Pam Friedman - I Now Pronounce You Financially Fit: How to Protect Your Money in Marriage and Divorce

Published by River Grove Books

Austin, TX

www.rivergrovebooks.com

2018 Edition

Copyright 2015 Pam Friedman

All rights reserved.

No part of this book may be reproduced, stored in a retrieval system, or transmitted by any means, electronic, mechanical, photocopying, recording, or otherwise, without written permission from the copyright holder.

Distributed by River Grove Books

Design and composition by Greenleaf Book Group and Kim Lance

Cover design by Greenleaf Book Group and Kim Lance

Cover image: Thinkstock/MaksimKoval

Cataloging-in-Publication data is available.

Print ISBN: 978-1-63299-068-6

eBook ISBN: 978-1-63299-069-3

First Edition

With gratitude to my husband, Mitch,
and to Rebecca Sundet-Schoenwald,
for adding their support, talent,
and humor to the writing of this book.

Contents

Disclaimer

THIS BOOK IS DESIGNED TO PROVIDE accurate and authoritative information on the subject of money in marriage and divorce. All material presented is believed to be from sources that are reliable, and no representations are made as to another partys informational accuracy or completeness.

The opinions expressed herein are solely those of the Author unless otherwise specifically cited. It is understood that neither the Author nor the Publisher is engaged in rendering legal, accounting, or other professional services by publishing this book. As each individual situation is unique, questions relevant to personal finance and divorce specific to the individual or business should be addressed with an appropriate professional to ensure that the situation has been evaluated carefully and appropriately. The Author and Publisher specifically disclaim any liabilities, loss, or risk that is incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this work.

All examples provided are used to demonstrate possible situations that individuals may need to address. The names provided are not real, and the situations have been enhanced to better demonstrate the potential pitfalls.

Introduction

I WISH I HAD MET YOU before my divorce. Ive heard that phrase so many times I should engrave it into a paperweight for my office. I hear it when I explain my line of work, whether Im at a party, at a luncheon, or I just finished speaking at a conference or workshop.

Both men and women think marriage is supposed to be about trust, love, and romance. And theyre right. But theres a reality theyre ignoring: The current divorce rate is about 50 percent. People willingly enter into marriage without even glancing in realitys direction. Theyre not about to consider the laws regarding marriage and divorce when there are caterers to hire and dicey family dynamics to manage. They miss the opportunity to educate themselves about the impact of marriage and divorce on their money and on their childrens well-being. There is a lingering taboo regarding divorce that causes peoplefinancial planners includedto avoid this particular kind of planning.

The chapters ahead approach financial planning through the lens of relationships, in marriage and out. Youll get the same information I provide my clients, most of whom, unfortunately, find me after theyve already hired and paid dearly for an attorney. They think they have a legal problem. I wanted a divorce, so I called an attorney, they tell me. Financial realities quickly follow this knee-jerk reaction. You need both an attorney and a financial planner, and they need to be open to working together to get the best possible results.

This book helps you talk about and protect what youve earnedbefore, during, and after marriage. The first part covers premarriage and marital financial planning. Youll learn how emotion impacts financial decision making, how to start a conversation about money, why you might want a marital agreement, and how to prepare to negotiate and monitor one. Youll also learn new strategies to budget, save, and protect your money as a couple. If youve already decided to divorce, the second part of this book will help you preserve your money as you move forward in your divorce and in your life.

I want you to have the tools and knowledge to make the right choices with your money. By reading this book, you can benefit the way my clients have: Youll be able to use the strategies illustrated here to plan a secure financial future before you marry, while youre married, or if necessary, after your marriage ends.

The Ties that Bind

MONEY TALKS, BUT IT ALSO WALKS. Just like our husbands, wives, partners, and lovers. If we listen to our partners, and support and respect them, were going a long way to keeping them. If we dont, our partners may leave us. Money requires attention, too. Deprived of care and respect, it departs, escorted away by ignorance and fear.

If only we understood that money is really just the grease that keeps the cogs of lifes machinery moving smoothly, we would be able to avoid so many financial problems.

Instead we attach a range of emotions, real or imagined, to our money. After all, who hasnt heard the phrase: Money is the root of all evil? Who wants to talk about that?

But enough with metaphors and clichs. The fact is that money enables us to do things for ourselves, our partners, our parents, and our children that are otherwise impossible. Thats why Im a little mystified by most peoples reluctance to talk about it, especially in the United States, where we practically worship money.

Were even more reluctant to talk about money in the context of our relationships. Money is a destabilizing factor in marriage and the nuclear weapon of choice in divorce. But it shouldnt be, and it doesnt have to be.

During my training years ago as a Certified Financial Planner (CFP), I learned multiple strategies to help clients save for retirement and plan for their loved ones. But strategies to protect financial security in marriage or in case of divorce? We didnt cover the impact that divorce laws have around money, marriage and divorce, or property divisions, or how to start a conversation about money with your spouse.

Fortunately, my training as a Certified Divorce Financial Analyst (CDFA) covered all of the above and more. Marital law, much like business law, is where the law and money collide. People know intuitively but fail to plan for the fact that a marriage is an economic partnership like any other. Marital laws and financial realities govern the division of wealth when there is a breakup of an economic unitthe family. But when applied to your own unique situation, its these same laws that can jeopardize your financial future. These laws cannot keep up with the evolution of the tax code, investments, or even how we earn, spend, and save money.

Have the Talk before You Take the Walk

The topic of money rarely comes up before that walk down the church aisle, garden path, or courthouse hallway. Even after the wedding, sometimes well into the marriage, the money talk stays tucked in the attic corners of couples minds. There it sits, sometimes for decades, along with embarrassing memories from high school.

Stashing embarrassing moments away does no harm in itself, but ignoring the money talk is like having an elephant in your living room. We unconsciously tiptoe around money so as not to rock the boat. But is that what you really want your marriage to look like?

One way to start the conversation is to talk about your parents and their attitudes about money. How did they view money? Did you get an allowance? Did they help you pay for college? How did your parents save for their first home or retirement? By the time a couple starts contemplating divorce, it may be too late to have this conversation. So let go of how you think your spouse will react to it, and use the conversation to get to know your spouse better. It can strengthen the connection you already have.