How Marriage Legally Changes Your Financial Rights

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Most of our listeners probably know they should be involved in the ~marital finances.~ But very few people, it seems, understand how signing a marriage contract legally changes their financial rights (I know I didn’t back when I got married!).

Whether you’re single and considering marriage one day, already happily married, or experiencing divorce, this episode is a must-listen. Content warning: This episode includes stories of intimate partner violence as well as financial abuse.

This is not financial or legal advice—please do your own due diligence, as laws vary by state.

We interviewed three women for this episode:

• The first was Stacy Francis, founder of Savvy Ladies, a 501(c)(3) that provides free financial help to women.

• The second was Victoria McCooey, a woman who escaped a financially (and physically) abusive relationship in a no-fault state and lived to tell the tale (and help other women do the same).

• The third was on background—a New York divorce attorney who helped me parse the finer points of how married people can reasonably and responsibly protect themselves (for example, saving year-end statements that track separate property).

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Our show is a production of Morning Brew and is produced by Henah Velez and Katie Gatti Tassin, with our audio engineering and sound design from Nick Torres. Devin Emery is President of Morning Brew content and additional fact checking comes from Scott Wilson.

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Mentioned in the Episode

• The Money with Katie Show episode on weddings

• The Money with Katie Show episode on prenups

• James Sexton on The Financial Diet on prenups

• Marital property: Community property states vs. common law/equitable states

• The “divorce gap” women face

• Rich Girl Roundtable with CFP & Therapist Bill Nelson on money and marriage

• Debt in a marriage

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Katie:

You’ve been doing this for more than 20 years. So what have you seen in your experience as what I would classify as the most dangerous decisions people make thinking that they are innocuous?

Stacy:

One of the most dangerous things is not to be involved. It’s kind of like going to the doctors and getting a checkup, but actually not asking for the results. Who would ever do that? That’s the equivalent of not really being part of the finances. It’s really important and it’s one of the best ways to protect yourself.

Katie:

As a married woman without a prenup, I was rightfully shook upon learning what I had agreed to simply by signing my name on our marriage certificate back in 2021. I’m nothing if not confident in my romantic decisiveness, and my husband is, if I may speak frankly, a catch and a half who happens to be a stellar person with more integrity in his little finger than the majority of the male population that I have interacted with. But still, understanding how the contracts you are signing affect your future decisions is a basic survival requirement, and the marriage contract is no different.

We’ve done episodes in the past about the absolute budgetary explosion of lace and florals that is the modern wedding, as well as a look into prenups before with the legendary Kim Davis. So we will link those in the show notes, but we’ve never snorkeled into the waters of how marriage legally changes your financial rights and how those changes might matter later if you were ever to get divorced.

It’s also really important to me that y’all know I permanently ruined my YouTube algorithm on behalf of this episode’s accuracy. At one point I was watching a man named Kyle with 231 subscribers do an asset split example on a whiteboard in one of those bleak suburban office park cubicles with white noise piped in. That said, I’m not an attorney, and the law varies by state. So please don’t make this the only piece of content that you consume about marriage. If you’re going through or considering a divorce, please hire a divorce attorney and engage in some good old fashioned due dil as the kids say.

I loved how divorce attorney James Sexton framed it in a Financial Diet video. He said, marriage is the most legally significant thing you can do to your personhood other than die, and you don’t get so much as a leaflet that explains what you just agreed to. So here’s your leaflet.

Welcome back to The Money with Katie Show, Rich Lovebirds. Today we are talking about what marriage means for your money and more specifically how it changes your legal and financial rights to your income assets and debt, especially if you were ever to experience divorce.

I want to cover the nuts and bolts, if you will, of the marital machine, but it feels dry and kind of strange to cover such a human topic without talking to or about any actual humans. So we’re going to inject a little human interest into today’s episode two with two guests. The first is Stacy Francis, the founder of Savvy Ladies. Savvy Ladies is a 501(c)(3) nonprofit that’s been providing free financial advice to women since I was in the second grade when my most pressing financial concern was whether I could sucker my mom into springing for the Lisa Frank notebook at the Scholastic book Fair, that beautiful mecca of paperback affluence.

The second is Victoria McCooey, a divorce coach and speaker who is sharing her own experience with us, and I think y’all will find it just as shocking and important as I did. But I do want to mention as a content warning that Victoria’s story involves intimate partner violence as well as financial abuse. So please keep that in mind. We will also put a little trigger warning before the interview begins, so you can skip ahead if you would not like to hear that.

But providing professional financial advice for free is both time consuming and expensive. So I asked Stacy about the inciting incident or origin story that put her on the path to change the world for women.

Stacy:

I have a story that’s very close to my heart, my grandmother, who was one of the most important people of my life, and I was so blessed to have her be there for me as I grew up. And something though that I learned about her that I couldn’t wrap my head around was that she was being mistreated by my grandfather, but when I say mistreated, I actually mean she was being emotionally abused. She was being financially abused and she also was being physically abused. And in learning that it was number one heartbreaking, but it also really gave me the motivation to make sure that no other woman finds herself in that situation. And what ended up happening is that she actually ended up passing away because of the abuse.

And so, I channeled my anger, my frustration, I’ll be honest also Katie, guilt that I couldn’t save her to try and help other people not find themselves in that situation. So I was pretty young when I started Savvy Ladies, which is a beautiful nonprofit. We work with tens of thousands of women helping them with financial empowerment, financial, and I’ll talk more about it, but I will tell you that it’s also really helped me deal with my emotions of the trauma of losing her.

Katie:

I’m so sorry that that happened to you and that that happened to her. But also I think about that generation and it occurs to me that that was probably a relatively common experience. And I know that sometimes people today will look back on the past and go, oh, divorce rates used to be so much lower or marriages used to be stronger. And I think it’s so important to remember that a lot of the time, the reason that people were not getting divorced in generations that came before us is because the women were trapped. They literally couldn’t leave. They didn’t have the means to leave or they didn’t have that path out.

And so I think when we talk about divorce, it’s obviously a very traumatizing experience and it’s a very heavy thing to talk about, but it ultimately can be one of the best things for you if you find yourself in this position where you are, God forbid, the victim of abuse. But in some ways I feel like we have come so far and then in other ways it feels like—

Stacy:

We have a long ways to go.

Katie:

We have a long ways to go.

We’ll get right back to it after a quick break.

Since our intent today is to give you the rundown on how signing a marriage contract without a prenuptial agreement materially changes your rights, we think of this episode as useful regardless of your current status, single dating, happily married, in a common law marriage in a minority of states, or considering divorce. And I don’t want to venture into couples therapy territory because I’m a little bit over my skis already with the legal stuff, but my instincts are screaming at me to say this, all of what we are covering today highlights why having financial conversations before you marry someone is so impactful and why someone who becomes evasive or unwilling to discuss it might be a red flag before you sign on the dotted line.

As a personal finance hobbyist who also happens to have a raging feminist streak, this is a topic around which I always feel obligated to make sure women know how to protect themselves. So I asked Stacy what she would say to anyone listening about this premarital phase. If there was a billboard that you could take out in Times Square that all women that were getting married we’re going to see it, what would it say?

