Navigating Conflicts of Interest When Spouses Hold Separate Property
Help married clients understand the consequences of converting Separate Property to Marital Property.
As summer approaches, so too does wedding season. CFP® professionals working with couples preparing to say “I do” should also be prepared for potential conflicts of interest that can arise in marital Financial Planning Engagements, particularly when one spouse brings significant Separate Property into the marriage.
Combining household finances is a transformative event. CFP® professionals may need to educate newly married couples
about actions that could unintentionally convert Separate Property into Marital Property. Clients should understand that these decisions often cannot be undone and may be irreversible without the other Client’s consent.
Examples of Separate Property include:
Assets in a bank or investment account accumulated before marriage
Real estate acquired before marriage
Funds in a retirement account accumulated before marriage
A preexisting business interest
An inheritance bequeathed before or during marriage
Proceeds from a civil judgment awarded before or during marriage
CFP® professionals serving married clients should have command of how Separate Property may be converted into Marital Property and where conflicts may arise.
An Illustration: Spousal Inheritance Creates a Potential Conflict of Interest
Wanda, a CFP® professional, has provided financial planning to married clients David and Maria for more than 10 years. The couple has a joint Financial Planning Engagement with Wanda as well as a joint and individual accounts with Wanda’s firm. After Maria’s father passes away unexpectedly, Maria learns that she will receive an inheritance from her father’s estate. Maria and David do not have a prenuptial agreement addressing inheritances.
Maria is considering using the inheritance to pay down the couple’s mortgage. Wanda must educate Maria about the fact that the inheritance is Separate Property and explain the potential consequences of using those assets to pay down jointly owned property, including that converting Separate Property into Marital Property often cannot be undone and may be irreversible without David’s consent. If Maria decides to proceed, Wanda may provide Financial Advice consistent with that decision. Wanda also should consider documenting the discussion and sending a communication that reflects the discussion and Maria’s determination.
As this example illustrates, couples may not fully understand each other’s assumptions or expectations regarding money and ownership. CFP® professionals in joint Financial Planning Engagements should identify disagreements early and help clients navigate those differences in pursuit of shared goals.
Explore Compliance Resources for the Code and Standards
To help CFP® professionals understand and comply with the Code of Ethics and Standards of Conduct, CFP Board has developed a robust Resource Library that contains a variety of guidance resources, including compliance checklists, FAQs and short videos addressing key elements of the Code and Standards.
A recent update to CFP Board’s Competency Standards now allows holders of the Certified Investment Management Analyst® (CIMA®) designation to pursue CFP® certification through the Accelerated Path. This pathway allows CIMA® holders to waive most of the coursework requirement for CFP® certification and sit for the CFP® exam more quickly. Learn more at CFP.net/CompetencyStandards.
More on Health Savings Accounts
In the March issue of Knowledge for Practice, we covered a recent law change allowing all bronze and catastrophic-level plans on the Affordable Care Act (ACA) marketplace to qualify as high-deductible health plans (HDHPs) that can be paired with health savings accounts (HSAs). Prior to the law change, only a few bronze and catastrophic-level plans qualified as HDHPs, but those that did could be paired with HSAs.
While an HSA owner who is age 65 or older can take a taxable distribution for any purpose, a younger HSA owner who uses the assets for any purpose will be subject to a penalty in addition to taxes on the distribution. If HSA distributions are used for qualified medical expenses, the distributions are tax- and penalty-free for an HSA owner of any age.
It’s important to pay close attention to what counts as a qualified medical expense. For instance, seniors can use HSA money tax-free to pay for Medicare premiums, because those are a qualified expense, but an HSA distribution would be taxable if it covers Medigap policy premiums, which are not a qualified expense.
Join Us in Las Vegas to Earn Up to 15 CE Credits
Register by July 10 to save $200 on CFP Board Connections Conference, October 5-7, 2026, in Las Vegas. Featuring keynote speakers Michael Kitces, CFP® and Theron Schaub, this conference brings together practitioners, firm representatives, financial services innovators, researchers, students and Registered Program faculty for three days of ideas and collaboration. Connect with peers, gain practical insights and earn up to 15 CE credits.
While 83% of Americans say they’re comfortable talking about money with at least one person, many remain reluctant to admit financial struggles to family, friends and colleagues. CFP Board's recent research, Financial FOMO: A Survey About Money and Relationships, found that 67% of Americans have declined social events in the past two years primarily due to cost — yet 56% never told loved ones that money was the reason. From trips with friends (30%) to family holiday gatherings (23%) and weddings (13%), Americans are missing major life events because of financial pressures they feel unable to discuss openly.
Financial Planning Review: Free Access to New Research and Insights
Financial Planning Review, published by Wiley and housed in CFP Board Center for Financial Planning, features original research that advances the body of knowledge in financial planning and related disciplines. Now part of Wiley’s Open Access portfolio, every article published since January 1, 2025, is free to read, download and share. Explore leading research offering new perspectives and applications for financial planners and educators.
Live Session: Essentials of Pro Bono Financial Planning
May 27, 2026
1-2 p.m. ET
Eligible for 1 General CE Credit
CFP Board and the Foundation for Financial Planning are partnering to host a live, CE-eligible pro bono financial planning training session. This one-hour webinar will introduce the fundamentals of pro bono financial planning and provide practical tools for delivering ethical, client-centered guidance in real-world settings. Participants will learn techniques designed to help volunteers make a meaningful impact in their communities.
At CFP Board, we believe each employee contributes directly to our organization's growth and success. We're currently looking to fill several positions in our Washington, D.C., office. View the list of currently open positions, and please share these opportunities with your colleagues who may be interested.
