On June 26, 2015, the United States Supreme Court issued a ruling in the landmark case, Obergerfell vs. Hodges, which provided equal protection for same-sex marriage in our country. As a result, same-sex couples now have the same benefits- and risks- associated with marriage as opposite-sex couples.
Managing risk and preparing for events that are unexpected is a part of sensible planning for married couples of all sorts, same-sex couples included. Today’s blog post from the Law Office of Bryan Fagan would like to help same-sex couples to better understand their finances in the context of marriage and divorce.
Having a say in the household finances is important
If you are active and involved in planning the financial present and future for your family then you are at a distinct advantage compared to those spouses in our country that do not. Personal finance is just that- personal. There is no one size fits all rule that you can go by that will possibly work in all aspects for you and your family. As a result, the only way to ensure that your family is taken care of and that you know how to contribute to this process is to take an active role in managing the financial well being of your household.
Unexpected events are those that take us by surprise and have the potential to stun and paralyze us. What once seemed certain may become uncertain and scary in the blink of an eye. Having your spouse pass away is one such unexpected event. For family law practitioners, divorce would be an unexpected life event that we see happen to people more often than we would like.
Divorce is an unexpected event that can have far-ranging effects beyond just turning your financial world upside down. The emotional component to losing your life partner and parent to your child is daunting to stare down. Add on top of that any issue that will need to be resolved in the divorce itself and you can already see that as far as unexpected life events are concerned, divorce is foremost among them.
Becoming financially independent is the key to surviving- and thriving- after divorce
When I say the term “financial independence” thoughts may spring to your mind of those get rich quick radio shows that play on AM radio at all hours of the day. For many of us who work 9-5 jobs, financial independence may seem like a faraway dream- one that due to our family commitments just is not possible for us. However, I am using the term in a differing manner in this blog post.
What I mean when I say financial independence is allowing yourself to be committed and trusting of your spouse during marriage while maintaining a certain degree of self-sufficiency from a money standpoint. In case of an emergency or another unforeseeable event, you can and should be able to act independently should the situation demand this kind of action.
How can you manage to become financially self-sufficient? Let’s discuss some tips that I have learned in my time as a family law attorney.
Keep basic financial documents and file them for future use
Financial documents are typically available to you online in PDF form, so why should you want to have hard copies of them in your residence? These sort of documents would include safe deposit box information, bank account numbers and tax returns. If you have retirement accounts like Individual Retirement Accounts (IRA)s, pensions, or mutual funds then these documents should be kept in whatever file cabinet houses those documents.
If you have life insurance, copies of those policies should be maintained and reviewed periodically. As life changes, you may need to update them as a result of beneficiaries changing during a family case, for instance.
Another good example of financial paperwork that you will absolutely need to keep handy in your divorce is a premarital agreement. A premarital agreement is signed and agreed to prior to your divorce and concerns how certain pieces of property will be handled in the event of a divorce (or the death of either you or your spouse). Having to manage your finances alone is daunting enough. Not knowing where all your accounts are, or how to access them can be a sickening feeling in the event of an emergency.
Should you have your own checking and savings accounts?
In my marriage, my wife and I share a checking and savings account. This offers several advantages for spouses. First of all, I would advise living on a budget as an adult. A budget is not constricting but rather tells you what you can spend your money on. This is freeing in the purest sense. Instead of spending your money first and then wondering where it all went.
When you live on a budget and share a checking account with your spouse you can quickly tell what money is going into your account and what money is coming out. I can’t think of a better way to manage your finances than to share the responsibility with your spouse while knowing exactly the money coming in- and exactly the money coming out to pay bills.
However, that’s not to say that there is no scenario where keeping a checking and savings account separate from your spouse’s is a good idea. This is especially true if you anticipate that you or your spouse will be filing for divorce in the immediate future. Having ready access to money can solve a lot of problems and can create a great peace of mind for you.
Improve your credit
When your spouse makes all of the financial decisions for your family you are entrusting him or her with too much responsibility. Your spouse may have credit accounts that go unattended to and ultimately are unpaid. Since Texas is a community property state, these unpaid bills could stand to harm your credit as well as your spouse’s in the event that your name is on the account itself.
In the future, if you want to buy a car or a home, having good credit is essential. A history of unpaid bills can negatively affect your credit and leave you without options in the future. Review your credit report to make sure you recognize all of the accounts that are open in your name. If you do not recognize one, contact the credit bureau to have some research done.
Of course, the need for good credit is diminished if you choose to live a life that does not incorporate the use of debt. However, I realize that a no debt lifestyle may be a dramatic change from your current lifestyle so baby steps are probably needed to get to this stage.
Save, save, save
If you choose to have your own personal savings account, it is wise to save money and to keep it there in the event that you need to use it in the future for things like hiring a divorce lawyer. Again, I am not advising you to hide money from your spouse.
I am also not telling you to start saving for a divorce attorney throughout your marriage. This would not only destroy the trust of your marriage but also is just plain unnecessary. However, by saving money with your spouse during marriage you can eliminate much of the need to borrow money for day to day things while also ensuring your own financial self-sufficiency if an unexpected life event were to occur.
Questions on divorce, LBGT marriage or any other family law matter? Contact the Law Office of Bryan Fagan
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Law Office of Bryan Fagan | Houston, Texas Divorce Lawyers
The Law Office of Bryan Fagan routinely handles matters that affect children and families. If you have questions regarding divorce, it's important to speak with one of our Houston, TX Divorce Lawyers right away to protect your rights.
Our divorce lawyers in Houston TX are skilled at listening to your goals during this trying process and developing a strategy to meet those goals. Contact Law Office of Bryan Fagan by calling (281) 810-9760 or submit your contact information in our online form. The Law Office of Bryan Fagan handles Divorce cases in Houston, Texas, Cypress, Klein, Humble, Kingwood, Tomball, The Woodlands, Houston, the FM 1960 area, or surrounding areas, including Harris County, Montgomery County, Liberty County, Chambers County, Galveston County, Brazoria County, Fort Bend County and Waller County.