Category: Marriage

Divorce/Estate/Financial Planning/Legal Separation/Divorce/Marriage/Money

What’s Yours is Yours

One of the things that I find (incredibly) nerdily interesting about my work is the concept of the character of property.  In Washington, most property is either separate property or community property.  (I’ll spare you the “quasi-community” property and the legal nuances that arise when parties move to/from a community property state from another state.)

Legally, there’s a presumption that what you acquired before marriage (either as an asset or debt) is your separate property or obligation.  When you marry, or in certain cohabitation circumstances, the legal presumption changes and the law begins to think of folks as a financial team.  Property that’s acquired is assumed to be community property; debt that’s acquired is presumed to be community debt; and the name that something is in is not the “last word” as to the character of the property.  These ideas, “Community Property 101”, if you will are key concepts for my pre-nuptial, divorce, and estate planning clients, as the character of property determines where the financial focus is in a divorce and what you have control to give away in a will.

A line I’ll often throw out is this:  “What’s mine is yours” is the opposite of the concept of separate property.  If it’s “mine”–my separate property–then it’s likely going to stay mine unless there’s a clear indication that I wanted to change that.  While “what’s mine is yours” may be a romantic notion, it’s not how the law sees it.

To that end, I thought that this piece on CNN Money was both clear and helpful.  The piece is primarily a response to the question of “if I marry my boyfriend [will] his student loan debt [become] mine too”?  The short answer is “No”.  Debt acquired before marriage?  That’s separate debt.  The longer answer is very thoughtful, though, as there will be impacts on the marital community from the existence of the debt.  In other words, while the debt is a separate debt, they’ll share its impact.

Marriage/Money

Learn Partner’s Money Style Before Marriage

For fun, I thought I’d share this article from the Money section of MSN Canada.  (Canadian print media may become as addictive to me as Canadian TV already is!)  Even though the article was originally published more than two years ago, the information is just as helpful as if it had gone up the this morning.

As an attorney and financial coach, I have absolutely seen what happens when couples are not on the same page about how they will earn, spend and save money.  The first step requires you to get really clear on your income and expenses–this can be tricky because it’s not a skill or process that we’re taught.  (There is help out there, though, whether in the form of a financial planner or financial counselor!)

The initial steps of starting a conversation and facing reality may be the hardest to take, but they may also be the most helpful in sustaining a relationship.  It’s not sexy, but my personal hope is that anyone who is considering marriage take time to educate themselves about how each person’s assets and debts are treated during marriage, upon divorce and in the event of death.  Unfortunately, most clients I see have learned these principles when it’s too late to change things.  I haven’t seen any studies, but I bet learning about property law is a bit like sex ed:  It helps folks make safe choices rather than engage in risky activity!

Marriage/Money

Money Mistakes to Avoid

This post on US News’s “Money” site is actually just about a year old, but the advice is absolutely apt.

I encourage you to visit the original article because there’s some good food for thought with the description of each mistake.  Here they are, in brief:

  1. Not talking about finances.
  2. Combing accounts too early.
  3. Sharing credit cards, real estate and other types of debt.
  4. Getting surprised by the marriage penalty.
  5. Ignoring the risk of a break-up.
  6. Putting one person in charge of money.

I second these sentiments, and I’m thinking I might check out the book from which these tips are excerpted.

Marriage/Money

Tip: Talk About Money Before You Get Serious

This post on HuffingtonPost.com and this piece on Oprah.com (from the February 2011 issue) both have good–and similar–advice on how to handle financial issues going into a relationship.  The bottom line is that it’s best to talk about these things upfront, when you’re looking at moving in together or getting married, rather than later in a relationship when things aren’t going well!

This advice is really, really important for at least two reasons.  One, by the time you’re in a relationship, it’s a lot harder to separate out money/property.  Two, it’s unfortunately common for folks to find out when divorcing or legal separating that their ideas about marriage, money and property may not fit with what the law says.  As they say, an ounce of prevention can be worth a pound of cure!

Legal Separation/Divorce/Marriage

Defining Vision for Relationship Avoids Divorce

This story cites newer studies, the results of which are that living together before marriage doesn’t necessarily increase the risk of divorce.  The old news was that having lived together before marriage meant that a couple was more likely to split up.

The take-home lesson?  “It’s couples who give into the urge to merge households without a defining vision of their future who are more likely to divorce.”  Yes!  I couldn’t have said it better myself.