Photo by Emily Long
I was engaged and married in my late 20’s. I spent hours in Kleinfeld’s looking at wedding gowns, hours looking at venues, hours (in person, on the phone, and by e-mail) with my florist to make sure my bouquet would be perfect, hours in multiple hair and makeup trials, and hours with various photographers. Planning a wedding takes a lot of time! But it was all worth it to make sure it would be a spectacular day.
By contrast, I spent no time evaluating the role finances would play in my marriage, something that I think we can all agree is probably more important than the perfect wedding cake. I had a retirement account, savings, a small stock portfolio, and wanted to buy an apartment. Even though I was a divorce attorney (I had practiced a different kind of law previously, but had been working as a divorce attorney for approximately seven months before becoming engaged), I did not stop to think how, or whether, my assets would be viewed differently as a married woman. Talk about the shoemaker going without shoes! I also did not take any time to think about what would happen to those assets in the event of a divorce, or what would happen to me if I divorced after having children.
Consider the following scenarios, and allow yourself to think about how you would feel if any of them applied to you:
1. You had a master’s degree or doctorate and a high-level job with a nice salary at the time you married, but you always dreamed of being a stay-at-home parent once you started to have children. Your spouse agreed to this, but after having been home for 10 years (raising your 10 and five-year-old kids), your spouse wants a divorce. While the money your spouse made was enough to support your household nicely, there is no way it can support two households. You haven’t networked in a decade and your skill set has lapsed in the decade since you’ve been inside an office. It is difficult for you to find work that will enable you to earn enough to set up a comparable new household, and your spouse argues that you should not be entitled to alimony since you are well-educated and previously earned a good salary.
2. You were earning a nice salary at the time of your marriage, as was your spouse. You waited several years to have children, during which time you were both promoted and living a nice lifestyle. When you were approximately six months pregnant, your spouse was laid off. He received a nice severance, so you both agreed there would be no rush for him to find another job since the baby was coming soon and you felt it would be great for you both to be home for a while. Once your maternity leave was over, you went back to work (whether enthusiastically or begrudgingly) and you decided that for the time being, your spouse should stay home with the baby. What was supposed to be a few months turns into a few years, and for various reasons, the two of you decided to separate/divorce when your child was three years old. Your spouse now wants alimony and child support from you and wants to have custody since he was a stay-at-home-dad.
3. Seven years into your marriage, you received a $750,000 inheritance from your grandmother. You and your spouse only had joint accounts, so you gave the money to your financial advisor to invest in an already established joint investment account that only had about $50,000 in it. Several years later, by your tenth anniversary, the value of the account skyrocketed to $1,250,000. Right after celebrating your tenth anniversary, your spouse revealed he had an affair and told you he wanted a divorce. He also told you that under the law, all of your accounts should be split 50-50. You feel this is unfair because the $750,000 came from your grandmother and you feel that pretty much the entire investment account (except the $50,000 that was in there before the inheritance), should be yours. Besides, you say, your grandmother would roll over in her grave if she knew that half of her money was going to your lying, cheating spouse.
4. After your wedding, you and your husband purchased a home outright with a $500,000 gift from his parents that you thought was meant for the two of you together. You are married for about fifteen years and have three children when your husband initiates a divorce proceeding. You want to keep the house, but your husband wants to sell. There is little to no equity in the house because you took home equity loans to pay credit card debts and go on vacations. You feel blind-sided because you always thought the house belonged to the two of you equally, and now you are worried you will walk away from the marriage with no assets.
If any of those scenarios evoke strong feelings in you, maybe you can begin to realize why it is so important to take an hour or two out of your time to make sure you understand what happens to your money as a result of marriage as well as in the event of a divorce. All state laws differ on how they would treat women in these scenarios, so take the time to meet with an attorney and/or other professional advisors to ask questions. If you don’t know what questions to ask, write down your assets and liabilities and ask the attorney (and/or other professionals) how these assets will change once you marry, and how they will change in the event of a divorce. Ask how to protect certain assets that are of importance to you. If you and your future spouse have not yet discussed how you are going to handle finances, you might want to ask the attorney (or other professional) for some ideas, as they have likely seen many different ways that couples handle their money. Sometimes an attorney can even identify warning signs for you with respect to strange financial behavior on the part of your spouse.
Keep in mind that divorce laws are state specific. Just because your sister in Kansas went through a divorce does not mean you know anything about a Connecticut divorce. Find out how the courts in your area view stay-at-home-parents with respect to custody and financial considerations. Find out how you can best position yourself to have a financially successful arrangement during your marriage, but also how to protect yourself in the event something goes awry.
Unfortunately, studies have shown that from a financial perspective, divorce hurts women more than it hurts men. Don’t let yourself be one of these women. Get informed before you get married so that you know you can walk down the aisle to happily ever after, no matter what that entails.
[Now for the requisite disclaimer: Nothing Jennifer Kouzi authors on this site should be considered legal advice, and no attorney-client relationship has been formed by virtue of you reading the above post. To contact her for individual inquiries, call 212.921.5526 or e-mail her at email@example.com.]