Prenups, Do They Help or Hurt? With Shawna Woods

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In this episode of We Chat Divorce, we’re joined by Shawna Woods to discuss the topic: Prenuptial and Post Nuptial Agreements. Here’s an overview of Shawna's experience:

Shawna Woods is the Managing Partner of the Atlanta Divorce Law Group. She has been practicing exclusively in Family Law for 18 years. She is the host of the soon to be launched Happily Ever After Divorce Podcasts and regularly appears as a guest on the firm’s Facebook Live.

Hosts, Karen, and Catherine sit down with Shawna Woods to discuss Prenup, Do They Help or Hurt?

Learn More >>www.atlantadivorcelawgroup.com

Connect with Shawna on LinkedIn >> @Shawna Woods

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The We Chat Divorce podcast (hereinafter referred to as the “WCD”) represents the opinions of Catherine Shanahan, Karen Chellew, and their guests to the show. WCD should not be considered professional or legal advice. The content here is for informational purposes only. Views and opinions expressed on WCD are our own and do not represent that of our places of work.

WCD should not be used in any legal capacity whatsoever. Listeners should contact their attorney to obtain advice with respect to any particular legal matter. No listener should act or refrain from acting on the basis of information on WCD without first seeking legal advice from counsel in the relevant jurisdiction. No guarantee is given regarding the accuracy of any statements or opinions made on WCD.

Unless specifically stated otherwise, Catherine Shanahan and Karen Chellew do not endorse, approve, recommend, or certify any information, product, process, service, or organization presented or mentioned on WCD, and information from this podcast should not be referenced in any way to imply such approval or endorsement. The third-party materials or content of any third-party site referenced on WCD do not necessarily reflect the opinions, standards or policies of Catherine Shanahan or Karen Chellew.

WCD, CATHERINE SHANAHAN, AND KAREN CHELLEW EXPRESSLY DISCLAIM ANY AND ALL LIABILITY OR RESPONSIBILITY FOR ANY DIRECT, INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, OR OTHER DAMAGES ARISING OUT OF ANY INDIVIDUAL'S USE OF, REFERENCE TO, RELIANCE ON, OR INABILITY TO USE, THIS PODCAST OR THE INFORMATION PRESENTED IN THIS PODCAST

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Karen:

Welcome to We Chat Divorce. Catherine and I are so happy today to welcome Attorney Shawna Woods to our podcast today. Welcome Shawna.

Shawna Woods:

Thanks for having me guys. I'm really happy to be here.

Catherine:

We're so excited.

Karen:

Yeah, we really are. And I'm very excited because in this episode, we're going to be discussing Prenups. Do they help or hurt? How many times do we hear that from clients? But first, let me just take a few minutes to introduce you, Shawna. Shawna is the managing partner of the Atlanta Divorce Law Group. She's been practicing exclusively in family law for 18 years. You don't look old enough, Shawna, I have to say. Shawna is the host of the soon to be launched Happily Ever After divorce podcast and regularly appears as a guest on the firm's Facebook Lives. Check them out. We'll have a link on this podcast after you listen to it. So welcome Shawna.

Shawna Woods:

Thank you. Thanks again. I'm really happy to be here.

Catherine:

It's so great, because we actually met through a mutual client.

Shawna Woods:

We did. Well, I had a client singing your praises and it was just serendipity that the attorney who was representing her was not available the day to take the call and we got on and I've just had such a wonderful time chatting with you and that you were so knowledgeable. And got to the point and we could understand, yes, this is what we need to be recommending for the client. Financially, it was the best thing for her. And I really did appreciate your approach to it.

Catherine:

Oh, and likewise. We appreciated yours. And we're so excited to meet you and have that conversation, because when we can work together, as a team, and come together with all the information that we need and the client is provided with the knowledge that they need, it just lets you do what you're trained to do in a much better fashion for them. So you get to just use your legal expertise and help them get what they should be getting.

Shawna Woods:

Absolutely. And I can't tell you how many times I've pulled up a client and go, you know what? My Divorce Solution would be really good with them. Let's send them over there now.

Catherine:

That's awesome. That's so awesome. Thank you so much for that. We really appreciate that. And today's conversation really led through our conversation as well. When we were talking to you about what is trending right now, we're getting a lot of people who are calling us, who are saying, you know what, we think we should get a prenup, which is gathering all that same information for your financial portrait, which has been great. But there are a lot of fears on what's the good, what's the bad, and what's the ugly, and what's the pretty about it.

