For Better or For Worse: Financial Protection Before and After Matrimony

The first of a two-part series on what to know and how to protect yourself in love, marriage, break-ups, and divorce.

Brooke Dilling | @brookefrances   

I was 32 when I got married. In love and in it for the long haul. My husband was nine years my junior and not as financially established. Since I wasn’t exactly rolling-in-the-dough, I didn’t think this was a big deal. We had the rest of our lives for things to even out over time. Why did I need to worry about protecting myself? We were in this together. Then life took a sharp left turn.

When my marriage failed, not only did it crush my soul, my finances took a beating, too. Here are a few things that might protect you from heading down the same path.

Kelly Rider Goodwin, founding attorney at Rider Goodwin Law, gave me the low-down on what you can do to believe in the “happily ever after” of your relationship but still protect yourself from the financial damage of a breakup or divorce.

Financial Protections

Her first suggestion: never buy a house together before you are married. Why? Because without a marriage license to protect you, you have no legal claim to the house. If the relationship goes south, the property can’t be handled as part of a division of assets as it is with dissolution of marriage. Instead you have to file a partition suit. This is handled in civil court where it’s much more difficult. Read:  messy and expensive.

Rider Goodwin also gave me the lowdown on inheritance.  If you inherit money while married, that money is considered yours, and yours alone. So if the marriage were to end in divorce, your spouse would not have a legal right to a portion of this money . . . unless you commingle the money. What is “commingling?” Putting your inheritance money into a joint account. Instead, keep your inheritance money separate, in your personal bank accounts or in a financial account with just your name on it.  

What about a prenuptial agreement or “prenup”? In legal terms, a prenuptial agreement is when you come to an agreement in anticipation of dissolution of marriage. You come to this agreement prior to getting hitched. A pre-nup does not need to be filed with the courts, so it’s difficult to know how many people are actually doing them. But Rider Goodwin states based on her experiences and that of her attorney friends, they are not that common in Colorado.

What does seem to be gaining popularity is a “post-nup” or post-nuptial agreement. She suggests this can be a useful tool after children enter the picture and to keep the best interests of children in mind in the long run. You and your partner make this agreement when you are happy and still love one another.  While the hope is to stay together, if the worst would happen you now have a plan in place regarding what’s best for your family if things fall apart.  

And what happens if things do fall apart? Check back tomorrow for the second installment of this two-part series and to learn more about what to do and how to protect yourself in the case of divorce.