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Real Estate: Home 'equity is again on.the rise. 12HOW I MADE IT 2 ::LETTERS 2 ::MONEY TALK 3 ::PERSONAL FINANCE 3 ::JOBS CLASSIFIEDS 4 ::REAL ESTATE CLASSIFIEDS 9
Money squabbles can wreck a marriage. Couples who talkfinances before saying 'I do' wi 1have a smoother-journeyKathy M. Kristof
.t's Valentine's Day, when even reasonable people wander around, engagement rings at the ready,blathering about how "love is the answer." err Snap out of it! Love, in fact, may be the prob-lem. err Passion often blinds sweethearts to the fact that matrimony is, at bottom, a contract. Figur-ing out how that partnership caJ?prosper is critical foIla successful union. Yet financial differencesrank among the greatest sources of marital misery, in part because talking about money before youtie the knot makes many couples uncomfortable. err Some worry that prying into each other's fi-nances might indicate a lack of trust, or that a prenuptial agreement is a self-fulfilling prophecy for
splitting up. err In fact, experts say,just the opposite is true. Spouses who find themselves bickering about fi-nances early in t~eir marriage could well end up hashing out the same issues in divorce court, according toTina Tessina, a licensed psychotherapist and author of "Money, Sex & Kids: Stop Fighting About the ThreeThings That Can Ruin Your Marriage." err "Everybody wants to focus on putting the wedding together andtalk about things like having kids and a house," ·Tessina said. "But nobody wants to talk [See Love, B6]
[Love, fromB1]. about the money part untilyou are married and finan-ciallyentwined. Then it's too .late."
No one is saying thatmoney is' everything. .Ro-mance, common interests,shared values and friendsare important for the sur-vivalof a marriage too.
But couples must under-stand that money carries farmore meaning than the sim-ple things it can buy. Howyou handle money can tele-graph how you (eel aboutpower, personal responsibil-ity, charity and family. Andthese are the issues that canpull a marriage apart.
So what do you need totalk about? Here are a few.suggestions from the pros:
Know the historyUnderstanding the past
is important to building asolid . future, said CecilyMaton, partner at the Chi-cago financial planning firmof Aequus Wealth Manage-ment.
Each partner needs tohave an understanding ofthe other's experiences to ~grasp what might be moti-vating their behavior now. If
your in-laws were cautiouswith money, chances areyour beloved is too. If yourparents spent carelessly, itwould help to explain yourcredit card addiction.
This background canhelp you understandwhether your partner seesmoney as areward; a punish-ment; a tool or an albatross,she added.
"Even .when couplesthink they know each otherreally well, it's amazing howoften they say they're fmdingout something that theydidn't know," she said.
Air the laundryForget affairs, drug hab-
its and rap sheets. Somenewlyweds have been mostshocked to learn of a newspouse's checkered credithistoty. .
That's why trading creditreports is also advisable be-fore you tie the knot, Tessinasaid. These reports showhow much debt you haveoutstanding and whetheryou've always been responsi-ble about paying your bills.
You wouldn't necessarilydump somebody simply be-cause they were in debt, saidBrett Graff, a former govern-
sertr
ment economist who editsthe website HomeEcono-mist.com. But you'd cer-tainly want to know whetherthat debt was linked to a lostjob or an unexpected medi-cal issue, or if it was a sign ofsomething more ominoussuch as a hidden gamblinghabit or shopping addiction.
You may decide thatyou're so in love that you'rewilling to marry an over-spender, said Laura Tarbox,a Newport Beach financialplanner, But having that in-formation might cause youto handle your finances dif-ferently, keeping your ac-counts separate, for exam-ple; so that the unencum-bered spouse doesn't end upliable for debts he or she hadno hand in creating.
"They won't let business-es merge without financialdisclosures," Tessina said."There's no law saying thatyou have to do that when youget married, but it should bea standard requirement sothat you both know whereyou're at."
Set your goalsNext, you need to talk
about the way you want tolive and what you want toachieve.
Those conversationsneed to be specific, Tessinasaid.
"It's one thing to say thatyou both want a house. Butone ofyou might be thinkingabout a little condo and theother wants a three-storyhome with a yard," she said.
Bhared goals keep part-ners. from blaming eachother if things don't quite goas planned, said Lorrainesteen, a Miami Beachmother of two.
After steen and her hus-band bought a house twoyears ago, they were dis-mayed to see prices tumblein the real estate bust. Butthey didn't take it out oneach other because they hadalready agreed not to sec-ond-guess themselves.
Eveh on their honey- ,moon, they established rulesabout spending: If theyagreed that a purchasemade sense, they wouldn'tfret later about whether theycould have gotten it cheaperelsewhere or" at anothertime.
