I Do, Until Divorce Does Us Part

By Lois Vitt and Karen Murrell

Managing your finances is much trickier when another person is involved. When you get married, you must anticipate your partner's money moves, which may be different from your own. Before you consider tying the knot, come to an understanding with your intended about your values and goals: where they are the same, and where they differ.

        Getting married is a big transition no matter what your stage of life or whether you've been previously married. You already have to deal with the emotional turmoil of merging homesteads and lifestyles and saying good-bye to old habits and possessions while adjusting to new ones. One way to smooth the transition is to work out your financial plan beforehand so that you can start your new life together as sparkling as that first champagne toast.

        An important consideration when coming into a new marriage is how the finances will be managed. Once you step over the threshold of your new life together, do not abdicate your financial involvement. Staying in the dark about your family finances can backfire. No matter who controls the checkbook, whether it is one or both of you, meet regularly to discuss any issues or just to review how well you are working towards your goals.

        The Trumps of the world aren't the only ones considering prenuptial agreements. While this may seem contrary to togetherness and sharing goals, it really isn't. If one or both of you is entering the marriage with high financial stakes, a pre-nup should be considered as part of an open, frank discussion you have as you plan your life together. Consider a prenuptial agreement when either or both of you:

• earn a high salary and have significant assets to protect;
• own a business;
• have agreed to pay for the professional education of your soon-to-be spouse and want to be sure that you will benefit from the income he or she will receive in the future;
• want to ensure that your children inherit all or part of your assets and property after your death; or,
  
• are paying child support for children from a previous marriage. If your marriage fails, you want to be sure that the assets to make those payments are not used.
  

If you decide that a pre-nup is for you, do not attempt to create it by yourself. Each person should have a lawyer who has experience in family and contract law. And do not sign it under duress or if you are not 100% satisfied with the terms. If you are feeling any angst as you put pen to paper, trust your instincts and go back to the drawing board. You and your spouse-to-be have more talking to do.

        Financially related issues are the number one reason for divorce in our nation. But as difficult as money issues are within a marriage, they pale by comparison to the complexity and animosity that comes into play when a couple is divorcing. They will be dealing with complex emotional issues, so if you are facing this prospect, it behooves you to get a handle on the financial aspects of your marriage and its dissolution. This is particularly important if you have deferred financial decisions to your spouse. While you are tending to your broken heart, you must also keep your wits about you and take the following steps:

• Consult with an attorney. It is wise to seek legal counsel for a consultation about the laws and your rights within your state before you start divorce proceedings;
• Estimate your worth (yours individually, your spouse's, and the assets your own jointly). List your assets and liabilities and gather documentation to support your claims;
• Check your credit report (and your spouse's credit report) and determine if you need to take steps to build or repair your credit history.  Remember, you will be living independently for at least a period of time;
• Assess your living expenses. Can you afford to live on your own?
• Analyze your income and expenses and project your best estimate of future income and expenses; and,
• Review your insurance. Do you have health insurance through your employer or are you covered by your spouse's company health plan? If your spouse works for a big company, you may be able to continue the health coverage for 18 months under COBRA, but you must pay the premium. If need be, investigate other, independent, ways to obtain this all-importantinsurance.
  

Marriage and divorce are both transitions that are often guided only by the heart. Take note that these contracts of life do not stop there. Whether you are embarking on a new life together or are dissolving a relationship, as you transition to the next stage, stay grounded in the financial basics.