0:00 Do you think prenups help marriages last? >> Yes. >> You're saying that as a divorce lawyer who gets paid to write them? >> No. Because it's the least profitable thing we do. >> Oh, okay. >> Yeah. Prenups are so easy. Like, they're, you know, they're really like to the point now where they're essentially automated. Like, I see a future where AI is just going to do them. Like, it's really not that tricky. >> Do you think I should get a prenup? >> Yes, of course. >> Why do you think I should get a prenup? >> You have a prenup? It'll either be written by the state legislature or it'll be written by you and she. Who do you trust more? You've been to the DMV? Have you walked into the DMV and went, "Oh, these people are great. They should be in charge of everything." I mean, you know what? They should make the rules for our marriage. And by the way, even though this legislature changes constantly, like whoever you are, whatever your political views are, in the last 20 years, at some point, you've
0:45 gone, I cannot believe who's in charge here. I cannot believe who's in charge of the government. Whatever side of the aisle you're on. So, what you're saying, cuz your marriage has a prenup. you get married, you've got a prenup. You're saying, I trust the legislature of the state in which we will be residing in the future in the event we break up more than I trust my partner who I've chosen out of 8 billion options. >> I imagine a lot of people listening would be scared to mention a prenup to their partner. >> And those people in particular, by the way, it's just like I said about, you know, I don't have 15 minutes a day to meditate. Great. Then you need an hour. If you'd be scared to mention a prenup to your partner, then then you should definitely mention a prenup to your partner because what that means is I'm
1:32 afraid to have a hard conversation with my partner. And if you're going to get married, you should get accustomed to having hard conversations. Life is going to come at you very fast and there's going to be lots of things that happen that require hard conversations. >> What if my partner says no? >> Says no to the prenup. >> Yeah. have a conversation about why >> and they say you don't trust me like you think I'm going to take your stuff. This is not very sexy. This is >> well arguably you don't trust me equally, right? Because that trust works both ways. So what what what you're saying when you say you don't trust me is you're saying that you don't trust that this marriage is going to last or you don't trust you're saying you don't trust that in the event this marriage ends we won't be fair to each other.
2:19 Right? So, why would you marry someone who you don't believe that they're going to be fair to you? What you're you're not protecting yourselves against each other. You're protecting yourselves against the government making the rule set in the event that that your marriage ends in something other than death. >> You know, I've got a friend um there's two people that convinced me that I should get a prenup. >> One of them was you. >> Thanks. Um, and then the other was watching a friend go through divorce and he said to me actually when we we went for dinner one time that it was it was it was looking at his face and seeing the like depression in his face from the process because not only had it ruined his relationship with his ex-wife because they've gone through this
3:04 onslaught for seven years where two sets of lawyers were fighting either side. He said that he had paid for the lawyer her lawyers >> Yeah. >> which he has to do which I I wasn't >> Yeah. There's a presumption that the higher earning individual should be responsible for the legal reasonable legal fees of the the less uh earning spouse. >> He said her lawyer has now got like a skyscraper whereas when this divorce started he was in a small little office. Now he's got like some massive building because he's had to spend tens of millions on her lawyers. >> And >> yeah, I've had clients who paid millions. The other thing he said was that he has her lawyer is trying to inflate his assets >> to tell the judge that his business is worth
3:49 >> billions of dollars when now I know why this divorce is taking so long. They have dueling experts. So instead of of the two lawyers hiring neutral a neutral expert to value his business interests, what they've elected to do instead is to hire individual partisan experts. And that happens sometimes. And when you hire an individual partisan expert, of course you're going to, you know, if you represent the party who wants half of this thing, you're going to find someone. You can, the cigarette companies had doctors who were willing to testify that cigarettes are good for you. Like you can find an expert to say almost anything if you pay them enough. So you find credible experts that will overly value the business and then because value is speculative and then the other side has an incentive to hire
4:34 experts who will deliberately diminish the value of the business and then you have two opportunities. One is you can play with the data set and you can impeach the data set and then the other is you can impeach the conclusion that came from the data set. So you can say you used the wrong data and that's how you got to the wrong conclusion. Or you can say you use the right data but you came to the wrong conclusion or some combination of both. Like this is the [ __ ] I get to do all day in a courtroom is to like try to engineer those optics or prevent those optics from being engineered in that direction. >> And say that I was going through a divorce now with my partner. Mhm. >> My wife would well her lawyer would theoretically be trying to say that this podcast is worth a billion dollars because then theoretically >> she's entitled to a larger percentage. Yeah. >> She might be entitled to 500 million.
