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For Richer and for Poorer: Top FAQs About Marriage & Money

For Richer and for Poorer: Top FAQs About Marriage & Money

As family law and estate planning attorneys, we’ve seen firsthand how money can be a source of conflict for many couples. According to our family law lawyers, money continues to top the list as a reason for divorce in Oregon and Washington.  In fact, CNN Money and a recent National Foundation for Credit Counseling survey, report nearly 70% of adults said they had negative feelings about discussing money with their significant other. Whether you’re newly married and preparing to merge your financial lives or need some tips on improving your existing financial management skills as a couple, here are the answers to our most frequently asked questions about  money and marriage:

Q: Before I get married, what are some key questions to ask my soon-to-be-spouse?

A: Start with the basics. Will you have a joint account, separate accounts or a combination of both?  The answer to this question will direct the rest of your discussion.  For example, if you have separate accounts, who will pay for the rent or mortgage? What about electricity, groceries, vacations, etc.? If you’re planning a wedding, start with a few practical topics related to your wedding plans, which can naturally lead into a discussion about about money. You may find that you and your fiancé have different values when it comes to money management—values that often translate into your own spending and saving habits. It’s important to have an open conversation about your expectations and long-term financial goals.
Here are a few questions to help facilitate that conversation:
  • Will both of you be contributing income long-term? How much money do you currently earn?
  • If you have a joint account, how will you manage it?
  • What are your general spending habits? How will you communicate your spending activity to each other?
  • How will you manage your savings or “rainy day” funds?
  • Have you started saving for retirement? Is this important to you?
  • How often to do you borrow money? How much debt do you have?  

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Q: Once we’re married, what are the important legal details to know when it comes to our personal and shared finances?

A: Once you say "I do," in Oregon or Washington, legally, the assets (and debt) that either party acquires during that marriage are subject to the presumption of equal contribution or equal responsibility. In most divorce cases, this means a Court would likely divide assets and debts acquired during the marriage equally. There are, of course, exceptions such as assets and debts owned prior to the marriage or assets received via gift or inheritance, but ultimately, assets and debt acquired during the marriage could be considered and allocated in a manner that is equitable for both parties at the time of a divorce
Marital or community property can include assets such as houses, bank accounts, cars, insurance policies, retirement accounts, etc. Generally speaking, each asset and debt acquired during the marriage, whether in joint or separate name, can be allocated by the Court. This means your partner may acquire an interest in an asset even if that asset is in your separate name.
Communication and teamwork are keys to a healthy financial relationship. Many financial advisors we work with recommend setting financial goals, budgets, and even quarterly finance meetings with each other to set your marriage up for long-term success.

Tip: With more couples marrying later in life (and accumulating more assets and wealth), it may be worth considering a prenuptial (or premarital) or post-marital agreement. These agreements should be customized to fit each couple’s unique circumstances. A well drafted premarital or postnuptial agreement allows couples to decide how they would like to manage their finances in the event the relationship ends, either by death or divorse, rather than leaving those decisions to the statutory mandates. In other words, the parties can decide how they want to divide things in the event of a divorce  rather than having the legal system decide.

Q: If I’m going through a divorce, what can I do to proactively regain my financial independence? 

A: We understand that going through a divorce is hard enough without having to worry about the financial impact it can have on your life. And while a financial restraining order can prevent either party from making any major monetary changes, there are a few proactive things you can do to take control of your financial independence. Here are a few things we suggest:
  1. Request copy of your credit report
  2. Establish credit in own name
  3. Open your own bank account
  4. Create a new private/secure email account
  5. Set up a separate mailing address
  6. Get a separate cell phone plan
  7. Review and make necessary adjustments to your estate plan, specifically your medical advance directive and power of attorney  

Q: Once my divorce is finalized, what should I be thinking about next in terms of my finances?

A: Once a marital settlement agreement has been reached, there may still be several things to do in order to officially separate your financial affairs properly. Here are a few top items we suggest:
  • Change beneficiary designation on all plans and policies including life insurance and health insurance policies, retirement plans, estate plans, etc.  
  • Change name on social security card, credit cards, insurance policies, utilities, etc., if appropriate.
  • Close joint bank accounts and open separate accounts.
  • Transfer ownership of savings accounts, certificates of deposit, treasury bills, and money market accounts.
  • Update/cancel credit cards.
  • Transfer ownership of stocks and bonds.
  • Sign or obtain deeds from former spouse transferring property.
  • Sign off on titles to automobiles, trailers, boats, etc. with confirmed insurance coverage.

By identifying differences in the way you and your significant other approach money, you can avoid some major pitfalls while also setting ground rules for building and merging your finances.
Interested in learning more about how divorce may affect your finances? Call Gevurtz Menashe today to talk with an experienced family law or estate planning attorney.

To schedule a consultation, call our Portland office at (503) 227-1515, our Vancouver office at (360) 823-0410, or contact us online anytime.