Shawna Woods:

Yeah. I think that people do have kind of a misconception that if your fiance, or even somebody where you're talking getting married, and someone brings up a prenuptial agreement that they're looking and thinking, oh, this isn't going to work down the road. And in fact it can be the exact opposite is that someone's looking at it in a very realistic and loving manner saying, you know what, if this doesn't work out, right, we're going to work really hard, because we all know marriage is work, right? It is not an easy thing. If this does not work out, let's decide right now, while we're in a good space, why we're loving each other, why we're really appreciative of each other, let's decide how we're going to divide things in the event that it doesn't work out, instead of coming at it when you're hurt, and when you're emotional. And when there's been a lot of baggage dragged into it when you're at that divorce state. So having a prenuptial agreement, I think, is a really loving thing to do.

Karen:

I love that approach. And so many couples that come to us, and I'm sure to you as well, Shawna, approaching divorce, had they had those conversations way back when they got married, they would be better positioned to contemplate and make really good decisions for themselves instead of recreating most of their married life after 20, 30, 10, 3 years even, it's very difficult. And to your point, emotional. So, having those conversations is so important, and helpful, and loving. I love that you're using the word loving.

Shawna Woods:

Yeah, I do think it can be. And I appreciate that. And I think that a lot of people again have that kind of misconception, oh, this is to protect the wealthy one, or the person who has assets. And in fact, if you are planning on having children, and your idea, and you both have discussed that, is that somebody who's going to stay home and raise the children and give up a career, or the opportunity to build their work, work history, then how does that look like if this doesn't work out once the children are grown, right? And that can be a very good protection for people.

Catherine:

Yeah. So that leads me to a couple of questions, and what you and Karen were saying just a second ago, it also can alleviate that. For all of us, who've been married when you were married 20 years, over those 20 years, you know your relationship's [not hard 00:05:26], but how many people throw out that threat

of divorce? I'm going to threaten you, and so once that word comes into the conversation, which is never really very good, it can comes in continually. So if you had a prenup, maybe that word wouldn't be thrown around so much, because it's not a threat any longer.

Shawna Woods:

Right, because you kind of know what's going to happen. You don't have that fear of the unknown. What happens to me if I don't have the financial stability? What happens to, do I have to go out and get a job while I'm raising kids? How is that going to look? What does my future look like? You can really just concentrate on what's going on in the marriage, right? And try to fix it without that then, what you said, Catherine, is that threat, which we really hate, right? Because that's that controlling. That's that financial control that we've seen so often in some marriages.

Karen:

Yeah. Who of us haven't done that 15 or more times anyway? It's just a natural response when you're an argument. That's it, I'm done.

Shawna Woods:

I'm done.

Karen:

I'm done.

Catherine:

Yes. Exactly. Yeah.

Karen:

But when it goes up further than that, this is something that people should consider, and I think one of the topics we're going to talk about is the prenup agreement for anyone and everyone? Are there cases that it's better not to have one? Or would you recommend that everyone start their family, their marriage with a prenup?

Shawna Woods:

I think prenups really are and should be for everyone, at least having that discussion. What does this look like for us? One of the things I like about having prenuptial agreements, because I just had a case yesterday where this lady had come in and said, "Well, he said, when we were getting married, he had all this money." Turns out he didn't. With a prenuptial agreement, you both have to sign affidavits that show, what are your assets? And what are your debts? Because that's an important part of it, is that sometimes they walk into a marriage not knowing that the person they're getting married too has a big tax step. Right? And they don't want to be sharing in that, maybe regardless, but definitely not in the case of a divorce. So you have to be honest and open. That's one of the requirements of a prenuptial agreement is you both have to sign affidavits and say, here are our assets and debts.

Shawna Woods:

Even if your assets and debts are my vehicle because I just graduated college, right? You want to say, this is what we have, and what about this going forward? One of the things that we find is really helpful for so many people want to start small businesses, right? And you have a business partner that is not your marriage partner, and what happens in the event of a divorce, because your portion of the business can be considered marital, right? And so, that's one of the things I think is really important as we're starting out, the thinking about the future of these assets, do we want a small business to be considered a marital asset or not? And it's an important conversation to have early on.

Karen:

Right? And

Catherine:

Karen:

Go ahead, Catherine.