5:21 And if the judge believes that this podcast is worth a billion, I need to find a way to pay her 500 million. >> Yeah. >> Even if I don't have it, >> it can be paid over time. It's what's called a distributive award. It can be paid over an extended period of time. That's >> and my lawyer is going to be trying to argue that this is worth nothing. >> Nothing. It's absolutely effortless. It's worth nothing. You should have negative contingency discounts, a key man discount. It's a lack of discount for marketability. There's Yeah, this is all I do all day. This is the gig. And and see, you know why you want a prenup is cuz God forbid for both of you that that happens. Like, you're going to pay me. I get a thousand dollars an hour to help people navigate that kind of chaos or to create that kind of chaos as a
6:07 weapon against a person or to just threaten that kind of chaos. >> Doesn't that mean it's your in your interest to stretch to amplify conflict and stretch it out and protract it? And by the way, I manipulate people's emotional state for a living. I said that earlier. You don't think I could use my powers for evil to get my client terrified and worried that forces are aligning against him? By the way, that's how good lawyers get their reputation as being good lawyers because sometimes we have a client where we could potentially make millions of dollars and we settle the case within like $10,000 worth of fee. Like I have a case right now where my opposing council is I I would consider the only lawyer in New York City better than me. like he's sort of
6:52 like an idol to me in the sense that he's such a good trial lawyer and he's my adversary on this case and it's not the first case we've had against each other and we are like when the two of us go in a courtroom it's like T-Rexes fighting we're going to settle this case in like two phone calls because we both are just not the kind of people that are going to unnecessarily amplify conflict. We we we have our reputation because we don't do that. Like the best of us, that's how you earn the reputation. The people that do that amplifying of conflict, word gets out. Word gets out and that's this is a business where you live and die by your reputation. So this is actually a great illustration of what a prenup should be. Okay? All a prenup is a prenup is not a referendum
7:37 on the likelihood of us breaking up. A prenup is not a commentary on how much we trust each other. A prenup is not um you know an opportunity to screw the person you're about to join lives with. Okay. A prenup is a rule set. It's creating tranches. Okay. So you have some things. She has some things. Right now you don't owe her anything. She doesn't owe you anything. Yours is yours. Hers is hers. You're in the title system. >> Can we talk about if we're just dating? So, if we're dating, I heard that there's some laws where if you date someone long enough, eventually they can basically argue that they own your stuff. >> Yeah. So, that's called what used to be called common law marriage or it makes
8:23 you responsible for what we used to call palimony, which is like alimony for a friend. Palimony. Okay. Um, most jurisdictions no longer honor that. It doesn't exist. It was largely a function of the absence of marriage equality. So once marriage equality occurred, once gay and lesbian individuals could marry, the court system essentially started saying there's no such thing as a quasi marital relationship anymore. If you are married, you're married. If you're not, you're not. So if you decide to live together and you don't have a marriage, then you can't have a quasi marital relationship anymore. Now that marriage equality is the law of the land and everyone who wants to get married is allowed to get married. You can't say well we were kind of like married but we weren't married. Like you're either
9:08 married or you're not married. Those are the two tranches. So that situation you're in the title system. Yours is yours, hers is hers. There is no we except for the voluntary we. >> Okay. So now using coming back to this example of these M&Ms and prenups. >> So here's what marriage is simply put. There's you, there's me, this is we. This is the bucket of we. Okay. When we get married, we're going to take you. I didn't put it all. See how I didn't put it all. Okay. I'm keeping this separate. That's called separate property. Okay. In California, this is called community property. This is
9:54 anything I acquire during the marriage. Okay? This is separate property. If I keep it separate, it stays separate. Okay? It stays separate. Keep that thought. This is her. Okay. So, she's put some of hers in there, too. It may not be exactly the same, but it's pretty close to it. And by the way, we just got married. It's pretty obvious to see which one's which, right? Okay. So, so this is any marriage really, with or without a prenup. Okay. This is what marriage looks like. There's you and there's me and there's we. We're combining. And by the way, this isn't just for assets and liabilities. This is like the nature of our stuff, our furniture, the things we bring to the relationship. You could even argue it's like what we watch on TV, right? It's
10:41 you, me, we, and we combine the two. Okay? Now, you and I both know this is actually what it starts to look like. It never stays this neat, does it? It always starts to get kind of mixed up together. In the law, we call that co-mingling. Okay. Now, here's what's interesting with a prenup. This stays this simple. Because anything you put in this bucket is marital. >> And that could be stuff I bought for the house. It could be a joint bank account. It >> could be anything. >> Okay? All we're doing when we have a prenup is yours, mine, ours, and we're defining that. So maybe I want you to feel I'm very invested in this relationship. So I throw some more in. Hey babe, I just got a bonus at work.
