Women, Marriage and Money

Date: 22 September 2008

I just had coffee with a woman who told me about how her sister had been supporting her spouse because she owned a business and he was looking after their farm.

Now, he’s told her he wants a divorce and intends to get a share of all her assets.

So, here she is in her 50s and she has to earn it all back agaixn just when she’s looking forward to doing things that she wants to do without worrying about earning a living.

On a different note, I had a few words with my partner this month about who pays for what in the family world. We have separate accounts and while we share some expenses, this is how it’s been when we both earned good money.

Now, my life has changed and I’m earning less. But I’m the one around with the purse when the tradespeople call, the school money is to be dished out and the food is to be bought. While my husband reckoned that a few bottles of wine and a big supermarket shop-up on Saturdays made the swings and roundabouts fair, I didn’t. Sounds familiar?

There are conflicting thoughts about whether women should act or think single when it comes to money because they often find themselves in different situations to men ie not earning income continuously and outliving their spouse.

Alternately, psychologists will argue that you must improve your approach to money as a couple because it’s all part of the couple negotiation and if you live like ships in the night then what’s to keep you together in the same port?

In my book All About the Money, Honey! Financial Recipes for Success (Wrightbooks 2007) , clinical psychologist Dorothea Vallianos urges women to regard the family money pot as yours, mine and ours….so that means having a bit for each of you and the rest  together in a joint account.

That makes sense when it comes to emergency events such as sickness or death because it may take time to get the money flowing through from insurance proceeds or if there are delays in probate.

I can only imagine that the worst thing that can happen to a woman whose husband dies unexpectedly is to not only end up with no money in their own name to tide them over while the probate process is going through but to be completely unclear as to what to do next.

Some years ago, I knew of a woman in her late 30s – a second wife with her two sons - whose husband dropped dead on the stairs at home, just as they were leaving for a weekend of skiing. Apart from the shock on losing her partner so suddenly, the poor thing was then dragged through nine months of probate and this could not be speeded up because his affairs were complicated by a self managed super fund and a large number of beneficiaries.

A blended family or a second family are in a tricky situation when it comes to the dividing up of the estate.

Advisors point out that it’s important to set up estate planning properly beforehand. There should be an emergency fund under joint names because under the name of the dead spouse, an account can’t be readily accessed.

So the message is this: you should have stuff in all names in the family as well as joint accounts. Financial advisors often argue that a heap of investments owned by a couple could better be set up in a family trust (although sometimes, it’s just too late to set up a family trust without tax issues because putting in old assets means transfers and that’s likely to set off a capital gain or a loss).  There may be agreements as to the distributions from the trust but that aside, it’s a good thing to discuss what happens to the joint wealth prior to a divorce or death. Exploring questions like: ‘What would happen if we weren’t together? What would we do with the house? Rent or sell?’ ‘How will we pay for the kids’ education?’ may be hard to do, but maybe it’s interesting to ask.

The problem is that when people divorce, rarely do we see big hearts. There’s a lot of punishment that seems to come into play and often it’s the women that get it in the neck financially. Equally, women punish men back through the kids – not so good either.

The answer for both parties is to try and think through some money issues before things get rocky. Writing down scenarios may help; talking it out with an advisor may benefit. There’s no clear cut path but don’t be a silent partner when the buck stops with you.