Did you know that nearly 40 percent of weddings today are second or third marriages for at least one of the spouses? The Pew Research Center shared this statistic along with several others, including that one in five marriages are remarriages for both spouses. You may be one of these numbers; single due to divorce or the death of a spouse. If you are marrying again you are creating an opportunity for new life with a new partner. Successful remarried couples have found the following tools helped their financial success during this joyful transition.
Couples coming together for remarriage have found that discussing assets, debts and property issues before the nuptials help them to understand what each party is bringing into the union. Will either of you keep certain debts or finances separate? It is important to acknowledge and understand each financial piece of the new life puzzle to put together a cohesive financial plan. How does each partner approach saving and spending? What are each other’s attitudes toward debt? A bankruptcy, lower credit ratings or other factors for one partner can affect the financial plans of both spouses as soon as the “I Do’s” are pronounced. If one partner is working on paying off significant debts, how will this be addressed in the new marriage?
Who really wants to talk about their past when the future looks so bright? You may not want to bring it up, but it is important to make sure both partners are aware of any conflicts with previous divorce agreements. It is also important to revisit divorce settlements or estate information that may have asset- or debt-related obligations for one or both partners.
While nobody wants to decide what happens in the event of a divorce or death, this isn't a first marriage for at least one of you. A North Carolina University study shows that over 60 percent of married couples attribute financial full disclosure as one of the reasons for their success. Couples often don’t share common habits and beliefs about finances. Be real with yourself and your partner and decide ahead of time about how joint assets and debts will be handled if there happens to be a split. Be prepared to revisit this issue, as assets and debts change over time.
Once the decisions have been made, consider a prenuptial or postnuptial agreement. An agreement such as this can make sure that both new spouses’ rights to any assets or property brought into the union will be protected. As transitions take place through life, successful couples revisit their agreements and update them for their current financial situation, especially for retirement plan changes.
A joyous transition such as remarriage can have many other financial complications, such as Social Security benefits, retirement and insurance to consider. If remarriage is in your future and you are overwhelmed by the financial merger, talking with a trusted advisor may help clear the path for your new journey.
Wood Smith Advisors, a woman-owned Registered Investment Advisor (RIA), is a fee-only financial services firm that partners with its clients to simplify their financial lives. We focus on women, entrepreneurs and individuals with complex financial situations, providing objective and competent advice, education and services to help them develop and build their businesses and reach their financial goals. We can be reached by clicking here.
“Finance Made Simple” blog posts are intended for educational purposes and not for specific advice. Each person’s situation is different. Consult your financial advisor for advice relating to topics discussed.