Tackling Money Concerns in
Remarriage
Roughly 75% of those who have been divorced will
ultimately remarry, according to government statistics. Money can be a
source of tension in any relationship, but the Iowa Society of Certified
Public Accountants advises that there are steps that couples who are
remarrying can take to preserve harmony.
Take a new approach
Old habits die hard, but you may have to change some of your spending,
saving, and planning habits in a new marriage. While many newlyweds are just
beginning their adult lives together, those who are getting remarried
already have experience in sharing a household with another person and
making financial decisions together. Their approaches to money may be
completely different. One person may have spent a lifetime being a
meticulous planner, while the other may never have reconciled their checking
account statements. It’s a good idea to understand these differences now and
to develop a financial approach that will suit your new family. Decide how
you will make decisions and monitor your finances. This is also a good time
to discuss your near- and long-term financial goals to be sure you are on
the same page. Discuss, too, the terms of any previous divorce decrees, if
they include payments to a former spouse or children, that will affect your
financial future together.
Yours, mine, and ours
As part of your discussion about your financial philosophies, decide what
kinds of accounts you will share or keep separate. Some remarried couples
pool all of their money in newly opened checking and savings accounts, while
others retain their own individual accounts as well as a joint account.
There’s no one right way to do it, but how you handle your money is a
decision that should be discussed before you are married. Decide, also,
whether you will be adding each other’s names as beneficiaries on insurance
policies, 401(k) plans, individual retirement accounts, investment and
savings accounts, or any other assets.
Consider a prenup
Prenuptial agreements are not only for the very rich. They can help any
couple establish guidelines about assets in case of divorce. Many people
believe they are unromantic, but they can be very useful tools, particularly
if one or both spouses have children from a previous marriage, or if one
spouse will be quitting a job to stay home with the couple’s extended
family. The prenuptial agreement can spell out what assets each spouse is
bringing to the marriage and how money will be distributed if the marriage
ends. Don’t try to work out the details in the prenups yourselves. Instead,
share your wishes with your attorney and let him or her negotiate with your
spouse’s lawyer. When everyone in your blended family knows where they stand
financially, it can mitigate unnecessary future tension.
Think long term
A will is an important document that can ensure your wishes are followed
after your death. Wills are particularly valuable in remarriage because,
like a prenuptial agreement, they provide a legal basis for how money will
be distributed. Your new marriage may also prompt you to make changes in the
beneficiaries for your life insurance policies or retirement accounts, or to
increase your life insurance to cover new family members.
A new marriage clearly raises many financial
questions. Your local CPA can help you navigate through these questions to
help you get off to the right start. To access “Find a CPA” on the web, go to
www.findanIowaCPA.com.
