It’s no secret that two-income households are now the norm. Commonly, men and women both work outside the home (although one spouse may work part-time if they have minor children at home). Yet even in dual-income households, one spouse is often in charge of the family finances while the other gives little to no input.
This arrangement may be fine for many couples, especially if one spouse has no interest in managing assets. But if/when these couples get divorced, the financially illiterate spouse could be at a serious disadvantage in matters of property division.
Whether a couple’s assets are significant or modest, it is important for each spouse to have at least basic knowledge of the household finances, including income, debt and property. Too often, the spouse who had been in charge of the family finances tries to negotiate an unfair settlement. He or she may even try to hide assets.
Financial knowledge and literacy will also help each spouse make smarter decisions about asset division. For instance, many women tend to want to keep the marital residence and are even willing to trade away other assets in order to do so. But before making that decision, it’s important to consider:
- How much the house is worth vs. how much is still owed on the mortgage
- Whether the monthly mortgage payments are affordable on a single income
- The estimated annual costs of maintenance and upkeep
- Whether the house could be sold reasonably quickly, if need be
- Whether a different asset (like retirement savings) would be more valuable than keeping the house
If you are considering divorce but don’t know much about the family finances, please take the time to familiarize yourself with the basics. Then, seek the help and guidance of an experienced family law attorney.