that seems on point because, and it's the same thing that people will sometimes do with everybody knows they need a will. Everybody knows they need a will, and that it saves your even people don't know. Exact details, they know that it will save your family stress and strain and financial cost at a time when they least need those types of problems on their plate, but it involves thinking about the possibility that you might die, and that is uncomfortable, and as a result, we sometimes just avoid it. I think that the best way that society has addressed these things is to just normalize it as a cost of whatever of living your life in society, right? The car insurance, like you said, is mandated. The home insurance, you've got to have it. And if you're spending x amount on a wedding, just a percentage of that should be set aside for the agreement. And if that were, if that were normalized, if it were the kind of thing that you if you had to opt out instead of opt in to a prenup, like literally everybody would do it. Literally everybody would do you would not think twice. If it was normalized in society that this is just a box that you check, you do your premarital counseling, you get your prenup, you get your marriage license, and you move forward with your relationship. And so that is that is part of the mission, right is to normalize doing the correct thing for your life, for your finances, even if it can be emotionally difficult in the moment.

Jamila Souffrant 26:18

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Aaron Thomas 28:44

Yes, yes. I think that the post up conversations are, you know, on average, more difficult because of a couple of things. One is exactly what you said. People think, Okay, now we're mid, you know, we're mid relationship. You know, when you're marrying somebody, it's kind of obvious that the love is high or you wouldn't be going through with it. And when you're married, you have had, you've already had some unromantic moments of your relationship. Anybody who's been married for a few years has had ups and downs, and so it can be more difficult from that angle, also, if they just say, no, what are you going to do? Run to the run to the courthouse, at least if it's prior to the marriage, you can, you can choose not to get married, and that's a much less, yes, it's drastic, but that's a much less drastic move to take than it is to say, Okay, well, I'm splitting up if you don't sign the post up. Also the post nub is you've already got a default prenup, so if so, you are having to ask somebody to trade the rights they may have under your state's laws for something that you want to put in place. When I see postnups come up most often, it is usually because there has been some kind of event, some prenup, some post ups are people who meant to get a prenup and they just ran out of time with the wedding. Planning. Others are the couple wants to stay together, but there has been something somebody, somebody cheated, or there was maybe some financial infidelity, and the couple says, All right, we want to work on relationship, but I need the security of knowing that I'm not going to be responsible for that 25 grand credit card debt that you ran up without my knowledge. I want us to stay together, but I am investing heavily in my 401, K, and we've had this conversation, but you're not saving for retirement, and I want to know that my retirement is protected, or, you know, any number of things, or I'm leaving the workforce and to stay with our stay home with our kids, and that was never on my mind at the beginning of our relationship. And I want to know that if I'm going to sacrifice my career for the betterment of the family here, that I got some alimony coming my way, or that I'm guaranteed a certain share of the assets if we split. So it doesn't always have to be necessarily a negative thing. It can just be adjusting for your new reality. And so usually there's been some kind of impetus. Some are, you know, somebody is, is listening to this podcast, is just saying, I want to be clear about what's mine, what's yours, and what's ours, while we both agree on what falls into those three categories. And let's just, let's get that protection in place, particularly as our assets grow and the potential downside risk of a divorce grows in size, I

Jamila Souffrant 31:29

think too, with the post nup is that if there was an event like financial infidelity or or just infidelity, and this is something as the partner who That happened to that, it seems perfectly reasonable to request and require that, you know, there might be a restoration process right to get the couple back, and it might take years, you know, to get back to trust and you but you have to establish that. So I do feel like that is a good time to bring that up for you, if you are the person that has been wronged or cheated on in that situation, or your partner hid something from you financially. Is that okay? But in order for us to work back together, if you're planning to stay together, you know here, if you want to show me good faith that you actually want to do better by me, or whatever that looks like, then this is something that I'm not going to budge on. It's or that's important to me, and I don't see why. If your partner is trying to work on the relationship and they've done you wrong that they would not be okay with that.

