Turn up the lights, turn down the music and forget about romance.
It's time to face the business side of marriage.
Cold as that may sound, the Census Bureau recently released data that should make even the most blissfully married couples forget pheromones and focus on finances.
According to the Bureau, the length of first marriages has been getting steadily shorter since it started collecting such data in 1955. Of couples married back then, about 70% made it to their 25-year anniversary. Now, fewer than half of couples who were to celebrate their silver anniversary sometime after 2000 actually ended up doing so. The majority of marriages ended, due to divorce, separation or death.
"Even the most optimistic people have to ask themselves, 'What financial shape would I be in if my marriage ended?'" says Marilyn Capelli, a financial adviser in Bloomfield Hills, Mich.
The most effective way for couples to button down their finances is through a prenuptial or postnuptial agreement. But many people are reluctant to even raise the possibility of drafting one because it seems so, well, out of sync with that bit about "till death do us part."
Short of one of those contracts, there are some moves that may help you land on solid financial ground, no matter what happens.
Protect Your Inheritance
If you receive a large gift or inheritance before or during your marriage, keep the assets in your own name. If you deposit them into an account you share with your spouse, they may be divvied up in a divorce. If they remain in your name, you keep them.
Don't Get Tangled in Debt
Spouses with different spending habits should hold credit cards in their own names. That way, any massive debt accumulated by one spouse won't end up being a shared responsibility in a divorce.
Plan Ahead With Care
Couples wealthy enough to worry about estate taxes are typically advised to title assets so that each spouse has an amount equal to the estate tax exemption in his or her name (the exemption is now $2 million per person). Here's why: When kids inherit assets, they can potentially benefit from each parent's exemption and inherit $4 million free of estate taxes. But if one spouse dies with no assets in his or her name, that spouse's exemption may be lost.
But be cautious. "If you came into the marriage with money and you title some of it to your spouse, you lose control over it," says Lisa Osofsky, a planner and accountant at Weiser LLP in New York.
There is a way to avoid this and still preserve the estate-tax exemptions: Create an irrevocable inter-vivos (meaning it goes into effect during your lifetime) QTIP trust. Fund it with the assets you would have titled to your spouse. Name your kids as beneficiaries, and they will inherit the assets upon the death of your spouse. They will be able to apply your spouse's $2 million estate tax exemption to the assets inherited through the trust.
Whether you remain married or not, your spouse will be entitled to income from the trust, "but you still protect the principal," Osofsky says.
In traditional arrangements, where the husband brings in a paycheck and the wife stays home raising the kids, "it's critical that the woman be involved in the finances, maintain a credit record and stay as updated as possible on whatever career skills she has," Capelli says. "While being committed to our families, people need to keep our awareness alive and the doors open."
Karen Hube is a freelance writer and former reporter for The Wall Street Journal and Money magazine.