A wedding is typically a happy event, but what comes afterward can be anything but pleasant, if the newlyweds haven’t planned how — or whether — to integrate their financial lives.

That conversation is one that must happen as soon as possible, preferably long before the bouquet is tossed, says Pete Blackwell, certified financial planner at Spokane-based Blackwell Financial Services LLC, located at 7307 N. Division, in Spokane. 

“The largest single contributing factor in divorces in the U.S. today is money problems,” Blackwell says. “What I’ve found is that a great deal of those money problems could be avoided if people would just talk about it.”

Bruce Longmeier, president of Northwest Planning Inc. in downtown Spokane, says while having the financial talk with a spouse-to-be can feel daunting, it’s necessary for the success of a union that merging personal assets and debts be treated as a business transaction.

Blackwell says a couple planning to marry should discuss their financial goals and priorities, their savings and other assets, as well as any outstanding debts. Next comes the decision of whether and how to integrate checking accounts. There are three models to choose from: fully integrating finances through a joint account, partially integrating via one joint account and two additional separate accounts, or keeping finances separate by retaining individual accounts.

The best method depends upon personal preference, Longmeier says.

“I have clients who have been married for 30-plus years who do not comingle their funds except for mortgage payments,” he says. “For the most part, they have separate checking accounts. They’ve come to some sort of agreement: you pay these bills; I’ll pay those bills.”

Blackwell says there are two types of joint checking accounts. The first, most common type is called a joint account with rights of survivorship.

“If one of us dies, everything in that account automatically belongs to the surviving party,” Blackwell says.

The other type is called a joint tenants in common account.

“That’s used a lot for people in their second marriage, or who have kids from a previous marriage,” he says. “Maybe we’ve put all our money in a joint account, but I want the wealth that I’ve accumulated since I finished college to go to my kids. I don’t necessarily want it to go to your kids.”

Some couples are making the decision of whether to integrate finances easier by deciding not to get married in the first place.

A 2014 Pew Research Center report found that 25% of young adults ages 35 to 44 in 2010 will remain unmarried by 2030. Meanwhile, Longmeier says he’s noticed more older clients who have been married previously deciding to cohabitate with their partner, forgoing the legal bonds of marriage altogether.

“We’re talking people in their late 60s, 70s, and even 80s,” he says. 

For couples intent on getting married who have decided whether to integrate checking accounts partially or fully, Blackwell says the next order of business is establishing a budget, followed by establishing each other as beneficiaries.

For some couples, a prenuptial agreement could be the best way for both people to protect their assets, he says.

“A prenup might be good any time there’s substantial wealth already involved in the relationship, particularly if it’s on one side,” Blackwell says. “Or a prenup could work both ways: you both have wealth, and you want to ensure that the wealth goes where you wanted it to go to start with.”

Longmeier says one common misconception about a prenuptial agreement is that it can protect the assets of one spouse if, for example, the other spouse must receive long-term health care. Longmeier busts that myth, noting that health care costs apply to the finances of both people, no matter which partner is sick or whether they have a prenuptial agreement, and that many married couples in this situation are forced to ‘spend down’ to qualify for Medicaid. 

“If you’re going to qualify for Medicaid, the state looks at the couple as a whole, as opposed to individuals,” Longmeier says. “The state doesn’t care what side has the money.” 

But a prenuptial agreement is a good idea for people who are entering a second marriage, Longmeier says, especially if there are children from a previous marriage, or there are business interests that need to be protected. 

“You’ve got to have some documented way to protect those people,” Longmeier says.

A prenuptial agreement also can be beneficial if one spouse becomes disabled in such a way that they can no longer look after their own finances. Longmeier says that without such an agreement, the children or legal representative of the disabled spouse could make decisions about the couple’s assets that the abled spouse opposes, potentially leading to court battles. 

He cautions, however, that a prenuptial agreement isn’t a cure-all. 

“It doesn’t cover the costs of a lengthy court battle or legal fees if somebody is challenging the prenuptial agreement,” Longmeier says. “We’ve seen situations where attorney’s fees can be a huge expense just in trying to enforce a prenuptial agreement.”