Ryan Kalamaya (3s):
Hey everyone. I'm Ryan Kalama
Amy Goscha (6s):
And. I'm Amy Goscha
Ryan Kalamaya (8s):
Welcome to the Divorce at Altitude. A Podcast on Colorado. Family Law.
Amy Goscha (13s):
Divorce is not easy. It really sucks. Trust me I. know Besides. being an experienced divorce attorney, I'm also a Divorce client.
Ryan Kalamaya (20s):
Whether, you are someone considering Divorce or a fellow Family Law attorney. listen in for weekly tips and insight into topics related to Divorce co-parenting and Separation in Colorado. Good afternoon. Welcome back to another episode at Divorce. at Altitude. I'm Amy Goscha. And. I. Have the pleasure of having Jennifer good with me today. How, are you doing Jennifer?
Jennifer Goode (43s):
I am just like my last name. Doing good.
Ryan Kalamaya (46s):
That's, that's amazing. So we had lunch this week. It was great. You're in dc I'm in Denver. It's really fun to be able to do this with You. can you give me a little bit of your background and what you do?
Jennifer Goode (57s):
Sure. Happy to. So I like to say that I am a recovering attorney. I practiced law for just shy of 15 years. Spent the first two years in corporate and the balance and Estate Planning working with a wide variety of folks, but focusing a more so on transfer taxes and also sort of basic Estate Planning estate administration trust administration. And through my trials and tribulations as an estate planner, managed to bump up to Family Law in the context of premarital Agreements, post-nuptial Agreements. And thinking generally about how do we think about protect and plan for family wealth in the context of a potential Divorce.
Jennifer Goode (1m 37s):
So that led to my interest in this area and about a year and a half ago I moved over to Bernstein Private Wealth Management, where I am, I think my formal title is Director of the Institute for Trusts and Estates. I know it sounds very fancy and really my role is twofold. So one is to work with clients and their advisors to think about Estate Planning, whether that be transfer tax income tax planning, whether it be thinking about guardians and trustees, but also thinking about asset protection, how we define the term family in that sphere, what we think about premarital Agreements and how that plays into the estate plan and the family governance structure.
Jennifer Goode (2m 19s):
And then the other component is really research, writing, speaking and getting out in the circuit to try and establish our thought leadership. And as part of that, I was very excited to write and release recently a white paper on premarital Agreements that discusses sort of high level what premarital Agreements are, how they're structured, what the requirements are, but then also how Modeling can be informative and helpful as we think through some of the more common issues that we see from our clients who are engaging in a a Prenuptial agreement. Premarital agreement negotiation.
Ryan Kalamaya (2m 52s):
Yeah, no, that's great. I mean, for listeners out there, we, you know, we've had some other episodes, you know, in Colorado on how I, as a Family Law attorney would attack or defend a premarital agreement. But what this episode is really focused on as Jennifer has talked about is, you know, how do you have that conversation if you're about to get married or you come from family of Wealth, you know, how do you have these conversations and how do you protect that wealth, you know, so you don't end up in, you know, a highly litigated Divorce case at the end of it. Can you explain to our listeners Jennifer, I think some people know what modeling is, but what are you exactly talking about there?
Jennifer Goode (3m 28s):
Sure. So one of the things that we rely on when we work with clients is our ability to, we refer to it as helping them financially pre-experience the outcome. So we look at what happens with a lot of times specifically liquid assets we model out, which means that we forecast with using our proprietary software that shows what would happen based on markets over the next, it can be 20 years, 30 years, 40 years. So the idea is to show them sort of what happens when the rubber meets the road in terms of Estate, Planning structures, investment structures, the goal being to provide a somewhat realistic range of outcomes depending on what the market does over time. So we're, we're looking to show what the decision that you make under an Estate Planning strategy or for example under a premarital agreement, what that will look like to you in the context of your finances and your lifestyle 30 years out.
Jennifer Goode (4m 22s):
And so hopefully that provides a little bit of context and a little bit of comfort with respect to these decisions for the folks that are engaging in strategy, the negotiation, what have you.
