BW Online | October 16, 2001 | What Brides and Grooms... -
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Published on: 10/16/2001
Last Visited: 10/17/2001
A lot of people when they're both still working keep separate accounts , but once the kids come , they spend down the woman's savings and move to joint checking and investment accounts , says Paula Ryan , a trusts and estates planning attorney at Davis , Polk & Wardwell , a New York-based law firm.But keeping assets separate makes them easier to trace in case of a divorce..My husband and I have decided to keep our own accounts and set up a joint account for household expenses.
If you're making a lot less than your spouse , you need to be up front about what you can contribute to household expenses.
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We counsel our clients to shift assets into both spouses' names , says Ryan.There are compelling tax reasons to make sure that both members of a couple hold assets in their names , she adds.
Starting in January , anyone is allowed to pass on $1 million of his or her estate free of inheritance taxes.Today , the amount that's sheltered is $675 , 000.If a couple holds all their assets jointly under one name , they can avail themselves of only a $1 million credit when one of them dies.But if each person owns some of their accumulated assets separately , each will have a $1 million credit against their estate.That will allow you to pass on more to your children.
TWO IRAs.
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The first aspect of premarital financial planning is planning for divorce , Ryan acknowledges.
That's where prenuptial agreements often come in , although there are certain circumstances that make prenups more important to some couples than others.Prenuptial agreements about how to divide assets in the event of a divorce are most common when there are children from a prior marriage to be provided for.
ALL IN THE FAMILY.It's also smart to have a prenuptial agreement if you're entering your marriage with a family business in tow.That way , you can keep business and personal assets separate.
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Finally , Ryan says that partners who come from wealthy families are more likely to specify the amount that would go to a spouse in the event of a divorce.Often it's the parents [ of the bride or groom ] who ask about a prenuptial agreement for their kid.Sometimes they prevail in the interest of preserving the family wealth , she adds.
If you're thinking that you don't want to go off on your honeymoon with your heads full of finances , how to provide for children , and what's going to happen if you split up , you don't have to.Begin the discussion well before you get married so that by the time you do , the way you and your spouse handle your finances is already established.
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