Bare all debts, assets before the big day

When it comes to weddings, the real horror stories aren’t about someone’s great-uncle getting soused at the reception. Too often they’re about money.

There’s one about the bride who found out that her husband had a $20,000 tax debt only after the IRS put a lien on her home. A story of an otherwise happy marriage laid to waste by the wife’s compulsive spending. One about a bride who canceled the nuptials after finding out that her fiance had paid his gambling debts by draining the joint account they’d established to pay wedding bills. And the divorces blamed on irreconcilably divergent financial goals are legion.

These unromantic outcomes can all be traced back to one thing: a failure to communicate.

“Talking about money before you get married is critical,” said Brent Kessel, chief executive of Kubera Portfolios, a Pacific Palisades money management firm. “Money is one of the leading causes of divorce.”

To be sure, money can’t buy you love, but candor on the topic certainly can help your marriage. Conversely, a couple’s inability to share financial facts can be a negative leading indicator for their relationship.

“If you feel like you can’t talk candidly about money, I’d consider it a really bad sign for the marriage,” said Mark Wilson, a financial planner with Tarbox Group in Newport Beach.

The discussion doesn’t have to be painful. Sharon Epperson, author of “The Big Payoff: 8 Steps Couples Can Take to Make the Most of Their Money and Live Richly Ever After,” suggests scheduling a “money date.”

What needs to be shared on that date -- or at least before the date of your wedding?

Credit reports

You are entitled to get a free copy of your credit report once a year from each of the three national credit bureaus by requesting it at www.annualcreditreport.com. The process is painless: You can download and print out a report in a matter of minutes. That gives you and your betrothed the opportunity to do a report exchange.

What should you look for in your intended’s file?

First, are your credit reports similar? Do they show that both of you are responsible with debt -- or both irresponsible? Does one of you have considerably more debt than the other?

Check for surprises, suggests Judi Martindale, a financial planner in San Luis Obispo. Is there a bankruptcy, a foreclosure or a series of late payments?

It doesn’t mean you need to call off the wedding if you find a nasty surprise, Martindale said. But you certainly should have a serious discussion about why this was something you didn’t know.

Realize, too, that if you get married, your spouse’s bad credit can harm your ability to buy a house or get a low-cost credit card or auto loan. You also may be held jointly liable for debts.

Balance sheets

While you’re at it, share information about your income and assets, Epperson suggested.

“Most people know what they make, but some haven’t paid any attention to how much they’ve accumulated in the 401(k),” she said. “You need a reality check. Look at your net worth.”

For a young couple starting out, net worth may be a misnomer. Often, it’s net debt. But for couples who marry later in life or remarry, there may be plenty of assets to consider. You should talk about whether you want to keep those assets separate or combine them.

If there are children from previous marriages, it’s wise to discuss estate planning too. Does one or both of you want to preserve assets to leave to children from another marriage?

“It gets really sticky when you have kids from previous marriages,” Kubera Portfolios’ Kessel said. “What amount belongs to your kids from the former marriage? What goes to the kids from the current marriage?”

There are no right or wrong answers. But Kessel says blended families-to-be would be wise to consult a family law attorney to consider the possibilities.

Agree on details ...

Have you discussed who will make sure the bills are paid? Do you plan to have a joint account or two individual accounts from which each of you will pay half of each bill? Or perhaps three accounts: his, hers and ours? Who will write checks?

Do you plan to discuss any significant purchases before they’re made? If so, how do you define “significant”? Will each of you have “an allowance” or some money that’s yours to spend as you wish?

If your income and assets are dissimilar, does it affect how each of you is able to spend money?

And if your incomes are similar, what happens if that changes? For instance, do you want to have children? Will one of you stay home with the kids for some period of time? If so, you also should discuss how money will be handled when one parent isn’t working.

No matter how the bills are split, husband and wife should each have a working knowledge of the checking account: how much comes in and how much goes out, Tarbox Group’s Wilson said.

“If somebody dies or you divorce, you both need to know that the gas bill needs to be paid each month,” he said.

... and your dreams

Now that you’re talking about children, talk about the other big things that you want in your life.

Is it a big house with a picket fence, or would you be happy with a small apartment? Do you aspire to send your children to private schools? If so, are you ready to sacrifice -- possibly mightily -- to pay the cost?

Is your top financial goal a retirement plan, a college account or a Ferrari? When do you hope to reach those goals?

How much of your income do you think you ought to save? If you had to tighten your belts to reach a financial goal, what would each spouse be willing to give up?

Finally, try this exercise in which each writes down the answers to these questions: If you came into a financial windfall of $10,000, what would you do with the money? What if it were $100,000? Or $500,000? Would it change the way you live?

Exchange your answers and discuss.

“Your financial goals say a lot about you,” Kessel said. “They spell out what gives you safety and security and what you most value in life.”

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How some cities compare on costs

Average wedding costs, by city

*--* Las Vegas Phoenix Dallas Chicago Los Angeles New York Site, food and $12,680 $12,037 $12,258 $23,117 $20,391 $30,094 drinks Photos 1,700 1,910 2,093 2,377 2,751 3,352 Event planner 1,905 1,633 1,355 2,014 1,900 3,167 Florist 680 740 1,477 1,661 1,945 2,605 Gown 1,116 1,031 1,307 1,336 1,435 2,297 Video 1,000 1,455 1,500 1,546 1,780 2,147 Music 883 772 836 1,012 1,116 1,677 Cake 398 382 649 568 512 877 Total* $15,257 $16,516 $19,677 $25,332 $26,930 $40,000

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*For each city, the total is less than the sum of individual costs because some couples do without certain services.

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Source: Knot Inc.