Arlie Hochschild, renowned Author and Professor of Sociology at the University of California once said, “The influx of women into paid work and her increased power raise a woman’s aspirations and hopes for equal treatment at home. Her lower wage and status at work and the threat of divorce reduce what she presses for and actually expects.”
This quote expresses much of the plight that is still prevalent with women today. Women dream as big as anyone else and desire to succeed just as men do. However, it puzzles me that we allow ourselves to fall short when it comes to protecting ourselves, specifically, our standard of living as it relates to divorce or widowhood. According to Psychology Today Magazine (1997) a woman’s standard of living plummets 27% after a divorce; a man’s standard of living increases 10% after the same event.
Don’t Wait to Fall Out of Love to Make a Good Decision
Consider this, when you first met your potential mate, love blinded you to any fault or failure they exhibited. You could ask for anything and his number one goal was to please you. You get married, everything is fine for a while but then, the inevitable happens. You start hating each other. He feels like he’s getting no quality time with you. In a moment of weakness, he finds someone who actually talks to him and laughs at his jokes; maybe he even manages to fit some time into his schedule for that admirer. Suddenly, he’s no longer waiting for you to give him attention and he asks for a divorce. You, on the other hand, are shocked because you didn’t see this coming.
Suddenly the gravity of the situation hits you, he took care of all of the finances and you assumed everything was fine, but now you are finding out it’s not.
Compared to men, women are known to love hard and to love fast. I’m not going to judge whether it’s right or wrong, it’s just a fact. It takes a man a longer time to completely fall head over heels and when they do, some may argue that their feelings are fleeting. However, when they are “in love” they are most likely to do anything and everything to gain and retain the favor of their beloved.
With all of these juicy tidbits in mind, when do you think will be the best time to ask for protection in the case of divorce or widowhood? When he’s totally and blindly in love with you or when he’s “through” with you and has moved on to another life?
Pre- and Postnuptial Agreements Protect Your Interests
A Prenuptial Agreement is a private contract between two people intending to marry, and a Postnuptial Agreement is between two people who have already married. A typical Prenuptial Agreement discloses each person’s assets and liabilities that they bring to the marriage. The agreement generally will settle financial and property issues that arise in the event of divorce or death—who gets the house, who pays spousal support and what property will be considered separate or marital. Most importantly, Prenuptial Agreements settle the issues normally governed by family and estate laws, which will be overridden by the agreement. This can help avoid drawn out legal battles in divorce court or probate.
Death and divorce are understandably unromantic topics for any couple to approach when they are planning on spending the rest of their lives together, but planning for these events, one certain and the other increasingly likely, is part of handling the business of marriage. Just as you buy car insurance to protect yourself and property and life insurance to protect those you leave behind, a Prenuptial Agreement provides a form of insurance protection as well. You protect yourself, your property and those you leave behind. Beyond that protection, the greatest value in a Prenuptial Agreement is the discussion it generates between the two people getting married, the expectations it sets as they start their marriage, and the knowledge each person gains about their current and future financial picture. That knowledge is power and often a tool the couple can use to avoid financial pitfalls that doom many marriages.
Believe in the Power of Love, but Don’t Do it Blindly
Nowadays, when a couple enters into marriage at a later stage in life, they typically come with more assets and often more debt. Therefore, it is wise to establish up front how everything will be divided if things don’t work out or if one person dies. This tends to make sense for second marriages that involve blended families or situations where third parties, like aging parents, are dependent on a member of the couple for support. If you came to the marriage with a substantial 401(k) or property, then you can be certain that those assets will remain separate in a divorce or will be passed to someone other than your spouse. When an agreement such as this is established it remains unaffected by estate laws in the event of your death.
Additionally, consider if your husband leaves you for another woman, do you really want to subsidize the entertainment of a new girlfriend with your hard earned money? A Pre- or Postnuptial Agreement will protect you from having to witness the financial pain that comes from watching your ex-spouse move on and will protect your interests to make sure you retain what was yours going into the marriage or what you earned during it. After all, who wants to watch their ex wine and dine another woman, let alone, end up having to be the one who has to pay the tab?
