Second Marriage Financial Information
Category: Personal Finance
Second marriages can be daunting. Partners arrive from previous marriage, perhaps with kids in tow, with high hopes, deep fears and a general wariness about combining finances a second time around. Add in alimony payments, child support and other complications, and things start looking scary. Taking the time to research financial information before entering a second marriage can prevent future squabbles, disagreements or rifts. Problems from a first marriage don't have to trickle into the second.
Don't avoid important financial conversations for fear of disagreement. As marriage becomes a genuine possibility, start talking about attitudes toward saving and spending, financial goals, money goals and beliefs about debt. Seeking premarital counseling establishes a neutral zone for addressing potentially hot-button issues, and engaging a financial consultant introduces professional expertise in the melding, if any, of your assets and financial responsibilities.
People's particular life insurance policies were designed for a specific set of circumstances, so the policy's specifications may need to be changed upon entering a second marriage. Find out if you'll need to change the name of your beneficiary from that of your first spouse to your new mate. In some states this happens automatically. If your ex-spouse owned the life insurance policy, you'll want to transfer ownership or purchase a new life insurance policy. Attorneys can help you determine whether premium payments are counted towards alimony payments for tax purposes.
Some people shy away from the idea of a prenuptial agreement, so broach the subject cautiously and with sensitivity if you're unsure of a new mate's attitudes. Signing prenuptial agreements can protect property, homes, family inheritances or other investments, according to the I Do! Take Two website in the online article, "Financial Planning for Remarriage."
Assessing financial information upon starting a second marriage involves taking another look at your will. You may want to rename your new spouse as a beneficiary. During this time also make decisions about designating power of attorney and health-care directives to your new spouse. If both partners have sizable estates, you may each decide to leave these to your own children.
After honest discussion and contemplation, partners may decide to keep finances separate when entering a second marriage. If one person has a poor credit score or significant debt, this may be a better option. Avoid confrontation or dissonance by talking about concerns openly, with trust and understanding. Maintaining separate finances doesn't have to mean separate lives; many couples enjoy rewarding marriages while maintaining distinct financial rosters.