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How pre-wedding financial planning can help your marriage

| Jan 29, 2021 | Family Law |

Every couple should discuss finances before they marry, and if you already have bank accounts, retirement accounts or other assets, it is particularly important. Debt is another critical topic to talk about.

According to NetCredit, you and your new spouse could be setting yourselves up for trouble if you have not addressed how your marriage will affect financial matters.

Marital property

The assets, accounts and debt that you and your spouse acquire or contribute to during the marriage are community property in California. This means no matter whose name is on the title, account or loan document, it belongs to both of you.

A prenuptial agreement can set out ahead of time who will retain certain items during the marriage and in the case of divorce, afterward. For example, you may want to state that investments you make are your own, whether you earn or lose money on them during the marriage.

Separate property

If you already have assets and debts before the marriage, those are your own unless they become commingled after the wedding. In your prenuptial contract, you can designate that those remain in your name.

This can preserve them for you in case of a divorce, but it can also serve another purpose. If you have children from another relationship, it can change the way that they inherit the assets. Community property will go to your spouse when you die, but your children may inherit a portion of an estate that is not community property.

Your prenuptial agreement may not be valid if you or your spouse insists on something a judge will say is unreasonable. You must also both be completely honest. And being reasonable and honest about your finances is a good start to your marital relationship.