I know this sounds crazy, but I believe it is best to prepare for divorce before you even get married. As a romantic, I hate this. As a divorce attorney, mediator and coach, I've seen the worst of the worst walk through my office door and cannot tell you how priceless this advice actually is. Being prepared for the unexpected may be one of the smartest decisions you'll ever make.
Meet Bob and Susan...
Bob and Susan met just after graduate school, ready to start their careers. They fell in love and married after one year of dating. After the birth of their first child, they decided Susan would stay home. Her career as a marketing consultant was put on hold until the children no longer needed her. Fast forward 12 years and Bob and Susan are divorcing. Their financial decisions have left them with no savings or cushion. Bob earns a decent income, but not enough to support two households. All they have are children, possessions, a house with a large mortgage, and debt, not quite the American Dream.
What went wrong?
This legally binding business and love relationship did not take into account how to handle the finances of marriage, much less divorce. Decisions that made sense when the kids were little we not revisited as the couple matured and their expectations, spending habits and contributions changed. Like most couples, they began to argue about money. In fact, Bob and Susan succumbed to the number one reason most people get divorced: financial problems. 6 Factors That Make You Less Likely To Divorce [Infographic]
What could they have done differently?
I am sure you are familiar with the prenuptial agreement. It is a legal contract that outlines the financial agreement of the parties in case there is a divorce. If a lot of money is involved, a prenuptial agreement is an unfortunate necessity. If one or both of you have a complicated life, with children, then a prenuptial agreement makes a great deal of sense. Bottom line, financially sound wisdom says: take a smart, honest look at your finances before you get married.
The facts are that only 30 percent of people enter into prenuptial agreements. They are usually those folks who have been married previously and are hoping to avoid the nightmare of their last divorce. Bob and Susan would never have considered such a contract, as they had no assets and thought they were going to be in love forever.
What can I do to prepare financially for divorce?
The best preparation for a possible divorce is to become financially literate. A person who understands finance, who knows their way around a bank or brokerage statement, who runs the family budget and is conversant with the family balance sheet will be much more capable of fending for themselves and their children if divorce becomes a reality.
At the same time, a partner who is actively involved in family finances will be a much better spouse than one who sits on the sidelines and leaves it all for someone else to handle. How To Talk About Money Without Getting Upset
If you want to take a more active role in your finances, ask yourself these questions: