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Marriage and Mortgage
You've talked to your future spouse about sex, children and politics, but have you tackled really difficult subjects like money, credit and finances? When you marry someone, you marry his or her credit history, too. Unless you earn enough to pay for houses, cars and other large expense items on your own, your spouse's credit will be "married" to yours when you apply for a home loan or credit card.
Before you say, "I do" it's a good idea to get a copy of each other's credit history, which you can do at www.myficoscore.com. Use the reports and discuss the debts you each bring to the marriage and how you'll get rid those charges. Don't fool yourself into thinking that a future spouse with bad credit won't affect your financial life. If your fiancee has unpaid child support or court-ordered judgments, his or her creditors may try to sieze joint assets, such as a home you own together.
If your fiancee has poor credit and you pay your bills on time, try to convince him or her that you should be responsable for all bill paying. If you both have poor credit, sit down and plan your post-wedding monthly budget and don't add to your money troubles by financing an overly expensive wedding.
Is this your second marriage? Ask an attorney to set up a pre-nuptial agreement. Also, consider a trust for assets you want your children to inherit, otherwise his kids could end up with everything if you die before your husband. Even if you pay the mortgage and all the home-related bills, your home may still become a joint asset if you live together long enough.
If you each have a home, consider converting one of the houses into a rental property, instead of selling it when you move in together. Owning a rental property can help balance your savings portfolio. And, since rental income usually rises over the years, a property could be a good source of extra retirement income.
For a bit of extra insurance, have the house you bring to a marriage appraised just before the wedding and tuck the appraisal away in case you need to prove the home's value in the event of a divorce.
If you have two houses and decide to sell one, consider the capital gains consequences. You will not pay capital gains taxes on your home sale profit if the home has been your principal residence for two of the past five years. So, you may want to sell first and marry second. You can then move into your new spouse's house, wait a couple of years and qualify for the capital gains tax rule again.
Married couples usually prefer to own their homes as tenants by the entirety. This means that if one of you dies, the other automatically inherits the house without having to go to probate court.
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