Catherine:

It's really important, as a matter of fact, Karen and I had this conversation because I just got remarried two years ago. But when we talked about me having a prenup, I said to Karen, "Well, what about you getting a postnup?" Because she's married, so it's a really interesting, we started business later in life, the two of us together. So, we have the postnup and the prenup, and of course we can talk about a postnup on another podcast, because it's so much to talk about. It's another great tool for people who are just thinking about it, or rather stay married, but want a financial agreement.

Catherine:

I do want to ask you something that was the second question from what you said earlier, before I forget, you talked about if you plan to have children and what's going to happen, you can lay that out in your prenup. Well, what if things change while you're married, and now what you thought about in the prenup, one of you, or both of you, don't agree with it. I guess if both of you, it doesn't matter, but what if you now don't agree with that anticipation that you tried to plan out.

Shawna Woods:

So yeah, and I want to be very clear that you can't do child support or child custody in a prenuptial agreement. That's not on the table. I think what we're both talking about, just want to be clear for the people listening, what we're both talking about is what about spousal support, right? What is spousal support look like if you both, let's assume that both parties have decided you're going to stay home with the children until they're school age. Right? And then they get to be school age, and lo and behold, there's a lot of other stuff that goes on with kids in school age too. There's running them back and forth to extracurriculars, and picking them up. And gosh, look at all that aftercare you're going to have to spend, if you go back to work. And that can be, maybe a renegotiation to a postnuptial agreement. Right? And I do think that having those initial conversations, but if you do change your mind, if you have to have that conversation with your spouse, right? Are we still on the same page? Do we still agree here?

Karen:

Absolutely. I have a really good friend who just got married last year, and her husband already had a business with third parties, plural. And he just happened to be mentioning that he was getting married at a board meeting. And all of a sudden he got the news, you have to get a prenup, because any spouse who's coming on board is not going to be an owner of this company. And that was news to both of them. And so they had to negotiate a prenup. And to your point, she had to understand that if she was going to be engaging, and participating, and supporting the business, that doesn't mean she would have ownership. So can you talk a little bit about how those things play out, especially when a spouse is disqualified, for lack of a better word, before they're even married, due to the operating agreement or the shareholder agreement?

Shawna Woods:

So those are very, very interesting topics. And again, there are so many people who are small business owners now, or have a portion of the business. And the way it works, at least here in Georgia, is the business, whether you own it a whole, or you own it with a partner, the growth on the business from the date of the marriage until the date of the divorce is considered a marital asset, and a forensic accountant comes in and helps us decide what the value of that business is. Right?

Shawna Woods:

Well, if the majority of the marital estate really is the value of that business, and the court wouldn't order, oh, the spouse gets to now step into the business. What the court would order was the spouse who has ownership in the business will then have to pay out to the other spouse. But if you have a small business, right, you can't really deplete all the cash out of that and keep running that small business. And that is one of the things I think people with small business and people who have partners who are getting married, do want to have that discussion, because in the event of a divorce, is this business going to tank because your spouse was coming after a portion of the assets of the business. Right? And that's really what we look at, is not necessarily, because an operation agreement is not going to let the spouse come in and run it. But a court could order, this person, this wife, this husband to say, you need to pay them a hundred thousand dollars in 30 days, chop, chop. That can ruin a business really quickly.

Karen:

Right. Absolutely.

Catherine:

That's really a great point. Because again, this is about having all the details in your agreement, right? So something that would be easily overlooked. Just saying, okay, I have this prenup, you don't get the business, but really what about the growth of that business during your marriage?

Karen:

Right. Right.

Shawna Woods:

And you'd have to look at the investments. Another thing that I hear very commonly is somebody will say, oh, I bought the house prior to marriage, it's mine. And I'll say...

Karen:

Partly.

Shawna Woods:

So true. If you purchased a house prior to marriage, yes there is some separate property asset there. Here in Georgia, if you put your spouse's name on it, you just gifted the whole thing to the marriage, if you don't, but you continue to pay on it during that marriage, that growth during the marriage is still considered marital. So if that is something that you both are looking at as, oh no, we see this as this one spouse's separate property, you need to spell that out.

Catherine:

So what is the difference between, you mentioned earlier, and I'm well aware of the couples now coming in getting into marriages, and they keep their accounts separate, and maybe have a joint account. Is having those statements from date of marriage, keeping them on record, enough to protect your premarital asset, or do they need to have the prenup?

Shawna Woods:

Oh, they definitely need to have the prenuptial agreement. Even in Georgia, it doesn't matter whose name it's in. Right. They consider if I was married at the moment, they would consider my earnings, marital earnings, and even if I put it in an account in just my name, that's still marital earnings. So just having [inaudible 00:15:26], and I do, I hear that a lot too. Oh, don't worry, we kept everything separate. Okay, but that's not enough. Right? You really do have to spell out, and I like to very well spell out, not only what is separate property, but what is marital property? What are we going to specifically consider marital property to be. If we buy a home together, and put it joint names, that's marital property. Okay. Now how are we going to divide it? Is it going to be pro-rata, what we put into it? Or is it just going to be 50/50.

Karen:

Right. And Georgia is an equitable distribution state, different from the community property states.

Shawna Woods:

It is.

Karen:

Like California, Arizona, and so forth.

Shawna Woods:

Yeah. It almost works out to be the same thing a lot of times. I think it just adds argument, unfortunately,

Catherine:

Exactly.

Shawna Woods:

Equitable, meaning what's fair. And equal, of course, meaning 50/50 and [inaudible 00:16:23] community property states are. Georgia courts really start out with what's fair being 50/50, but they let you argue why it's not in your particular case. And so it does open up a lot of doors for litigation if you don't have that prenuptial agreement in place.

Karen:

Absolutely. And Shawna, just to that point, can people come to us when they're considering a prenup, or a divorce, that financial portrait that we built for them helps them collect all of that documentation. So, you know when it's delivered to you, you're not only looking at a number on a report, you get to look at the documents that support it. So you get to look at the operating agreements, and you get to look at all

of the different documents that would support your client's claim for whatever that may be or would support the prenup disclosure. Is that what you call it? A disclosure for a prenup?

Shawna Woods:

Yeah. And a disclosure is a great, yeah. A great term for that. Absolutely. And that is so very helpful. And it's not that our clients, I would say, are unsophisticated, but it does take nuance to get all of that stuff together and look at what is a financial portrait.

Catherine:

Yeah, your attorneys are also intimidating for a lot of people. I mean, I love you. You're great, from the minute I started talking to you, I find you very easy talk to you. I would go to lunch with you. I think you're a fabulous, Karen felt the same way. But for a lot of people who are in this emotional state where they're afraid to even talk about a prenup or anything, because you're talking about divorce before you're married a lot of people feel like, going to the attorney almost puts them at a tense scenario, right? When they come to us, what I loved about what we do now with the prenups is that, and everything else, is we turn it into a financial exercise for our clients.

Catherine:

And so they're coming in at a really, you know, this is just an exercise. We're getting everything together to deliver it to your attorney. And that's why we love working with attorneys like you, is because we just make this transition for everyone so much smoother. And it can be more loving, if it's treated like an exercise instead of something that's torture for somebody else. Because there's always one person that doesn't want to do all the data collecting, or one person that doesn't want to talk about it, because they just don't want to, or they're just agreeing to go there. So I find this to be really exciting for not only our business, but for what we're doing, working with you, and the people who are really trying to be smart about these decisions going into them.

Shawna Woods:

I absolutely agree. I can't tell you how many times I'll sit across from somebody and I start talking about the disclosure. It was Karen who said the disclosure statement, and I get this kind of blank look on the other side. And I'm like, okay, I need to walk them through this, but that's not what I do. Right? That's that's not my forte, and I love having you guys, and I feel the same way about both of you. I was like, this is such a fun connection. And it's great when I have, not only this wonderful company where I can send clients, but it's like I really like them and you're going to love them too. And I do think that what you guys do is so very important. People are waiting now a little bit later to get married, right? And they kind of already started having 401ks, and maybe some assets, and helping them understand what their financial position really is right now is important. And I really love that about you guys.

Catherine:

Yeah. And listen, we can talk all the legal stuff. I mean, you have to have really serious conversations with these individuals. So if you have to mucky the waters by talking about their financials and get them in this blank state, or get them in this, it's so nice when we send them over, and we don't have to get into those conversations. Everybody stays in their zone. And your conversations are more bearable when everybody knows what they're dealing with because you bring up really great points about the details.

Shawna Woods:

Yeah, I actually can give really good advice when I know what the details are.

Catherine:

I like that.

Karen:

I love that quote. That's the best quote.

Catherine:

We're going to have to do this, because I totally agree.

Karen:

Shawna, you talked about that a prenup cannot include child support, child custody discussions. Are there other things that cannot be included in a prenup? And are there things that can be included in a prenup that people may not think about?

