The best way to avoid conflicts over money in marriage is to talk about your finances before you get married. Couples should discuss their financial situation, including income, assets and debts, as well as their financial expectations in marriage. This also includes finding out what kind of marital lifestyle each side envisions. You and your fiancé should be on the same page, or disputes are likely to arise later. If matters escalate and you end up divorcing, marital lifestyle will become important for a different reason, potentially affecting how your property is divided as well as spousal and child support.
Pre-Marital Discussions of Lifestyle
Many people are uncomfortable discussing their finances, but you must be able to have open and honest communication about money with your future spouse. Knowing your fiancé’s finances, values and expectations allows you to plan your life together even if you decide to keep much of your finances separate. You can work out how to deal with financial issues during marriage, including your lifestyle, to minimize disagreements.
Once you’ve talked about these issues, you should consider a prenuptial agreement. Contrary to popular belief, a prenup is not just for wealthy people. It benefits any couple by compelling them to disclose their finances and learn how to talk about and resolve difficult money issues early on. In particular, it is helpful for anyone who has significant assets, income or debt, is remarrying, or has children from prior relationships or inherited wealth.
In the event the relationship does end, a prenup also allows you to determine in advance how you want to divide your assets and provide for spousal support. In the absence of a prenup, you will have to negotiate these issues in divorce proceedings or litigate and have a judge decide. Both can be time-consuming and expensive. You can also contractually address estate and legacy planning concerns in a prenup.
Marital Lifestyle Issues in Divorce
Marital lifestyle can be a consideration in how a court divides marital property in divorce. While it isn’t one of the statutory factors for equitable distribution, it may be a consideration in certain cases. For example, under some circumstances, a lesser-earning spouse may receive a larger share of the assets if a court deems that it is just and proper because his or her earning capacity could never become what the higher-earning spouse earned during a long-term marriage. In that situation, a court may consider the lifestyle of the parties during marriage, along with other factors, in deciding how much of the marital assets to award the lesser-earning spouse.
Support awards are also affected by marital lifestyle. Generally, temporary spousal support during divorce proceedings is granted in an amount consistent with the marital lifestyle. However, this support ends when a separation agreement is signed or there is a final court order resolving support issues and a divorce judgment is imminent.
In New York, as with interim prejudgment spousal support, a final spousal support award is determined using a statutory formula that varies depending on whether the recipient is also getting child support and whether the payor’s income exceeds an income cap. (The cap is $228,000 until at least March 1, 2026.) If a spouse’s income exceeds the cap, then the court can consider a list of statutory factors to determine support, one of which is the couple’s standard of living established during the marriage. Therefore, under the law, two different couples with the same income may pay different amounts of support because one had a more expensive lifestyle.
Similarly, child support awards also use a statutory formula. The amount varies depending on the number of children up to an income cap of $183,000 (in effect until at least March 1, 2026). If the parents’ combined income exceeds the cap, the court can consider additional factors, including the child’s standard of living.
Additional Considerations
Most people don’t choose their standard of living with divorce in mind. However, if your marriage is starting to deteriorate, you may want to consider your lifestyle to avoid paying more money to your spouse. Also, keep in mind that once you do separate, your expenses will go up anyway because it is usually more costly to support two households than one. Either way, review your expenses.
If you are considering divorce, consult an experienced family law attorney to help you understand your rights and obligations. Contact us today to learn how we advocate for the best result in your case.