It is a natural thing to want to believe in happy endings. After all, no one would ever get married if they walked into it thinking they were going to split up. However, statistics are statistics and facts cannot be ignored, two out of three marriages today end in divorce. Consider your future, be smart and investigate your options as it relates to a Pre- or Postnuptial Agreement and rest assured that if the fairy tale goes south you won’t end up being the damsel in distress waiting for another prince to rescue you.
This article was co-authored with Afi Johnson-Parris is a divorce and family law attorney practicing in Greensboro, NC. She aims to guide her clients through the highs of lows of family life, tackling all matters from prenuptial agreements and adoptions to divorce, alimony and custody actions as their Trusted Counsel for Family Matters.
The reality about many marriages and other cohabiting relationships is that usually one partner has more money and/or assets than the other. And I don’t know about you but I’m a firm believer in “What’s mine is mine.” So my advice is that you shouldn’t ever be fooled into thinking that once you say “I Do” or move in together that everything is now viewed as “OUR STUFF”. Statistics say that over 50% of all marriages end in divorce and that women are usually left with nothing; usually facing poverty. That leads me to believe that someone in the relationship is not playing nice. And by not playing nice they are not dividing everything “even steven” — don’t end up being a statistic.
Marriage contracts and cohabitation agreements are not just for the rich and famous. As a matter of fact, contracts and agreements should be viewed as a way to protect yourself AND your assets from the possibility of a bad breakup or divorce. It’s been my experience that once the relationship is over, it’s not the best setting for negotiations. Feelings are hurt and anger has taken over. Needless to say all rational and logical thinking has gone out the window.
With that in mind, here are a few reasons why I believe a “relationship contract” is a good idea.
- You are wealthier than your partner. This should be a “no brainer.” If you are coming into the relationship with your own wealth, whether it’s inherited or earned, protect it.
- You own a business. You have worked hard to establish your business. Don’t allow a bitter ex-spouse access to destroy it or your solid business reputation.
- You have a higher income than your partner. If the relationship should end don’t put yourself in the position of having to support him (alimony) and his new squeeze.
- This is not your first marriage and you want to protect your children’s assets. Estate planning is very complex and it would be wise for you to put your intentions in writing so your children from previous relationships get what you intend for them to have. It doesn’t matter if the children are minors or adults, don’t leave them hanging.
- Your partner has a lot of debt. This is sticky because my advice to you as a professional would be if your partner has already developed bad money habits, you probably shouldn’t get involved in a serious relationship anyway.
- However, if you are “poorer” than your partner, I think it would be in your best interest to put something in writing that will protect you and the children just in case he decides he wants a divorce. A contract can state that you will receive a certain amount of monthly income for a specified period of time. It’s much better to make this kind of decision when the relationship is still new because once your partners finished with the relationship and ready to leave, his ears and heart are closed. And there’s no such thing as a quick and easy divorce settlement.
“The only things certain in life are death and taxes.” Ben Franklin
Disclaimer: I am providing the content in this e-newsletter for the reader’s general information. This e-newsletter contains my personal commentary on issues that interest me. Unless otherwise stated, the views expressed in this e-newsletter are mine. Nothing is intended to be a solicitation of, or the provision of, legal advice. You should seek professional legal counsel authorized to practice law in your jurisdiction before acting on any information contained in this e-newsletter. I expressly disclaim any and all liability of any kind or nature with respect to any act or omission based wholly or in part in reliance on anything contained in this e-newsletter.
Thinking about death is not something we choose to do. Death is a subject that we shy away from and pretend doesn’t exist; at least from the standpoint that it certainly won’t happen to us until we’re ready. We extend our sympathy and cry a few tears when death happens around us. We gather in small groups and say, “But he was so young,” and are silently thankful that we still have time. Unfortunately though, it’s not that simple. Have you ever asked someone if they were ready when death came knocking at their door? Probably not because if they answered death’s knock, they’re already dead. But I can almost guarantee that if the dead could speak they would unanimously agree that they wished they had more time. Unless you have some kind of super celestial power along with Nostradamus-like ability, death will probably come when you least expect it. No one lives forever.
I don’t want to put a damper on anyone’s mood, but if I don’t point out the obvious, who will? I’ve seen too much family discord after the death of a loved one to let the same thing happen to you. Do you know how many lives are affected when someone dies? Not only will your loved ones have to somehow deal with the fact that you’re no longer around; they also have to deal with the financial tragedy of what your loss really means. But there’s good news! If you haven’t taken the time to take care of your family and assets postmortem, North Carolina will take care of them for you.