Ryan Kalamaya (4m 33s):
Yeah. So before we jump in kind of this podcast, Ryan And I, my co-host, have used the scenario of Melanie Wolf and Eric Wolf who get divorced And. we talk about various scenarios that they would face. But say if we went back in time before Melanie Wolf and Eric Wolf were married and Eric came from money, let's talk about some of those initial conversations. They're very difficult. What are some things that you see Jennifer, you know, when talking to clients when they're about to have that conversation with their soon to be spouse about a premarital agreement? What is important?
Jennifer Goode (5m 9s):
Well, I think the most important thing is to strip anxiety out of the situation. The facts are that more and more people are, are engaging in Prenuptial negotiations, getting a premarital agreement, Prenuptial agreement. And so this is becoming a more and more common process, And, I think hopefully as that becomes the case, we're stripping away some of the stigma of getting an agreement. It's not that you think your marriage is going to fail, it's not that you don't trust your spouse, it's that you're looking to replace the uncertainty of what could happen in the event that the unfortunate occurs with certainty. So everyone has the same sort of starting understanding of what your finances will look like over time.
Jennifer Goode (5m 51s):
when we are engaging with people, talking to them about what a premarital agreement is and how it functions, we think of it as an opportunity to do a couple things. The first being that You can think about sort of what your ideal life looks like with your partner. Where do we wanna live? Do we wanna have kids? If we do, does someone wanna stay home for a period of time with those children? What do I expect for my career? What do we expect for your career? How does that all function together? So we create that sort of shared vision. And then from that we kind of reverse engineer how the finances work. So this is where we wanna be eventually. How do we finance that? What pools of money do we pull from?
Jennifer Goode (6m 31s):
Are they going to be shared jointly fed accounts? Are there separate pools of funds that we're gonna pull from? And what does that mean for each of us? And how do we establish a sense of equity between the partners and make sure everybody feels comfortable both at the start and at the end in terms of how we're proceeding. We hope to have this be an opportunity to dream together. And then as part of that, the second thing that I would encourage people to think of is to learn how to have the first of what might be, you know, many hard conversations or at least conversations about money. I don't think that anyone, or at least no one should assume that a happy successful marriage can proceed without learning to talk about money and finances and how the two parts create a whole when it comes to how you're spending and where you're spending from.
Jennifer Goode (7m 22s):
And so this is an opportunity to learn how to do that and to learn the skills and terms of talking to each other that You can then fall back on in the future. Cuz they're, I mean I'm married, And I could definitely say there are bumps in the road, but they're not insurmountable. And it's always nice to have that skillset established of communication, of a general understanding that you want to be partners in this venture, And I. So I think that that's what the Prenuptial process can create and provide for.
Ryan Kalamaya (7m 51s):
You said you're a recovering attorney. you know, I'm an attorney still in the throws part of my practice used to be drafting, you know, premarital and marital Agreements. But yeah, it took me a while to kind of understand kind of that mindset when people are coming in where they're at, they're super excited to get married. As you had put in your white paper, you had said this is like a new adventure. you know, it's really cool to be like, this is uncharted territory, we're getting married, we can figure everything out. But I think, you know, it is my job and your job as ex attorney, but also financial advisor, we have to help people kind of walk through these scenarios so they can see what are the things that they should be thinking about.
Ryan Kalamaya (8m 32s):
Because I think it's kind of just that marital bliss is already kind of set in, you know, when you're about to get married.
Jennifer Goode (8m 39s):
Yeah, I mean if you think about it, you wouldn't typically go on a vacation without considering where it is that you're going, what you wanna do, what could potentially be some of the pitfalls and how you're gonna deal with them. And this is, I mean, not the marriage is a vacation, hopefully it is. That would be nice. But it is this crazy long journey together. And so why wouldn't you wanna plot it out and be thoughtful about what you're entering into and how you're gonna work together to do it. And the other thing that I would raise is that I think it not only is an opportunity to learn to work together, provide a sense of comfort for each other, but especially if you come from family wealth, it's an opportunity to provide certainty both for your future spouse but your family as well.
