Should We Separate Our Finances?
When a couple gets married, whether to keep their finances separate is often a question. For some couples, it’s easy. My husband and I planned that my career as an attorney would take a backseat to his career as an executive because I would be the caregiver for our children (and him!). I would work as much as possible, but my primary responsibility would be raising our children. And he would be the primary breadwinner.
Obviously, if you have an agreement like this, it doesn’t make much sense to separate your finances. You are making the joint decision that one spouse will focus on their career and earn a higher salary while the other manages the home. Not to mention, my husband and I share the same views on how money should be saved. Neither of us is an excessive spender. We both feel it is important to have a savings account that increases over time. But we also know when money should be spent, like on special vacations, safer vehicles, or our home.
On The Other Hand
Some couples choose not to have children. They both want to focus on their careers. They both earn a good income. Perhaps one is a saver, and one is a spender? Ultimately, if they stay married forever, it doesn’t much matter which party has a bigger savings account. If that spouse wants to go on vacation or buy a nice car, and the other can’t afford it, the one who wants it will end up footing the bill.
But what happens in the case of a divorce? This scenario is exactly what happened to my good friend, Richard. When he married to his first spouse, they commingled their finances completely. Richard earned far more than his wife did, and, eventually, he paid for her to open her own business.
Worst Case Scenario Does Happen
Or consider a client that I had several years ago. The middle-aged spouses chose in their marriage not to have any children, and instead, to focus on their careers. My client, the husband, put a lot of energy into becoming successful. Meanwhile, his wife accepted jobs at the very base of her education and experience, knowing that her husband would always financially support her.
What You Should Know
Financial matters are one of the top reasons why couples have marital issues and get divorced. In Florida, if you have no prenuptial agreement and find yourself divorcing, your marital property will be equitably distributed between you, usually meaning that it is equally split, regardless of whose name is on it.
Marital property includes all assets and liabilities either of you acquires during the marriage. If you have premarital property, it remains your property in a divorce if you haven’t commingled it with marital property. For example, if you have a bank account in your name before you are married, and you don’t put any marital funds in it, then the entire amount remains yours in a divorce. But if your ex is able to trace marital funds into that account, then s/he becomes entitled to half those marital funds. In some cases, pre-marital property becomes so commingled with marital property that it can’t be traced, and the entire asset is deemed marital property that must be split between the spouses.
If you wish to avoid that, entering into a prenuptial agreement helps if you are clear that you want your premarital or non-marital property to remain yours in a divorce. Of course, there are issues regarding whether a your soon-to-be-spouse will enter into one if s/he thinks it takes the romance away or that it sets your marriage up for failure.
The Choice Is Yours
The bottom line is that whether to keep your finances separate in marriage really depends on both of you and your circumstances. If you’re considering this possibility, consider also keeping a joint bank account wherein each of you deposits a certain percentage of your pro rata income to use for joint expenses like groceries and entertainment. That way, you won’t feel as inclined to count every penny spent and feel resentful towards one another when you’re the spouse who’s always paying more.
In reality, keeping your finances separate can be difficult. But depending on your situation, it may be the best fiscal decision for you. While you don’t intend to divorce, it happens to many marriages, and it is wise to plan for the possibility of that eventuality.
Learn more about collaborative divorce. Follow Open Palm Law.
Joryn, attorney and Open Palm Founder, began her own firm here in Tampa after a 14-year career in law, two of which she served as a professor of law at Stetson University. She is a recipient of the prestigious A. Sherman Christensen Award, an honor bestowed in the United States Supreme Court upon those who have provided exceptional leadership in the American Inns of Court Movement. For more information on Joryn’s professional experience, take a look at her resume.