If you die without a will in North Carolina, you are considered to have died intestate. And if you die intestate, your assets pass to your heirs based on North Carolina’s laws of intestate succession, determined by marital and blood relationships.
Under North Carolina law, the clerk of the county’s Superior Court also serves as the probate court judge. North Carolina’s personal estate probate law requires that the clerk oversees the handling of intestate estates. There are rules and regulations that must be followed by the probate court and what they have in mind for your estate (real property, personal property, other assets, etc.) may not necessarily be what you’re planning for your stuff.
Before I get into the nitty-gritty, let me point out a couple of things that you need to be aware of.
Money in bank accounts or investment accounts that belong only to the decedent (person who dies) isn’t available to the family or the executor until the executor has been appointed by the probate court. So NO ONE will be able to access the deceased’s bank accounts or investment accounts unless they get special permission from the probate court or until an executor has been named. Although jointly-titled and payable-on-death accounts generally do not pass through the probate process, North Carolina law requires such information for probate records.
Common Law Marriage in North Carolina
Common law marriages cannot be created under North Carolina law in any circumstance. However, spousal consideration may be given to couples who establish a common law relationship in another state that recognizes such unions. Please speak with your attorney for more details.
Same sex relationships in North Carolina
At this time, same sex marriages are not legally recognized in North Carolina. If you are in a same sex relationship, you will need to see an attorney to establish contracts and agreements to protect yourself and your assets before your partner’s demise.
My advice to anyone who participates in a relationship that is not legally recognized is that you should write your final wishes in contract form. Your situation is especially precarious if there are children, ex-spouses, parents, and/or siblings involved. Without something in writing, you may find yourself fighting unnecessary battles with the deceased’s family members and/or children. If you don’t have it in writing, preferably legal form, you will find yourself up the creek without a paddle. Know what I mean?
In North Carolina, after the payment of your debts, funeral expenses, probate and administrative fees, the remainder of your possessions will be divided based on North Carolina statutory law. The following information was written by Jackie Bedard (ncwillsandtrusts.com).
If you’re single and your parents are living, no child(ren)
Your entire estate will pass to and be divided equally among your parents. If only one parent is still living, then everything will pass to the living parent.
If you’re married and your parents are living, no child(ren)
Your spouse will receive the first $50,000.00 of personal property, one-half (1/2) of the remaining personal property and one-half (1/2) of all real estate. Your parent(s) will receive one-half (1/2) of the remaining personal property and one-half (1/2) of all real estate.
If you’re married and your parents are no longer living, no child(ren)
Your spouse will receive all property which could pass under a will.
Married with child(ren) – no living parent(s)
One child – Your spouse will receive the first $30,000.00 of personal property, one-half (1/2) of the remaining personal property and one-half (1/2) all real estate. Your child will receive one-half (1/2) of the remaining personal property and one-half (1/2) of all real estate.
More than one child – Your spouse will receive the first $30,000.00 of personal property, one-third (1/3) of the remaining personal property and one-third (1/3) of all real estate. Your children will evenly split the remaining two-thirds (2/3) of personal property and real estate.
One or more children, no living parents or spouse
All of your property and possessions will be divided evenly among your children.
Neither spouse, nor children, nor parents surviving
The intestacy laws of North Carolina provide additional rules for distributing your assets to more remote relatives. In the event that you have no other legal heirs (i.e., blood relatives), your assets will pass to the State of North Carolina.
I know this seems like a lot of information, but keep reading for a few more important items.
If you have minor children, the intestacy laws do not provide a means of appointing a guardian to care for your children.
Why would you want to leave it to the courts to decide who cares for your children after your death?
If you have minor children, it is not recommended that you leave property to your children outright.
Under North Carolina law, children are not allowed to own property. As such, if property passes to a child directly, either under a will or under the intestacy laws, the courts will appoint someone to manage the property on behalf of your child. This process can be time consuming, frustrating and costly. The person appointed must file an annual accounting each year reporting (to the penny) all money into and out of the children’s accounts. While this might seem like a reasonable protection, the result is that it often binds the hands of a surviving spouse or guardian that is caring for the children, for example, making it difficult to handle such day to day responsibilities such as paying mortgage, utilities, educational expenses, etc. It is instead recommended that you include a trust for minors in your will or have a separate trust agreement to provide for the management of the children’s property. Such a document can be drafted to protect your children while still allowing flexibility to the surviving spouse or guardian.
