How Financial Advisors Help Married Couples

Marriage is often an important milestone in many people’s lives. Once married, however, many important decisions loom regarding how to handle finances. Questions about merging accounts, aligning goals, and whether to get a prenup will almost undoubtedly crop up. To ease the pressure and gain more clarity on these choices, it’s helpful to work with a financial advisor.

In this article, we’ll highlight how financial advisors work with couples before, during, and sometimes after their marriage.

Identifying Goals

One of the first tasks couples face, whether married or not, is determining goals and reaching some level of alignment on them. These are often tied to momentous life events like buying a home, having children, and traveling. However, it’s also critical to discuss financial benchmarks, including retirement, paying for your children’s education, and saving strategies.

A financial advisor would meet with you and your spouse to assess your goals. These could be unique to each person or for both of you. To do so, they’ll usually ask a range of questions about what you desire financially and personally.

Developing and Revisiting Financial Plans

Once your expert understands you and your significant other’s goals, they will be able to help you construct a comprehensive financial plan. While its scope and nuances may vary depending on your objectives, it’s not uncommon for a holistic plan to include benchmarks for various ages, ranging from a young couple to retirement age.

According to Amy Colton, a certified divorce financial analyst (CDFA), financial planner, family law mediator, and founder of Your Divorce Made Simple, “financial planning is essential” through periods of “life transition,” such as marriage. Therefore, getting married and uniting financial goals and assets with another person can present a prime opportunity to revisit or develop new plans.

Reliant on your needs, a professional will also be able to offer guidance on how to manage investments and savings. For example, they may provide insight into an ideal emergency fund amount, present budgeting strategies, and walk you through which investments will fit best into your portfolio based on your combined risk tolerance and time horizon.

The relationship between a married couple and a financial advisor is often ongoing. Meetings might comprise regular check-ins and, if necessary, adjustments to existing plans. As Colton suggests, it’s good to meet with a professional during transitional periods. She says, “When your life changes so does your financial future and it is time to look at the plan and reassess if necessary.”

Choosing to Merge Accounts

An important decision couples must make is choosing whether to have joint ownership over the various types of accounts they have. For instance, this may include checking and savings accounts, retirement accounts, such as IRAs and Roth IRAs, and credit cards.

There are several reasons for and against merging accounts and sharing ownership. For some, the “our money” approach can be an easy way to keep everything under one roof. For others, it can be more freeing to retain control over individual accounts, as well as be a way to avoid disagreements on spending habits.

Ultimately, a financial expert could help you and your partner weigh the costs and benefits of merging accounts now and later. They may even recommend sharing some, but not all, of your accounts. You might, for example, have joint ownership of bank accounts and credit cards but have separate ownership of retirement or brokerage accounts.

Prenuptial Agreements

Should you sign a prenuptial agreement? This is another critical consideration that tends to find its way into many couples’ lives before saying “I do.” In short, a prenup is a contract that defines the parameters of ownership of property and the division of it if a divorce were to occur. This can be an effective method for both spouses to protect their assets, especially if they acquired them before marrying.

Though signing a prenuptial agreement can be a good idea, it’s known to cause rifts in relationships. Some believe it signals that a significant other already sees a possibility where the marriage fails. Even so, per Colton, it’s imperative to “look at not only your life today but how things may play out in the future,” especially where finances and assets are concerned. For this reason, she points out that “a prenuptial agreement may be in order” upon getting married.

Seeking the help of a financial advisor or attorney can allow you to gain more clarity on whether signing a prenup is right for you. Specifically, they’ll help you determine whether the assets you bring to the table and future earnings are valuable enough to protect in a divorce situation.

Estate Planning

While not always on the list of priorities for young people, married couples of all ages should also consider putting together an estate plan. Depending on the complexity of your finances, family size, and circumstances, this may include documents and arrangements such as a will, trust, and healthcare directives. You’ll also face the task of selecting beneficiaries and allocating property to them. An advisor, legal professional, or both can assist with formulating an effective estate plan and adjusting it as your needs change and your situation transforms.

Navigating Divorce

A final way financial professionals can lend their expertise to couples is in the unfortunate case of a divorce. In these situations, where emotions and stress often tend to be at the maximum, having an advisor in your corner can be invaluable.

“The role of a financial advisor in divorce is essential,” says Colton. “Although many people use their attorneys as financial professionals they typically are not the best guides when it [comes] to financial and tax strategies around the divorce,” she continues.

Divorce can happen when you least expect it, and, unfortunately, it can happen in later years when you have events such as retirement on the horizon. “Divorce after the age of 50 is the fastest-growing area of divorce in the world,” Colton explains. “Typically, these couples have spent ten, twenty, or thirty years building a nest egg together, and [now], they have to separate it.”

An advisory professional, as Colton suggests, will have a firm grasp on handling the financial nuances surrounding your split, whether you’re young or nearing retirement. This may, for example, include an understanding of laws governing breaking up retirement accounts, tax implications, and perspective on how the divorce can impact your financial plan.

Frequently Asked Questions

Do couples need to be rich to hire a financial advisor?

While some advisors exclusively help clients manage their wealth, couples don’t need to be particularly wealthy to hire an advisor. It’s a smart practice to get another trusted pair of eyes on your finances and have help developing a plan tailored to your needs. Many advisors specifically work with families of all asset ranges. Consider, however, that hiring an expert can come at a high cost and that not all of them use the same fee structure.

Should a husband and wife share a financial advisor?

Like the choice of sharing bank accounts or credit cards, this is a personal decision. Having a separate financial advisor, or at least separate meetings, from your spouse can be beneficial if you value tracking individual financial targets and investing in your own portfolio; however, this means you’ll likely handle the costs alone. On the other hand, meeting with a professional together can enable the two of you to have a more united plan. It can also strengthen the advisor-client relationship by giving your advisor an open and clear line of communication with both partners at the same time.

What types of experts help married couples?

When looking for an advisor to help you and your partner, there will be many options and credentials to comb through. Ultimately, it’s best to work with someone who matches your needs while upholding a fiduciary duty. Here are some examples of professional titles to look out for:

• Certified Financial Planner (CFP)
• Chartered Financial Analyst (CFA)
• Chartered Financial Consultant (ChFC)
• Certified Public Accountant (CPA)
• Certified Divorce Financial Analyst (CDFA)