Marriage & money: what to consider when you re-marry
Second marriages tend to have a higher failure rate than first marriages, and it’s not hard to see why. When both spouses have an ex-spouse, are more advanced in their careers, have significant assets and perhaps have children, it’s much easier for life to become rather complicated.
Money can be a major source of stress in any marriage, but especially in second marriages. If you’re planning on tying the knot again, there are some important financial considerations you need to be aware of first.
- Financial history
What does your combined financial history look like? Is oneof you a great saver and one a great spender? Have there been any previous bankruptcies or major money problems? Are there any financial issues with either of your ex-spouses? All this needs to be talked about, particularly if you plan to buy a house together, or combine any of your assets.
- Real estate
Real estate is usually your greatest financial asset, so if you and your new spouse move in together, you need to be aware of what will happen to the house if one of you dies. Will it be left to the remaining spouse? Will your children inherit the house? Talking about these issues now can eliminate many estate disputes in the future.
- Child support
If you have children who are under the age of 18, it’s possible you’ll have to pay child support until they turn 18. If you plan to have another child with your new spouse, will you be able to financially support more dependents? Children are a long-term financial commitment and this needs to be discussed before you make any plans.
- Estate planning
If you want your real estate and assets to be left to your children rather than your new spouse, you’ll need to arrange a pre-nuptial agreement. This is also the perfect time to update your will, because if you divorce, your will is still current. Any pre-nuptial agreements and will updates need to be in place before you get married.
- Current debt
Getting married usually means you share your spouse’s assets, but also their debts. Talking openly about the debts you both have is essential to move forward. Will you combine your debts? Keep them separate? Open new bank accounts or credit cards that are in joint names? Have a detailed discussion about your debts and your plans for paying them off.
The key message with all your financial arrangements is to communicate and be transparent about all your money matters, both good and bad. Set a date and run through everything in detail. Talk about how money will be handled and discuss your values and goals.
If possible, speak to a financial advisor before you get married to make sure you’re both on the same page. To meet with one of our financial consultants and get your marriage off to the best possible start, please call us on 02 9241 2575.