Jennifer Goode (9m 28s):
So it's an exercise in defining how your spouse is going to play a role in that family wealth, if at all. And making sure that everyone kind of understands the rules of the road. And so I think that that can provide comfort for your external family as well. So it can be a little bit of a soothing process, right? Making sure that everything, everybody understands how they're gonna function and potentially preventing some relationship bumps are down the road.
Ryan Kalamaya (9m 54s):
This episode is brought to you by our law firm, Kalama Goscha. Amy And I describe our law firm as an innovative and ambitious trial team that pushes the boundaries to discover new frontiers in family law, personal injuries in criminal defense, in Colorado. We currently have offices in Aspen, Glenwood Springs, Edwards, Denver, and Boulder. If you wanna find out more, visit our website, Kalama Law now back to the show. Yeah, so I think what would be helpful for our listeners is we've kind of set kind of the mind frame when people are coming into marriage, when you're dealing with say one soon to be spouse who has money in their family and maybe it's multi-generational wealth, you kind of have two layers of conversations that are coming at play, right?
Ryan Kalamaya (10m 42s):
Like between the family member and maybe parents and wanting to protect the wealth and then the conversation between the soon to be spouse and how they fit in. So let's take the scenario that Eric comes from Money Melanie does not, you've sat down, they said that they want to get married. Can you kind of walk me through from your perspective, what is your advice from the financial planning point and also doing this white paper on premarital Agreements? How would you structure kind of the next conversations and modeling to help them walk through this process?
Jennifer Goode (11m 17s):
Sure. So I'm put my lawyer hat back on and say sort of, it depends, I need more facts. So I'm meeting with Eric alone, this is, they've just gotten engaged. I think there are a couple things. First, we need to establish whether or not this concept of a premarital agreement is something that is new to him and his family or if this is something that's already been integrated into their family governance structure. And I'll say that I think we at times advocate for Prenuptial Agreements to be part of a larger family structure for a family to get together and create sort of an idea of everyone, all the children are gonna get Prenuptial Agreements, this is what we needed to provide for it. This is why.
Jennifer Goode (11m 57s):
Cuz it supports our overall, our overarching family goals and values. And if that's the case, then Eric has a really good understanding of why he's doing it, what it needs to require, and probably is a little bit better educated about the process. Now if this is the first time that Eric's really ventured into this, then obviously there's gonna be a conversation about what it can and can't include. But I think it's also a conversation about what are we looking to protect, promote, provide for. So in the past I've had conversations with clients about that, but then also about how do we present this idea to your betroth and present it in the right idea, I mean, or in the right way, rather.
Jennifer Goode (12m 38s):
I mean I think it's about setting the table. So again, it's a conversation about, all right, what are you looking for? What do you envision when you think of your marital future together? What are any of the concerns that you have? And so we highlight the places where we wanna go and the things that we wanna avoid. And then from there we can also look at, let's say for example, one of the examples we have in our paper, let's say Eric's involved in the family business and he is taking sort of a, a naturally low salary cuz he wants to keep more cash in the business to allow the business to grow faster. So we have a conversation about, okay, we're probably pulling less money out than we normally would if you were employed elsewhere.
Jennifer Goode (13m 19s):
How is this gonna impact then the marital funds that you are creating with your spouse in the future? And is that going to sufficiently support your, your goals for the future? And if not, let's think about should you increase your salary, what does that do to the business's value over time if you don't increase your salary, is there another way to provide comfort that we are gonna sufficiently compensate the marital unit for the efforts that you're putting into the business while you all are married? And so Modeling is helpful in terms of looking at what those two scenarios do over time and helping them evaluate hopefully both Eric and his future spouse. Would we prefer one versus the other.
Jennifer Goode (13m 60s):
What makes us feel better? What makes us feel like we are really supporting our, our joined future, but also providing against certainty for his family on the other end who has the family business? Okay, so are we gonna increase salary? How are we gonna do this? Should we put a buyout provision into the premarital agreement so that if for for any reason there's a claim against the interest in the family business, they have a way of securing that that will never wind up in the hands of a non-family member. Things like that. So we really kind of just talk about what their goals are, what the potential issues are and kind of flesh out some of those areas where there are a more than one way to kind of get where they're going from a financial perspective.
