Q: There are many books and articles that talk about how to recover financially after a divorce. However, I’d like to know what financial steps I should take with my fiance before we get married.
For example, I bought the house we live in without his name on the deed or mortgage. Once we marry, what steps do I have to take to put his name on the deed?
Also, his credit is less than stellar while mine is impeccable. He plans on taking steps to clean up his credit, but are there certain liabilities that he needs to remedy before we marry? And finally, how will his poor credit history affect our buying power as a married couple?
A: First, it should be important to you that your fiance takes some quick steps to fix his credit before you say “I do.” While you keep your credit and he keeps his, if you need to combine incomes to purchase a house or car, his negative credit score will translate directly into higher fees and a higher interest rate on loans.
You and your fiance should also sit down to talk about your money values: How you feel about money, how much cash you need to live on, what you’re willing to give up in order to save money. Do you and he agree on what you should spend to furnish your home, go on vacation, and for your vehicles?
And while we’re on the topic, can you both agree on how much cash you should be saving each year for your long-term goals?
Coming up with some short-term and long-term goals will help you and your fiance focus on the future, and what it will take financially to get there. Talk about how much you earn, whether you will want to stay home and raise your children (and how much that will cost) and whether it is important to you to provide assistance for college tuition to your children.
Finally, if you or your fiance has assets that were acquired prior to the marriage, like your house or an inheritance, discuss whether that asset should remain in your name or his name alone and how the other person will feel about that decision.
Frankly, I think it would be a mistake to add his name to your deed without putting him on the mortgage as well. If you add him to the deed and for whatever reason the marriage doesn’t work out, he would then own half of your asset, but have none of the responsibility for paying off the mortgage. You’d have to refinance to get him named on the mortgage.
If it seems too difficult to broach the subject of money now, be careful — it doesn’t get any easier down the road. Since most marriages break up because of money trouble, it’s important to start talking about your finances early on, and then continue the discussion throughout your lives together.
Good luck and congratulations on your marriage.
Published: Nov 19, 2004