11:27 I'm throwing it into the Wii. I'm keeping a little over here. I'm keeping a little over here. >> Wait, can you do that after the marriage? >> With a prenup? Yeah. >> So, you can add to a prenup. >> With a prenup, what you're saying is if it's in my name, it's mine. Asset or liability. If it's in your name, it's yours. Asset or liability. If it's in our joint names, we divide it 50/50 or how we agree in writing. But we create three separate buckets. Yours, mine, and ours. Okay? Do you know what happens in the state of California after seven years or in the state of New York if you co-mingle assets in any way? This is solely things in your name. This is solely things in her name. Things you owned before marriage. This is the you and the me before you got married.
12:17 It's community property now. All of it. >> Everything. >> All of it. Every bit of it. You didn't have a prenup. Everything that's in it, everything in here is is subject to division. Everything that's in here is subject to identification, valuation, and division. And think about think about sorting that out. >> And also going back to my friend, some of the value of these assets is up for debate. >> Sure. Sure. Not only is the value because look, some of these are cracked and some of them aren't. And did they crack in this process or were they cracked before? Did she crack them or did you crack them? And which ones are worth more than the others? And were these the same at the be? It doesn't matter. It's all in. And by the way, take take out the marital take out your
13:03 property. Now, how long is that going to take you? It's impossible to do. that once you're in the community property system, once you've put something into the Wii category, if you get married without a prenup, you can unintentionally buy into this into this system, which by the way, I make a very comfortable living helping people sort this out. Whereas whereas all you had to do was agree on the rule set of yours, mine, ours, and then this is intentional. Now, I understand why that's scary for some people because you have to have a conversation about, well, are we putting that in joint names? Or, well, you got that bonus. Are you putting it in my account or your account
13:49 or some in your account and some in my account or some in this? But isn't it better to keep some level of control over this? >> If I was a financially motivated individual and I was marrying say you and you were a billionaire, >> I mean it's very much in my interest to avoid this prenup. >> Maybe. >> Yeah. >> Because then, you know, it's all going to become we in seven years time. So, I've just got to be with you for seven years and then I can bounce out of this and I'm going to make half half a billion dollars. Have you ever seen that? >> Of course. Have you ever seen, but here's also what I will say to you. Flip that story for a second. So, we're married for 6 and 1/2 years. It's going pretty well. We're at the 6 and 1/2 year mark. You're you're a billionaire. You're
14:36 probably not stupid, right? Are you going to take that bet? >> Is it seven years is the moment >> 7 years is the moment >> when it all becomes >> community property. Yeah. So do you find some very successful people >> they spike the divorce rate at six years six and a half years because why? It's the same reason why I tell people don't put don't put what we call you know sunset clauses in a prenup because people people all have the bright idea that they're going to oh well we'll do a prenup but after 10 years it'll go away after 10 years you know it'll self-destruct like in Mission Impossible. And all that does is makes people ask really icky questions at the nine and a half year mark where they have to start going because seven years seven years it's like the honeymoon's over. Maybe you got a kid or two and all of a sudden you go, "Okay, do I want
15:23 fully one half of everything I owned prior to the marriage to now be subject to division? Is it going that good? Do I want to take this bet?" Like look, we live in reality. What you're doing when you marry someone is you're marrying your destiny to them and you're making decisions about a future that you can't see. It hasn't happened yet. If seven years is the moment when our assets become co-mingled to the point that community property where we have to kind of split our assets in a relationship, have you ever seen someone get to like seven years in one day and then file for divorce because they're going to get >> Yeah, I've had people who wait until the exact moment. Like there's other there's other formulas that are applicable. Like I I have plenty of people right now that have come to me for a consultation and they're like, "Yeah, I'm not going to
