The Changing Face of Marriage: Preparing for the Unexpected

Getting ready to tie the knot? Check out our 7-step guide to navigating finances as a newly married couple. 

Even after a couple has kept the lines of communication open and has discussed finances early and often, there is still a possibility that their marriage will end in divorce. As I discussed in Part I of this article, research shows that divorce rates among young couples are on the rise. The happiness of a wedding can just as quickly fade to sadness and bitterness in the face of a divorce.

If you’re confronted with this tumultuous situation, your finances will likely be the last concern on your mind; however, there are several important things you should take care of when trying to separate your finances — and your life — from your former spouse.

Changing Face of Marriage - Part II

Financial Planning Considerations

After the divorce is final, take steps to make sure that your own financial life is in order. You should take inventory of all of your debt, savings, insurance policies and investment and retirement accounts to make sure you know where your assets are located and confirm that you are receiving statements. Additionally, you’ll need to verify that the beneficiaries on your retirement accounts and insurance policies are correct. More likely than not, your ex-spouse will be listed as the beneficiary on each of these accounts, so you will need to designate another family member — such as a parent, a sibling or your child — to ensure the assets don’t pass to the wrong person.

While you’re updating your beneficiaries, you should also work with an attorney to update your estate planning documents (which may include a will, a living will, a healthcare directive, a healthcare power of attorney and a general power of attorney). If you have children, you may want to consider designating a new legal guardian to care for them in the event of your death. If you are leaving assets to a minor, you might consider using a trust or another structure to avoid leaving assets directly to your child; this will also allow you to designate a trusted individual to manage the inheritance until your child reaches a specific age.

Tax Considerations

There are several ways in which divorce can affect your tax situation, so consider meeting with your trusted advisors during the proceedings to try to avoid any potential tax pitfalls. If you and your ex-spouse have shared professional relationships with financial advisors, accountants and attorneys, you may consider hiring new advisors.

First, update your withholding — tax brackets for married couples are more generous than the brackets for individuals that claim the “single” filing status, therefore tackling this item first will help you avoid any surprises.

Children can also affect your tax situation. Most notably, the divorce proceedings may determine who can claim the children as dependents for tax purposes. This decision typically depends on a parent’s custodial or noncustodial status. The custodial parent is generally the parent that has sole, physical custody of the child, or the parent the child lives with more often; the other parent is the noncustodial parent. If your ex-spouse is paying you alimony, you should review your tax situation with your accountant and determine if you need to make estimated payments.

If you and your fiancé are just starting out, it may be hard to think about what could happen in your lives further down the road. However, in starting a marriage and in ending a marriage, it’s crucial to be fully knowledgeable regarding your financial situation to ensure that your savings and future are protected.


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Cassandra (Latsios) McNulty

MSTFP, CFP®, CDFA® | Financial Advisor

Cassandra (Latsios) McNulty, MSTFP, CFP®, CDFA®, is a Financial Advisor with Wipfli Financial Advisors in Media, PA. Cassandra specializes in financial, tax and retirement planning for high-net-worth investors, and also advises retirement plan sponsors and participants.

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The Changing Face of Marriage: Preparing for the Unexpected

time to read: 2 min