Discussing personal finances is important for any couple preparing for marriage. However, this topic can be more complicated for those who remarry later in life.
If you’re remarrying later in life, one of your goals should be to understand each other’s financial situation and attempt to determine which money-related decisions you and your future spouse will make together, and which obligations will remain separate.
Here are 8 important financial considerations you should make if you’re remarrying later in life:
1. Decide Where and How
One of the first questions many engaged couples have is where their money will be held. Will you and your new spouse mix your money or keep your accounts separate? Who will have access to which accounts? For couples remarrying, a more complex financial history is expected. Discuss with your soon-to-be spouse what would work best and whether you’ll establish a shared account, keep things separate, or use a combination of the two.
2. Be Clear About Financial History
What kinds of debt will each spouse bring into the marriage? House payments, credit card debt, student loans, or medical expenses? Prior financial responsibilities can impact both of you unless you take steps before getting married.
3. What’s Your Estate Strategy?
Establish your expectations ahead of time regarding whether estate documents will be updated. Are you expecting to update your will, living will, power of attorney, or healthcare powers to reflect the new marriage? If you have children, consider including them in this process. Understanding their expectations and communicating your strategy to them is critical.
4. Your Retirement Accounts
It's important to consider how you and your spouse will impact each other’s retirement accounts. Consider whether you will update the beneficiaries and whether having separate accounts would be appropriate.
5. Understand Social Security's Rules
Since your retirement benefits are based on your individual earning history, and they do not change when you tie the knot, whether it is your first, second, or fifth time.
However, remarriage can affect other kinds of Social Security benefits such as if you are receiving benefits from an ex-spouse, survivor benefits, or supplemental security income. Be sure to contact us or the social security administration if you have any questions as to how remarrying might change your benefits.
6. Be Aware of Taxes
Remarrying later in life can have tax implications, particularly if one or both partners have a complicated financial situation. Knowing these implications before marriage can help you and your new spouse be better prepared.
Remember, this article is for informational purposes only and is not a replacement for real-life advice. So, consult your legal and tax professionals as your marriage plans progress.
7. Review Your Insurance
Your current coverage may need to be updated. Evaluate what’s available and whether additional coverage will be necessary for your new marriage. You might want to check in with your insurance professional and update them on your pending marriage.
8. Prenuptial Agreement
Though often viewed negatively, a prenuptial agreement can help structure how you and your spouse will manage your assets. One study showed that 42% of Americans support signing a prenup before marriage.1
Work With Us!
Give our office a call if you’re looking for more information on remarrying later in life. We may have some thoughts and ideas for you and your future spouse to consider before exchanging your vows.
1 theharrispoll.com, July 20, 2022