How to Be a Smart Spouse
No one wants to be blindsided by a negative financial situation, particularly one created by one’s spouse.
California protects spouses during marriage, by establishing that each partner has a fiduciary duty to the other. The state treats spouses as business partners. The partners are required to provide full and complete information to each other about property, finances, and income.
Similar to business partners, both parties in a marriage should know their financial picture (i.e. what assets, debts, liabilities, or other obligations they have). Both spouses should open the mail and know what bills exist, how they are paid, and be prepared to take over paying those bills and handling the finances at any time. In the event of illness, each partner should be able to continue to run the household smoothly. Each should know exactly where to find important documents (estate plans, etc.) in the event of an emergency.
If one spouse has a business, the other spouse should attend all financial meetings to understand how the business operates and how it is doing financially. It is common for spouses to delegate responsibilities, but both spouses should be involved in a family business to understand it. Both parties should meet with their CPA at tax time and understand their tax obligations.
Not only is it a good idea to be a smart spouse who can handle things in the event of an emergency, knowing what is going on financially, prevents surprises and allows both marital partners to make informed financial decisions. Transparency leads to financial trust and security.
Vanessa Soto Nellis is a California Bar Certified Family Law Specialist.