Problems can arise in blended families.
In families with step-parents or step-children, certain family members that you do or do not want to be included may not receive the treatment you would like. For example, if you are a step-parent that would like some of your property to pass to your step-children but you have not legally adopted the step-children, the step-children will not receive anything via intestacy.
Heirlooms and sentimental possessions may be sold.
Often people have special family heirlooms, family vacation homes or other sentimental possessions, that they want to ensure remain in the family and are not sold upon their death. If the property passes through intestacy, there is a greater likelihood that such property may be sold. Having a valid will can ensure property treatment of such sentimental property.
Equal may not be “fair.”
The intestacy statutes lean towards equal division of property to those within the same generation. For example, equal division among parents if your property passes to your parents, or equal division among children if your property passes to your children. The reality, for many, is that an equal distribution may not be a “fair” distribution. For example, parents with adult children often use wills to leave unequal amounts to their children due to particular circumstances. The parents may choose an unequal distribution because during lifetime they spent disproportionally more money putting one child through graduate school. Another common reason is that one child may have stayed close to home and taken on the caretaker role as the parents aged.
Special circumstances will not be factored in.
There are many, many reasons why intestacy will not fit most people’s wishes. Intestacy statutes are drafted with a “one size fits all” mindset, and just like one size fits all T-shirts, the intestacy laws often end up fitting very few people properly. The laws cannot take into account each person’s particular circumstances, so special situations will not be adequately resolved under the intestacy laws. Such special circumstances might include the need to provide for a special needs child, a pet, a business ownership interest, a close friend, charity, and so on.
My final word is this, call your attorney and get a will. Other documents to consider are powers of attorney, an advance medical directive, marital trust and children’s trust. For more end of life planning information, click here.
At the beginning of each New Year many of us resolve that this year will be the year of saving more and spending less but before the clock strikes 4 a.m. on January 1 of the New Year, you find yourself at Waffle House. The all night partying has created an appetite beyond belief and you need to eat NOW. An impromptu breakfast will cost you $10-$15 that you really don’t need to spend (nor did you plan to spend it). And that’s how you start the New Year…screw the resolution!
Hey, I’ve been there so I’m not judging. I know how hard it is to save. Especially when you feel like you barely make enough money to pay your bills and take care of all other life necessities. I can’t tell you how many times I truly wanted to start a savings plan but by the time I received my first paycheck of the New Year my resolution was no longer possible. After I paid my bills; bought groceries; and gassed up the car I had barely enough left over to make it until the next pay period. I’d pretend that everything would be okay and think to myself, “I’ll start next year.”
For a long time (even as I started my career as a financial advisor) my definition of savings was - a sought after but unattainable goal that my personal financial situation couldn’t sustain.
INSANITY – DOING THE SAME THING OVER AND OVER AGAIN EXPECTING DIFFERENT RESULTS (Albert Einstein)
Don’t dismay. It’s never too late to start and I’m going to help you. Why? Because I believe you still have time to retire rich. I know you can do it – it is possible! If I can change my life and change bad money habits, I know you can! But you have to make me a promise. You have to promise that you are going to commit to doing things differently. You can’t make the same money mistakes that got you into this financial mess in the first place, okay? So are you ready? Here we go.
NEW YEAR RESOLUTION #1 – GET ORGANIZED
Before you can move forward with a new financial strategy for your life, you need to be financially organized. Everyone’s financial life consists of giant paper trails and e-records. Being organized is emancipating…..it cuts down on stress so you can focus on actual financial management. Two types of organization are required: the physical organization of papers and electronic records, and the organization of data or information.
The physical organization of papers and electronic records. These are the paper or electronic records we find at home or work, in our bags and briefcases, on our computers, and in our wallets. They include a listing of your vital documents as well as your account numbers, passwords, and personal identification numbers (PINs). These statements and records are the sources of your core financial data, and they demand a simple filing system. Why? Because we need simple ways to file and retrieve financial records without wasting valuable time looking for critical statements and money papers.
