Remarrying can come with a renewed sense of joy — as well as financial baggage that wasn’t there the first time around.
Whether your previous relationship ended due to divorce or death of your spouse, there’s a good chance you or your new partner — if not both of you — are entering your next marriage with a range of assets, debts and other financial obligations, not to mention children that may need support now or down the road.
This makes it important to determine how you and your new partner will handle the various aspects of your financial life, experts say. And this goes far beyond deciding whether to keep separate checking accounts or determining who pays which bills.
“You should have the conversation about finances as early as possible in the relationship,” said certified financial planner Jim Graham, investment advisor representative at Orange Rock Wealth Management in Peoria, Arizona.
“But even if you’re already engaged or married, it’s never too late to have the conversation,” Graham said.
Here’s what to consider.
Assess the risk
It’s not exactly romantic, but you should figure out if your new partner is a financial risk — which is a fairly common occurrence, Graham said.
For example, one spouse may have an addiction to gambling or drugs or have frequent tangles with the IRS over tax returns, he said. Or, perhaps the person owns a business or wants to start one, and wants the new spouse to help finance it. And debt — whether due to credit cards, student loans or other obligations — also can cast a cloud over a marriage if there’s no plan to tackle it.
“There may be few financial risks with the new spouse, and that’s great, but there also may be a significant amount,” Graham said. “It may cause you to do some planning that you otherwise wouldn’t have to do.”
Consider a legal agreement
If you haven’t yet said your wedding vows, it’s worth considering a prenuptial agreement (or prenup, as it’s called).
“The first time you get married, you’re less likely to want to use a prenup,” Graham said. “The second time around, you’re more likely to have it.
“It’s easier to have that conversation when you’ve already been through a marriage.”
While a prenup is mostly associated with determining in advance who would get what in the event of divorce, the agreement also can spell out how finances will be handled during the marriage. That could range from outlining whether you and your spouse’s incomes will be conmingled for household bills to ensuring a future inheritance remains solely yours (or your children’s) no matter what happens to your relationship.