Aaron Thomas 32:28

Yeah, yeah, absolutely. And it even can go beyond the financial so it is super common. Some of the most common clauses that we put in our prenups and post up these days are around counseling. So what I would see in my divorce practice is one spouse would want to go to counseling, but when they bring it up, it's right on the tail end of like a drag out fight, and the other person, maybe understandably, is not as receptive to the idea of counseling. They take it as like, Oh, you think something's wrong with me. How about you go to counseling? Maybe something's wrong with you, rather than establishing ahead of time, this is how we are going to resolve conflict when it arises in our relationship. And so that's one of the things that my wife and I did in our prenup, is we put a clause in that said either one of us can trigger up to three marriage counseling sessions per year, and we've agreed ahead of time that we're going to go no questions asked. Some people will put in clauses about substance abuse counseling if that's been something that has come up in the relationship, or is a concern for either partner. If either one of us thinks that that's an issue, we're going to go talk to a counselor. And if the counselor agrees that there's a substance abuse issue, you're agreeing to do three months of treatment, something like that, so that instead of having to figure out those difficult problems at the point in time that they arise, you have a plan in place for how you are going to resolve that type of conflict. And a lot of people think that that can be a really helpful and healthy way to address those things in a relationship.

Jamila Souffrant 33:56

Part of the benefit other than because you don't want to like, let's say that happens. You say, alright, it's in our prenup. I can, I can initiate this counseling session. I think the important thing too is that you, you came up with this plan ahead of time, in advance, so then least the parties are on the same page. But now, if you're in a situation where you're not getting along, I can see where one partner might say, well, even though I know it's in writing, I know that's what it is, but I don't want to right, that can still happen. So what are the stops or the enforcement of that? Like, you don't want to go straight to, well, it's in the prenup. So this can be like, we can get a divorce, but are there other steps or things in which you can enforce what has already been put in a prenup without taking it all the way to starting off the divorce proceedings.

Aaron Thomas 34:41

Yeah, some people will write in varying levels of enforcement mechanisms, like, if you don't follow these rules, then if we break up, there's going to be a financial penalty for you on the back end. But I think, in my experience, people have found it to be helpful just. From explicitly defined expectations up front. It's the same kind of thing, like I might compare it to say you have a rental apartment. You're renting out your apartment to somebody, and you put a no pets clause in there, and they get a cat. It may not be enough for you to divorce yourself from that rental contract, right? It may not be enough, but it is informative that, hey, we agreed ahead of time that this was going to be the rule, and you're not breaking the rules. And so when it comes time up for renewal, or if I'm deciding whether or not to continue this lease, then that is a factor that I put in place, rather than the alternative, which is I was, I've never been in fan of a fan of counseling, like, I don't want to go to counseling,

Jamila Souffrant 35:40

like, but we talked about this, like, right? Like, this is in the freedom,

Aaron Thomas 35:44

right? And I think it's, I think it's something different. If you've had it's kind of, it's also like the definition of cheating, right? If our line is, you're not going to even have lunch with an ex alone, the two of you alone, and we've explicitly said that that is, like breaking the rules. Then somebody goes and does it, then they can't, they can no longer use the excuse of but it was just coffee. Like, that's just, you know, we're only friends now. Like we were just, you know, we were just hanging out, because you've explicitly said, this is the line. And so it is just more informative, and it gives you less weight room. If you say, you know if you agree, ahead of time, you're going to do counseling if X, Y, Z happens, and then you don't do it, it's much more informative than if you never got on the same page about it in the first place. And so just putting those kinds of expectations that or assumptions that can be kind of nebulous, and putting them down into writing, I think, is super powerful for couples.

