How to Protect Your Assets While Dating

January 23, 2024

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Dating should be an exciting journey in your life, no matter if it’s your first time or you’ve been on the rodeo before. But as with any love, it comes with the risk of heartbreak, and when there are assets involved, things could get messy. You may end up hurting yourself and your loved ones if the relationship doesn’t work out.

But where do you start? Here are some tips to consider at each stage of your dating life.

A new beginning

So you’ve met a potential match and you’re at an exciting stage of discovery. Most likely you both shared details about your dreams, your hopes, your jobs, your family, and your future.

Then you may start to notice little perks of habit when it comes to money – perhaps your date likes to buy you gifts, but when does that become too much? Or you like to pay for meals – but not all the time. Maybe you noticed your date likes to splurge and buy expensive items that they could not have afforded on their wages alone.

Asking your date for their credit score is probably uncomfortable and even off-putting, but according to a SunTrust-Harris Poll survey, a third of respondents say finances were the top cause of friction with their partner. Maybe it shouldn’t be a first date question, but knowing where your potential partner stand in their finances could help minimize distrust and conflict in the future.

If you feel you have connected with this person, it’s important to have open dialogue about money to lay the financial groundwork towards shared dreams. This could be an uplifting process that may strengthen the relationship.

Moving in together

Could this person be the one? Moving in together could be a major step into forging a serious relationship. If you haven’t talked about money before, now can be a good time to bring it up.

How will you share the costs? If one of you is expected to provide for all the costs, what is the expectation of the other in terms of household contribution?

It’s important to be upfront about how you as a couple want to divide your finances – for instance, whether each person maintains their own assets and debt, or you may choose to share.

Who owns the assets and debt if you’re not married?

Legally, unmarried couples are presumed to own their own property and debts unless you deliberately combined your assets – such as opening a joint bank account or adding both names on a deed to your house.

Generally, joint assets are owned in equal 50-50 shares unless there is proof of a different agreement, or in some instances, where one partner clearly made a greater contribution and can prove it. This is when things can get muddy when you start pooling your funds or buying property together, but here are some things to consider before you legally sign your names to joint assets.

Commingling funds

Once you start funding an account together, it’ll be hard to determine what portion belongs to who if you break up. Before you start commingling your funds together, document your finances by saving bank statements, transfers, and intentions for the joint account. That way you have a record of what you brought to the joint account and proof of your contribution.

Cohabitation agreement

Also known as a “living together agreement” or “unmarried couple contract”, this is a legal document outlining what you want and could cover every aspect of your relationship.

For example, it could be an agreement drawn up just over the ownership of a property. You could also outline a more detailed agreement that covers how you split the bills and assets, how one partner can support a stay-at-home partner, or perhaps one partner pays the student loan of the other, etc.

If you have a child together (or plan to), you may want to be clear on what happens to your assets in case of separation. You may want also a document to clarify what your partner is entitled to if one of you dies.

It’s a good idea to seek legal advice to ensure this document is clear for everyone involved.

Getting married

Congratulations on taking the big step towards saying “I do.” Before you start planning your big day, make sure you’ve been clear and open about what assets (and liabilities) each one of you would bring to the marriage.

Of course, few would get married expecting a divorce later, but having an honest conversation about assets and debt could help strengthen trust between couples.

Marital property

From the point when you say, “I do” and sign the marriage registry, any assets and debt accumulated going forward could be considered marital property. This may include paychecks, businesses, investments, real estate, and employment benefits, as well as retirement plan, pension plan, and 401(k).

The best way to keep record of your separate property is to document everything in your name prior to the marriage. Download copies of the most recent statements just before your wedding and save them somewhere you will remember.

Good to know: If you have any non-retirement accounts that you wish to keep separate and pre-marital, think twice about putting any new money into the account that isn’t also separate or pre-marital. For example, if you have a high-yield savings account with $30,000 and wish to keep it clearly pre-marital, be aware before depositing your paycheck that after marriage it could be considered marital property. It could be a challenge later to prove that this account is separate once you mix the funds.

Prenuptial and postnuptial agreements

One tool that can help outline the ownership of property, or how marital property would be divided should the couple separate, is the prenuptial agreement. While it’s not the most pleasant thing to talk about before your wedding day, it is useful in protecting separate property, future wealth, and against debt.

Separate property: Even though you may not add your spouse on the deed to a house you owned prior to the marriage, if you used marital funds to maintain it or sold it and used the proceeds to buy another house, it may be complicated to claim it as separate property unless you clearly define this in an agreement to be your property.
Future wealth: Prenuptial agreements could also protect future financial security. For example, couples commonly sacrifice one of their careers in order to look after children, and that could seriously erode that individual’s future earning capability. Having an agreement could help secure both parents’ future should one decide to step back from work and support the family.
Debt: Prenuptial agreements could also be used as a tool against debt collectors. For example, if a partner has terminal illness, a prenuptial agreement may protect the surviving partner from inheriting the medical debt after death.

If you choose to draw up an agreement after the wedding, then it is postnuptial.

There are online tools that have helped make prenuptial agreements accessible to everyone, but generally, it’s best to seek matrimonial legal advice to ensure there are no surprises.

For some couples, talking about money could get emotional, so you may want to think about bringing a professional counselor or financial advisor into the conversation to help facilitate any potentially difficult discussions.

No matter which way you go, communicating about financial scenarios between you and your partner could help foster a mutual understanding of financial responsibility from the get-go.

This article is for informational purposes only and is not a substitute for individualized professional advice. Articles on this website were commissioned and approved by Marcus by Goldman Sachs®, but may not reflect the institutional opinions of The Goldman Sachs Group, Inc., Goldman Sachs Bank USA, Goldman Sachs & Co. LLC or any of their affiliates, subsidiaries or divisions.