When we think about living happily ever after, most of us don’t consider the cost of divorce. The thought of ever having to part ways with our sweetheart is so upsetting we push it out of our minds entirely. But there is nothing wrong with being sensible about your finances, and a healthy couple can acknowledge that while they’ll always strive to make their marriage work, divorce still happens. To protect yourself and enjoy a much happier matrimony, here’s a few things every engaged couple should know about how to safeguard your wealth before tying the knot.
It’s dangerous to let anyone have total control over your finances; even if you plan on staying home and raising a family, you should still have your own checking account and respective card. While you can easily open a joint account, both partners need their own financial independence.
If you bought your house prior to getting married, you may want to wait before adding your spouse’s name to the deed. With two people on the deed, the court may deem your spouse entitled to half the value of the home. This means you’ll either be forced to sell or, if you want to leave, transfer the mortgage into their name. Sharing a home together is wonderful, but you don’t necessarily need to share the investment.
You may get life insurance after getting married and think it’s useless after a divorce. While you may not intend to leave your spouse any money, you could still profit from maintaining coverage. It’s easy to remove a beneficiary from your account, and you can keep paying into your policy to generate a value. When your account is worth enough, you can sell it for a lump sum payout. This blog will help you learn everything you need to know about cashing out your life insurance. This info is valuable even if you never get a divorce. Many couples use life insurance policies to supplement retirement income.
Owning a business prior to getting married could complicate a divorce. Let’s say you owned a business that was worth $200,000 prior to your marriage. At the time of your divorce, you successfully scaled your business to $500,000. Without a prenup, the court could award half your business’ value to your spouse. Ensure that any arrangements you make include waiving entitlement to all appreciated value of assets and personal entities.
Separation can be even more painful when spouses have to part ways with beloved pets. Who will assume ownership of any animals you raise together if you decide to part ways? What happens if the dog you adopted prior to your marriage is now considered joint property of you and your spouse? Settle any pet custody arrangements prior to your marriage to avoid heartache and disruption during a divorce. Pet parents should also consider the impact their actions can have on their animals. Cats and dogs are highly sensitive to emotions, and constantly warring over who has a right to keep them can lead to significant distress. Ultimately, the decision should come down to who is most capable of caring for the pets and what environment is healthiest for them.