Stacy:

Oh gosh, I would love to have a few billboards. So the first thing is actually something that you may not have thought about because know we’re talking about marital versus separate property and some other things, but the first thing is actually to know what each other’s finances look like going into marriage. I will tell you, Katie, and you know this too, a lot of people don’t know. They don’t know and they find out when they get married that they married someone who might have significant credit card debt or significant student loans, and there isn’t anything wrong with that, but you should know that, right? Because part of being a marriage is an economic union.

Katie:

So let’s set up the areas of impact. If you’re thinking about marriage like a legal contract between you, another person and the state you live in, there are a few common areas of your life where the rules are especially impactful. Now, the first act in the marital theater is how your income is impacted because marriage turns two people into one legal entity in the eyes of the state. Your spouse gains certain rights to income you earn after you’re married, but more on that later.

The second is savings, investments and other assets. So the major thing to be aware of is that while the assets that you stockpiled before the marriage will probably remain separate property, the assets you gain after you get married, enter what’s considered marital property or community property depending on where you live. And this is something I think most people don’t realize or think about explicitly until it’s too late. For example, you’re splitting up and you learn that your spouse has a legal claim to half of your 401k plan.

The third act is home ownership, which I’m choosing to break out separately because while it technically could be covered under a discussion of assets, there’s something dystopian to me about treating the place you live with the same cold detachment as a Roth IRA. And because the laws around ownership and liability are a little complicated in this arena.

The fourth is debt, which is where the most downside risk is introduced and the totally separate finances with a don’t ask don’t tell policy can become a should have asked, told too late, no longer separate firestorm in the event of a divorce in a community property state. And don’t worry, we’re going to talk about what community property means.

And of course there’s the elephant in the room if you ever were to split children who fall outside the realm of our conversation. But it’s worth noting the financial implication of splitting up when kids are involved is that protracted custody battles can run up six figure legal bills with ease. I’m actually not talking much about that type of family law today because children are not a financial asset unless your child is a Disney star I guess. But I do want to acknowledge it, since a divorce involving kids is almost always going to be more complex and therefore expensive than one without them.

So let’s start with location, location, location. The screamingly obvious element of marriage and divorce law that seems understated to me in most of these conversations is that where you live while you file for divorce has a humongous impact on just about all of these outcomes, which highlights a very important point: Everyone has a prenuptial agreement, but not everyone writes their own. If you don’t write your own, your state writes it for you.

That is to say if you don’t make your own contract, you’re going to use the standard contract. But most people, myself included, don’t devote a lot of time to reflecting on whether or not we like the rules that our states are setting for us. So there are two different major sets of rules here that dictate ownership of assets and liabilities in the event of a divorce, depending on where you live, if there is no prenuptial agreement in place, there are community property states and there are common law states which are also referred to as equitable distribution states in the context of a divorce. The difference is pretty stark in my opinion. So in a community property state, the law of the land is effectively you are going halvsies. It feels a little less nuanced to my crack legal mind since a court basically looks at everything and goes split it down the middle amongst yourselves.

And there are nine states that take this approach. Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Now even though it’s only nine states out of 50, California and Texas are the two largest states by population. So a lot of people have community property rights.

I’m going to say things like split 50 50 a lot today, but that doesn’t literally mean everything gets divided in half. It just means that when you pool everything together, there’s an assumption that each person in the marriage is entitled to a value that’s worth half of the total estate. That might mean one person keeps the house, the other person keeps the 401k plan or that one person retains ownership of a business while the other person gets a pension. You get the idea.

The other 41 states are equitable distribution, which don’t take this straight down the middle approach and instead aim to treat marital property equitably. For example, maybe one spouse earned all of the income that purchased the marital property and maybe the couple had no children. So a court might decide the earning spouse should be awarded more of the estate as the other spouse did not work outside the home.

So why does it matter? Because despite the stereotypical trope of the gold digging woman who personally enriches herself via leaving a trail of alimony paying men in her wake, the statistics tell a different story that of a divorce gap wherein women over 50 see a 41% drop in income post-divorce compared to only a 23% loss for men. Women tend to have worse financial outcomes than men when marriages dissolve because historically women are statistically more likely than men to exit the paid labor force or otherwise downshift their ambition to fulfill the unpaid caretaking duties in the home. This means that post-divorce, not only do women continue being the primary caretaker in many cases, but they also need to now create a source of income.

This is why understanding what you’re legally agreeing to and taking the opportunity to shape those terms can be valuable. For example, you can actually write terms into a prenup that describe how a spouse who becomes a stay-at-home parent would be compensated in the event of a divorce.

So now that we’ve defined the two major ways a state would treat marital property, we can talk about what marital property actually means. So you’ve got two terms here. Separate property and marital property are sometimes called community property. This is a distinction worth making because it refers to how a court of law would view an asset or liability. Separate property refers to assets or debt you personally accumulated before you were married, but it can also refer to things like inheritances that you will alone receive during marriage. So for example, if you have $100,000 in a brokerage account that you saved and invested before getting married, that would generally be considered separate property that’s off the table if you were going to split up, if you have a prenup that defines what property in the future is considered separate, it could also refer to that.

But generally speaking, the default status of assets or debt accumulated post-marriage is marital property. So marital property refers to the assets or debt that you are taking on together, and if you live in one of the nine community property states and you are without prenup, the easiest way to think about this is anything that happens financially to us after we get married is fair game here.

If you live in one of the other 41 states where equitable distribution as the law of the land, it’s not as straightforward, which is why it can be a little complicated to discuss what ownership really means in the context of a marriage.

My understanding is that unless you have an enforceable prenuptial agreement that explicitly defines how your assets would be divided, most property acquired after you were married is either eligible to be split straight up 50/50 by default or at the very least up for legal debate in the event of a divorce making matters slightly more complicated, assets can become co-mingled.

So practically speaking, it seems like this is most likely to happen with things like inheritances or literal property as in my beach house in Florida, not property in the abstract sense, where you might unintentionally route an through a joint account and therefore commingle it with joint assets. Calling into question whether it’s joint property too or if you’re paying down a mortgage on a house that you purchased a loan before marriage with a joint account. Basically these seemingly innocuous accounting decisions introduce legal questions about whether or not something that otherwise might have been separate property actually became joint property. Here’s Stacy with more.

Stacy:

The challenges is if you get divorce, you have to go back to the account statements and you have to prove that and it’s not an easy thing. It’s very hard to untangle because if you think about I have Sprite right here and I have a cup of coffee, if I pour them into a cup together, who’s going to figure out what molecule is from the Sprite and what molecule is from the coffee? Yeah, you can do that, but it’s not going to be super easy.

Katie:

And your lawyer is going to charge you $500 an hour to help you figure it out.

Stacy:

Exactly, and it’s going to have to be a forensic accountant, someone who has the specialty to be able to do this. When you get married, open new accounts and those accounts that are separate property keep to the side, new contributions go into your new accounts. Just to make it simple.

Katie:

To clarify here, because when Stacy and I first discussed this, I was surprised by how this worked. She’s saying that if you have an individual checking account that’s just yours from before marriage, you’ll want to open a new individual checking account that’s just yours after marriage to continue contributing money to rather than using the old one. Otherwise, introducing post-marriage income to your previous separate property individual checking account, even if it is routed directly to the account from your paychecks, can still introduce a question of commingling later because that new income is considered marital property.

Stacy:

I think that one of the challenges, there are some accounts that you can’t open new ones. Let’s say you’ve been at your employer for five years, you have a 401k there retirement plan, but what you can do is you can get an account statement as of the month that you got married and just keep it filed away to make it a little easier.