Jamila Souffrant 36:38

Yeah, even just getting to that point is the work is like getting to agree and to know each other's standards and work together to get there, seems like the majority of the work to the relationship. And now that you said that I've seen, especially like with celebrities, you know, sometimes you'll see things in tabloids that this person had this cheating clause in if you cheat like they get more money in the divorce, which, you know, you hope that you wouldn't need to put that in to a divorce, but I'm, I'm sure that it does help deter or it makes the person think twice, like, Wow, if I do this, like, you know this is going to be millions of more dollars that I have to pay out to my ex. Yeah.

Aaron Thomas 37:16

If nothing else, it puts the importance of that activity front and center both people know about it, and we don't typically put an infidelity clause in every agreement that we draft, but I think it can be reasonable if it's been a problem in the past, and part of the assumption that you're moving forward in the relationship is, I am not going to cheat, and the other person says, I want to believe you, but Can you put your can we put some teeth behind there? Can you put your money where your mouth is on that? And that may be the level of security that somebody needs to feel like they're moving forward in the relationship with confidence. And that extends, you know, way beyond infidelity. That can be a bunch of different things in the agreement. Another very popular thing is having what I call the annual shareholders meeting clause in your agreement, where it's very easy to Yes, you've you've disclosed your assets and debt to the beginning of the relationship, and you had that money conversation then, then it's easy to go a year, two years, five years, you're not having those conversations. You're drifting further apart in your expectations. And so my own prenup has an annual shareholders meeting clause where we have an agreement. We're going to sit down once a year and we're going to talk about this preset agenda of items. What was last year spending? What's our budget for the upcoming year? We're going to revisit insurance. We're going to plan for the upcoming year's travel. We're going to talk about potential big expenses. Do we have to replace somebody's car this year? Is this year that we have a baby or that we buy a new house? Can we look at the status of our investments and see how they're doing? And these conversations that so easy for these conversations to slip in the context of you're raising kids and you're working a job, and you have careers, and you've got all these other things to go on in your lives to have a set time that you're going to agree to sit down and talk about these things, it's again, it's an investment in the success of your relationship. Yeah,

Jamila Souffrant 39:08

I love that, having that meeting and baking it in, you know, I know a lot of people like to do this around the New Year and setting goals and resolutions as for yourself and then as a family. So it's a perfect time to bake that in and make it just part of the conversation. Let's talk about affordability, or just like, the cost of it. So I know that for some people, is also the barrier. So even if they believe that, okay, I know I should do this, it's like, Oh, it's another cost on top of the wedding, on top of the honeymoon, on top of just life. So can we talk a little bit about how much these things cost and considerations for people when they are weighing the value and cost of this, yeah,

Aaron Thomas 39:45

for an average prenup, my office does them for flat fees of 3500 that is pretty typical. It's going to vary based on your location. High cost of living areas are going to be more, low cost of living areas are going to be less. That is pretty typical for. Working with an attorney to have a prenup draft if you're not having anything that is super crazy complex. And right now, the average cost of a wedding is like 35,000 so it is, you know, 10% it's a rounding error on the average wedding budget. I'm sure listeners your show aren't spending that much money, probably being more economical in those areas. But again, it is, you know, the kind of insurance where you get it once and it should last you for a lifetime, versus, you know, your car insurance. You're paying that premium every single year throughout your ownership. This is something that you know when you break it down to the cost of a 20 year marriage is really a tiny drop in the bucket when you see the type of benefit it gives you. And the one divorce case that I worked on, the most expensive divorce case that I ever worked on, our client paid over a million dollars in fees alone just for his side of the case. The case lasted four years. It went up through the appeals court, we had all types of experts. It was like a two week jury trial. A lot of people don't even know that that is a possibility in a divorce case. It is in some jurisdictions, and this was one of those couples where when they got married, they didn't have anything. But it turns out, most of the fights in divorces isn't about, did you have this before that we came to the relationship or not, it's about most of the fights is about what you accumulated during the marriage itself, and they didn't have clear understanding as to whether the assets they were accumulating were mine, yours or ours. And that turned into a four year seven figure on lawyers fees fight that could have been avoided for a relatively simple document that cost a few grand at the beginning of the relationship. And so what I tell people is, if you are upwardly mobile, if you are on a career path, if there is the possibility that you are going to make money in the future, you can't just gage it based on what you have in the bank account at the time you get married, this is something that you want to protect you 1020, 30 years down the line, after hopefully you've accumulated millions of dollars, and being clear about what's mine, yours and ours, is going to benefit you during the relationship itself, right? Because it helps you navigate. You know who has access to what finances and what level of communication do we expect from each other during the relationship like you know, the another common clause is neither me or my wife can spend over 500 bucks from any joint account without approval from both of us. These are the types of things that are going to help you navigate your financial relationship, whether you ever get divorced or not. And so it's not just about protection from a divorce. Obviously, that's super important, but it's protection against the most common arguments that couples have during their relationship as well.