"You can never go backand say 'I told you so.' Oncewe buy something, we enjoyit and move forward," Steensaid.
Who does what?After you understand
how you feel about moneyand what your priorities are,it's time to get practical. Howare you going to pay the'bills?
Some couples choose tomerge their checking and
JON KRAUSE Forfl'he Times
'Nobody wants to talk aboutthe money part until you aremarried and financiallyentwined. Then it's too late.'
- TINA TESSINA,psychotherapist and author of "Money, Sex & Kids: Stop
Fighting About the Three Things that Can Ruin Your Marriage"
savings accounts and paybills out ofjust one pot. Oth-ers divvy up expenses, andeach pays certain bills. Somecouples choose a "yours,mine and ours" approach,where they have a joint ac-count that's fed with moneyfrom both to pay shared bills,but each keeps smaller sepa-rate accounts too.
The right answer can beas individual as the couple.
When Mark and MariaWilson got married 20 yearsago, for instance, they werefresh out of college and bare-ly scraping by. They mergedwhat little money they hadbecause there wasn'tenough to keep in separateaccounts. No one couldspend a dime without con-sultingthe other.
About 15 years of doingthat kept them on the samepage, says Mark, a certifiedfmancial planner who workswith Tarbox. The Wilsonscould now afford to keepseparate accounts, but don'tfeel they need to.
In contrast, when Lor-raine and Joseph Steen mar-tied four years ago, they wereboth in their mid -30s and ac-customed to handling theirown fmances, so they kept itthat way.
A year later, the couplehad their first child andbought a house. $uddenly,completely separate ac-counts didn't work.
They opened a thirdchecking account to-pay allthe joint household ex-
penses. They still keep theirown accounts so they can ,maintain a certain level offlscalautonomy,
"Wewere so used to doingour own thing, merging ac-counts was a whole newworld for us," Lorraine said.
Get it in writingPrenuptial agreements
are written contracts layingout the division ofassets andfuture earnings if a marriagefalls apart.
Some people considerthese documents so unro-mantic that they swear theywould never marry anyonewho even suggested such athing.
But prenups make sensefor couples that come intomarriage with children orwidely disparate assets, saidEleanor Blayney, consumeradvocate for the Certified Fi-nancial Planners· Board ofStandards and the founderof Directions, a financialplanning firm focused onwomen.
"They can take moneyout of the relationship, sothere are no nagging ques-tions, like 'Hmm, I wonder ifhe married me for my mon-ey?' " she said. "By recogniz-ing that there is a fmancialaspect to a relationship, theycan spell out that that's notwhat the relationship isabout."
Family law attorney IkeVanden Kykel said the con-tracts are almost always en-forceable in court. The one
caveat: Prenuptial agree-ments divide only incomeand assets. They don't dealwith child custody issues.
In second-marriagesituations, the agreementscan be helpful to flesh out ahost of sticky concerns suchas who pays to educate thekids and the rights of a sur-viving spouse in the event ofone's death.
Consider the kidsPlanning to have chil-
'dren? That begets a wholeseries ofmoney discussions.
.For instance,' will youwant one partner to stayhome while the kids areyoung? If so, who? And howwillyou handle money mat-ters then? After all, whilethat partner may not bringhome a paycheck, they'restill contributing to the fami-ly well-being. If they don'thave an income, does thatmean they lose their "madmoney" too? .
With older couples, thepractical issues get evenmore complicated, Tarboxsaid. You not only have totalk about how you'll payyour ongoing bills, you haveto discuss the assets anddebts each of you have com-ing into the marriage andwhether you want to co-min-gle those assets or keepthem separate.
If you both have kids, willyou share the cost of theirupbringing and college, or,do you intend to handle your
, respective kids' bills fromthe money you hold sepa-rately? You should also con-sider how you each feelabout supporting your off-spring as adults. Do youwant to help them buyhouses? Would you bailthem out-of crushing creditcard debt? Under what cir-cumstances could you seethem moving back in?
There's no pat answer.It's just better to considerthe possibilities before youmarry rather than after.
Estate planning gets dic-.eytoo. You may want to leaveyour assets to your respec-tive children, for example,but what happens to the sur-viving spouse when one ofyou dies? Does he or she loseaccess to the deceased part-ner's pension and savings?Could they lose control overthe house? I
"Everybody talks aboutmarriage in terms oflove.andromance," Graff of Home-Econo~st.com said. "But,ultimately, it's a legal andbinding contract that affectsproperty. It's important toknow where the person iscoming from and make sureyou can live with whateverthey are bringing to the ta-ble."