The other thing I want to make sure too, people understand even if you are married and you receive an inheritance, or let’s say you receive a gift from your mom and dad, that’s separate property, that’s separate property unless you deposit it into a joint account. And so I’ve seen some issues where Tammy gets a $17,000 annual exemption check made out to her from her parents. She puts it in the joint account, she keeps it there. Now if she put it in the joint account and then immediately transferred it maybe to an accountant in her name, she might be okay, a separate account that was separate property.

But typically that’s not what happens. You just throw it in the joint account and there you go. Well, if she then makes a claim that I’ve been putting that money in our joint account for the last 10 years and now it’s worth $250,000, it’s hard to make that claim that that gift was just to me it wasn’t a gift to instead of it being a gift to both of us. So ideally what it is is you get a gift of inheritance or you get a gift of that annual exemption gift each year from your family. Again, put it in account just in your name and ideally have it be separate property. Don’t put any marital funds in there.

Katie:

TLDR: The difference between separate property and community or marital property depends not just on where you live but also where the money’s coming from in the case of an inheritance or a gift. And when the asset or liability was acquired as in before or after you were married.

We’ll be right back after a quick break.

Let’s meander into the world of things like savings and investments because we’ve mentioned this on the show before in a Rich Girl Roundtable with Bill Nelson. We’ll link that in the show notes but similar to property, remember that just because you have an account that’s in your name alone and funded solely by your income does not mean that you are the sole legal owner of that asset. Should you divorce someday though I think this is a reasonable and flawed assumption.

For example, let’s pretend I open an individual brokerage account in my name today. Now let’s say I put the money that I earn on my W-2 paychecks that I earn with my own two hands and my own hot takes directly into that account. This is mine, right? Wrong, it’s ours. Since the government sees us as one legal entity, it does not matter that they are my earnings or that the account is just in my name.

These same rules apply to retirement accounts too. Just because something is called an individual retirement account and your name and your name alone doesn’t mean that it’s yours and yours alone necessarily. And I know marriage is looking less and less romantic by the minute. Contributions and growth in that account that happen post-marriage are also considered marital property unless otherwise specified again in a prenup.

I guess the easiest way to summarize this is whether we’re talking about a high yield savings or a Robinhood account or a 403B plan, if the money in the accounts was earned and contributed after you were married or the growth happened after you were married, it is probably going to be on the mediation table.

Next, let’s talk about the roof over your head. Your home is also an asset and probably one with a liability attached, which means it has to be considered in all of this too and presents a unique sort of twofer opportunity factors like whose name is on the deed and the mortgage matter, but it also matters when the house was acquired.

Stacy:

If you buy a house and you use property from before the marriage to buy that house, and let’s say you use assets from the current marriage as well, write it down, get it in agreement of $500,000 was my separate property. You can even have what’s called a postnup that shares that in a legal sense so that if God forbid again, there’s a disagreement down the line, you’ve got it all written down. Buying a house with all of your separate property and putting your name on the title and then putting your spouse’s name on the title, well, you’ve just gifted them half the house not realizing that that’s actually what you just did, or you received a large inheritance and said, Hey, why don’t I use this to renovate our home, make it beautiful. But that home was purchased with marital funds.

Again, you’re just creating a lot of issues. It can really create a lot of problems if God forbid, things don’t work out. So these are things that are really important just to kind of keep things easier and keep things where there’s less disagreement because typically a divorce costs many, many, many, many more times what you paid for your wedding and it often is very expensive because there are disagreements about things like this.

Katie:

Plus even if the house is only titled in one person’s name, it doesn’t mean the other spouse doesn’t have a marital property interest in the house unless there was a prenuptial agreement in place that specified that the house was going to remain separate property. Typically that forensic accounting style analysis can be performed to determine what the marital interest in the house is.

So one of my pastimes in a pettier phase of my life was looking up people’s addresses on county websites to see what their property tax bills were. Look, I’m not proud and I remember being surprised and horrified to learn that a lot of the people I knew that were married, they weren’t legal owners of their homes, like their husband’s name would be on the deed or listed as the sole owner on the property tax website, but their name wouldn’t be on it.

And I was like, girlies, what are we doing here? But I guess it actually doesn’t really matter that much based on what I found when I was hashtag doing my own research. Though it doesn’t sound like there’s ever a completely straight answer on what happens to a house. I think it depends a lot on how much net equity there is if both people want the house, whether it was purchased before or after the marriage, if there are kids involved who the primary caretaker is. There are a lot of factors that go into determining what happens to a home.

Now, speaking of debt liability risk, the asset division is one thing, but there was one truly terrifying legal tidbit I learned in my research for this episode that I actually cannot believe is not more widely discussed: debt in community property states.

So let me set the stage: Debt that you take on before you’re married remains separate property. So if you come in with $5K in credit card debt, that’s legally yours, your spouse comes in, they’ve got $5K in student loans, that’s theirs. You don’t become legally liable for the debt if they incurred it before they were married to you though our dear friend, CFP, and certified financial therapist, Bill Nelson will remind us that that does not mean someone else’s debt won’t affect your life, just that if you were to split up, you would not then be legally on the hook for paying it back. And we will again link to that in the show notes. That said, debt you take on after marriage is a different story. And again, it depends on where you live because in community property states, the court basically goes, look, it doesn’t matter which one of you took out this debt or why you are one entity in the eyes of the law. So we’re going to assume that you both benefited from it, which means you are both liable.

Let’s say you and your spouse have totally separate finances, right? You guys are not in each other’s financial business at all and they rack up $20,000 in credit card debt. Creditors can come after jointly held property to get their money. For example, you own a home together. You both put money toward the home. It was a joint savings goal, what have you, right? The home equity is fair game to pay off that debt even if you had nothing to do with it. And this is why in community property states, if you don’t have a prenup, you need to have your financial ducks in the straightest line possible because your personal financial liability is from where I’m sitting, pretty tremendous. In equitable distribution states, the court can decide what’s an equitable way to split the liability.

So from what I’ve read and heard in talking to people, i.e., in my obliteration of my perfectly curated YouTube algorithm, it sounds like how this actually ends up biting people in the ass is that they co-sign for one another or they might take out a loan that they’re both using, but they’re only putting it in one person’s name because that person has better credit. But then in the event the marriage is dissolved later, it means the person whose name it ends up being responsible for paying it back. Even if a court orders that your ex-spouse has to reimburse you, who knows if you’re going to see that money, right? You probably don’t want to be even more of a litigious queen than you need to be because again, if your lawyers like mine, they charge 500 bucks an hour.

That’s not to say you shouldn’t take out debt together of course, but apply a healthy level of skepticism and just awareness about taking out all of the debt in your name or what you’re co-signing. And you want to generally be aware of the debt the other person is taking out, especially if you’re in a community property state because realize what it might mean in a worst case scenario, just girly things. Even if you’re both totally comfortable having completely separate financial lives, it’s in everyone’s best interest to make sure nobody’s running up a tab at Caesar’s Palace because the effects will be shared and felt by all.

