Ask Susan!

“Dear Readers: This month I’d like to talk about giving, and introduce an amazing non-profit, run by musician, Mick Sterling.”

For those who prefer to watch and listen (click video) Susan and her guest, Mick Sterling, talk all about his foundation, how it started, what it does and how you can help. 

Announcer 0:00
Music.

Susan 0:05
Hi, I’m Susan Stiles, and I have Kristine Meyer, one of my colleagues, here at Stiles Financial Services, and I asked her to have a little afternoon chat with me today. So this month’s question in the “Ask Susan” column is: My fiance wants to combine financials. Am I being a bad partner if I don’t say yes? And so Kristine, I asked you to join me to talk about this, because you indeed, just got married on April 28 of this past year. You’re coming up on a year pretty soon, and my guess is, because you’re in the financial world as maybe some of this issue was addressed with you and at your with your fiance at the time, and now your husband. Yeah. So absolutely, when I ask this question, what’s the very first thing you think of?

Kristine 0:58
No, you’re not a bad partner. So not want to fully combine your finances, okay? Because there’s so many different factors in play, and everybody’s situation is a little bit different. So in the case of our marriage, this is my second marriage, and I have a daughter, so that made it a little more complicated, and we’re both established in our careers. So you know, it’s not like we’re, you know, young birds in our 20s getting married, where we were just starting our lives entirely. You know, we both had established things that we needed to discuss and navigate through.

Susan 1:29
Yeah, and you make a good point, because I’m actually seeing this question a little bit more often, because people are waiting to get married later in life and back in the day, people got married young, they stayed married forever, and oftentimes there was only one working partner, and so it was a little simpler.

Kristine 1:53
one person handled the finances too.

Susan 1:55
That’s right. Today it’s a little more common. You’ve got the two careers. You’ve sometimes have that late marriage start. You’ve got, in some cases, children coming to play from both sides or one side, and then sometimes you end up sharing children in the future. But I think where it gets complicated is where there is a large imbalance of either debt or assets. And so the question is, you know, where do you think a couple should start? Yeah,

Kristine 2:30
well, I think the first thing that each person has to do is individually figure out what their what their experiences with money, what their assets are, what their debt is, what their budget is, what’s their relationship with money themselves, and then having those conversations together as a couple about, how do you see money being used in your life? Are you? Are you? You like to enjoy spending your money? Do you want to be charitable with your money? What’s your priority for saving for the future. What are your big goals? You know, are you going to be, you know, having multiple homes, you’re going to be using them as investments? Are you going to be funding college for kids and grandkids? Those are all really important conversations to have, and they’re all big ones too. That’s It’s uncomfortable to talk about money, it really is. It’s a really, really tough subject for people, because there’s a lot of insecurity around it and shame with it, and it really will test the communication of a relationship when you start getting into that. You know,

Susan 3:35
some people have debt and and that debt could be just from school. Yep, you get an education, it supports your career investment, but you’re now you’re paying a lot of money toward paying down that debt, and some people sometimes are embarrassed to share that. So you find someone that you’d like to spend the rest of your life with, get married, but you’re afraid to broach that subject around around things like debt. I’ve seen the opposite too, where an individual maybe has saved a fair amount of money, and they are a little bit nervous about sharing their level of assets with their potential future partner.

Kristine 4:23
It’s important to also understand what marital asset laws are in the states where you’re going to reside as well. So, and that’s part of that taking inventory piece. I know prenups are. They make people go, ooh, but really, I think they’re one of the best things you can do to start really taking inventory about what you have, because it’s not there to it doesn’t curse your relationship, no, if anything, it helps you work through your communication. Yeah, and

Susan 4:51
that prenups make a lot of sense if, if you have a substantial amount of amount of money put away, if you’re exp. Affecting a substantial inheritance. Those would be if you own a business okay, that you started before you even knew the individual you’re going to marry. It’s important that you have some type of of a prenup, I think at least consult an advisor or consult an attorney about that, and whether that makes sense. But the idea around combining assets, a lot of times, we suggest here that monies that are premarital, that you keep them premarital, and you don’t commingle. Once you’ve commingled your assets with your partner, it’s no longer premarital. And then you were just commenting earlier about, could you work on the 401, K sign,

Kristine 5:48
yeah. Kristine, yeah. And even if you don’t do a prenup and go through that whole, you know, forensic accounting, basically, of everything that you have, it’s important to hang on to documentation of what you had prior to your marriage, because we’ve unfortunately had calls from participants on this looking for information from, you know, their 401, K, from 15 years ago before they got married. Yeah, and those statements, they don’t exist a lot of times anymore, because if the plan changes, providers, or that happens in other areas too, that data can get lost if you don’t hang on to it, nobody thinks about that stuff at the beginning. You don’t want to, you don’t want to, you want to get married, right? You want all the fun and the planning, and it’s like, Oh, yeah. But the

Susan 6:28
reality of it is, 50% of the marriages do end up divorce in the US, and so holding on to keeping your pre marital assets separate, it’s just a prudent thing to do, right?

