When I was a little girl, I sometimes looked in the mirror and imagined who I might marry and what I might wear on my wedding day. Later as a teenager, I sometimes wrote my name as if I were married to my boyfriend du jour, just to see what it felt like to try on a married persona. What I imagined involved love and romance. It did not involve thinking about a financial partnership or the implications of putting together what amounts to a small business relationship where each member has a role and responsibilities. It certainly did not involve working out a conflict resolution procedure that allowed for the voices of both participants to be heard in order to have an effective decision-making methodology.
It turns out that the things I didn’t imagine are possibly the most important parts of a marriage and often people don’t learn about them until they are getting divorced.
When a couple falls in love and gets married, they trigger a change in status that often goes beyond the scope of what they think or expect. Marriage initiates a financial partnership in which both spouses contribute to the whole rather than the individual, whether or not they so intend. Regardless of what the people intend, unless they make an explicit and formal agreement otherwise, from the moment of saying their vows, spouses are working for the benefit of their business unit, not for themselves.
Of course when people in love decide to marry, it often seems part of the romance to share finances. When people decide to divorce, it is often another story. When clients come to my office, they are often unpleasantly surprised to learn that assets they thought they had protected from divorce are, in fact, part of the “marital pot” and vulnerable to division as part of the divorce. It is surprisingly easy to inadvertently convert savings or other assets from separate — not distributed between spouses in a divorce — to marital and subject to distribution as part of a divorce (although not necessarily equally). For example, a single person earning money, investing it and saving for retirement in a 401(k) does so for his or her own benefit up until their wedding day. That 401(k) is their separate property until they or their employer make the first contribution into it for work performed after the honeymoon. When that happens in most states, the entire 401(k) changes its nature and becomes an asset of the marriage.
The implication of many decisions made as a couple can also be a surprise for people newly contemplating divorce whether or not these decisions were explicit or implicit. Some of these decisions could be:
- Who worked and how much was earned
- What were the lifestyle choices
- Who made investment decisions
- How title to the marital residence is held
- How was credit managed
Finally, I wish people learned in high school that although marriage might be about romance (at least in part), divorce is not. For decades the trend in divorce law has been toward “no fault” divorce. This means that the “law” will be less sensitive to the foibles of the relationship, including extra-marital relationships, disagreements over money and other disputes than a couple might expect or one of them might want. Divorce courts are not interested in the breakdown of the romance and decidedly focused on unwinding the business end of the relationship. Divorce courts are not likely to deliver a reprimand, financial or otherwise, for broken hearts or other betrayals of the love relationship.