Stacy:

We’ve actually had a good number of cases where there’s been a huge amount of debt run up from gambling, drug use, alcohol abuse, girlfriends, prostitutes, you name it. If it’s on a credit card and you are on that credit card as well from the perspective of Visa, MasterCard, American Express, Discover, you are actually responsible for a hundred percent of that debt. So if your spouse declares bankruptcy or decides not to pay it, they’re going to come after you. So that’s really important to know because I do see in a lot of settlement agreements from divorce where each person is responsible for paying half the debt, or let’s say it was because someone was behaving badly, that person’s a hundred percent responsible. So that’s what the settlement agreement says.

Katie:

But then…

Stacy:

And I’ve had this happen.

Katie:

Oh my God.

Stacy:

He doesn’t pay it. And so now the credit card is coming after her and she’s like, hey, wait, but look, here’s my settlement agreement. It says he has to. And they’re like, hey, hey, hey, no, no, no, no, your contract is with us. The contract that you have with him over the settlement agreement is not the contract that we follow that we have.

Katie:

Oh my God.

Stacy:

So that’s something to think about. Now, the other thing that you will talk to your lawyer about is what’s called marital dissipation. So all those things that we just talked about were marital dissipation. It’s using marital assets for non-marital purposes, and you typically can get a credit. So let’s say it was a hundred thousand dollars that was spent on this, then you often can have your lawyer essentially negotiate for you a credit so that you’re not having to foot the bill for this person’s bad behavior. So that’s good.

And what I would just say about any debt incurred because of that require before you sign the settlement agreement that that debt is paid off from the assets that they’re going to receive even before because then you know that if they don’t comply, you’re still off the hook. You actually will have the debt paid off that your name might be attached to.

Katie:

Okay, so let me make sure I’m understanding. So this is referred to as marital dissipation. This is what happens when one spouse is for running up a tab that you were not involved with. And so I imagine there’s some, you mentioned a lawyer negotiating. I imagine there’s some process by which you have to somehow prove that you were not involved.

Stacy:

Yeah. So you have to prove gambling this dollar amount in Las Vegas. Yes. And so you have to show that. And you also have to show like, Hey, you weren’t right there by your partner’s side, your lawyer will or your certified divorce financial analyst. And I know that most people haven’t heard of a certified divorce financial analyst. They can do that calculation for you and work with your lawyer. Quite frankly, I would say in the divorces I work with, probably one out of five has a marital dissipation claim.

Katie:

So at this point, if you’re not currently married, you might be like, this sounds like a total freaking headache. Why would anyone do this? But now that we’ve covered the nuts and bolts, let’s talk about a few other things that might be worth knowing moving forward.

The point of maintaining some individual accounts, what financial abuse looks like, and the positive outcomes of marriage and money that we should not lose sight of in conversations like these. Practically speaking, I also think this information is still worth internalizing if you maintain those totally separate finances from your spouse. Because think about it this way, if you and your partner are both earning similar amounts and investing for the same goal in a joint account, maybe you’re splitting that 50/50, I mean ending up in a situation where everything gets split down the middle, that might feel fair to you.

But if you are investing your little ass off and homeboys blow in 60% of his take home pay on DraftKings, the fact that he might be entitled to half of your savings might make you want to go nuclear. And I only say that because I think sometimes separate finances without a prenup creates a veneer of safety and insulation from someone else’s decisions that might not be real or legally enforceable.

And at this point, you might be wondering why people suggest having an individual account at all. Then as in what’s the point if legal ownership is joint anyway, if titles are relevant, what individual accounts really matter, but there’s still a good reason to have individual accounts that you will loan have access to. If you needed immediate access to money for whatever reason, you want the ability to draw from a well that someone else cannot drain. Only having joint accounts means someone else could theoretically limit your access to cash in the short term, which is just an unnecessary risk to take. Now, crucially, it might not mean you’d be able to shield those individual assets in a divorce proceeding, but you would have access to them in the meantime in case of an emergency.

And we’re now tiptoeing around the topic of financial abuse, but it is worth addressing head on.

Stacy:

The cycle of abuse has not stopped with the younger generation. And what we do find is that when there is physical abuse, about 95% of all situations also have financial abuse. And financial abuse isn’t really spoken about very often, but it is often the primary reason why people find themselves stuck in these relationships unable to leave. Financial abuse can show up in many forms, but the typical is not having access to the finances sometimes barred or hindered from being able to hold down a job even so much so of anytime there is a expense put on a credit card, the abuser receives a notification. It can show up a lot of different ways. These are just a few. But what it does is it is a way for that abuser to control the victim so that that person cannot leave. And unfortunately, the statistics are not better with abuse. In fact, particularly during Covid, we saw the incidents of abuse spike.

And the other thing that I think is really important, there’s myths that abuse happens in couples of older generations, and that’s not necessarily the case. It can happen in younger generations. In fact, women, the studies have been done, millennials that are women that end up getting married have less involvement with their finances than any generation before them. And the other piece that often people will think about is that it’s a socioeconomic that you tend to see financial abuse, physical abuse in lower income households, and that is not the case either. There are many situations where I’ve become involved, where these are people that have vacation homes, boats, and even more.

So I think it’s really important that we don’t fall into the trap of those myths because it can happen to absolutely everyone out there, men, women, all different ages, all different incomes, both individuals who work and maybe don’t work. It really can happen to anyone.

Katie:

This is where I would like to introduce our guest, Victoria. She’s a high-conflict divorce coach who had gone through financial abuse in her marriage and now works with other women to find freedom from the same. She’s also certified as a mediator. As a reminder, Victoria’s story includes descriptions of both financial and physical abuse. So if you’d like to skip ahead, we recommend going to the 1 hour, 12 minute mark and picking it up there.

Victoria. Similarly to Stacy, you have a very powerful story that led you to become a divorce coach and a motivational speaker. So if you’re open to it, I would love if you could share your background and how that background led you to the work that you’re doing today.

Victoria:

Yeah, I would love to share it. I’m an open book when it comes to this because I really feel like if I talk about the mistakes I made, it can help future generations of women not do the same things I did, which was to fall, hook, line and sinker into a relationship and marriage with someone who had very narcissistic tendencies, but mostly around money.

So very quick out of the gate, I lost control of all of the finances. I was an adult. I was 27 or eight when we met. We married when I was 30. I had a career. I was a freelance writer. I earned my own money, had my own business. I was doing quite well, and it was the understanding that he had access to or made way more money than I did. So he was the “money partner.” So just with that dynamic in place, I let him make a lot of the financial decisions.

But it happened as soon as we got married. I got pregnant right away and had three babies in three and a half years. So those years I was really a zombie. I was not taking projects. I was taking maybe small projects between babies, but I wasn’t earning the way I normally was, which was never an issue, not a problem, never even a discussion of that, that might not work for us. He was perfectly capable of handling things he told me. So that wasn’t the issue. The issue was when I did start working again, even though I started off slowly, whatever money I made was so tiny in comparison to what I’d made before, I would easily just hand it over to him because he was carrying the whole load. He was paying all the bills. I would just contribute.

But what happened was that was a pattern. I could never change that. I set that precedent and from that time forward, I could never get control of my money again, even the money I was making. So even when I got back on a regular schedule, he insisted on keeping control of it because his argument was there can only be one person in charge, and he was playing things so closely and bills were so tight and only one person could manipulate moving one money from one place to the other. It took one and I bought it. I was, as I said, up to my eyeballs in babies. I really didn’t have the bandwidth to figure that out. So I gave it up and he did it. So I should say he owned real estate. That was business. He kind of managed real estate investments.

