When planning your life with a partner, there are some key conversations to have. Some conversations you may be having with your partner are about family and goals. Other conversations may be financially related. Many times, couples skip the difficult financial conversations and think that they can be discussed at a future time. However, this is not the case. Most couples never talk about very important financial topics which can lead to heartache, stress, and even divorce.
One of the first conversations to have with a partner is estate planning. Estate planning is a very important thing to figure out because it allows your partner to handle your estate in the case of an unfortunate death. While these can be difficult conversations to have, they are important because they help prepare for the death of a spouse.
Estate planning is what lets your family and loved ones know exactly how you want your assets to be handled upon your death. You may choose to either give your assets to certain family members, handled by certain people, and donate to charity. An estate plan creates wills, trusts, naming executors and beneficiaries, and any funeral arrangement (Kagan, 2021). You want to know that your spouse can handle these arrangements for you and that your assets will be handled exactly how you want. Without these plans, there could be scenarios where the people you want taken care of aren’t taken care of because you didn’t include this in your estate planning.
Want to create a will or trust? Check out Trust&Will, an online resource for everything trust related, and to create one online.
Another important conversation to have with your partner is to talk about insurance policies. While there are many types of insurance policies from life, home, car, and so on, the main type to talk about is life insurance. However, all of these types of insurances should be something you consider as a couple.
Again, this can be a difficult conversation to have, but it is important because you want to know that your partner will be taken care of in the event of your untimely death. Life insurance can provide financial security to your family.
There are different types of life insurance policies to choose from. To determine what is best for you is to look at your family situation. Will you have children who need to be cared for? Any debt that you still have? Some insurance plans will give your family cash in the event of your death which can assist with paying for bills, paying off debt, and assisting with educational costs.
A third conversation to have with your partner is surrounding any debt you may have. Hopefully your partner knows about this debt. You’ll still want to have this conversation because it can assist in making a plan to pay off debt.
Be honest with your partner if you have any debt. Your debt becomes their debt when you are married. Some types of debt to list out are student loans, car loans, credit card balances, and mortgages. It’s also important to note the interest rates on these debts since that impacts how much you truly owe. Figure out how you want to handle these debts and how you plan to pay them off. Making financial plans around debt can ease some stress around having debt. Having debt can lead to financial struggles so having a conversation around debt and even making a plan to pay off debt can make your marriage that much better. You may even decide to include your debt in a prenup agreement if you choose to keep your debts separate.
It is important to talk with your partner about financial goals you have. Discussing long term goals with your partner will let you both be on the same page. These don’t need to be things that you act on now, but they are important to talk about to ensure that you meet these goals.
One financial goal you may have it to own real estate. You may want to buy a home and you may want to have rental properties. Both of these things are big financial decisions so it is important to see how your partner feels about both of these. If your goal is to own a home, how do you plan to save for the down payment and how much home can you afford? If your goal is to own rental properties, where do you want those properties and how will you manage them? These are all good questions to ask and you may come up with more.
Another financial goal you may have is to become an investor. Deciding to invest and grow your wealth should be something you discuss with your partner. Do you each have your own brokerage accounts? What type of companies do you invest in? Is this something where you want to grow your money over a long period of time or do you want to make a quick profit? Also understand the tax implications of investing. You and your partner may find that investing now is a good idea or you may want to wait until you have more disposable income. If you want to know how to protect your investments with a prenup, find out how people who are retiring early protect their investments.
Another conversation that many couples do not have is about prenups. While a prenup is a legal document, it helps partners discuss their assets they have and how they should divide those up in the case of a divorce. A prenup is something most couples should have because of the huge financial implications divorces can have.
Many couples don’t want to have a conversation about a prenup because they don’t believe they will get a divorce. While everyone hopes for a successful and happy marriage, this is not always the case. Even if you stay together, having that prenup is a nice security blanket just in case something happens.
Having discussions about your assets will prepare you to be a better couple. Communication is key to a marriage and the prenup conversation aids in communication. Regardless of the outcome, when you have these conversations about a prenup you are having many small financial conversations that you might not have thought of having. If you aren’t sure if you should get a prenup, learn about who should be getting a prenup (hint: almost everyone!).
When planning your life with your partner, there are so many important conversations to have. Financial conversations can be uncomfortable, but they are crucial to a successful relationship and life. Being on the same page or at least talking about these topics if you aren’t on the same page can allow you to communicate with your partner on what is important in your life. Having these conversations early will allow you to get these out of the way and enjoy your life. Knowing how you will handle these financial scenarios will set you and your partner up for success. You won’t have to have these conversations when emergency financial situations occur because you’ve already had them. You will know how you will handle these instances and have less stress around these scenarios.
References: Kagan, J. (2021). Complete Guide to Estate Planning. Retrieved from: https://www.investopedia.com/terms/e/estateplanning.asp
Julia Rodgers is HelloPrenup’s CEO and Co-Founder. She is a Massachusetts family law attorney and true believer in the value of prenuptial agreements. HelloPrenup was created with the goal of automating the prenup process, making it more collaborative, time efficient and cost effective. Julia believes that a healthy marriage is one in which couples can openly communicate about finances and life goals. You can read more about us here Questions? Reach out to Julia directly at [email protected]