Thursday, June 26, 2003

Going down the aisle? Unveil your finances

By Jennifer Wirth
Florida Today

Most financial experts are unified in their thinking that harmony in marriage goes hand in hand with financial compatibility.

Having a serious discussion before marriage about financial belief systems is one way to iron out financial arguments before they happen.

According to experts, asking questions such as "How much debt do we have?" "What is our lifestyle going to be?" "How much money should we spend on entertainment, on clothes?" "How will we use credit cards?" and "Should we have separate accounts?" can provide a dialogue that can save a lot of tears and frustration down the road.

Steve Pybrum, president of Pybrum and Co., a California-based management-consultant company, advises engaged couples to discuss financial issues at least six months before they get married.

"Most people do not want to throw cold water on a hot relationship by bringing up money," said Pybrum, author of Money and Marriage: Making It Work Together. (Abundance Publishing; 1996) "They think they'll just slide into marriage and work out those details later. That's why the divorce rate is 50 percent. Couples don't slow down enough to talk about their financial thinking."

Why argue about money when you don't have any money to argue over? That's what Annette and Frank Ciccone decided when they were married 35 years ago.

"When we were young, we thought, 'Who needs money?' " Annette Ciccone said. "We struggled in the beginning, but lack of money wasn't a consideration when we planned our family.

"With four kids and college expenses, we certainly think about it now, and we've grown in maturity and wisdom," she said. "The secret is communication."

Attorney Violet Woodhouse, certified financial planner and author of Divorce & Money: How to Make the Best Financial Decisions During Divorce (Nolo Press; $24.95) agrees that communication is the most important component of a good financial relationship.

"Ultimately, the issue of love and money and the conflicts it creates are all about the ability to communicate," Woodhouse said. "It is about accountability and how we are accountable to our partner."

Annette Ciccone gathers the bills, writes the checks and mails them out. But her husband, a sergeant for the Palm Bay (Fla.) Police Department, knows exactly where the money is being spent, how much is in the account and what expenses are coming up.

The Ciccones just have one rule: They discuss all major purchases.

Julie Murphy, executive director of Consumer Credit Counseling Service in Melbourne, Fla., recommends engaged couples undergo premarital financial counseling.

"We are all raised differently," she said. "When a spender marries a saver, it can be a major frustration for both parties. It's important to develop a financial plan and a budget for your future life together. That way, when disagreements come up, you can blame it on the budget."

Left unresolved, financial difficulties can spiral into other problems, such as alcohol or drug abuse, depression or job loss.

"When we counsel people, we see a lot of stress, anger and hostility. We strictly counsel people on finances, but it's worth it for couples to get a handle on why they have financial problems in the first place, even if they have to go to a marriage counselor," Murphy said.

"And it doesn't mean that a spender can't marry a saver, because they can actually complement each other."

Prenuptial deals more common

Prenuptial agreements, once used only by the rich and famous to protect large amounts of wealth, are becoming increasingly common among middle-class couples. So common, in fact, that some states have enacted tougher laws to keep them fair.

The American Law Institute recommends prenuptial agreements be drafted at least a month before the wedding to allow ample time to review the contract.

A prenuptial details what each party acquired before marriage - not what will be acquired during marriage. By signing it, both parties agree to take back what was theirs before marriage. Once married, a postnuptial agreement can be drawn to focus on dividing marital property. It spells out what each party's rights are, and what each party agrees to waive in the event of a divorce.

Attorneys around the country are recommending new steps to safeguard the legality of the prenuptial, including videotaping contract signings. But an agreement is only as good as the law allows it to be, said Violet Woodhouse, a Newport Beach, Calif., attorney who also is a certified financial planner and author of Divorce & Money (Nolo Press; $24.95).

"If two parties married and had a child and, in a postnuptial agreement, they agree that, in event of divorce, there will be no child support paid to one from the other, that's an agreement that can't be enforced, because support is a child's right," Woodhouse said.

Unmarried couples living together also can sign a contract, called a cohabitation agreement, to define financial obligations.

"A lot of couples are making the choice not to marry and instead live together," Woodhouse said. "They may purchase a house together and put one person's name on the deed, say, for example, because the other has bad credit. They make equal contributions. But, when they break up, what rights does the partner not listed on the deed have? None, unless there's a prior arrangement."

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