And he came to me at one point and said, I need you to sign for this loan for a mortgage payment. I have to make a balloon mortgage. And I was like, well, I can pay that back. And he said, no, no, no, of course not. I’m going to pay it back as soon as that building sells, but in the meantime, this is what I need you to do because your credit is good. I’ve maxed out. I can’t, and this is what our family needs you to do to keep us afloat. And I did. And then of course, that didn’t get paid back.

And then there was another emergency where he needed my signature on another loan in my name. And I pushed back harder because I was like, I could never handle all this. And the more I pushed back, the more abusive he would become, telling me how stupid I was and how I didn’t understand business and how I would never be a leader. I was always a follower, but also that I was a horrible mother because I wouldn’t do this for our family, whatever it took, whatever it took to get me to sign.

And at that point, I was compromised. I was trying to take care of three babies, working a full-time job dealing with an abusive husband. Other abuses had been going on as well where I was isolated. I didn’t really have a lot of contact with friends or family because I freelanced. I didn’t have a work community. I was just sort of on my own and far away from home. I grew up in New Orleans. I went to college in Virginia and ended up in New York. So that’s how we got into this really abusive, toxic dynamic of me working and him taking my money.

Katie:

So it sounds like there was a precedent that was set. He had already assumed that controlling role and then was not willing to let you kind of step in and share that leadership was there were excuses and reasons why this was not something that you are going to be fit to do.

Victoria:

Exactly. A lot of times I look back and I think we should have had a conversation around money before we got married, before we had babies. What will happen when I don’t work or earn as much for a period of time, but it was never talked about. It was always, I have lots of money, lots of money. Oh, I’m worth so much money. It was never an issue, but it was not true either. So I didn’t do my due diligence and I believed everything at face value. Even though we dated for years, I didn’t see what was really going on because what looked like a wealthy portfolio was all very leveraged and underwater and not what it seemed to be.

Katie:

What strikes me about your story and about you is just how it could happen to anybody. It’s not like one of those things where you look back and you go look at all those humongous obvious red flags from the jump. It was like, I can see how the little red flags would be easy to explain away or ignore, particularly when you are up to your eyeballs in babies and everyone knows just whether or not you have kids. That newborn phase is a really trying and tiring and emotionally fraught, hormonally fraught time.

I mean, I think it’s easy to look at it now and go, oh, well, these are the things that could have gone differently. Or for example, oh, well, that wouldn’t happen to me because I know that this is important. But it’s like when you’re under a state of physical or emotional duress, you don’t make decisions in the same way that you do when you are fully operating at a hundred percent, I think. And it’s a slippery little slope. It’s a little step by step. It’s not like you’re being asked to jump off the cliff right away.

Victoria:

And I think that he did, whether knowingly or premeditatedly or not took advantage of my weakened state. I wasn’t making clear decisions. I was overwhelmed. I was exhausted all the time. I had very little bandwidth and I was letting him take over a lot of the decision-making.

Katie:

Yeah, and then like you said, it becomes a precedent and a pattern, and then that becomes hard to change. I think that there’s something that I’d like to dig into here with someone’s listening to this and maybe they’re already dating or married to someone who isn’t willing to talk about money with you, or you suspect that you might be experiencing financial abuse and there are all sorts of red flags. You kind of just through the nature of telling your own story highlighted a few of these areas where things were not quite right, but you didn’t necessarily realize at the time how dire it was or how dangerous it could be. What do you think about now as that best next step that you can take in those types of situations in a way that also keeps yourself safe? Because obviously in abusive situations, the personal safety is a huge element of the consideration set.

It occurs to me that there might be situations wherein someone has treated you in a way in the past where you have implicitly or explicitly received the message that this is not a welcome topic and they’re not going to treat you well if you bring this up. And so you have every right to feel concerned and nervous about it because you don’t have a positive self-image, but because this person has systematically chipped away at your feelings of comfort and psychological safety in addressing stressful things with them, does that make sense?

Victoria:

And this is how the bullying starts, how this abuse plays out with people who are narcissists to have a lot of narcissistic tendencies. So they will make it so uncomfortable for you to bring up topics they don’t want to talk about. It becomes not worth it, or you have to choose your battles, right? It’s just too abusive. The behavior you get back, they will have tantrums, they will throw things and break things and yell and scream and call you nasty words and make threats. And when you’re juggling all the other things in life and you’re trying to get through the day, that is not something you can always deal with. So you might avoid it.

Katie:

I mean, I can completely see why, especially if you have a bunch of kids running around, you’re like, this is the last thing that I want to do is start a huge thing that’s going to become a giant mess. So you wrote too that it took six years for your divorce to be finalized and that there were lawyers, custody battles, forensic psychologists, there were property sales. It took so much external help and so many professionals to close this chapter of your life.

And I can imagine that someone listening to that who might feel like maybe that is the right solution for them, who’s a little apprehensive about what they’re about to embark on, and this year long journey that might be an incredibly unpleasant and expensive disengagement process from this individual that they’re legally bound to. What do you say to women who are considering divorce or who are in the midst of it, just in terms of preparation for the road ahead or what they can do to make this as straightforward as possible given how commingled things can become when you are married to someone that is potentially financially abusive to you?

Victoria:

So there are lots of precautions people should take, whether they are about to embark on a divorce or not. There are things people don’t even know. They should know that there should be a course you have to take to get married before getting married, get you’re signing a contract and there’s nothing to read.

Katie:

It’s just a license.

Victoria:

And there are so many implications that happen when you get married and nobody knows what they are. So I think from the very beginning, you have to educate yourself on the laws around marriage and divorce. But then if you’re in it, what can you do? Still get educated, but be on top of what’s going on. I didn’t know. Most of my clients don’t know even salaries, bonuses, stock options. They don’t know what their partner has. So how can you fight for your equitable share of something when you don’t even know what it is?

Katie:

I’m curious in your position, because by the time you all were getting a divorce, what was the earning situation like? And did you have access to money by that point? Because in the beginning it sounds like you were the lower earner or the part-time worker. You were not the primary breadwinner in the household. And so I can imagine someone that is the lower wage worker or the person maybe a stay-at-home parent is like, oh my god, I need to hire a lawyer. I don’t have any access to money of my own.

Victoria:

I always thought I was the lower earner, but I wasn’t. I was made to believe I was the lower earner. He would come home with watts of cash because he would collect rents in cash most of the time and not do any kind of accounting or hide money. Everything was so smoke and mirrors and everything. I didn’t know the extent of it. I knew that he had huge debt, huge loans, mortgages out on all of his properties. I knew that they were in bad shape and he just kept pulling money out and never putting money in. So what I didn’t know though, was the extent to which they were leveraged and how little equity there was and how they were probably underwater.

So I was given this image of all these buildings being so valuable when actually it was a very expensive hobby that he was running. And I’m earning, I dunno, six figures, but certainly I thought I was the lower earner. So whenever there was a decision to be made about who needed, okay, we have three children, we both work for ourselves and we have to balance. So if there was ever a conflict like, well, I have to go to a meeting and he had to go to landlord tenant court. Well, he trumped me because he’s the higher earner. So I would have to move my meetings around his schedule or whatever because he was more important, which wasn’t ever true.

Katie:

So what was true, it was an expensive hobby.

