You think your love will last forever—until it doesn’t. Your initial response might be to tend to your aching heart, but the first order of business should be to make sure your finances are in order.
This is especially true for women, who often let their spouses handle the money.
Divorce can have an impact on not only your heart, but also your wallet. BlackEnterprise.com chatted with AXA Advisors Financial Consultant Ainka Munroe, MBA for advice on how women should approach their finances before, during, and after a divorce.
BlackEnterprise.com: If a woman is facing a divorce what’s the first step she should take when it comes to protecting her finances?
Ainka Munroe: Whether a woman is facing divorce or not, she should be knowledgeable of her family’s finances, including assets, liabilities and the various accounts held and their balances. Regardless of one’s marital circumstances, a woman does not want to be in a situation where she’s in the dark about her family finances. Financial literacy is very important for everyone, male or female. Even if a woman doesn’t participate daily or have the main responsibility, she needs to have general awareness of the family finances.
What are some financial preparations women can make before getting married in order to ensure a sound financial future after saying “I do”?
Munroe: Perhaps the most important preparation a woman can make is to have a financial plan that includes regular savings before marriage. Ideally, such a plan would also include occasional consultations with a financial advisor. If a woman is well informed before marriage, she likely will be better off once married. With the care that many women take in planning their weddings, similar care should be taken when a woman joins her finances to those of her spouse. A couple will have major decisions to make periodically regarding how bills are paid, how much to put down on a house, etc. This kind of communication is important in any relationship. In some circumstances, a woman might prefer to hold something separate that she obtained prior to marriage–perhaps a piece of property or an inheritance–this should be communicated to the prospective spouse. Having some items owned separately could make for an easier transition later on. This is also why many couples choose to have prenuptial agreements drawn up by an attorney.
Is a prenuptial or a postnuptial more useful? Is one better than the other? What are the differences between the two?
A prenuptial agreement is a contract between two parties that’s entered into before the individuals are legally married. A postnuptial, as the name implies, is an agreement entered into at some point after a couple is legally married. Such an agreement sometimes is used to effect an orderly disposition of assets in the event of death or divorce. Laws governing such agreements vary from state to state, so anyone considering one should consult an attorney with knowledge of matrimonial law.
Stay tuned for part two of this interview, where Munroe will give tips to newly divorced women.