Shawna Woods:

I think there are some clauses in there. I call them the penalty clause. And some of those things are when you think about infidelity, if that has been an issue in their relationship, And they kind of want to go forward saying, all right, we're both in this, but one partner has already experienced the other partner having stepped outside of the relationship. There are times when they put, what I call the penalty clauses in. It's like, all right, if this is the cause of the breakup, the marriage is that you're stepping outside of the marriage, or if you're stepping outside the marriage, this is going to shift how we separate things, or this is going to shift spousal support. And so, I think it's important for people who may have those issues, not only to get a prenuptial agreement, but also to have had some pre-marriage counseling, right? To ensure that these are the things that they're looking at important.

Shawna Woods:

Primarily not included in a prenuptial agreement is anything to do with the children, because all of courts are going to tell you, it is the purview of the court to decide what's in the best interest of the children, at the time. Not pre-planning it. And it makes sense, right? Because this unknown child, we don't know who's going to end up being the primary parent. Or a default, we think it's going to be mom. And sometimes it's really not, and same with child support. It's all determined, the needs of the child based on calculators of where the parties are living at the time, because you have to do all that cost of living things. So those are the things that can't be included in a prenuptial agreement.

Shawna Woods:

What you really look for is, is this prenuptial agreement so one-sided, right? Is it so one-sided that it's just unconscionable, right? And those would be really those situations where you have somebody who's wealthy, and usually significantly older than the other party, and says, I get everything and you get nothing. Those aren't really going to be held up in court.

Karen:

All right. And you mentioned the state, as it relates to the kids, where they're living at the time, if a prenup is drafted in Georgia, and the couple moves to Utah, is it still enforced?

Shawna Woods:

It's still enforceable since we have full faith and credit with all of the states in the United States, and even in the prenuptial agreement, and you've seen these in other contracts, I'm sure you guys have too. It'll say if this has to be decided, it's to be decided on the laws based on Georgia. Right?

Karen:

Okay.

Shawna Woods:

So, we signed something for our car insurance that says something about Delaware, right? That's always where they, so that's the same thing. It's a contract. And that's exactly what a prenuptial agreement is. I think what people don't realize is that when they get married, yes, it is a wonderful, loving bond, but it's also a contract, and it's a contract with you, your spouse, and the state. And the prenuptial agreement is to say, no, no, we don't want the state deciding it, we're making those contracts ourselves.

Catherine:

Okay. I love that look at it. I never heard that before, said like that.

Karen:

Yeah.

Catherine:

Yeah.

Karen:

That's very good.

Catherine:

Yeah. That's very good.

Shawna Woods:

Yeah. Once you look at it that way, because people don't realize how much the state is going to get involved in your marriage if this goes to a divorce, and for most people, we don't want them involved.

Catherine:

Right. Exactly.

Karen:

So I've heard some, sorry Catherine, did I just cut you off?

Catherine:

No, go ahead.

Karen:

Shawna, I've heard some attorneys ask initially when a couple's going through divorce and they have a prenup, they'll throw in the phrase to sunset. I think it's called the sunset clause. Have you heard of that? Like it makes it non-valid after so many years, and maybe that's

Shawna Woods:

A sunset clause.

Karen:

I think it's called the sunset clause.

Shawna Woods:

I haven't heard of that in particular. I think what you're probably, it is like, oh, well that was so long ago. There is certain ways to, what I call attack a prenuptial agreement. One would be the one I talked about earlier, where it's simply unconscionable. You wrote it, or whoever wrote it was just written in a way it was just really unfair to one person.

Shawna Woods:

A second way would be if you signed it like two weeks from a wedding, that's really frowned upon. Right? Think about all of the things that we've got family coming in, we've got the flowers picked out, we've got the cake coming. And all of a sudden here sign this prenuptial agreement. It's a little bit of a duress, right? That's really unfair.

Karen:

And so many are.

Shawna Woods:

So many are. I do strongly suggest, is that at least two months prior to a wedding. One of the things with what I think you're talking about Karen with a sunset clause is so much has changed. That's one way they talk that, can we attack this? So much has changed from the time that we decided this prenuptial agreement that it's no longer fair, right? Because there's always a fairness presumption to it. Those are kind of rare, but they could happen, and give you maybe a 40 year marriage, say you had an idea that you were both could have W2 jobs and somebody was going to stay home, but happens if you had a special needs child who actually you have to stay home for 30 years with, right? What happens then? Or what happens in those types of things? It's something so unusual happen that this is no longer a fair prenuptial agreement. We try to kind of foresee certain things. Right? But those do happen on rare occasion.

