Managing Money In A Second Marriage

How to Manage Your Money When You're Remarrying

Updated on Jul 10 2019


More than 40 percent of weddings include one partner who has been married previously. Different than most first marriages, where partners enter the marriage as financial equals, second marriage finances can be more complex. You’re older, you have more assets, you may have children, you have a retirement strategy and combining finances are a bit more complicated.

These tips can help you manage money in a second marriage.

Four Tips to Manage Finances in a Second Marriage

In second marriages, especially second marriages later in life, finances often play a bigger role because the financial stakes are higher. Protecting your life savings, investments, and children in the event of divorce or death is a higher priority. Here are four tips for successfully navigating and protecting your finances in a second marriage.

1. Have an open and honest discussion about finances before marriage.

While this is true for all marriages, it’s particularly important for second, third, or fourth marriages where you have a longer financial history. Be direct with your spouse about your existing debt, your financial goals, your investments and your risk tolerance. Openly discuss financial obligations from any previous marriages. Identify and set short-term and long-term financial goals and how you hope to achieve those goals both as an individual and together. This conversation can serve as a basis for financial decision making for years to come.

2. Strongly consider a prenuptial agreement.

Prenuptial agreements, or prenups, are no longer just for the very wealthy. A prenup for a second marriage has become very common. As people marry later, or for the second time, they are bringing more assets and debt into the partnership. In fact, financial experts say that a prenup should be standard for most couples today. A prenup for a second marriage is especially important if you expect to inherit a business or other assets, or if you have children from a previous marriage. A legally binding document, a prenup specifically spells out how assets and liabilities will be divided in case of divorce. And, it’s not just protection for the wealthier of the partners. It can also give financial protection to a spouse who quits working or moves because of the marriage.

3. Make appropriate changes to your estate plan.

A new marriage will undoubtedly require updates to important legal documents including wills, medical advance directives, insurance beneficiaries, and your retirement plan. In second marriages, it’s important to decide how assets will be divided. If there is no will, the money will typically pass to your spouse and then to your children, which can cause family feuds and high legal expenses. To avoid this, and have your assets divided exactly as you want, be sure your will and estate plan is updated.

4. Get expert advice.

When financially preparing for a second marriage, hire an expert. A trusted financial advisor can help you see financial pitfalls, financial conflicts on the horizon, and even help facilitate sensitive financial conversations among family members. A fiduciary financial advisor is legally and ethically required to put your interests first. You can trust that they will give you a comprehensive road map to a financially successful future together.

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