Finances for second marriages: A to-do list

Article published: December 14, 2021

Remarrying means a second chance at a life filled with love and new adventures. It can also mean more complicated financial situations for both spouses – and a thoughtful approach to how you plan your financial life together. We are here to provide guidance and some financial advice for second marriages.

Talking about money may not seem very romantic amid all the wedding planning, but it can help create a solid foundation for a stronger partnership moving forward. The topics of money and personal finances are often cited as one of the biggest stressors in a relationship, as people who have been married before may know all too well. Add to that the increased likelihood that, in a remarriage situation, the spouses may have accumulated more wealth; own several homes, investment accounts or workplace retirement plans; owe alimony or child support from previous relationships; or be in a host of other more complex financial situations – and it becomes clear that a frank and honest discussion about your finances and building wealth together is absolutely critical.

In a second marriage, financial planning should be just as important as wedding planning – and it certainly has longer-lasting implications, years after the last slice of cake has been eaten. Here are some important “to-do” items to add to your “I do” list.

Have an honest conversation before the big day.

  • What assets are you bringing to the partnership – such as homes, investments and retirement accounts?
  • If one or both of you have children, what are your financial obligations with them?
  • Are you paying child support?
  • Are you paying college tuition? Or contributing to a 529 account?
  • Is there a tricky custody situation that could involve extensive legal or travel expenses?
  • How are your credit scores?
  • Are there any outstanding debts or other liabilities?

Once the financial cards are out on the table, the next step will be to come to some important decisions together on what assets and liabilities you will share, and which will continue to be held by one partner only. This can help set up your finances for success and reduce friction or confusion down the road. While the details of each conversation will be unique to each couple, there are some themes that come up frequently in financial advice for second marriages.

  • If one individual is paying alimony or child support, their former spouse could potentially claim for higher payments based on an improved financial status.
  • When there’s a significant age gap between the two new partners, and the older one has adult children, is there any chance that in the future, the new spouse and the grown children may contest who stands to inherit any of your assets?
  • Does one of you (or both) have aging parents who may require expenditures on care and housing, and are you going to share that responsibility?
  • Similarly, who is paying for the education (and other expenses) of children of either spouse?
  • If one partner is carrying a significant debt burden, is the other comfortable taking that on?
  • Have you decided which expenses will be shared in your new life together, or whether you will maintain separate accounts?

These topics may not be something any of us want to think about before such a happy occasion, but a few uncomfortable, honest conversations now could prevent some much more unpleasant situations in the future.

Make a detailed plan.

After you have agreed on your approach, it’s time to formalize the details. This could involve setting up a joint account for shared household expenses, or a joint tenancy investment account, if that is what you have agreed on. Remember that the more detailed and transparent you are upfront, the smoother your transition to your new financial life will be.

Estate planning is especially important in a remarriage situation – even more so if there are children from a previous marriage in the picture. You may want to revise your will to include your new spouse or stepchildren, and any shared assets. Update titles and deeds as needed, as well as the Social Security Administration, to minimize any potential confusion in the future as to who is entitled to your assets. And don’t forget to update your beneficiaries on any life insurance or investment accounts you may own – revising your will isn’t enough. If you named someone else as beneficiary back when you first set up your accounts, this is still who the money will go to unless you update your information.

Talk to a financial advisor about your second marriage financial decisions.

And finally, if you’re currently working with a financial advisor, seek their financial advice for second marriages. Keep him or her up to date on any significant financial changes and decisions you have made with your new spouse. He or she will be able to help you ensure you’ve thought through all the details so you can start off (re) married life on the right foot.