BY JAMIE LOBER
Before tying the knot and saying “I do,” there is an important conversation that should take place with your spouse-to-be. You may think you have your future all planned out as far as where to live, what your dream job may be and whether or not you want children down the road. What you may not have on your list of things to discuss is how you intend to manage your finances. If you have overlooked that aspect, you are not alone. According to new research from Ramsey Solutions, couples in healthy marriages are much more likely to talk about their money dreams and make long-term money goals.
When it comes to financial disclosure with your partner, honesty is the best policy. Some things to consider in the conversation include:
- The amount in your savings
- Your monthly expenses
- How much debt you have, if any
- Car loan payments
- Student loans
You may want to keep funds that you have prior to marriage in separate names and create joint accounts after the wedding. If your partner has incurred debt prior to marriage and you have the premarital assets separate, you are not responsible to the debt collectors. Another means of financial protection is the prenuptial agreement. This legal document should address investment and retirement strategies. A statute called the Uniform Premarital Agreement Act governs prenuptial agreements in our state. It is important to educate yourself and work with a lawyer as if an agreement does not satisfy the law’s requirements; it becomes void and unenforceable. You can always amend or revoke an agreement but only with the signatures of both spouses. To prepare to draft the contract, you should decide how you feel about:
- Property rights and duties
- Spousal support
- Estate planning
- Life insurance policies
If you want to take matters into your own hands, you can write your own prenuptial agreement or find a do-it-yourself form on the internet depending on how comfortable you are doing so.
At the end of the day, everyone’s goal should be financial protection. One option is to look into a revocable trust which is an entity that is set up by the grantor, a person placing assets in the trust, owned in the name of the trust but managed for your benefit while you are alive. You select the trustee who manages it, most likely yourself so you can be in charge of the decision making. This is something you can do in addition to the prenuptial agreement which can potentially save you from being ruined financially should your marriage end in divorce. The main advantage of the prenuptial agreement is that it is especially helpful if you have spent years getting established in your profession and do not want to share your hard-earned dollars. If you are the beneficiary of an inheritance or have family money, you may be less inclined to want to share it.
After the wedding bells are done ringing and you have returned from your honeymoon, it is time to start your new life together. Part of beginning the new chapter should involve:
- Updating your personal contact information
- Notifying banking institutions, credit card companies, insurance plans, beneficiaries and emergency contacts
- Sending change of address cards in the mail or sending an online greeting with your new information
- Creating a filing system for records regarding bank accounts, IRAs, property taxes, insurance and investments
If you have questions or concerns as you work through financial matters, you can always consult with a financial advisor or accountant. With some planning ahead financially before your big day, you have taken the first step on the road to happily ever after.