16:08 file for another 6 months because we'll hit 20 years in 6 months." And when we hit that, it kicks up to another level of alimony in terms of the formulas. Like here's the thing. When the government makes decisions for you, they set numbers. Like there's a highway near where we are right now. It's 55 miles an hour is an acceptable legal speed to drive on that. 56 and you're committing a crime. 76 and you're committing a different level of crime. 106 and you're committing a higher level felony crime. Right? Is 56 and 55 that much different? No. We had to pick a number. So, we picked that number. So, do you trust the government to pick the number? That's the only question to ask when you're thinking about a prenup is, do I trust
16:53 the government so much that I'm going to let them pick the number? Personally, I don't. Personally, if I like someone so much that I've decided I'm going to choose them out of 8 billion other options, I would think I have enough faith in that person to come up with a rule set between us that we and BY THE WAY, NOT A COMPLICATED rule set. If it's in my name, it's mine. If it's in your name, it's yours. If it's in our name, it's ours. Then you can have all the conversations you want about why aren't you putting things in joint names or why are you putting things in joint names and here's what I need to feel safe because here's the thing. If you're the billionaire or you're the person marrying the billionaire you both want to feel remember we're going back to what is it you want to feel? What is it you want to feel? That's the key question. You what do you want to feel? You both want to feel safe. Isn't that fair? I've represented a lot of victims of intimate partner abuse and domestic
17:39 violence and course of control and I can tell you you can't feel loved if you don't feel safe. And there's lots of ways for a person to feel unsafe physically emotionally financially. There's lots of ways to make someone I hope you want to make your fiance feel safe. And I hope she wants to make you feel safe. So, one of the ways that you make her feel safe. By the way, you can't protect her from everything in the world. You know that, right? Like somebody drops a nuke, there's nothing you're going to be able to do to help her with that. Okay? There's lots of things that can happen that you can't keep her safe from, but you're going to do your darnest, and that's great. Okay. And by the way, like she wants you to feel safe. She wants you to feel safe and not taken advantage of and loved for who you are. Right? I I have every confidence she does not love you just for money. There's lots of people with
18:25 money in the world. So, she loves the unique combination of things that are you. One factor of which may be that you're a very successful man professionally. And that makes her feel safe and that makes her feel secure. And it makes her feel like she can really have a future with you that's a bright and lovely one. And she can focus her energies on things other than find. That's great. This is great, man. We're both happy. We're doing the thing. So, what is wrong with just keeping this conversation an ongoing conversation about what is it we need to feel safe? Cuz if you are in that dynamic where she's gorgeous and he's rich, if she says to him, "Hey, if we split up, I'm going to like need some things. Like, I I'm not really focusing on finances and you have so much more than me. You're telling me a guy's not going to say,
19:11 "Yeah, it makes sense." And by the way, when's the time to have that conversation? WHEN YOU'RE MADLY IN LOVE WITH EACH OTHER in the beginning of this thing, when you're on your knee in front of the restaurant, you know, proposing to the person. You don't have it when you're breaking up. That's the worst time to have that conversation. Have it when you're first having that abundance of optimism and connection to each other. And then and then, by the way, what does he feel unsafe? He feels unsafe that he's saying, "Look, I'm willing to contribute financially to this relationship. Clearly, I've proven that. I bought you a Birkin bag. I bought you a car. I pay for your bills. I'm signing on to marry you and to give you a wonderful, beautiful life." Are you entitled to 100% or 50% of everything I've ever owned? I have so much more than you right now. Like, that seems wildly. Do you Are you saying that
19:57 everything I earn from the date of marriage on we should split? Like, that's what's great about a prenup. You can make whatever rules you want to in that situation. So I I believe there is genuine value in having honest conversations about these things. Look, I it's just M&M's. It's just money the end of the day. And by the way, this has no more real value than the pieces of paper you're holding in your pocket that we've attributed value to. If anything, this tastes good. Chew on money all you want. It won't help. If you love the D CEO brand and you watch this channel, please do me a huge favor. Become part of the 15% of the viewers on this channel that have hit the subscribe button. It helps us tremendously and the bigger the channel gets, the bigger the guests.