Jennifer Goode (14m 40s):
And that's where the Modeling again becomes really handy because we can show what that potential solution does now, 5, 10, 20, 30 years in the future and kind of help them understand contextualize is sort of my favorite way to put it, what that solution means for them for Eric and for Melanie.
Ryan Kalamaya (14m 58s):
Yeah, no that's great. And I mean it's kind of the definition of almost like informed consent if you're having people waive certain rights, right? I mean I think right. you know, and so I think the whole point is is that there's been this notion that premarital Agreements, there's like a taboo around them. Whereas I think there's been a shift that I've seen where it's positive it's this is planning your life through these scenarios. So you're thinking about these things and this is really gonna help you and your spouse as a roadmap you are successful.
Jennifer Goode (15m 30s):
Yeah and I'm sure as you touched on in your prior episodes, I mean understanding what it is that you're signing, what you're agreeing to is key to the enforceability of these Agreements, right? And so this ability to model things out, to have everyone understand generally where what this is gonna do to the couple over time and to the other parties is really helpful in terms of establishing that everybody understands what they're signing and that you don't have a risk of unenforceability.
Ryan Kalamaya (15m 56s):
Yeah. Is there anything else Jennifer related to Modeling that you know, like are things that you see get modeled out? you know, you talked about in the context of a business or buyout? One thing I can think of that I use a lot with Modeling would be spousal maintenance. If someone is waiving their right to spousal maintenance or if it's a certain amount and we're putting it, you know, like a certain indicator in there for inflation, here's what it's gonna look like, here's what you're gonna have if you're married 10 years, 20 years. Can you think of any other just general categories of where Modeling is really helpful to help people see?
Jennifer Goode (16m 33s):
One area obviously is if you are pulling from a separate property pool, what that will do to the growth of the separate property over time. And also how that might actually limit your abilities in terms of investing. If it's gonna impact like you are constantly requiring liquidity, that might narrow the scope of potential investments and that might also impact growth. Another area would be, like you were sort of referring to is this idea of how do we ensure that one person is going to be in a place where they can support themselves in the event something happens to the marriage. Especially if that person is taking maybe a step back from their career to support the family goals. So again, just kind of referring back to the paper, we had a situation of potential case study where an individual was considering staying home to take care of family members.
Jennifer Goode (17m 22s):
And so we were trying to identify how much in terms of a lump sum payment would be required to make them or provide for them in a way that they could sustain their spending over time based on an idea of what their salary might look like if they came back into the workforce at 10 years, 20 years and 30 years. Cause as we all know, if you take some time out of the workforce and then you come back, your salary is unlikely to be where it would've been had you stayed in the entire time. So modeling's helpful there because we can really look and see what sort of pool of assets you would need to support a spending period or spending annual spending rate over, you know, again, 20 years, 30 years, 40 years.
Jennifer Goode (18m 6s):
And You factor into that, the anticipated salary, the shifts in salary as that individual comes back into the workforce at different points in time. So You can provide a little bit of data instead of sort of throwing a dart in a dart board as to what you would really need to make that person whole or to provide for them sufficiently. And then hopefully the goal really is, is if you're making that decision based on Modeling on data, it provides an avenue to potentially strip some of the emotion out of the decision. And so it feels less as though this is what I'm worth to you and more as though I am trying to provide for you and this is what the data is showing me in terms of what I need to do to do that.
Jennifer Goode (18m 50s):
And so it, I think it, I hope that it provides a perspective where it might feel fair and it gets a little bit more to the heart of what the, the couple hoping to achieve. Yeah.
Ryan Kalamaya (19m 0s):
And one thing I also find interesting or that you know, I'm looking at is if there's a waiver of spousal maintenance and we've done the Modeling where one party wants to, or one spouse soon to be spouse wants to step back in their career And, we do the Modeling for what that looks like and how if something goes awry with the marriage, you know how they're gonna survive moving forward and what that looks like. I also look at, you know, Estate Planning because as as, as we know and as we've discussed in previous episodes, premarital and marital Agreements can deal with a waiver of certain benefits upon death. you know, and so I've seen where Estate Planning becomes key, you know, at the same time of doing this premarital agreement, you know, and what that looks like.