Victoria:

It was an expensive hobby. His real estate, it was a very expensive hobby.

Katie:

You were the one that was supporting your lifestyle. You didn’t even know it.

Victoria:

Didn’t even know it.

Katie:

And were made to feel as though you were the one that had the hobby career. And he was the important guy that had all the money coming in. Did you have access to that money when it was time to hire an attorney?

Victoria:

No, but let me tell you how we got to hiring an attorney because I first went to a lawyer, there was verbal abuse, there was certainly gaslighting and emotional abuse threats. He would take the kids and not tell me where they were. If we had a fight, it was me. So I finally get enough chutzpah. He scared me to death. I mean, threatened to kill me all the time.

Katie:

Understandably. Oh my God.

Victoria:

Yeah. So for me to go to a lawyer, this is what it took. I had to borrow my friend’s car when he was away. We had one car, it was my car, my money paying for it, my maintenance of it, insurance covering it. But he used it every day. I didn’t have a car. So I would wait for him to go. I had to coordinate this appointment. I had to borrow the $300 for the appointment from a friend, take her car to go to it. And I’m explaining what’s going on to this lawyer. Remember, this is the year 2000, and New York was not a no fault state. So this lawyer tells me that I don’t have grounds for divorce. I said, so how do I detach from him financially? He’s sucking all of my money and it’s going down the drain. How do I separate my money from him? And he said, you can’t. You’re married.

So $300 later, and this whole manipulation of getting to this lawyer’s office, I just felt hopeless. Hopeless. And I fell into such a depression. I can’t even tell you. I could barely get out of bed.

So the next thing was another day I’m walking to the post office to get our mail because he has the car, my car, and I can’t. And the kids are at school. So I have to walk the half mile to the post office to get our mail, and we can’t get it at home because he’s taken the numbers off the house and taken the mailbox down. So the process servers can’t find us. You couldn’t answer the door ever.

Katie:

Victoria. Oh my God.

Victoria:

We’d have to hide and everything’s in my name.

Katie:

I forgot about that.

Victoria:

You’re looking for me. And I had no control over it. So I’m walking to get our mail. It won’t all fit in the box. So they have to hand me the bundle of mail every day that is late notices and subpoenas and all these threatening you owe final notice. All this stuff in the mail. Every day he’s convinced me that this is normal. I’m weak that everybody has debt. Everybody lives like this. You’re not a risk taker. You just don’t understand. You don’t understand business.

So I’m getting more and more anxiety. I’m getting sicker and sicker from the anxiety of every day, waiting for the next shoe to drop, living like this, trying to pretend to my three little children that everything’s happy and blissful and joyful, and having this wonderful life. But a knock at the door is enough to make me become unraveled.

So I’m coming back and thinking, oh my God, this is my life. I’m 40 years old. I’m making more money than I ever expected I would. I have a great salary and this is where I am. I have no money. I have so much debt, I can never get out of it. I can’t divorce. I can’t get out of it, and there’s nothing I can do. And I just collapsed. I just fell. I was sobbing uncontrollably. And then when I pulled myself out of it, I start picking everything up.

And that was my breaking point. That was my moment when I’m like, I have nothing left to fear. I don’t care what he does to me. I can’t live like this. This is not okay. If he kills me, he kills me. It was almost that bad. I’ve got to take some action because I can’t live like this.

So that was the day I decided I was going to take back my money. And the very first thing I did was not tell him, because he would grill me about when my checks would come. And I lied. And I told him it was coming later than I knew it was. And back then it was the dark ages. Everything came in a check in the mail. And when he knew there was a check coming, he would get there before me. And he would take my check and he would go to the bank and he would sign my name and he would deposit it into his account. And he had some teller at the bank who would do this for him. He’s a narcissist. And he would manipulate and charm them into believing that this was okay. So he would take a check written to me and put it into his account.

So I decided that I was going to intercept that check, and it was a hefty check. So I knew he was counting on it that I was going to take it. And every day I would decide, I’m now running, I’m now going for a run. I would go and check the mail. So every day I checked the mail, it wasn’t there every day. I checked the mail, it wasn’t there. And then the day it was there, I had to take it and not the rest of the mail so that he didn’t know I had been there. And I took the money and I went to a bank that we did not bank at, and I deposited it. And in the olden days, it would take a week for a check that size to clear days go by.

And then one day I’m just sitting at my little desk working and he comes in and he shoves a piece of paper in my face. It’s a letter from the bank telling me when the funds would be available. I would be able to tell someone, you have to get secret address, an email address, a secret post office box. You have to do all these things before you start doing this stuff. Alright, so now I’m caught. He storms out, who? I’ll never give you another penny. He takes this basket of bills for his buildings—

Katie:

But you’re like, I don’t need your pennies. You’ve been sucking my pennies dry.

Victoria:

I still believed that he was contributing. So he puts all of his buildings bills on my desk like, this is you now. You want to control money. This is, you don’t know what you’re doing or you’re going to lose everything. So then when the check was actually supposed to clear, I get another letter telling me that there’s a lien against the account because of a cell phone bill that wasn’t paid that I did not take out. So he took out a cell phone in my name without my knowledge, and that caused the money to be frozen and taken to pay that debt. And so he said, you see, you’re stupid. You don’t know what you’re doing. You are the reason we have that money.

Katie:

I am in utter shock. What a monster. This person should be in jail.

Victoria:

I agree.

Katie:

I cannot. What did you do?

Victoria:

The next check I was getting, I did it again.

Katie:

I love it. You said, fuck this guy. I’m not stopping.

Victoria:

That is the only way. And that’s part of my messaging when my coaching is you have to become unstoppable because it’s easy to say this is too hard, this is never going to work. And I have to back down. And I shudder when I think that I might’ve backed down and still been in that situation all these years later.

Katie:

So you did it again?

Victoria:

I did it again. Finally I had access to money. It took a lot of tries. I said, I will pay for the mortgage on our house, the second mortgage on our house, all of the food, all of the utilities, the car, everything around the car and everything the children need.

Katie:

So everything.

Victoria:

Everything. I said, you have to pay for your buildings and if you can’t pay for your buildings, you have to sell them. That was it. So reasonable. You can live here, you can eat here, you can have insurance here, but I will not put one penny toward those buildings. That’s you. So he said, well, that’s not fair because if I had known that you were do that, then I wouldn’t have paid that bill and I would’ve saved it for this mortgage I have coming up. I said, fair enough. How much is the mortgage coming up? $1,800. I gave him $1,800. I said, now there are no more excuses. That is it.

And two days later he needed another whatever mortgage for another building and I said no. And he had a temper tantrum and I didn’t back down. He assumed I would because I backed down the first time and he didn’t believe me and I did it.

Now the abuse is amped up 10x. He is taking the kids for days without telling me where they are. He said, I’ll burn the house down before you get it. He said, they’re going to find you and me both dead because I’m going to do it. Every time I walked in the house, he would scream profanities at me in front of the children. He told the boys who were at this point, 6, 8, and 10, that I didn’t love them, that I was crazy, that I was on medication, that my family didn’t love them, that nobody liked me to get me to give him money.

And I stuck it out and I kept going and I didn’t back down. And then one night I came home, I would have to commute into the city once in a while, not often. And this was one day I had to, and normally he would pick me up from the train and I called him. He had my car to pick me up from the train at nine o’clock at night and it was raining and he laughed and I said, that’s it. I am never not going to have my car again. I am never not going to have my car again. So I got home and I took the key off of his chain where he kept it, which he’s done to me many times. And I hid it. I’m like, this car is mine.