A word about the electronic world. In recent years, new technology has transformed how we conduct our personal financial affairs. As you opt to do more of your financial transactions on-line, a new need has emerged: how/where to record all of those websites, account numbers, and PINs in your life. Think carefully about how to protect the privacy of this information, but at the same time, think about how the information might be needed by someone else should something happen to you. You need an electronic reference list, but you should be cautious about where you keep it and with whom you share it. Since this is very new territory, be sure that the information will not be open to snoopers. Keep up-to-date firewalls on your personal computer, and be very careful how you share sensitive financial information with others. Remember to list all types of electronic accounts that you use: checking accounts, brokerage accounts, retirement accounts, credit card accounts, bill-paying services or creditors, on-line stores you order from (yes, even eBay!), free subscriptions to financial newsletters, frequent flyer accounts, and other types of accounts. Sooner or later, you will forget an account number, log-in name, password, or PIN, which will be frustrating and cause you to lose a lot of time recovering from your memory lapse if you haven’t made a list of the information.
The organization of data or information. This is the information you need to know to make sense about the money in your life and how you want it to be directed and used.
Warning: DO NOT SKIP THIS STEP! The information you compile is vital to your future! If you are already “financially organized,” this will not take you as long as it would if you are just starting out. When you start your working and become independent, you need to start keeping records related to your financial life. Over the years, you will reorganize your files and records to meet changing personal and financial needs. Technology will also bring new ways to organize vital information.
Step 1. This is an easy step and an important one. Complete the Credit and Debit Card Safety Record. Much of the information is in your wallet or purse already, but you may have to find information from your credit card issuers to fill in addresses and telephone numbers. (Never keep PINs in your wallet.) Try to keep this record up to date.
Step 2. Complete the Vital Documents Inventory. Not all components will apply to you, and some elements of your financial life may not be listed. Be sure to add them. You can complete this task fairly quickly if you know where your documents are located.
Step 3. Complete the form, My Electronic Accounts, Passwords, and PINs. Be sure you keep this in a safe place. Do NOT keep this information in your purse or billfold where it could easily be stolen.
Step 4. Create a Financial Center at home (or as the Feng Shui advocates like to call it, a Wealth Center). This will be where you keep your financial records and conduct your financial affairs. If you use a computer, provide adequate space for it. Invest in a filing system (metal filing cabinet, baskets, or bins) and plenty of file folders. Some people prefer hanging files to non-hanging; let your own preference prevail. If you do not have the money to buy such equipment for your Financial Center, paper storage boxes will work just fine.
Step 5. Establish a filing system. In Step 2 above, you entered where you keep your vital documents. Now it is time to file them systematically. Develop a filing system. You may wish to use the file categories in the Vital Documents Inventory or create your own. Some people merely file everything alphabetically, and it seems to work for them. Label each file folder so you can easily find what you are looking for. Leave room for more files, which you will create as you work through other sections of the curriculum.
Step 6. Decide how to organize your electronic files. With many financial institutions now providing only electronic copies of statements, decide how you will keep these records. One option is to organize “file folders” on your computer that match the categories in your filing cabinet. You must also decide if you plan to print paper copies of your electronic statements as back-up. If you back-up your computer regularly, it may not be necessary; in the event your computer crashes, you would still have your records. But if you do not back-up your computer files regularly, you may decide it is better to print off vital records.
Next Issue: The State of North Carolina has Already Written Your Will
The section Get Organized was provided based on Wi$eUp, a financial education program developed by Texas AgriLife Extension Service (formerly called Texas Cooperative Extension) of The Texas A&M University System under a contract from the U.S. Department of Labor Women’s Bureau.
Cali Pearl Corporation and Therapist Leslie Kausch Team Up to Present Workshops to Combat Women’s Investment Challenges
Sherri Brown of Cali Pearl Corporation and Therapist Leslie Kausch are proud to announce a new workshop series entitled, “Women, Wealth and Wine.” The workshop series is set to address deficiencies and challenges women face as they work to invest and prepare for their financial future.
