If you’re considering getting remarried, there are some financial issues to address. Whether your previous spouse predeceased you or you divorced, you’re probably bringing some assets and/or debts that predate your current relationship. You owe it to yourself and your new spouse to discuss your money situation together and agree on how to handle finances. You should seriously consider having a pre-marital agreement that details what will meet your joint needs and protect each of you. Many people feel that it’s awkward and unromantic to negotiate a financial agreement. Be aware that if you can’t discuss and agree on financial issues while you’re planning your walk down the aisle, you can rest assured that it will be more difficult to address financial disagreements if your relationship is strained.
First, you and your fiancé need to share information. There are many situations in a marriage where lack of candor can be a mistake, and this is definitely one of them. You each need to tell what your income is, what your assets are, and what your debts are. It’s fine to start with some general information, but before you tie the knot, share documents – tax returns, account statements, payment schedules. In Colorado (and many other states), what you bring to a marriage, inherit, or have gifted to you – and keep in your individual name is considered “separate property”. Your spouse doesn’t co-own separate assets or owe separate debts. There are at least two ways this can change. The growth in separate assets and debts is marital, even if it’s only in the name of one of you. Also, if you change the title of an asset or debt to joint, it’s now joint. So if you add your spouse to your investment account, you’ve made what the legal community calls a “presumptive gift to the marriage”, meaning it’s presumed you gave it to the marriage. Is there any way to change that? There are instances where the court has assumed a joint asset is separate, but you need a good attorney to have that happen.
Once information is exchanged, you and your beloved can talk in detail about how you want to handle family finances. There are basic items to discuss. What does a joint budget look like? How much do you want to put into savings each month? How do you handle your debts? It’s also good to discuss how financial decisions will be made. That’s a sweeping subject. It can include everything from whether either of you buy impulse purchases at the grocery checkout to how much research you do before buying a car.
A legal marital agreement should have all financial facts disclosed, be drawn up by an attorney, and you should each have your own attorney advise you on it. Unromantic? So is arguing about financial issues that you never discussed before getting married.