Episode description

It’s often said that money is one of the most common sources of conflict in a marriage, and a leading cause of divorce. Today’s episode has me rethinking that positioning: What if money isn’t the one to blame, and the actual culprit is a lack of communication?

You’ve likely heard me talk at length about the 7 Steps to Wealth, which is the framework I used to climb out of debt and build lasting wealth. The final step in that framework, Protect, is all about safeguarding your financial future. It’s one of the most important–and often neglected–steps. 

I did a deep-dive into the seventh step in episode 264, but today we’re taking a closer look at one crucial part of Protect: how to protect your wealth when you’re in a relationship. Specifically, we’re going to talk about prenups, postnups, and how they can help you preserve your wealth *and* your relationship.

To help us unpack this topic, I’m joined by Kara Foster, an attorney from Foster Hsu, LLP. Kara and Lydia, her partner at the firm, are experienced in all aspects of California family law including divorce, legal separation, domestic violence, guardianship, stepparent adoption, and—what we’re focusing on today—prenuptial and postnuptial agreements. 

In this episode, we discuss:

• What a prenup covers and when to consider one
• Why prenups can be good for a relationship
• How to create a prenup and how much they cost

But my biggest takeaway was this: What’s more important than any piece of paper you sign (or don’t) is that you have open, honest, and consistent conversations with your spouse about your finances. You should be on the same page about what’s going on, and the only way to do that is to talk about it.

I learned so much from this conversation, and am grateful to Kara for lending her voice and expertise to the show. Now without further ado, let’s talk about what to do before you say “I do!”

Here’s what you’ll learn in this week’s episode of Love, your Money:

• 03:44 What a prenup is, what it covers, and what can not be included in it 
• 05:44 When should couples consider a prenup, and why businesses and real estate make asset division more complicated 
• 08:05 How a prenup allows couples to keep assets separate during the marriage–and the pivotal thing a prenup “forces” you to do before getting married that will change your relationship (for the better!) in the long term
• 12:49 How a postnup differs from a prenup, when it’s worth getting one, and the limits or enforceability of the agreement
• 14:43 The process of creating a pre- or postnup, what can make the cost go up, and the importance of financial disclosure 
• 18:30 Sticky situations a prenup can help couples avoid, the stigma of prenups, and why Kara doesn’t agree with the bad rap–even though she hears it a lot
• 21:51 Why unmarried couples who purchase real estate should get a cohabitation agreement, what it means to be joint tenants, and the importance of taking title
• 25:22 Why Kara didn’t get a prenup, the importance of ongoing communication about finances in marriage, and red flags to look out for 

Show Notes
To get access to the full show notes, including all the resources mentioned, visit: https://hendershottwealth.com/podcast/kara-foster-finances-in-marriage

Hendershott Wealth Management, LLC and Love, your Money do not make specific investment recommendations on Love, your Money or in any public media. Any specific mentions of funds or investments are strictly for illustrative purposes only and should not be taken as investment advice or acted upon by individual investors. The opinions expressed in this episode are those of Hilary Hendershott, CFP®, MBA.