Over the years, I have had the privilege of working with many forward-thinking couples on developing contracts that govern how couples will handle money and share assets once married. Clearly in light of the Great Recession, this has become a hot-button topic among couples as evidenced by the surge in prenups this past year. Now, I realize this may not be very romantic, but the harsh truth is that couples cannot ignore money discussions, and it will continually be a work in progress for families to work on a realistic budget, saving for retirement and/or college, and paying down debt.
Two people may be in love and yet have completely different views about money. Rather than ignore these differences, they need to talk about them. Unfortunately, many avoid money talks and sometimes naively believe that as long as two people have good incomes, there shouldn’t be any problems. In fact, what I’ve seen is that the more people make, the more they tend to over-extend themselves with expensive homes, cars, etc. Furthermore, those that come from wealthy families have significant external pressure to protect that family wealth, and emotions can run high when legal discussions are involved.
Most lawyers are generally trained to detach from emotions, and once our clients share their concerns with us, it is simply our job to draft the right legal documents to address their concerns, including: (1) cohabitation agreements, (2) prenuptials (aka “prenups”) (3) post-nups, (4) trusts or wills, (5) family limited partnerships, and in the unfortunate event that things do not work out (6) Separation Agreements. These are all part of my every day vocabulary, and my firm belief is that as long as people can articulate their concerns and find common ground, the legal contracts drafted should preserve the peace and protect everyone.
For those that have a problem discussing money with their partners, seeking the advice of a neutral person, such as a couple’s counselor or certified financial profession to facilitate these difficult talks might be a wise investment. Let’s face it, money talks are inevitable and can make or break a couple. Having realistic expectations of what each party can and will contribute financially on the road to happily-ever-after is perhaps not very romantic, but is a reality of life and love in the 21st century.
Here’s the tv interview I did for Money Matters on this subject: http://www.youtube.com/watch?v=MS6ekFYr9Pg
By Regina A. DeMeo, Esq.