So the next morning he goes to get his key and he sees that it’s not there. There’s no question what’s happened. He knows I took it because he wouldn’t pick me up. He hides it from me all the time. This is a game he plays now I’m playing it back. And that was when he really lost his mind and he ransacked the house and he dumped out all my stuff looking for the key and he took my cell phone and he smashed it on the floor and stomped on it and was actually having a breakdown. And when he had my wallet, I actually bought into it for a minute. I went and I’m trying to get my wallet away from him. And then I had this epiphany, I’m buying into this, I’m playing along. I need to let go of. I can’t engage in this craziness. So I literally let, and he fell backwards pulling the wallet. And I think that was, I turned around and we were in the kitchen at the time and I’m walking away. I think he was so embarrassed and humiliated that he’d fallen during this when I let go, I didn’t see it coming, but he came up from behind me and he grabbed me around the neck and he dragged me two rooms away. And then he threw me up against a wall by the throat and my youngest one who was six was right there. And I blacked out. I mean, my feet were off the floor.

Katie:

You’re being choked.

Victoria:

I’m being choked. And when I blacked out, I think he thought I was dead. I think he freaked out and he put me down. And so I remember opening my eyes and he’s just like deer in the headlights with his hand still around my throat. My six year old’s crying. He thinks I’m dead. And this wave of calm just came over me. I knew, I knew now I could divorce him.

Katie:

Oh my God.

Victoria:

So I calmly, crazily, it was like everything’s moving in slow motion at this point. He’s shocked, right? He’s still in a state of shock. I walk over to the phone, these are olden days, there’s the landline and I dial the number for the police and he’s just watching me and he’s saying, who are you calling? He’s so out of touch. And I said to the phone, I gave them my address. I said, I need help come right away. And they repeated the address and he said, we already have officers on their way. What’s going on there? I said, my husband just choked me. He said, stay on the phone until they’re in the house. So when he fell back, he fell against a window and broke the window and a neighbor was walking their dog and heard the crash and heard the screaming and called the police and they were already on their way when I called. So the second the police, I open the door and the police are there actually he pushes me out of the way and opens the door before they said anything, he said, my wife is insane. She’s on medication.

Katie:

And then what? I mean I have so little faith in the system at this point that I’m like, did they go, oh, okay, thanks, man.

Victoria:

Do you know there had just passed a law that said, thank God that year I think that if they see evidence of domestic violence, they have to make an arrest. Whether I press charges or not.

Katie:

Thank God.

Victoria:

Because I could not press charges. I knew he would kill me. I knew he would kill me. There was a hand print around my throat and they saw that. So they take him in one end of the house and they take me in the other end of the house, they send the kids upstairs. So one officer is talking to me and I can hear him screaming at this other policeman about how I’m insane. And he said, I just pushed her. And he goes to demonstrate to the police officer how he just pushed me against my throat and he touched the policeman’s throat. He put his hand on the policeman’s throat and the policeman went for his gun and he said, don’t ever touch a police officer. And then he goes, I was just trying to show you that, and he does it again.

So they threw cuffs on him, they dragged him out. My kids are upstairs looking out the window watching their dad being dragged to a police car in handcuffs and the other officers with me saying, you need to press charges. I said, if I press charges, he will kill me. He goes, do you mean figurative or literally I said, literally he will kill me.

So that was how I got out of that marriage.

Katie:

Oh my God, thank you so much for sharing that story. I’m so speechless and stunned right now because there’s a part of me that mentally never moved on past the point where you were told by a lawyer you can’t divorce him. And even still today, if a woman is pregnant in Missouri, Texas, Arkansas or Arizona, you still cannot finalize a divorce. I can’t even think about how many other women have been or still could be in your shoes. And it just blows my mind that you had to wait for him to physically assault you to be taken seriously enough to have legal grounds.

Victoria:

So this is really going to disturb you because I thought this divorce was open and shut. He was found indicated, which means guilty of child abuse because he did this in front of our children.

Katie:

Oh my God.

Victoria:

There’s evidence of the police, there’s no denying that this happened, yet I was made out to be the villain in our divorce.

Katie:

The other thing that seemed like such a turning point in this story, this breakdown in the reign where you basically realize I can’t keep living like this. I actually don’t have anything to lose at this point because this is no way to live. It’s so interesting the way that that power dynamic then began shifting and little by little is you just kept not relenting to the scare tactics and the intimidation tactics and just kept pushing forward. It occurs to me that he was escalating attempts at intimidating you into submission, but that was really when it seemed like the power dynamic began to shift. And it was like, no, this is my money. No, I’m the one in control. And I think the fact that you’re sitting here now out of that situation 20 years out of it and you did it, I mean I can just think about anyone who might find themselves in any sort of situation that has parallels to this or is similar and go, oh my God. Well, she was being tortured really in her daily life and she got out. And so I can change the power dynamic too. I can change it too. Thank you for sharing your story with us. That is just unbelievable.

Victoria:

My pleasure. There are more laws in place, there are more things that you can depend on to keep something like that from happening. Now people like me are out here trying to make changes, trying to educate people on this, trying to help other women who are stuck in this sort of position. So something really positive came out of it.

Katie:

Yeah, and you did that. Thank you for being here.

Sometimes we focus on the worst case scenarios to prove a point about protecting ourselves. And while the easiest way to protect yourself is by getting a prenup before you’re married, that clearly spells out what would happen to your assets and debt in the event of a divorce. And maintaining things like separate property trusts, which is a topic that I’ll explore further in chapter four of my book. There are probably a lot of you listening to this who are like me, you’re already married, your accounts are commingled to hell and you’re living on a prayer.

You might be wondering if a postnup will fix this issue. And the laws regarding postnup viability vary widely by state, as in some states won’t enforce them at all, but a postnuptial agreement might be a solution worth pursuing. So I wasn’t sure. I ended up calling a New York state divorce attorney and certified divorce financial analyst named Lisa Zeiderman to ask her for her opinion.

She did not charge me $500 an hour, thank God. And she told me that postnup are absolutely an option for people who didn’t get a prenup. So I sketched out an example for her. I was like, okay, Lisa, let’s say my husband and I came into our marriage with separate property and we would like to retroactively legally define that stuff as separate property in the event our marriage is dissolved someday. And also maybe we have marital property between us that we don’t want to split 50/50. Maybe we want to split it in a way that’s proportional to our earnings. Like what if we wanted to do 60/40 instead? Could that work? So basically I’m trying to get a sense from her for how creative can you get in a postnup today?

And she told me that you could something like that, but to just keep in mind that it might be hard to prove which money came from whom. So she told me that because property is presumed to be marital, it’s your burden to track and trace the movement of your separate property. So how did she recommend we do that? She told me the best thing that everyone can do is to keep their year end account statements and keep ’em in a safe place so you can prove that no marital property was added to your separate accounts and that any growth in the account came from underlying investments, not co-mingled marital property.

She said the year-end account statements are important because bank records usually only go back about seven years. So if 20 years from now you’re trying to prove that a brokerage account that you opened before you were married and funded on your own has only your premarital separate property money in it, that’s almost impossible to do without saving those year end statements from that time period that show the money was in the account before you were married and no marital property was added to it after the fact.

