Preparing to obtain married is a enjoyable time, but it’s also fraught with expectations, both demanding fiscal choices, and possibly embarrassing discussions.
Prenups aren’t always a given
Getting married is an exciting time in your life. However, it is also fraught with expectations, tough financial decisions and potentially awkward conversations. Also: Joint accounts can be scary.
Although getting married can be financially beneficial, sharing the wealth – and the debt – can make you feel like you’re paying more than your fair share. That’s why in most cases, it’s best to set clear financial expectations from the start and take steps to protect your shares in marriage, especially if one partner comes into it with significant wealth or with children from previous relationships.
We spoke with several experts who sounded off on whether to sign a prenuptial concession, how to discuss finances without hurting each other’s feelings and how to protect your shares.
Protecting your Assets Before Marriage
- Start With an Honest Conversation
- Should I Insist on a Prenuptial Agreement?
- Protecting Your Assets
- Think Big Picture
Start With an Honest Conversation
The before all else step in the process is sitting down with your fianc and having a candid conversation about money.
"Before you married, you must explore values enclosing debt, budgets, lifestyle, retirement objectives and strategies, kids and faculty, and much more," says Lynn Ballou, Certified Financial Planner and regional director of EP Wealth Advisors in Lafayette, California. "It’s OK to not agree about everything, however (for) instance, if you’re marrying somebody who doesn’t care about borrowing for a better lifestyle while you really want to own what you have before you buy it, there’s going to be a lot of tension and conflict. "
She indicates assembly with a financial advisor to help alleviate these discussions.
Carla Dearing, CEO of internet financial planning agency SUM180, proposes asking many distinct queries of your own spouse so as to obtain a more complete financial picture.
Start by discussing your credit reports,” she states.
"Any joint account you open will require a credit report being checked for both you and your spouse. If your spouse’s credit is too poor to use for a home or car loan, you may be tempted to take on those financial responsibilities on your own," she states. "But be careful: Depending on where you live … should you face a divorce, you may be solely responsible for the debt owed on your home or car. "
Asking your possible spouse if he’s carrying substantial debt is another significant one.
"Debt can put a big strain on a marriage," Dearing says. "And, although legally you’re not liable for debt your spouse had before you got married, realistically, once you’re married, you will likely be involved in paying off your spouse’s debts. That’s why it’s important to be open with about how many you owe before you obtain married. This way, there are no surprises. You’re building trust and teamwork by deciding together how to handle debt that’s still on the books. "