Hello Ladies,

Last night, I was having desert with my mom and we were talking about retirement and savings. I became eligible for my companies 401(k) contributions and turned in my application. I was telling my mom that since I have been saving my paychecks since I was 15 years old, I have quite a nest egg in the bank. I don't touch this money unless it is a dire emergency and this money is supposed to be for my future (downpayment on a home, wedding, retirement monies).

My concern is when I do marry my FH, what should I do with my personal savings? I feel uncomfortable joining my 7 years of savings with my FH (since he has no savings at the moment!) I still want to contribute part of my income to my personal savings every month (even if it is just 100.00 per paycheck) I am not trying to "keep" my money away from FH when that day comes but it is my money and I worked really hard to save that. I don't want to work until the day I die. This has nothing to do with trust issues but I need to think of myself first and everyone else second.

I guess my question is how has everyone else handled their personal savings when they got married? I know some people have joined their checking accounts together and have their income put in the same pot for bills but I am not worried about the checking aspect. I am more concerned about the savings portion. I do know that I want a joint savings for house maintence, vacations and big purchases.

Any feedback would be appreciated.

I am not sure either about the bank savings--like what would happen to it if you ever divorced or when you die. My mom once told me that when you die, your accounts are automatically frozen, but to what extent and who can touch them, I am not sure. I would think that if your savings was just in your own name, a spouse wouldn't have access to it, but if you divorced, he could probably get half if you didn't have a prenup. This knowledge is strictly from the movies and TV so who knows if thats true. And I am sure it varies state by state.

For any 401(k) contributions, you had to put a beneficiary on the paperwork when you signed up so that person would have access to that money when you die. If you get divorced, I am pretty sure the spouse gets half...but I guess that would be dependent upon if you opened it after being married, or if you had it BEFORE you got married and had a prenup.

I know you said your FH doesn't mind, but me being in "his shoes" per se (no savings unless I needed something, pre-marriage) I am not sure I'd be so thrilled. DH has always maintained that what we both earn is ours--he kinda adopted that mentality once we got engaged and he moved into my apartment. I know every couple handles money differently, and does what works for them. But even though DH makes like 40% more than me, that doesn't automatically give him access to 40% more of the checking acct each month in our minds.

New Jersey: We have dumps, bays and cement boots and we know how to use 'em

Oh believe me, I am not going anywhere without a 401(k). My DH is a retirement specialist with a very well-known gigantic bank. I have heard horror stories, and I had NO choice in enrolling in my company's program the minute i was eligible (not that I would opt out)! Probably if we had a little more extra cash, I'd put some away for myself, and I did before we joined our money. But as it stands right now, we don't have a ton of "extra" money seperately to save seperately. If I want a girls weekend, or a new outfit, I check the bank account, double check w/ DH to make sure there are no outstanding checks that haven't cleared and decide what I can afford to do.

I definitely hear you on the woman aspect--unfortunately DH and I are not in the position to have me stay home after I have a baby (at least not longer than the allotted 12 weeks) but when the time comes, I am sure we will amp up our savings even more. And I do think it totally sucks that some women have to make the choice between having a family and having a job. I know you can have both, but sometimes you just can't. That's probably my #1 gripe when it comes to being a woman--even above getting my period!!

New Jersey: We have dumps, bays and cement boots and we know how to use 'em

Ladies,

Hmmm... a lot of good questions. Let's take them one by one.

First, you need to educate yourself on the laws in your state regarding marital or community property. There are a handful of community property states in the US; such as California. Most others have their own versions of marital property. No two states are exactly alike.

If you have any assets or children, prior to marriage, then you are well advised to see a lawyer in your state and consider drawing a pre-nuptial agreement. These assets may be something as simple as a savings account or complex like multi-millions in real estate. The lawyer can tell you exactly what are your states's community or marital property laws, so there is no ambiguity. It is worth spending $200 or so for a lawyer's time and get the exact state law.

There is another thread about pre-nups, so I won't go into a lot of detail. Suffice to say that if you decide to get a pre-nup, then each party (the future husband and the future wife) needs to have their own lawyer. Don't try to save money by engaging the same lawyer; such an action could invalidate the pre-nup sometime in the future. Similarly, you need to negotiate the pre-nup well before W-Day, so it cannot be invalidated later by citing "duress".

Having said all that:

Any property that a person owns before marriage is, in general, theirs alone, so long as marital funds are not comingled. You need to learn the exact definition of marital funds (see above) so you know exactly what can and cannot be comingled with your pre-marital nest egg.

As an example:

" I still want to contribute part of my income to my personal savings every month "

Bad idea. Why? Because your earned income post-marriage could be considered marital income. If that gets comingled with your savings from pre-marriage, that might taint the entire pot and all become marital assets.

Here's a better idea. If you want to have your own savings, then start a new savings account after you get married, and put earned income savings in there. Keep your old, pre-marriage savings account, but do not put any more deposits in there unless you are sure those deposts are non-marital assets. (Again, seek local counsel for exact legal defs.) For example, money from an immediate relative or inherited money from family could be considered non-marital assets. If Great-Grandma dies and leaves you some money, that money could go into your pre-marriage savings account as non-marital assets.

