Before getting married, it's a good idea for couples to discuss their views about money. Discussing any money issues you have from the start could help prevent conflicts regarding money down the road. And should you find yourself facing separation or divorce, there are some additional fiscal matters to consider.
Getting married? Here are some things to consider:
Divide financial tasks so that you are both fully aware of your financial obligations and status. It's important to trade responsibilities regularly, or at least give each other frequent updates, so that each of you understands what the other is doing financially.
Make decisions about money and purchases together so that you both stay informed, and neither person becomes too entrenched in his or her own money style.*
Discuss your retirement dreams and financial expectations. Agree on common goals and timelines, so that you can begin to invest now in a retirement plan for your future.
Be sure that you both maintain credit in your own names.
Don't forget to update your beneficiary designations on insurance policies and retirement accounts.
If you're changing your name, be sure to file the change with the Social Security Administration and Department of Motor Vehicles. Also notify your bank and other creditors.
To protect your family, consider life insurance for replacing lost income. Life insurance can deliver a designated amount of money to your spouse, and is generally income-tax-free.
Most importantly, though, is the need to update legal documents, such as Wills. Your Wills determine how your estate will be distributed if you die. Without Wills, your state will decide how your probate assets will be distributed.
Separating or divorcing? You may wish to consider:
Maintain a file of basic financial information-tax returns for the past five years; retirement account records; insurance policies; bank, brokerage and mutual fund statements; mortgage or lease agreements; and your estate plan.
Keep a current list of all of your assets, including account numbers, beneficiary information, and physical location. When assembling the list, don't forget easily overlooked assets like country club memberships, stadium seat licenses, life insurance policies, and retirement accounts.
Establish credit in your own name, so that you can qualify for credit if you find yourself suddenly single through divorce or the death of a spouse.
Close all joint accounts, including overdraft protection-in writing-if your spouse's spending is out of control or if you are facing a divorce. If you're separated, notify your spouse in writing of your intent to close these accounts at least 10 days before you do so.
Update your retirement plan beneficiary designations. As with life insurance, survivor benefits will be paid to the person you named in your qualified and nonqualified plans.
Review your overall retirement situation, as divorce can scramble your retirement nest egg, separating you from assets that may have taken years to accumulate.
While Wachovia Securities does not provide tax or legal advice, a Wachovia Securities Financial Advisor can help you assess your financial situation when you are facing marriage, separation, or divorce.
* Money Harmony: Resolving Money Conflicts in your Life and Relationships, by Olivia Mellan
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