Karen:

Right. And then that's all the way back to Catherine's point earlier where she asks questions that may require a postnup agreement to make the amendments and so forth. Yeah.

Karen:

Another thing we see are people coming in, in this age of technology, so many people think, well, I can just go get a form online. I can just go get divorced online, and our eyes get this big. And so they'll come in and we'll say, well, we want both of you to go get this prenup interpreted, and come back to us so we can help you get the documentation, because it's sometimes very clear that that form was just downloaded from some random website. So can you talk about the importance of a professional, helping to draft these prenups so that both parties are protected?

Shawna Woods:

Absolutely. I can actually kind of give an example of the danger zone. I had a gentleman come to me, he has small business. Most of their asset was in the small business. He has put his life and soul into this [inaudible 00:28:23], 12 hour days. We all know those things. And they had a 25 year marriage. He says, well, I have a credential agreement. I said great, let me look at it. And I said, this isn't worth the paper it's written on. And he was shocked. And well, what do you mean? Why not? I said, well, because the prenuptial agreement is very statute-based. Okay? You pull it off the internet, now 25 years ago, I don't think it was off the internet. I think he probably just like tried to copy someone else's, right? But it's very statute-based and it's based on the state that you're going to be getting married in. Right? And they have certain requirements that they're not necessarily going to be in this thing that you just pulled off the internet. And if those requirements are not met, it's invalid. Immediately out the window.

Shawna Woods:

Secondly, how we attorneys, we speak that special little language. Everybody speaks a special language. And I always use the example, my mechanic speaks a special language that I don't understand. Okay. I speak a special language for the courts. And that's just the way we're trained. The courts are going to read our language and know what it says. It doesn't always make common sense, y'all. We have to word it in a certain way that the courts have told us, this is what this word or this phrase means, right?

Catherine:

Yeah. I don't speak that language. I get very frustrated reading it.

Karen:

That's why I call you all word assassins. But you have to be.

Shawna Woods:

I take it, I accept that. I understand. Yeah. But the same with divorce settlement agreements, people come to me afterwards and say, "Hey, can you fix this?" I'm like, "No, you messed it up so much I can't even fix it."

Karen:

Oh, it's so true. It's so true. So what else would make a prenup or a postnup non-enforceable. Obviously downloading an agreement, that's not, what do you call it? It's not according to statute, as you said, but what would be another reason?

Shawna Woods:

A couple other reasons, one of the things, if you are addressing spousal support here in the State of Georgia, at least, and of course, that's all I can speak to, but you have to have two witnesses in addition to the notary, right? So if you don't have those, and you've addressed spousal support, again, that's out the window. Not releasing your financials or defrauding on your financials, not completely saying what is the value of something. One of the reasons I actually, with small business owners. I tell them, go get just a really quick and dirty, but go get someone to value the business, and go with the highest value, right? Because you don't want someone to come back and say, oh, they low balled me. I didn't really understand that their business was worth three million dollars when we got married.

Shawna Woods:

And again, with small business owners, you're like, well, it's not worth that much. I can't take that much out. No, but that's what it's worth. I'm putting that in quotations when the court puts a value on it. Right. So definitely get evaluated. Use someone like, you know, use you guys, My Divorce Solution to actually have your financials done. They're done and understanding, right? It's done, a professional has done this. I don't have to write what I think my pension is worth, I actually know what my pension is worth. And you guys know that's a big one.

Catherine:

Yeah, absolutely Shawna. I love that you say that.

Karen:

I know Catherine has to talk to a lot of people about why giving up that pension could be detrimental, because they never really think about it from the perspective that they're from their retirement, they're more afraid, or pensive because someone doesn't want to share the pension.

Shawna Woods:

Right.

Karen:

We go through that a lot.

Catherine:

How does a prenup hold up in the event of a death?

Shawna Woods:

So you're really looking at the last will and testament, as far as death, right? But I do say a prenuptial and a last will and a testament should kind of mirror each other if that's what you want. A prenuptial agreement's whole purpose is in the dissolution of a marriage. Right? But if you have a prenuptial agreement, and this often comes into play, to your point, is when you have second or third marriages, and you have grown children that you want to leave your wealth too. Right? And so if you have the last will and testament, that reads, here's what I want to leave to my children. And a prenuptial agreement that says, we've already said that was separate property. Right? So that you don't have a spouse than trying to make a claim on a will when you already have that prenuptial agreement. All right. You've got two contracts.

