17 Apr 2020
Congratulations! You are engaged to be married or have just returned from your honeymoon and starting your new life together.
Perhaps you have been living with your partner for a while already and are sharing expenses, but one very important aspect that you need to discuss and plan for is your financial situation. Being legally married brings with it a new set of financial and taxation ramifications.
There are quite a few aspects that you and your spouse need to discuss and plan for. The ideal situation is to have all these details sorted before marriage so you can get on with life, but if not, it needs to be done as soon as possible afterwards.
• Couples need to disclose all their financial assets to each other so they can properly plan their expenditure e.g. property, investments, savings etc. and liabilities such as debt, loans, mortgages and credit cards. The combined income could help pay off debt and mortgages quicker.
• Create a new budget for your expenses. Will you share expenses down the middle or will one of you take over debt and household expenses and another your retirement and investments? Ask questions such as:
o What are your top priorities? Children, travel, investing, property?
o What are your long-term career prospects or goals? – one of you may want to study further and this will reduce you combined income.
o Will one of you stay home to raise children or be needed to care for elderly parents?
o Do one of you financially support other family members?
• Are you keeping everything separate or opening a joint account?
• Being legally married may have tax implications for you. It is ideal to consult with your tax practitioner to see if you qualify for reduced taxation or rebates as a married couple.
• Meet with your financial adviser to relook at your retirement needs as a couple. At what age do you plan on retiring? Will one retire early while the other continues working? What kind of retirement do you envisage together?
• Do you have children from previous marriages? These are extra costs that need to be budgeted for.
• Will you be moving into a larger house together to accommodate children etc? This will eat into the budget.
• Is there an inheritance or trust fund involved? There might be a need for a pre-nuptial agreement to protect family wealth.
• Have a look at your credit score. A bad credit score from one spouse may prevent you from getting a joint mortgage. Try to build a good credit score.
• You might have different attitudes towards saving, investing and spending. How will you manage these differences? - Investopedia
This may be the last thing you want to focus on as a newly engaged or married couple, but it is essential to plan a secure financial future together to avoid any challenges later down the line.
Meet with your deVere Acuma adviser to plan a couples’ budget and check the financial and tax implications thereof. [email protected]
Please note, the above is for education purposes only and does not constitute advice. You should always contact your deVere Acuma adviser for a personal consultation.
* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.