Love and money are two of the most significant forces in any relationship, but they don’t always go hand in hand. Studies show that money is one of the leading causes of conflict in relationships, with financial stress impacting trust and intimacy. Finances are a primary source of conflict in 40% of disagreements and financial issues among spouses are the second leading cause of divorce.

In many cases, open communication can make a major difference. Researchers have concluded that couples who engage in regular financial discussions experience improved relationships and financial well-being. By addressing finances head-on and treating wealth as a shared responsibility, couples can foster a healthier financial relationship.

Below, we share our practical strategies to help navigate money matters, plan for the future, and build a lasting legacy together.

align on long-term goals

• To start, create a shared vision. Do this collectively by defining what wealth means to you and your partner including, lifestyle, philanthropy, legacy, and multigenerational impact.
• Work with a financial advisor. A trusted advisor can help facilitate discussions around important topics like planning, spending habits, investment strategies, and risk tolerance.

Navigate financial conflict

• Discuss and understand behavioral patterns. You and your partner may have different perspectives on money and wealth, likely stemming from upbringing and previous experiences. Having an honest discussion may help reduce misunderstandings between you and your partner.
• Create a balance between individual and joint decisions. Create room for personal spending accounts within your shared financial framework.

plan for the next generation

• Establish trust and estate plans. Work with your advisor to create a plan that outlines inheritance structures for the future. These should be regularly reviewed based on circumstances like new tax laws.
• Consider family governance. For high-net-worth families, formalizing a decision-making process and creating family councils to manage wealth and legacy can head off family arguments and position the family for long-term success.

manage business and investments together

• Align risk tolerance with your partner. Work with an advisor to regularly review your and your partner’s comfort levels regarding investment strategies and risk exposure.
• Make decisions together. You and your partner should both be included in significant investment decisions.

plan for contingencies

• Establish emergency protocols. Create a financial plan in the event you or your partner is incapacitated or passes away.
• Use life insurance. Consider using policies if your financial situation and estate plan will not cover estate tax or wealth replacement.

Viewing wealth as a shared responsibility and engaging in honest discussions about finances can contribute to a healthier relationship. Addressing potential conflicts, understanding each other’s perspectives, and planning for your future together can strengthen your financial relationship.

At Fulcrum, our team of advisors can help you navigate these complex issues. Please reach out if you or someone you know needs help planning for the future.