Ryan Kalamaya (19m 47s):
Do you have any thoughts on is Modeling important with maybe looking at after death, you know, and Estate Planning or have you had that circumstance come up and do you have those conversations as people
Jennifer Goode (20m 0s):
Yeah, absolutely Now, now you're really talking my language. I love Estate Planning. So yeah, I completely agree. I, I would hope that premarital Agreements address both Divorce and death And, I think Modeling can play a huge role there as well. So if we are thinking I know as an estate planner, I sometimes want things in trust, my ideal vehicle for payouts. So if I'm thinking about requiring that a distribution to a spouse be put into, say a trust that requires an income payment versus full discretionary distributions or just an outright distribution, I think Modeling can show what we could anticipate in terms of income over a period of time. And then we can also isolate whether or not that income would be sufficient to support the spouse.
Jennifer Goode (20m 44s):
And if it's not gonna be sufficient, then maybe we need to go back to the drawing board in terms of how much we're allocating to the spouse or the structure of the payout. And then You can also think about other ways of supporting the spouse. Maybe we really want, let's say to say for example, we go back to Eric, he's got family wealth, maybe his trust only allows for him to leave. Let's say he has this beautiful family trust, it allows for him to leave his surviving spouse a income interest only when he passes away. So we identify, okay, she could get this amount of income, we can generally predict or forecast the range of income that could come out of that trust and it's gonna be a little bit insufficient to support her over her lifetime given what we anticipate will be her income and spending needs.
Jennifer Goode (21m 30s):
That's a great way to kind of shed a light on the need for say life insurance. So then maybe he takes out a life insurance policy, we put it into an irrevocable trust that's fully discretionary or shudder to think he has it outright because that would be included in taxable state. But it's, it's a way of kind of identifying again, sort of where are the holes, where are the things that we need to maybe revisit or tinker with or tighten to ensure that the parties are where they wanna be at the end of the day. So I think that Modeling is both helpful on the front end if we're thinking about potentially dissolution of the marriage because of Divorce and certainly on the back end if we're thinking about the potential death of one spouse.
Ryan Kalamaya (22m 10s):
Yeah. And as we're talking about this, I mean I think it's crucial, you know, like as we're talking about, to understand what your're signing and what your rights are and what it's gonna look like. I mean Modeling is key. So that's really important. Well one other point that you highlighted that I thought was really good is talking about having several different meetings saying Eric and Melanie would maybe sit down and have several conversations. Do you kind of see that where you'll meet with say like Eric Wolf and he'll go maybe talk with Melanie. Do you give them a structure as to how these conversations should be done, you know, over time?
Jennifer Goode (22m 46s):
Well, I should note that in my new life I can't provide tax or legal advice. I don't serve as anyone's attorney in this role. I think we typically talk to the clients sometimes before, sometimes after they've met with their own counsel. And so the idea is really to flesh out what are the issues, not to provide strategy, but again to sort of contextualize the strategy that their attorney comes up with or that the couple themselves have kind of expressed interest in. So I think, yeah, there there's, there's a fair amount of meetings where I think it's really helpful to identify what their goals are, what their concerns are. You're gonna have the attorney who's either part of that conversation or thereafter coming up with strategies.
Jennifer Goode (23m 28s):
Then you kind of evaluate what that looks like, again, from a financial perspective when the rubber meets the road. And then from there I'd say that, you know, it really depends on the clients if they wanna have additional conversations, it depends on the negotiation between the attorneys. So I don't think that this is a super quick one and done sort of process. I don't know that I would want it to be. I think that it, again, it should be an opportunity to learn how to talk about money, to learn how to think about negotiate with your spouse to learn how to deal with what can be kind of an uncomfortable, difficult topic. And so it's going to be one that's gonna involve a couple of different visits.
