We have a new category at Queercents called Sleeping with Money. These are financial lessons learned from partners (past and present) including men and women we might have dated for two minutes or perhaps only knew for one night but walked away from the experience with some insight to share about money. These are our stories (and yes, names have been changed where needed to protect the innocent).
“Those who cannot learn from history are doomed to repeat it.” — George Santayana
I’ve had three partners with a few girlfriends in between:
Partner #1: a lovely and very wealthy woman.
Partner #2: we had good years, followed by one very bad year resulting in the “crazy lesbian breakup” with all the drama of the L Word.
Partner #3: Jeanine, who I intend to be with forever. That said, experience made us sensible and early on we put in a place a financial exit strategy if either one of us decided it was time to part ways. I realize that this sounds so dreadfully unromantic but part of our success as longer term partners has been due to our mature and practical approach with how we relate on so many levels… finances being just one of them.
Girlfriends: I’ll save this for another post, but there are a handful of stories to share, money and otherwise.
Awhile back there was a lesbian musical that enjoyed a healthy run in LA called The Break-Up Notebook. It cleverly dealt with many issues that women experience with a break-up except finances. It wasn’t mentioned. Perhaps, it’s because there isn’t a lot humor when it comes to people fighting about money. Case in point: did anyone really like the movie the War of the Roses? That’s why it was labeled a dark comedy.
When Jeanine and I first met, she described me as a woman scorned. I guess you could say the wounds were still fresh even though a year had passed since my break-up with Partner #2. I was bitter about why I had been left but also still dazed about how two people (supposedly once in love) could have such a fight when it came to dividing up assets. There were lawyers, threats of restraining orders, and missing financial documents. We’re lucky that we didn’t end up in court.
Unfortunately, the same rules don’t apply to queer couples as married ones. Partner #2 and I were not domestic partners, so it was more like dissolving a business partnership than a marriage. However, there are “pre-divorce” tips I would have benefited from had I known what I know now.
Right after Valentine’s Day, The New York Time ran an excellent article called: Who Gets to Keep the Barry Manilow Records? Hillary Chura writes, “With divorce as prevalent as ever, separating couples may not realize that the most significant ways to stave off financial problems probably come months before the lawyers start hashing out child support, alimony and other issues. Laws vary by state, but people can use myriad tools to protect themselves in advance of a divorce.”
“Divorce mediators, financial planners and other specialists urge people considering divorce to request a copy of their credit report and to make copies of important financial documents ” bank statements, retirement accounts and tax returns, as well as mortgage and loan applications ” before they move out.”
“In addition to updating wills and insurance beneficiaries, divorcing spouses should find their own advisers, including lawyers, accountants, financial planners and insurance providers. One of the most important exercises, however, is to anticipate a change in lifestyle, perhaps even find jobs, and get command of their budgets, especially if they have assigned Quicken to the spouse over the years.”
“People who have been covered under a working spouse’s health insurance should look into their own coverage as they probably will not be on their spouse’s once the divorce is final. Conversely, a spouse who has been paying for the other’s health, auto or other insurance coverage should not let it drop until a judge gives the approval to terminate. People with children or other dependents should also have life and disability insurance.”
Guilty as charged. Even though Partner #2 and I were not registered domestic partners in the State of California, she was covered on my health insurance and I dropped her without notice. Of course, it was in retaliation to her threat of suing for more than half of our assets. But it was stupid move on my part and I regret playing that card.
The article continues, “Advisers also discourage clients from racing to the bank teller and draining joint accounts. At most, they say, people should remove just half of the funds or freeze the accounts so that both signatures are required to withdraw funds. Canceling joint credit cards is also smart because both parties may be responsible for debts even if they are run up by one spouse.”
In a sidebar, Chura provide a list of Things to Think About Before the Breakup. I think they are important to keep in mind that I’ve reprinted them below:
1. People contemplating divorce are advised to safeguard their money even before they start haggling over alimony. Divorce mediators, financial planners and other specialists say they may want to consider doing the following:
Freezing joint bank accounts and opening a separate one.
2. Canceling joint credit cards, splitting the balance. If debts cannot quickly be paid off, consider transferring balances to other credit cards.
3. Obtaining a copy of credit reports and make copies of bank statements, tax returns and mortgage applications and other financial documents.
4. Updating wills and insurance beneficiaries.
5. Anticipating a change in lifestyle: assess whether a new job is needed; establish a budget for a second household; set up a rainy-day fund to cover expenses for several months.
6. Creating a financial team and setting up or revising estate plans.
7. Taking inventory of valuables like real estate, cars and jewelry. Obtain independent appraisals.
8. Buying life or disability insurance if dependents are involved.
9. Looking into selling a home before the divorce, when there are two owners, to avoid capital gains penalties.
Of course, much of those depend upon people being able to talk civilly which often times can’t happen in the heat of a break-up. All the more reason, that couples should talk and develop an “exit strategy” while things are good. Many problems can be avoided by creating a domestic partnership agreement and registering as domestic partners if your state allows.
Love and money. There’s so much to write about… more stories another day!