Marriage Money and Property
Marriage carries certain legal implications with respect to property, money, and debt. Becoming legally married in the eyes of your state means your spouse's income (and debt) are now yours, as well. If one of you runs up a huge credit card bill, you both now are on the hook when the bill comes. The following resources include information about marital (or communal) property and debt, how property is treated in a divorce, how marriage affects taxes and related topics. To learn more about marital property and the legal concept of "community property," visit the Divorce & Property section of FindLaw's Family Law Center.
Marital Property: Who Owns What?
The possessions acquired by partners when they get married are generally shared, although each spouse may claim certain items as a practical matter. This is referred to as "marital property," which really only matters when the partners get divorced. Marital property does not include property that was acquired by either spouse prior to the marriage, nor does it include inheritances, personal gifts, and other limited types of property.
That which is considered marital property, however, is subject to division upon divorce. For those who live in community property states, marital property generally is divided right down the middle. But more states use an equitable division model in which the needs and assets of each party are carefully considered.
While everyone enters into marriage with the belief that it will last, roughly half of all marriages end in divorce. Therefore, it makes sense to take certain precautions with respect to property. For instance, any property acquired with nonmarital funds (such as an inheritance) is considered separate property, as are any personal injury lawsuit awards. Any separate property that is "commingled" with marital property will be difficult to separate in the event of a divorce.
Marriage Money Problems and How to Avoid Them
An otherwise close and loving relationship can quickly come undone under financial stress, which tends to be the most common cause of marital discord. While it's hardly romantic, discussing financial matters before and during your marriage is an important undertaking. And even if financial problems and disagreements lead to divorce, the divorce itself often presents much larger problems with respect to finances.
One of the most important things couples should do when they get married is to set clear financial expectations. For instance, you should decide what is essential in terms of expenditures; whether to use a joint checking or savings account; who earns more and what financial contributions are expected of each party; and who actually pays the bills and balances the checkbook.
Couples also need to decide what their future plans may be, and what it will take to afford this future. For instance, it costs a lot to raise children -- you'll have to consider the cost of child care, medical and orthodontic care, and the cost of a university education. Another consideration is your retirement goals and whether you will have enough money tucked away to meet those goals.
Click on a link below to learn more about the role of money and property in marriage.