Jennifer Goode (24m 11s):
You're gonna think about it, take some time and come back to it. And how you structure the timing of all of that, who you meet with first. I mean I think I would hope that couples spend a fair amount of time just the two of them really thinking about that future, thinking about what they want. I would ask for you to weigh in on this as well. Back when I was practicing And I, think even in this role, if individuals have done the homework first, it makes everything easier. If they identified what's important to them, You can be that much more efficient with the advice that you give.
Ryan Kalamaya (24m 46s):
Yeah. And to be clear, you know, like my hat is more attorney, you're more doing the research and financial piece now. But yes, I wholeheartedly agree with you that I think, I always tell my client if I'm representing the soon to be husband or wife and I've talked to them about how to talk to their soon to be spouse, I say the more conversations that the two of You can have and that you're on the same page, the smoother this is going to go. And I think you raise a good point that the attorney needs to be working with the financial planner who can be doing a lot of the Modeling, but it's, it's kind of a team.
Jennifer Goode (25m 20s):
Agreed.
Ryan Kalamaya (25m 21s):
And so I think having that communication and collaboration is really important for a successful outcome.
Jennifer Goode (25m 28s):
And the only other thing I'd add is that we've talked about multiple conversations and some of those conversations can start before there's even an engagement. And I mean that actually with the extended family, again, if you've got family wealth, having conversations with your child before there's a potential spouse about the fact that the actual premarital Agreements are protective, they're instructive, they're, again, this opportunity to learn and grow can sort of supplement or supplant rather some of those initial conversations between the spouses. Cuz you're gonna educate your child on what the process is and how to kind of go into it with efficiently and thoughtfully. It also, if you are again talking about premarital Agreements prior to there being a potential spouse in the picture, it removes any worry that this is triggered by the person that they are selecting.
Jennifer Goode (26m 19s):
This is more about you and your family and your values and how we think about protecting that sort of shared family legacy and not some sort of indictment against the the soon to be in-law. Right?
Ryan Kalamaya (26m 32s):
Yeah, exactly. Well thank you Jennifer. Let's wrap up with, I mean you had some really in your white paper, some really interesting statistics. One of 'em that I read was, I think it was between the ages of 18 and 24 25 that two out of five are thinking or will be signing a premarital agreement. So when you've done all this research, I know you love research, what are some of the trends that you found that are really interesting in your research when you did this white paper?
Jennifer Goode (27m 2s):
Well, I think that the access to premarital Agreements is ever expanding. I don't know if this is a trend so much as I recently met with the founder of Hello Prenup, which provides a two party software service where people can sort of start to learn about Prenuptial Agreements and then ultimately work with an attorney. And so I think we are just starting to see more and more people engaging with information on premarital Agreements, different ways to start educating themselves or start thinking about the negotiation process. Not to say that I think one is better than the other, but I do think that the appetite for it is ever growing. And along with that, the stigma is being somewhat stripped away.
Jennifer Goode (27m 43s):
And so I'm, I'm excited by that. I think that's really good. I think that people are, again, taking this next step really thoughtfully with a vision for the future for the long haul, but as part of that, they're sort of trying to work out the the kinks beforehand.
Ryan Kalamaya (27m 60s):
Right? Yeah, exactly. Well, Jennifer, thank you for coming on today. I really appreciate your time and your insight. And if people want to get a hold of you or have questions for you, what is the best way for them to do that?
Jennifer Goode (28m 15s):
Sure. Well, they can always email me Jennifer dot good with an E on the end@alliancebernstein.com and You can always head to our website and find my incredibly dorky bio where I believe the tagline is, research is my intellectual adventure, which is true. Doesn't make it any less dorky though. Please reach out. I'd love to chat.
Ryan Kalamaya (28m 37s):
Hey, everyone, this is Ryan again. Thank you for joining us on Divorce at Altitude. If you found our tips, insight, or discussion helpful, please tell a friend about this podcast. For show notes, additional resources or links mentioned on today's episode, visit Divorce at Altitude com. Follow us on Apple Podcasts, Spotify, or wherever you listen in. Many of our episodes are also posted on YouTube. You can also find Amy and me at Kalamaya.law, or 970-315-2365. That's K A L A M A Y A.law
