A lawyer and Certified Financial Planner (CFP) professional, Gabrielle Clemens, has written an interesting blog for Huffington Post, suggesting three financial steps couples about to get married should take in preparation for divorce.
She suggests three steps that couples can take now to protect themselves financially in the event of a future divorce:
1 – Discuss debt and credit
2 – Protect premarital assets
3 – Create and review your Financial Plan
These are all smart suggestions.
With one in ten marriages ending within the first five years, the chances of a successful marriage are much greater than the alternative. However, these three steps are all sensible moves that can be beneficial regardless of the outcome.
As people are typically leaving it until later in life before getting married, there is more opportunity for one or both parties to have built up a poor credit history. The coming together of two people in marriage can have ramifications for your ability to get credit in the future.
Protecting pre-marital assets, such as investments or pension rights accumulated prior to the marriage, is potentially trickier in the UK than in the US, the intended audience for the Huffington Post blog.
Pre-nuptial agreements can achieve this end, although they must be properly drafted and do not guarantee the protection of pre-marital assets in all circumstances.
Creating and reviewing a Financial Plan is something that all individuals and couples should do on a regular basis. Couples who plan together, stay together.
By agreeing on the contents of a documented Financial Plan, couples can share common financial and lifetime goals. This is often a better way of managing household finances than placing the burden on one spouse.
Your Financial Planner can also help to identify the various financial issues you should consider on marriage, including the need for financial protection and the most effective way to plan for retirement.
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