So you are thinking about making the biggest step in your life? A point in time when what you do will have long-term repercussions. You want to know ahead of time; Will I be happy? Will I be sad? Que Sera Que Sera, what will be will be.
Financially, when you are considering marriage for the first time you will need to recognize that like the lessons you teach your students, marriage will be filled with learning. Here are five things to consider before marrying:
1. Comingle assets after you are married.
2. What is yours stays yours.
3. Marriage is a contract in the eyes of the law.
4. Discuss a five-year plan.
5. Do you Pre-nup.
Commingling Assets
Experience show that you should not buy big things together before you are married. Big things like houses, cars, airplanes, boats, artwork, or anything that is not easily divisible by two. Imagine the worst case scenario, as much as you hate to do this, it is simply wise to buy things as individuals not as a couple until you are officially married.
What is yours stays yours
Simply put if you come into the marriage with a million bucks you inherited or made via the biggest IPO of all time, ala Jeff Zuckerburg, those assets continue to be your sole and separate property. Unless you decide to put that asset in your spouses and your name as if you are one person, like a married couple. If both of you start out broke or with only your furniture from college then most likely you will own things together for the rest of your lives. The point is if you own significant assets going into the marriage it is yours and community property does not apply.
Marriage is a Contract in the Eyes of the Law
If you are marrying at a young age you most likely have no experience with contracts. Therefore, you are what a lawyer would call ignorant of the law. While your marriage is emotional and full of hope for the future it is still a contract where you accept the good with the bad and will be held to the standards set by society in the contract. I hate to be a Grinch but you need to know if your partner enters into agreements, like credit cards, auto loans, phone contracts and anything that can sour a budding relationship, you are part and parcel to the agreements.
Discuss a five-year plan
Before you take the step and sign on the dotted line, look into one another’s eyes and ask:
a. Are we both going to work
b. Do we want to have children
c. Who is going to pay the bills
d. Who is responsible for different household tasks or do we share
e. Where do we spend Christmas and Mother’s day
Do you Pre-Nup
It depends on each person’s upbringing, assets, age, and family history. My experience with pre-nups dealt with large assets and where the family had significant intertwining of “family assets”. While these are rare instances, there are circumstances where it is necessary financially to create a pre-nup. One big concern with pre-nups is the injection of the adversarial relationship of attorneys at the moment you are celebrating the start of a life together. If one party wants a pre-nup, don’t wait until the last second, as it is incumbent on the other spouse to hire a lawyer to represent his/her interest. Paraphrasing Ben Franklin, you would be a fool to represent yourself when negotiating like a lawyer. Be aware that if your betrothed springs this on you at the last second, it was his/her lawyer’s strategy to do this!