Dear Kim,
I’m 32 years old and getting married for the first time. My mother went through a financially harsh divorce with her second husband while I was a teenager, so I’ve seen how marriages can end and leave a woman in financial shambles. While I love my fiancé and intend to stay married, I want to protect myself financially in case things change. What are specific things I should do?
Sincerely,
Cautiously Optimistic
Dear Cautiously Optimisitic,
The answer to this question has several different options. You might begin with a Prenuptial Agreement. This document, prepared by an attorney, outlines how you will divide assets should the marriage end. It might include real property brought into the marriage by either party, separately held assets, alimony agreements and the like. Next you might decide how you are going to merge certain assets like bank accounts. You may choose to keep those totally separate from each other, you might have one joint account you both contribute to for joint bills, or you might combine everything.
You should sit down with your fiancé and have a very frank conversation about all things financial. It’s best to have this talk before the wedding…really before you even set a date. If you aren’t on the same page financially now, you may never be and it will create stress in your relationship. If one of you is a spender and the other a saver, that can cause animosity between you. If your life goals aren’t aligned, its best to find out now.
As for protecting yourself from a financial setback from a divorce, making sure you know what is going on with the family finances, know where assets are, and having a say in how they are managed will go a long way. What I find most in my divorce work with women is they are often blindsided and have never taken a part in how finances are managed within the family. When a divorce happens, they don’t have any idea how much money, debt, or retirement assets there are. Educating yourself and partnering with your spouse to manage the finances will be invaluable to you. So, when you and your spouse have been married 50 years and a death occurs, you will know what needs to be done. You will be the head of your household and will need to manage your finances by yourself.
Finances are a leading cause of divorce, and I certainly hope your marriage is a long and happy one. Sitting down now and having hard conversations will benefit you in the long run.
Kim
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