Kristine 6:41
Yeah, and I don’t think it’s any disrespect to your partner at all. No, you know, because you’ve worked for what you have, and they have as well. And I think a good partnership, you’re going to understand that, and you’re not going to take it personally. Then they’re not giving you everything. If they are, I would maybe consider running pausing on that narrative.

Susan 7:02
But you know, in some cases, it may make sense to keep your assets separate. And maybe what we’ve seen is some of our clients will have a combined bucket that they both contribute to to pay for the monthly expenses. But when it comes to things like large purchases, like, let’s say, cars or toys and things like that, especially if the two individuals have completely different views on how to spend on those types of items, maybe it’s better for those large persons just to be done separate.

Kristine 7:41
Just consult in the space it takes up in the house, I guess. But you know, can make your purchase on your own. But yeah, I know that when we were going through and we recently sold homes and then bought a new home together, that we really went through and did a budget of everything that we expect to have talked about, where we want our money to go, and then we do have that joint account where we put a proportionate amount of our pay into, right? And then that goes towards those joint expenses, okay? And you know, it’s, there’s expenses for the child, and then there’s vehicles, and then there’s, you know, you and we just talk about whether or not that belongs in the joint bucket or not.

Susan 8:17
Well, Kristine, I’m glad to hear that, given the fact that you work here at this firm, I’m really glad to hear about that. But you know what? What is hard is you’re in the business and the industry, but individuals that you know sometimes they don’t want to know about money, they don’t want to deal with finance, they don’t want to deal with budgets. And this is hard. It’s really hard. This is really, really hard. And in those types of situations, it’s often times good to kind of consult either an advisor, a psychologist, even your priest, your minister, if if you have a parish that you’re close to, they’re actually well trained in marriage counseling, yes, and even in the financial aspect of marriage counseling, it’s really and communication,

Kristine 9:14
yeah, today, right? And then you do have to think about too, thinking towards the future with those big goals that you have, but also protecting each other should something happen? Because so many times we’ve seen this with our family members. Yes, one one of the people passes away, and the other partner doesn’t know what they have. They don’t know how to access it. They don’t know how to pay the bills. Even sometimes, like, you know, protecting, from a monetary standpoint, is important, but also the knowledge to continue on even in that incredibly difficult situation, right? Yeah, it just makes it that much harder if you’re both not on the same page when it comes down to that.

Susan 9:50
And what about passwords?

Kristine 9:52
Get a password manager.

Susan 9:53
We’ve seen that, yes, yeah, where a spouse dies and the other spouse has no. Idea how to get into anything, because it’s all password protected, and those passwords were not shared. And if you don’t have a password manager, they’re not there,

Kristine 10:11
yeah, oh, either password managers, you can have your individuals, and then you can have your joint passwords. We have that but, and it’s also there’s ways to set up failovers, so if you don’t access your email for a set amount of time, you can have a backup that so that you know, if something were to happen to us, I would then get access to my husband’s email and vice versa, so we’d at least be able to get into the information that we don’t have. But it takes a while, so I

Susan 10:36
think you hit the nail on the head, though. It’s communication. It’s really dialog. And if you’re going to marry somebody, you got to be comfortable in communicating about

the stuff that’s not really fun,

Kristine 10:53
the icky stuff is not going to go away just because you don’t talk about it, right? In fact,

Susan 10:58
it’s going to manifest and get worse. Yeah. And so I think the key really is open dialog, communication and and then, you know, the rules of a partnership get established early on in that relationship. And so understanding what the rules around whose responsibility is what and making sure that you’re each comfortable with what your partnership contribution is,

Kristine 11:28
unwritten contract, right?

Susan 11:29
It is the unwritten contract you’re right,

Kristine 11:31
yeah, that mental load piece is, it’s definitely in there. So, yeah, sometimes

Susan 11:36
that’s what happens. That’s the reason why there’s a breakdown. Yes, absolutely. Is because, for some that doesn’t exist. Yeah, and then you start existing separate, separately, but still together, and that’s where you

Kristine 11:48
don’t want to be roommates. No, not ideal. No, actually, that happens if you if you don’t communicate and collaborate, right?

Susan 11:54
So any other thoughts that you have about I,

Kristine 11:58
I think we covered it pretty well, but you know, at least for now, who knows what the future is going to look like, right? Finances, but yeah, it always evolved, just like your relationship. So continue

Susan 12:10
the conversation and revisiting some of this stuff. Yeah, you know, you get married, you start one way, and then maybe five years into it, you make some tweaks or some changes, or maybe just the financial makeup of your household changes too. And so you have to be on top of that and fluid enough to make adjustments as you go. Yep,

Kristine 12:32
and you know, we’re about to find out what’s coming up on tax time. So it’s first time we’re gonna file together. So you know That’s right, yep, joint tax return. Yes, yep, and then having those conversations with the professionals, right? Give you the resources. So yeah,

Susan 12:48
all right. Well, happy tax time, Kristine,

Kristine 12:52
and happy almost anniversary.

Susan 12:54
That’s right, that’s right. And good luck to all the fiances out there. And the key is, I think to start with good open dialog and communication. Absolutely. Thanks for joining us on our “Ask Susan” column.

 

– Susan

 

 

Video transcribed by https://otter.ai