Karen:

What if they don't agree? Which is the reigning document? Let's just say the prenup says...

Catherine:

If they're not aligned.

Karen:

Yeah. Yeah. So the prenup says, I keep my 401k, but the will says all of my assets go to my wife.

Shawna Woods:

Those two actually do agree.

Karen:

Okay.

Shawna Woods:

Because I keep my 401k. So when I die, I can say where it goes.

Karen:

Oh.

Catherine:

Wow.

Karen:

Wow. You're so smart.

Catherine:

That's a good one. Yeah.

Shawna Woods:

No, we just had that one come up a couple of times.

Catherine:

Can you just give me the data, and then you interpret it. [inaudible 00:34:20].

Karen:

We could ask questions all day long, but I know what a lot of couples would want to ask you is, can we both use the same attorney?

Shawna Woods:

Yeah. I mean, technically you can, but you should not. The reason being is you're going to get legal advice coming in to see an attorney. You're going to get the legal advice of here's how we should word it, right, to protect you. You should have your spouse, or your potential spouse, should have an attorney representing them that says, okay, this is how we want them to word it, to protect them. Right? And it doesn't mean it has to get contentious, you guys. It doesn't mean we're going to blow this up and it's going to get super expensive. It's just that each one should have somebody who says, I have informed my client, and we have an attorney affidavit. They're not required in the State of Georgia, but I think it's good practice to have an attorney affidavit that says, I have explained to my client what this prenuptial agreement means, and they understand it. Okay? That's another way to making sure that your prenup [inaudible 00:35:34] agreement are being upheld. So both spouse, potential spouse, have these attorney affidavits independently saying we have explained this, they understand, okay?

Shawna Woods:

It's just another way to protect yourself from this getting kicked out for being fraudulent. For myself, I will tell you, I simply don't feel comfortable having two people in the office say, we want to do this together. I appreciate that. Y'all go talk about it outside my office, and I will talk to one of you, and I will get a recommendation from another very amicable attorney to represent the other party.

Karen:

Yeah. And you know what, Shawna, to your point of loving, it definitely sets the stage for really constructive financial discussions moving forward, getting through that with two different advisors, having just delivering perspective is really what you're doing. In doing this, this is what you're doing. I think that's a great way to set the stage for continuing to have really good discussions about the finances and each person's approach to them. And it balances out that relationship that, I'm going to say, most marriages do not have. The balance of the financial management of the household.

Shawna Woods:

Absolutely. And I think it's so important to have that financial honesty with each other from the get-go. Are you a spender? Are you a saver? That's another thing we talked about when we talk about prenuptial agreements, if you're marrying someone who is a spender and you're concerned about their credit card statements, well, you should be, because that's going to be your debt if you don't do something about it from the get-go.

Catherine:

Yeah. It's all about expectations, having the conversations about what we expect from each other, and what will happen with one of those expectations change. And remember everyone, divorce rates the second time around for second marriages or more, is 62% or higher. So it's larger than the first time you get married. So if you want to prevent some of that, and a lot of it comes from financial issues. Have these discussions because you may want to decide even if it doesn't go right, if you should be marrying that person the second time around.

Karen:

That's great. Shawna, is there anything we should add before we conclude this episode? I know you've been amazing at all this information and the details. It's incredible. But is there anything that you would like to add that people need to know when considering a prenup?

Shawna Woods:

I just want to circle back, that I really do think it is the kindest way you can enter into a honest discussion about finances. What your expert, to Catherine's point right now, what your expectations are moving forward, balancing your finances, and planning for the future. It's a great time to talk about what do we want our future to look about? Are we on the same page, right? And too many people don't get into that discussion, and then they get married and realize, you have completely different financial goals. And you want to be there together when you're saying I do.

Catherine:

Yeah.

Karen:

I love that.

Catherine:

[inaudible 00:38:59]. Yeah.

Karen:

I love that.

Catherine:

That's good.

Karen:

Thank you, Shawna.

Shawna Woods:

Thank you.

Karen:

And this concludes our episode on getting clear on prenups. Thank you Shawna, for a great conversation.

Shawna Woods:

Thank you guys.

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