With the divorce rate of first marriages hovering around 50 percent, it’s common for people to remarry. However, statistics show that in the U.S. there is a 67 percent chance of the second marriage ending in divorce. As you might imagine, most individuals don’t consult their financial advisor before making this life-changing decision to remarry. But, after deciding to move forward with a second marriage, it’s important to talk about the financial implications of saying, “I do,” again. The financial considerations of getting remarried are fairly similar to those that you should have reviewed prior to your first marriage; items such as assets, liabilities, income and expenses. But, there are a few differences to keep in mind the second time around.
One big difference to consider with a second marriage is if there are children from the first marriage. With kids, it’s important to discuss the financials if one spouse is paying or receiving alimony and/or child support. If someone is paying child support from a previous marriage, that is an expense that needs to be accounted for. You and your new spouse-to-be should discuss education (private versus public school),college and other finances that go along with children such as extra curricular activities. And if you have young children, you’ll want to make sure that you and your ex-spouse have a discussion about guardianship.
In addition, you and your new fiancé should review documents such as tax returns, bank accounts, assets and debts ahead of marriage to get the full picture of what you’re coming into. Once married, even if assets are titled separately, they can become common assets under marital law, depending on your state. While it may be a difficult topic to broach, you may want to consider a prenuptial agreement as it can help to protect assets for the children from the first marriage.
Social Security also adds a twist depending on how long your first marriage lasted. If you were married for at least 10 years, you can claim Social Security on your first spouse, but, if you get remarried you lose that option. While this may not be a deciding factor for getting remarried, you will want to consider the financial impact in retirement.
Finally, you should review your Wills, living Wills/health care proxies, Durable Powers of Attorney, and be sure your beneficiaries on retirement savings accounts, annuities, and life insurance have been updated. While your finances may not be the driving force behind getting remarried, it’s important to remain savvy and plan for your financial future before saying, “I do,” again.