And sometimes the best way to protect yourself moving forward is by instituting positive habits and transparency within your relationship as Stacy tells it in her own marriage, this wasn’t easy, but it can work, it can be done, and in the absence of legal protections, it might just save your marriage.

Stacy:

We’ve been together, I can’t believe this, 25 years.

Katie:

Oh my gosh.

Stacy:

Kind of crazy. And we came from very different money backgrounds. For me, if I have a dollar, I try to save two. And for me, money means actual physical safety and security having money. And it’s because the way I grew up and what I saw from my husband, and he will admit this, if he has a dollar, he will spend two. He looks at money differently.

You put these two opposite people, you marry them and you’re bound to have disagreements, which can I tell you Katie did we have disagreements? We had to find a way to live a healthy happy marriage and deal with money. And what we started to do is once a month we would go on financial date nights and I would talk about what was important to me around money and what I needed to see, which for me was savings. And he spoke about what was important to him about money, which was to be able to have experiences and to be able to do things. And we were able to come together.

We actually hired a therapist to help us because there was so much friction between us and we couldn’t get ourselves on the same page. So with the help of a therapist and then also having money dates each month and having full transparency with what he’s spending, what I’m spending, what our incomes coming in, making good decisions together about big spending such as what vacations are we going to take, how much are we going to spend on that? And also really talking about the future. I have to tell you that we are in such a good place. I have learned how to embrace important things in life, like experiences and spending money on them.

And he also has learned to embrace how saving money and having money saved for retirement can also bring a lot of peace of mind. It was not a linear path. It was not easy. There were arguments and when there are arguments about money, they’re typically the most volatile and aggressive arguments. But we kept at it and we got help when we needed help. And most importantly, we tried not to blame each other of like I’m right or him saying I’m right. Yeah, so quite a journey. But after 25 years, I’ve only fallen more and more in love with him and am so excited about our future together because we have been working hard.

Katie:

Wow. 25 years. I can imagine someone listening to this and going, oh my gosh, that is my exact situation. I’m the saver and my husband’s a spender, or maybe I’m the spender and my husband’s the saver and we just cannot get on the same page. And it sounds like one crucial piece of your success was that you hired a professional, a therapist to help you with it. I’m curious if there’s anything else in your situation that you attribute your joint ability to move forward and find common ground to, because even just some of the things that you just described, like we had monthly money dates, we had full transparency in the spendings that I could see everything that he was buying and vice versa.

Did that take any sort of wheeling and dealing on your part to institute maybe those practices? I can imagine if I’m the spender and I’m trying to just yolo it up and my partner’s like, no, you need to be sitting down with me every month and no, we need to be reviewing all of our expenses. I’d be like, yeah, yeah, okay. Not really interested.

Stacy:

I’ll be honest, there was a lot of self-righteousness on my part because of course I’m the good guy because I want to save money and look at you. You’ve got a sports car, you spend your money on X, Y, and Z. So we definitely had to work through that of realizing quite frankly, I need to get a life. So we were able to find that common ground things.

I will tell you that really us, in addition to therapy in addition to the money dates was having goals for ourself each year because what we ended up doing, and this is a system that actually works for a lot of couples each year we have goals of how much we need to save into which account, so how much should go in the 401k, how much should go in the IRA and is this a year where we might even be able to put a little extra aside?

We have specific dollar amounts. As long as we’re hitting that goal, it kind doesn’t matter where we’re spending our money. That has given, I am sighing as I’m saying this because it’s just given us so much relief in how we deal with money, but you also want to make sure that you each are feeling comfortable that you don’t have one person who’s living like a pauper and the other person who is living much more lavish. It is a lot to negotiate, but there are certain things that I want to spend money on that don’t mean a whole lot to my husband, and there are things that he really wants to spend money on that don’t mean a whole lot to me.

And so we just constantly are having those conversations. Let’s be really honest, does this have a long-term impact on our finances so that we can really have an understanding of is this something that we can be doing now while we’re balancing saving for retirement and saving for our kids college?

Katie:

I love that. That makes a lot of sense. I think that you’re hitting on, it basically just gets you to align on what does success look like and if we are in mutual agreement that this is what success looks like and we’re six months down the road and those benchmarks are not being hit well now it’s not like he said, said wishy, wishy-washy thing. It’s like, well, we both agree that that’s what success looks like and we’re not doing it. Something needs to change. The people that are going to be listening to this, I would bet you anything, they’re the ones that are more involved and some of them are sitting there right now going, how can I get my spouse to care? How can I get them involved?

Just knowing what I know about our listeners and the emails that I receive, is there anything that you tell people or recommend about how to loop ’em in, how to lasso them into the process and make them want to care aside from the shock factor of like, Hey, listen, if you don’t get involved, you’re putting our marriage at risk or you’re putting yourself at risk.

Stacy:

Yeah, I mean that’s a strong one, but that’s a lot to come out of the gate with. I get you on that, Katie.

Katie:

Maybe that’s level three. We’ll escalate where necessary.

Stacy:

Yeah, I would say level one is just the love you have for your partner of I care for you so much, I love you so much and I worry about if God forbid something happened to me, it would be so hard on you and I don’t want that to be the case. And so I get that this is not your cup of tea. I get that this is not something that you’re really excited about, but can we go for a steak dinner, have a nice glass of red wine, and I’ll just take you through with what things look like. Would that be okay?

Katie:

That’s lovely.

Stacy:

And the person’s going to say, sure. And then being super organized so that your partner has the name of each account, the username, the password, that they know the name of your CPA, they know the name of your estate planning attorney for the will. I call it an I Love You Letter because I do feel like that’s the most wonderful gesture of love is to make sure that your partner’s okay by them having all this information.

Katie:

Yeah. Beautiful.

If you think you might be in a financially abusive situation and your unable to access funds to pay for help, Stacy’s nonprofit might be the answer.

Stacy:

A lot of the high net worth divorces that I was just speaking about is through my independent financial advisory company called Francis Financial, so just kind of putting that out there. But I started Francis Financial actually to pay for Savvy Ladies and what Savvy Ladies is all about, it’s for every woman. It doesn’t matter whether you have a dollar in your pocket or not. We work with women one-on-one through our financial helpline, and you can then be matched with one of our 300 volunteers, and we have experts that are certified divorce financial analysts, accountants, certified financial planners, experts in credit debt investments, you name it, all free of charge.

Then on top of it, we have hundreds of courses that you can take FINRA approved courses with little questionnaires at the end, every topic under the sun, and then of course we have webinars and live panels and we have volunteers in every single state. So it’s just a great resource and you go to Savvy Ladies, S-A-V-V-Y ladies.org.

Again, it’s all free of charge and it’s for anyone that has a question because if you have a question, ask it and know that you’re not alone and we’re going to work with you to get the right answers and savvy ladies, it’s my love letter to my grandmother.

The more women know, the more financially confident we are, the better decisions we make, and we more likely to live a happy, healthy, and financially secure life.

Katie:

That’s all for this week. I’ll see you next week. Same time, same place on the Money with Katie Show. Our show is a production of Morning Brew and is produced by Henah Velez and me, Katie Gatti Tassin with our audio engineering and sound design from Nick Torres. Devin Emery is our chief content officer and additional fact checking comes from Kate Brandt.