Can Planning for Divorce Actually Save Your Marriage?
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What financial considerations should I think about before marriage?
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I'm Imani Moise for The Wall Street Journal. This is What's News Sunday, the show where we tackle the big questions about the biggest stories in the news. All week, The Wall Street Journal has been breaking down the cost of divorce. According to a 2023 Harris Poll, 42 percent of American adults support the idea of a prenup, but only 15 percent of couples actually sign one. That's up from 3 percent in 2010. So today we're breaking down the math you need to do before saying I do.
Going into a marriage is the biggest financial decision that you will make in your life. And it shouldn't be taken lightly because you put years of blood, sweat and tears into this relationship and it can financially decimate you.
Why is it important to plan for divorce even before getting married?
And so you need to plan for that.
That was Kristen Sheeran, the director of the Institute for Divorce Financial Analysts. Yes, that's the real job. And no, she wasn't exaggerating. Certified divorce financial analysts, or CDFAs like Kristen, are the people brought in to untangle finances when a marriage ends. They figure out what everything's worth, what gets split, and what those decisions mean years down the line. Occasionally, they also have to track down assets that spouses forgot to disclose. So let's get into it. Kristen, I do have some personal news since we last connected. I actually got engaged last weekend. Congratulations! Thank you so much. And I thought about you over that weekend because I remember you telling me that you believe that it's really important to plan for a divorce, maybe even before you start planning your wedding.
Why should I listen to you? And how do I know that that's good advice and not just a sales pitch?
How can a prenuptial agreement protect my financial future?
As you enter into a marriage, I think that it's somewhat negligent to not also plan for the unfortunate event if that marriage goes wrong. The statistics tell us that at least 40% of first marriages are going to end in divorce. The statistics tell us that 60% of second marriages are going to end in divorce and you need to protect your financial future. Divorce is one of the most financially devastating events that you can have in your life. And unfortunately it occurs at a time when most people don't have the opportunity or the time to financially recover from that. And so it's hugely impactful for you and your spouse to be on the same page. and to be working in conjunction towards the same financial goals.
And are those negative financial outcomes that you just spoke about the same for both men and women?
Women are disproportionately impacted by divorce. Women make the decision to be stay-at-home caretakers. More women need to realize that those are years that they're going to be outside of the workforce. And those are years that they are not going to be investing in their own careers, potentially investing in their own 401ks.
So prenuptial agreements are usually the best way for people to protect themselves financially in the event of divorce. What is a prenup? And what does a good one look like?
What are the common misconceptions about prenups?
The prenuptial agreement is a contract between a husband and wife, and it can literally contain almost anything that you want it to contain, as long as it's not against public policy. For example, you can't put sexual favors into a prenup. You can't put restrictions on conduct after the divorce. But what you can put in a prenup is, and this is the type of prenup that I'm going to insist that my children have, is that you can say, if and when we do get divorced, here's how we're going to do it. We're going to have mediation that contractually has to occur. We're going to utilize a certified divorce financial analyst as part of our divorce process to ensure that the numbers are correct and that everyone understands the financial piece of the divorce.
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Chapters
8 chapters
1
What financial considerations should I think about before marriage?
0:00–1:24
2
Why is it important to plan for divorce even before getting married?
1:24–2:23
3
How can a prenuptial agreement protect my financial future?
2:23–3:50
4
What are the common misconceptions about prenups?
3:50–5:24
5
How can discussing finances strengthen a marriage?
5:24–6:12
6
What options do I have if my spouse refuses to sign a prenup?
6:12–7:19
7
How can I ensure my prenup or postnup holds up in court?
7:19–9:08
8
What should I expect when hiring a Certified Divorce Financial Analyst (CDFA)?
9:08–14:25
Speakers
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