|
|
July 11, 2003/Tamuz 11 5763, Vol. 55, No.46
Marriage brings financial considerations
LEE EISINBERG
Special to Jewish News
Spring and summer tend to be the most popular wedding time of the year. Amid the love, flowers and happily ever after, young couples may want to ask each other not only about joining together in matrimony, but also joining together financially.
Even in good times, stress over finances can cause problems in a marriage. But when you combine a new marriage, a shaky economy and uncharted territory, matrimonial finances can be overwhelming. The first step should include honest communication with your significant other about finances. Here are some ideas on where to start.
Prenuptial agreement
A sobering statistic: approximately half of all marriages end in divorce. In light of that, some couples opt to draft and sign prenuptial agreements prior to marriage, which are designed to dictate financial terms of the union or the divorce. Agreements vary, but they can be used to protect any or all assets from the marital estate - basically ensuring that in the case of a divorce, you take with you what is yours.
Most young couples entering marriage are without significant assets so a prenuptial agreement probably isn't necessary. However among couples who are marrying later in life, or couples who are on their second or third marriages, it may be worth considering, particularly if they have acquired assets that they want to preserve for their children from previous marriages.
Create a financial picture
Regardless of whether you sign a prenuptial agreement, you should sit down with your betrothed and have a heart-to-heart about the big financial picture you want to create. This means discussing everything - your salaries, current savings levels, assets and debt. You should also talk about your near- and long-term financial goals and priorities, such as buying a house or saving for retirement.
Day-to-day expenses
Once you get the big picture squared away, you are going to have to determine your joint expenses and how you'll pay them. Each couple should decide how they want their finances blended. Specifically, how many accounts you want to keep between you. Most couples choose one of three options: A single account where you share everything, separate accounts where you keep money separate and pay bills individually, or both - which means each person contributes to a joint account for shared expenses, while still maintaining their own money to do with as they please. Again, your decision will be based on your individual circumstances.
Sign on the dotted line
Last but not least, don't forget the paperwork. Once the nuptials are completed, beneficiary documents - including insurance policies, retirement accounts, benefits, wills, trusts or any document that requires the designation of a next of kin - will have to be changed.
Getting married is a monumental event that affects all aspects of your life, including your financial life. Talking to each other and learning to compromise can help ensure a smooth transition, and hopefully help with the happily ever after - at least financially.
Eisinberg is a local financial consultant. Reach him at 602-508-7863 or e-mail Lee.Eisinberg@rbcdain.com.
|