Greensboro, North Carolina, January 14, 2013—
When it comes to the differences between men and women, indeed, the list of characteristics is extensive. However, while it may be easy to debate Mars versus Venus personality traits until an individual is blue in the face, it is the difference in investment and savings tendencies which has interested Sherri Brown, financial planner and managing partner of Greensboro-based Cali Pearl Corporation, and Leslie Kausch, licensed counselor and therapist. Noting a recent article from U.S. News and World Report which discusses the biggest retirement challenges women face, including experiencing a longer life expectancy than men, lower workplace earnings, failure to take advantage of employer-sponsored retirement benefits and widowhood, Brown and Kausch decided to team up to address these issues as well as other factors women face in the investment arena through a new workshop series entitled, “Women, Wealth and Wine.” The workshop is scheduled to commence on January 24, 2013 and will be held at Active Healing in Greensboro. Subsequent workshops will be held on the fourth Thursday of each month.
“[Leslie] and I created a partnership, which I believe is the first between a therapist and a financial planner, to ultimately address and help conquer some of the self-sabotaging financial behaviors many women experience,” stated Brown. “However, the point of the Women, Wealth and Wine workshop is not to lecture, rather present educational information in a fun and balanced atmosphere. We want to instill women with the confidence they need in order to make positive and beneficial financial decisions.”
Brown goes onto note that the U.S. News and World Report article, while informational and realistic, backs up several studies on women investment behavior completed by major financial firms completed in recent years. She recounts an online survey completed by MassMutual.
“MassMutual completed an online survey between November 15, 2009 and January 15, 2010 which interviewed over 1,000 of the company’s retirement plan participants,” commented Brown. “What the survey found was shocking and disheartening, especially since I am a woman working in the financial services industry. The survey showed that women expressed feeling significantly less confident in making important investment decisions on their own and noted that they preferred an ‘avoidance strategy’ when the subject of retirement or investing was brought up. This is devastating information, especially when you realize the implications of women’s financial actions; they are either refusing to educate themselves, defering the decision making to a husband or partner, or choosing not to invest at all—these are all roadblocks.”
While there are still significant workplace earning equality challenges in the lives of many women, in approximately one-third of all American households women who are in relationships are the primary breadwinner. As such, these negative attitudes toward investing and retirement serve to not only hurt the woman in the relationship, but also her entire family.
Kausch agrees with Brown’s position and adds that she believes many of these attitudes toward finances are rooted in deeper psychological fears.
“Women’s lack of interest in financial planning is ultimately a type of fear, a sense of powerlessness,” opines Kausch. “Women often put themselves last when it comes to making important decisions and it affects their lives in tremendous ways.”
Whether single or married, Brown and Kausch have discovered that conversations about money inevitably lead to the realization of bigger life issues for many women and that while married women might automatically defer financial decisions to their spouse, single women who refuse to take charge of their financial futures might also be harboring other money-related issues, including using money as a way to feel loved, achieving a sense of purpose via shopping or through the acquiring of material possessions.
“As the MassMutual study shows and the U.S. News article proves, women have this tendency to voluntarily create financial disadvantages for themselves or use antiquated belief systems when it comes to being responsible for their own futures,” commented Brown. “At the same time, I’ve been working with women for a very long time and I’d like to say that each women is unique and has her own perspective when it comes to financial planning. This also leads to the fact that sometimes there are deeper issues that I cannot handle as a financial planner. That is why Leslie [Kausch] and I developed a partnership. I know what it takes to become a successful investor; Leslie knows how to address fears and other roadblocks that prevent a woman from moving their lives forward.”
The dynamic duo of Brown and Kausch are eager to instill their experience and open up the floor to have an informative and honest financial discussion with area women who are interested in taking the first step in addressing their financial futures or who want to change attitudes regarding their role in creating an effective financial plan. The Women, Wealth and Wine workshop is open to the public and interested individuals can find out more information about the workshop by visiting www.calipearl.com/womenwealthandwine.
Cali Pearl Corporation is a privately-held fee only investment advisory firm based in Greensboro, North Carolina. Cali Pearl has created programs specifically tailored for women that address what women need, want, aspire to and expect in a happy and fulfilled financial life. The company is well-versed in providing services and advice related to investment management, insurance, risk management, trust and estate planning, financial planning and banking services to meet short- and long-term objectives. Cali Pearl Corporation can be contacted by visiting www.calipearl.com or calling 336-808-3496.
Leslie Kausch, Med, NCLPC, NCC is a licensed therapist and counselor who specializes in helping adults and young women address relationship issues, power dynamics, conflict resolution and issues related to confidence, anxiety and more. A graduate of the University of North Carolina at Greensboro, Kausch can be reached by calling 336-509-3680.