Can Planning for Divorce Actually Save Your Marriage?

SPEAKER_1 (0:00)

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Imani Moise (0:35)

Hey, What's News listeners, it's Sunday, April 26th. 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% of American adults support the idea of a prenup, but only 15% of couples actually sign one. That's up from 3% in 2010 So today, we're breaking down the math you need to do before saying I do.

Kristen Shearin (1:10)

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. And so you need to plan for that.

Imani Moise (1:26)

That was Kristen Shearin, the director of the Institute for Divorce Financial Analyst. 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.

Kristen Shearin (2:06)

Congratulations.

Imani Moise (2:08)

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?

Kristen Shearin (2:24)

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.

Imani Moise (3:14)

And are those negative financial outcomes that you just spoke about the same for both men and women?

Kristen Shearin (3:20)

Women are disproportionately impacted by divorce. More 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.

Imani Moise (3:41)

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?

Kristen Shearin (3:50)

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 we, 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. We're going to bring in professionals who are specialists to help us make good, mindful decisions about our divorce. And so a prenuptial agreement can ensure that a divorce takes place in a reasonable amount of time for a reasonable cost.