Jamila Souffrant 42:51

Guys especially see this being important. A lot of my listeners like income varies, but like, if you are maybe the breadwinner of the family, right? Or, you know, you are taking on this role that you will stay at home and you're not going to be contributing monetarily to the house, but you are contributing to the household and the success of the partner who is working, if they're allowed to work and have that freedom, versus you being home. So I just feel like it's such a it's such an important protection for you, depending on where you are, I mean, for both parties, but if you are the one that is not bringing in as much, or you're bringing a lot, especially as a female breadwinner, and you want to protect that also, I was you were talking about the guy that you were representing. I'm I'm wondering, I'm sure lawyers go through this all the time. It's like when I listen to all my the dateline in 48 hours, and you have the lawyers defending, like, the alleged killer, and they're always just like, it's my duty, even if they think they did it, they're like, it's my client. I have to, like, separate what I think versus what my duty. And so I'm wondering if there have been cases where you were representing the person who had more money, or, you know, the person, and you're like, oh, like, I wish the other person did have the prenup, because you don't necessarily agree with maybe how that one you're representing is handling things, and it sucks for the other person, and they're seeing the short end of the stick because that person has more money or more leverage in the situation. Yeah,

Aaron Thomas 44:14

totally. Divorce law is probably 10% black letter law at 90% emotion in psychology. And so a lot of what I would try to do with my clients is help them recognize that this is not a business deal where it's all about coming out with the highest number on your end of the column at the end of the day, often this is the person that you have to co parent with for the rest of your life. This is a relationship where you guys share friends, you share family, and you can't just treat it like a numbers game. The other thing is the stress and strain of you know, potentially a year and a half of. Litigation is time and energy that you never get back. And I did have a lot of clients that were like, look, I would rather be more generous than I have to be and protect our ability to co parent our kids or protect my sanity over the next year and a half, rather than try to go for every dollar, and then you see, you see the opposite. You see where the money really isn't going to change no matter what you say. But somebody wants their day in court. They want to drag the other person through a court process where they get to expose them and their behavior in front of a public courtroom as they're kind of pound of flesh that they get back and either way, you can protect against, you know, those types of situations by having an agreement in place ahead of time that says we're not going to fight about it. You know, these things are 5050, this is mine. This is yours. And remove yourself from a public court process that really tends to make the lawyers rich and and nobody ends up, quote, unquote, winning at the end of the

Jamila Souffrant 46:02

day. The one thing I wanted to talk or ask you about before we kind of close up is I know that there are probably, you know, you have your service, which I'll let you talk about in just a minute, but there are companies, I'm sure other companies are like boilerplate prenups and postnups that you can buy online for cheaper than what you've just mentioned, and people will naturally say, Well, why not like, I'll just do it from like, whatever, like, $1,000 is cheaper than 3500 so why not do it that way? Can you talk a little bit about what those differences may be? And I know, obviously you're biased, because it's your company, but I'd love to hear it, because I know that would be if I was doing this. By the way, I do not have a prenup or post up, so to be honest with my audience about that, that I'd be like, well, like, what's the difference between the cheaper option versus going with Aaron's company? Yes,

