Financial Considerations When Getting Remarried
Preparing for marriage is always an exciting, joyful time. There are also financial considerations to take into account, and this is particularly true of couples who are remarrying after divorce or death of a spouse. Addressing these concerns before saying “I Do” can help minimize questions and concerns for both the couple and their extended families. Let’s take a look at the unique financial considerations when getting remarried.
Yours, Mine or Ours?
Since you will both be entering the marriage with assets, it’s important to know who owns what. There are two property systems that cover existing assets brought into a marriage and those gained after marriages: community property and common law.
- Community Property dictates that everything obtained after marriage is jointly owned by both members of the couple. Nine states are considered community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.
- Common Law applies to all other states, plus the District of Columbia. Derived from British law, common law dictates that property acquired by one member of a married couple is completely owned by that person.
Establish a Budget
It may seem too basic to warrant mentioning, but planning a budget with your soon-to-be spouse is key to establishing solid financial footing as a couple. Understanding of your partner’s expectations when it comes to saving and spending money can save you from unpleasant surprises. And it’s especially important to establish clear expectations if money was a source of frustration in your previous relationship. Of course, this baseline budget will evolve over time as your priorities grow and change.
Review Child Support Obligations
Before getting remarried, both partners should disclose whether they are receiving or paying out child support. State laws vary on how child support payments are affected when partners remarry, so you’ll want to check with a lawyer or financial planner in your home state to hash out the specifics. For example, some states reduce the amount of child support one parent receives when they remarry. The important thing is talking about these topics before the wedding, to eliminate surprises after the fact.
Investigate Insurance and Benefits
Most of us don’t think about insurance much until we need it. That’s why it can be easy to overlook. But it’s definitely something you’ll want to take into account when remarrying. Among the factors to consider are changing the beneficiaries of life insurance policies, as well as which partner has better benefits through their respective employers.
For those remarrying later in life, check into how the marriage will affect things such as Medicaid and Social Security benefits.
Establish an Inheritance Plan
Whether you are remarrying at 35 or 75, you’ll want to have your estate in order, especially if you have children. Depending on where you live, a last will and testament may be the only documents you need. In other states, however, a revocable trust will offer additional protections to your heirs. Again, talking with a lawyer or financial planner can help you make the best decisions for your family.