By Quentin Fottrell
“He keeps hinting that he wants to take care of the finances when we finally buy a house together”
My husband and I earn about the same salary and live modestly. Six months after we got married, I found out that my husband’s net worth was practically nil. He owes more money than he has in assets (about $40,000). My net worth is over $500,000.
I only found out about her situation because we each own a house, and we are looking to buy one together and have filled out a mortgage application for pre-approval. My house is paid off and I have very little debt.
Although we dated for five years, he hinted that he was financially secure. He was always hesitant to share actual numbers, and now I know why. I’m an accountant and — looking at the numbers — he’s not creditworthy, even though he still claims to be.
We haven’t combined our finances, but we have a joint savings account. He keeps hinting that he wants to take care of the finances when we finally buy a house together. I am against this after finding out about his financial situation.
He doesn’t know the value of my assets, but he knows my debt. He won’t let me take care of the finances. How can I protect my accounts (my parents’ inheritance, my 401(k) and my other savings accounts?
I thought about a postnuptial agreement, but I doubt he’ll accept one.
Concerned about finances
Your husband not talking about his finances and wanting to control your finances are the two italicized sides of a bit of a thruppenny. Neither bodes well for good monetary health. You can’t do anything for the first, but you can do something for the second.
Before going any further, we need to correct the missing elements in your letter. They can be the key to your future projects. You don’t say how old you are or how long you have until retirement and/or how much you and your husband earn. If you’re close to retirement and earning a five-figure salary, proceed with caution.
If you’re younger and, say, earning six figures, you probably have time and compound interest on your side. If you buy a house, sign an agreement indicating the amount of your contribution and the amount you will receive if you sell it. Make sure your plans are fair and find out if the husband can afford to make up for lost time.
About your 5 years in court and your now-husband’s misgivings about his financial situation: You could say he lied by omission, but it’s also your responsibility to do your due diligence before signing a contract of marriage. It is a legal and financial merger of two lives.
Your husband’s desire to take the reins of your financial life gives me serious pause. Your number 1 priority should be to separate the lion’s share of your assets. Anything you put together in a joint bank account or even invest in a house you buy together automatically becomes spousal/community property.
A third of people keep at least one financial secret from their partner, whether it’s credit card debt, a secret bank account or a major purchase. That’s according to a recent TD Bank survey. But one secret begets others. It never happens in isolation.
When people hide their finances, it’s either because, like you, they have a big nest egg and they want to protect it, or because, like your husband, the closet is empty and they want to conceal that fact. . Your husband, however, has a plan to improve his financial security, with your help.
If you don’t have a prenuptial or postnuptial agreement, talk to a family law attorney about the laws in your state, if you should go ahead with a home purchase, and why. What if you want to sell? If you break up? Do you share the costs 50/50?
The estate, as long as it is not deposited in a joint savings account, is generally considered separate property in the event of a divorce. “Your spouse cannot claim an interest in the inheritance you receive during your marriage,” says Brenji & Associates.
As this Beverly Hills-based family law firm puts it: “The law defining separate property specifically states that all property received during marriage by ‘gift, bequest, will, or descent’ is considered separate property. ” Again, there is an important caveat: keep separate assets separate.
You write: “He won’t let me take care of the finances. I invite you to change your way of thinking. It’s not about letting him do X or Y. You’re of legal age. You decide whether someone else has a say in managing your finances. You’ve done pretty well on your own so far.
There is a time for discretion, and you currently don’t have to open your books to someone who has been so careful to open their finances to you. If your husband has failed to manage his finances, why would you allow him to manage yours?
Seek advice from your state attorney and/or financial advisor on separating your inheritance and assets and how to proceed as a married couple. None of this is particularly romantic, of course, but it all comes down to the one thing that holds all relationships together: trust.
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