The holidays are a popular time for couples to get engaged. While nothing is quite as exciting as two people in love, a lot more goes into saying “I do” than flowers and a white dress. Entering into a marriage is a legal process, and it involves the joining of bank accounts, trust accounts, and properties. Below are five things that couples should discuss before their walk down the aisle.
- Who is paying? The average wedding today costs nearly $30K—not to mention bachelor/bachelorette parties, the honeymoon, etc. Traditionally, the bride’s parents have paid for the entire wedding; more and more, though, we are seeing this change. It’s important for newly engaged couples not to assume anything, and to instead have a frank and honest conversation early on with both sets of parents about what the expectations are—long before any dates are set and/or venues booked!
- What’s in a name? For those who choose to take their spouse’s name, updating your social media accounts is just the beginning. For all intents and purposes, this is one of the biggest legal hassles of a new marriage! Among the many items that will need changing are driver’s licenses, credit cards, debit cards, bank accounts, voter registration cards, and passports. Modern technology has made this process easier with services such as HitchSwitch. For a fee, these services do everything from prepopulating forms to creating a fully customized name change packet. Updating the titling of assets and properties is also extremely important. Couples who both own properties prior to the marriage might consider a quitclaim deed to make the property transfer process easier.
- Got debt? Sometimes, one person can bring debt into a marriage which could have a huge impact on the couple. Couples need to be upfront about their debt—and their plans to pay it off. If a wife has medical school bills, will she pay them off by herself or will they tackle the debt as a couple? Above all, do not keep debt a secret.
- To prenup or not to prenup? Prenuptial agreements are typically viewed as a pessimistic, archaic ritual. However, the mindset behind the decision to have a prenup—to protect what you entered into the marriage with—is a good one to have. It is not about trust (or lack thereof), but about protecting yourself for the future. This could be especially important for an entrepreneur with a business established prior to the marriage. If, on the other side, you are being asked to sign a prenup, have an attorney review everything. It is a legal document, so having sound legal advice is crucial. Often trusts created by parents or grandparents could alleviate the need for prenuptial agreements while protecting the assets.
- How to handle money once you’re married. Joint checking? Separate? Do you contribute 50/50, or do you do it as a percentage of assets? Who will handle the bills and who will keep up with the spending? Is one of you more apt to spend than to save? There isn’t one right way to do this, but there must be agreement from both parties on how to handle money. Creating a philosophy of wealth as a new couple will help answer these questions and set the precedent as your family grows.
Money issues are the third-leading cause of all divorces, according to the Institute for Divorce Financial Analysis. By having these financial discussions before the wedding, couples should be ahead of the game. These are just five tips; however, there are many more items to consider. As a wealth management firm, one of our goals is to provide simplicity and peace of mind. Please talk to a Balentine Relationship Manager if you have additional questions about money and marriage.