Next question: what to do about your husband getting your money quickly in the event of your death? (Or you getting his in the event of his death.) Make the account a Transfer On Death (TOD) account.

Here's a US government website (.gov) which outlines TOD accounts:

http://www.sec.gov/answers/todreg.htm

If you have set up a TOD account, then the money can be transferred to the TOD designate immediately, bypassing probate.

Again, I can't repeat this enough: If you have substantial assets, or children, pre-marriage, you need to discuss this with a lawyer in your state and get specific legal advice for your specific situation.

I said this several times in the pre-nup thread and I'll repeat the same thing here. Pre-nups are not just for people who might get divorced. All marriages end, repeat, all marriages end through divorce or death. A pre-nup protects both parties in the event of a divorce or the death of one spouse. It protects the children of the marriage from greedy or just sticky-fingered future step-parents.

I truly believe each and every one of you when you say you do not intend to divorce. I also know for a fact that all of us here will eventually die.

Which brings me to the next topic. Estate planning. Get married, enjoy the consummation, have a great honeymoon, write those thank you notes, cry when you first see your video, then get your butts back into the lawyers' office to draw up a proper will or other estate planning document. That's another legally binding document where you designate who gets your nest egg and under what circs.

Dear Bosox,

Yes, money is a team effort, and yes, what is his is mine and what is mine is his, but as you learned with your father, people can and do "go rogue" and empty out joint accounts.

In my opinion, you might be best advised to keep the savings you have in a separate account, in your name only, and make it TOD to your husband after you get married.

Your mother works for a bank, so she is in an excellent position to advise you, or know other bank officials who could offer sound advice. That's a great asset and I hope you make use of that. Remember, the only way to get official, legal advice is to see a lawyer. Those bank officials might be able to recommend a local lawyer who charges moderate fees.

" What we both earn is ours."

I agree. But go back to your orignal message. You have substantial savings; FH does not. (Good question: Why not?) Right now, prior to your marriage, that money is yours and yours alone. My suggestion is to keep it that way, if only to give you a cushion should something happen to you as happened to your mother and father. I have to assume you have told FH about your dad. (If not, then you should.) That would be a great way to bring up the topic of having your own nest egg, with your own pre-marriage savings.

"Honey, I know I'm being weird about this, but since I watched my father empty out my parents' joint accounts...."

Yes, your joint savings is for your joint projects. Retirement, future children, their education, home repairs, etc. Great. Wonderful. But, put yourself in your mother's shoes. Do you think she ever expected to suddenly wake up with a bank balance of $0?

" Should I stop putting monies into my personal savings when I get married? Make a deposit every month to keep it in an active status? "

This would be a great question for the bankers. Post-marriage, you cannot deposit marital money, because that would comingle the money. How can you keep the account active if you do not deposit money? Ask the bankers.

*****

What do we do?

When we first got married, there was no need for any pre-nup simply because neither of us had any substantial assets. We were both graduate students, supporting ourselves with Teaching Assistant incomes. We made a whopping $415/month our first year in grad school. We both had paid-for cars. No children from any previous relationship.

Consequently, from then on, all money was marital money. We kept separate checking accounts for a long time. Our 401(k) accounts were titled separately, but TOD to each other. Our children were born, grew up, went to college and are now on their own.

Now, after 33 years of marriage, things are much different. This is typical, by the way, of many couples. Their financial picture changes radically from Young Married to Young Family to Kids In College to Empty Nesters. We are at the Empty Nest stage.

What's different? First, the stakes are much lower, now. I don't have to worry about being, suddenly, widowed or divorced with two hungry little children depending on me. Second, the bulk of the 401(k) money is already there. With the"magic of compounding", we now have a huge chunk of dough sitting there waiting for us to tap into it. Third, my income has skyrocketed in the past 10 years, or so. I have hit my stride and make a lot of money with a lot of free time. My husband retired and is actually officially disabled following a back injury.

After 33 years of marriage, I don't see a real need to keep separate accounts so much. We now have just one joint checking account and one joint savings account, plus some joint investments. I inherited money from my parents' estate after they died, and I have kept that in a separate TOD account in my name only. The reason I did that was actually irrational. After being married so long, it actually FEELS GOOD to have my very own money. There's no real rational reason, but the money is sitting there, appreciating at a snail's pace like everyone else's investments. "Flat" is the new "Up" these days.

I've mentioned many times that there's a great book about finances for engaged couples:

Financially Ever After by Jeff D Opdyke. He's a personal finance journalist for the Wall Street Journal.

You are asking all the right questions. That's great. Now, talk to your mother and see if she can recommend someone at the bank to give you specific advice about the mechanics of your account post-marriage, and see about talking to a lawyer to get legal advice concerning marital property in your state. I can give you general ideas, but you're past that, now. You need specific answers to your specific questions, and you need those answers before you get married.

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