Financial Illiteracy May Leave Parties at the Losing End
It is often taboo or unthinkable for married couples to discuss financial literacy and marriage assets. This void in financial education leaves many couples with serious problems in settlement matters if divorce occurs.
Law attorney would agree that financial illiteracy on community property distribution, alimony, etc, should not be dispensed as a crash course but rather, taught to the general public to raise awareness on settlement arrangements and preparations.
Through enlisting the assistance of professionals such as financial and tax consultants, couples can achieve financial transparency between both parties that will help foster stronger trust and collective asset and property management.
Traditionally, husbands tend to keep marital assets and properties confidential, with their partners in the dark. According to a recent fidelity survey, most couples are open about their marital finances though some couples still practise an imbalance of financial literacy.
As censuses show, a significant percentage of married couples end up in divorce, leaving a disparity in the eventual settlement pay out, which is affected by the financial literacy of the parties involved.
Therefore, it is capital that all married couples consider taking up retirement plans early in the marriage, for the purpose of financial security in preparation for any crisis. Many factors should be considered before and after divorce proceedings.
Couples may consider the basic spending budget, medical fees, children support (if applicable), legal fees and other miscellaneous charges that may be incurred upon divorce, along with concessions to lifestyle with the separation from the main earner (if applicable).
Hence, it is important for parties to consider long-term saving plans and other policies with financial consultants that will help them tide through the tough times.
Most importantly, the lower-earning or unemployed party in a marriage should be kept updated on the latest figures in marital assets and property as in the case of a finalized divorce, they will require more compensation from the settlement to pay off the bills that was once handled by their former spouse.
The sharing of commitments and responsibilities do not immediately terminate at the dissolution of a marriage, which means that mortgage and incurred debts through marital finances, continue to stay in effect until they are officially settled in the court of law (which takes time). This means that both parties have equal responsibility in returning the debts to the creditors if the names of both parties were involved in the signing of any applicable contracts.
Financial literacy not only equips with parties to fight for fairer divorce settlements but also, to be fully aware of any outstanding debts to be shared between them.