Aaron Thomas 46:49

I am biased. I will say that up front, but I also think that this is the most important financial transaction of your life, your marriages. The more I know you don't. Most people don't look at it like a financial partnership, and it certainly is not just a financial partnership. It's an emotional partnership, it's a family partnership, it's a spiritual partnership in a lot of ways, but it is also a financial partnership. And is the most important financial contract that you ever signed getting married. And I think that people should treat it with that type of seriousness, the template boiler plate prenups and postnups that you can get out there are not customized for your life. They often are not going to have anything like the shareholders meetings or the counseling clauses or pre calculating alimony for a spouse that leaves the workforce. They're going to be very kind of cut and dry, mine yours, and that's it. And don't allow for, you know, the kind of flexibility that an individual couple really needs when entering, you know, a financial partnership that this has to last you for the rest of your life. So I would not recommend that any of my friends cheap out on something like this. Also the type of protections in terms of, what if you do split up? What does that look like? Are you required to go to mediation? You know? Are you required to do co parenting counseling if you have a disagreement on what a custody parenting plan should be? The template agreements that I've seen never include these kinds of protections, and so people end up going to court, and they say, Why did I get this prenup? If it doesn't save me from having to go through like a courtroom divorce process, and it's like, okay, your prenup, your template prenup, protected that one retirement account that you had coming in, but it didn't give you a path to resolve all of the other conflicts that can come up in a divorce case. And so it really is one of those you get, what you what you pay for, kind of things. We have never drafted an agreement where somebody didn't end up including a clause that was completely not on their radar before they've met us. And so drafting your own prenup or using a template agreement is like doing your own dental work, like it may turn out, okay, but it's probably not recommend.

Jamila Souffrant 48:51

And this just came up for me. I'm assuming that you also may need to adjust the prenup like you could set one, but then as life happens, you may need to add clauses or come back. So how does that work?

Aaron Thomas 49:01

Yeah, people will sometimes come back and revise their agreements. Really, it's just called getting a post up where we'll go in and address the things that have changed and keep the things that that are still relevant for the couple. We like to build in enough flexibility so that most of the time, couples don't have to come back and redraft their agreement. Typically, these are structured as what I call title based agreements, meaning that you have the power during the course of your relationship to re title assets and change their classification. So, okay, we've been together for 15 years. Maybe now, you know this house that I owned, you know, prior, maybe, let's just consider this a joint asset at this point, and they'll put both of their names on the asset and under the terms of the agreement that now is classified as marital property. So often, there are things you can do that don't require coming back to revise your agreement, but if you need to, then, yeah, once you've already got a starting place, it's a lot easier to have the post enough conversation when you've already got a freed up in place.

Jamila Souffrant 49:59

Oh my gosh. Okay, love it. Okay, so, Aaron, please tell us more about the company your services, and you do have a special offer for journeyers, right?

Aaron Thomas 50:07

I definitely do. So our website is prenups.com and for your listeners, we're gonna do a discounted consultation of $99 you get a video, you get a free ebook, and you get to sit down for a half hour with a premarital finance specialist to walk you through how a prenup might help in your situation, and your listeners can access that prenups.com. Backslash journey, if people want to find out more or just kind of dip their toe in follow, I'm prenup guy on Instagram,

Jamila Souffrant 50:40

got it, got it, and just give me the website one more time, prenups.com,

Aaron Thomas 50:43

backslash journey.

Jamila Souffrant 50:46

I will link all of this in the episode show notes. Thank you so much, Aaron, for coming on this show and just spreading the good word about prenups and postnups and why it's so important. Thank you. Thanks so much for having me. Jamila. Don't forget you can get the episode show notes for this episode by going to journey to launch.com or click the description of wherever you're listening to this and you can still grab your jumpstart guide for free to help you on your journey to financial freedom by going to journey to launch.com/jumpstart

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