Numerous studies and surveys have been conducted as to the reasons why people divorce. Although there are some variations in the studies’ results, the issue of conflicts over finances consistently ranks near the top, along with incompatibility and infidelity. Lawyers are not therapists, but there are some common sense actions couples can take to avoid the pitfall of arguing over money. As lawyers provide strictly legal advice, there also are some legal arrangements that can settle the handling of financial assets as well.
One of the main reasons people argue about money, or anything else, is the disparate perspectives on how it should be handled. Every couple’s finances are different, but most couples would be well-advised to consider the following before they marry:
- How will expenses be prioritized? Each party to the marriage will have his or her own ideas about what is essential and what is nonessential. It is important to discuss each other’s values in detail and come to a shared understanding of purchasing priorities.
- Which expenses and which debts will be shared and which will be paid for separately? Perhaps essential items will be shared, and each spouse’s personal discretionary items will be paid for by that spouse. It is also important to consider income disparity between spouses and how that affects contributions to shared expenses, as well as debts that existed before the marriage.
- Will bank accounts be shared or kept separate?
- Who will handle paying the bills?
- Will you buy a house, have children, pay for college, purchase automobiles, travel?
- When do you each plan on retiring?
- Predict net income and assets and make a budget. Include your salaries, business income, property income, investment income, as well as any assets you may have. Then make a list of your debts and expenses and get specific as to how much you reasonably can spend on your various priorities and how much you can save for retirement and major purchases, such as a home.
- Make a point of maintaining accurate books and records.
- Consider entering into a written agreement. Couples that want to formalize their financial plans have the option of entering into a premarital agreement prior to their marriage. If the couple is already married, then they have the option of entering into a “postnuptial” agreement. Such agreements can establish how property is to be held during the marriage and how it is to be divided in the event of divorce or death of one of the spouses. In addition to the characterization and division of property, the parties may also establish terms establishing or limiting spousal support. Overall, couples that should give serious consideration to entering into the aforementioned agreements generally:
have major assets, such as a home, stocks, or retirement;
run a business;
expect to receive an inheritance;
have children or grandchildren from a previous marriage;
have income disparity;
expect that one partner will support the other;
have elderly parents or relatives that need care; or
expect to have an increase in income through a business or profession.
One need not have an unusually high net worth before considering executing a premarital agreement (or if the couple is already married, a postnuptial agreement). Even a relatively small amount of assets that one party accumulated over time might warrant the necessity of solidifying how those assets are to be treated during the marriage and in the event of death or divorce.
It is important to retain a competent Palm Beach Marriage Attorney before entering into either a prenuptial or postnuptial agreement, if it is to stand the test of time. There are various ways to undermine the enforceability of the aforementioned agreements particularly when the parties lack a full understanding of the applicable law. James S. Cunha, Esq. has been in the legal profession for more than ten years and has assisted countless individuals in carefully drafting both prenuptial and postnuptial agreements. Call today toll free at (800) 558-1227, or locally at (561) 429-3924, to schedule a consultation.