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    April 2013
    M T W T F S S
    « Mar   May »


    Planning to Re-Marry

    Guy Conger

    If you’re planning to remarry, you must decide
    how you and your fiance will combine your
    finances, and you’ll need to plan a financial
    strategy that considers the assets, liabilities,
    and financial responsibilities that each partner
    brings to the marriage. You’ll find that financial
    planning for marriage is more complicated
    than it was the first time you got married,
    because your life isn’t as simple now. You
    may have acquired more assets. You may
    have children now. You may want to plan
    more carefully this time, now that you’re
    familiar with the financial consequences of
    divorce or the death of a spouse. You’re older,
    perhaps substantially older, and you and your
    spouse may be concerned with retirement
    and/or estate planning.
    Tip: Many of the issues you face will be no
    different than the issues individuals marrying
    for the first time must deal with. These issues
    include budgeting, savings and investments,
    insurance issues, integrating employee and
    retirement benefits, and property ownership
    What obligations from your past
    can haunt your future marriage?
    Debts and bad credit
    It’s not uncommon to have extensive debt and
    a less-than-spotless credit history, particularly
    if you’ve been through a divorce. However,
    debt and/or credit problems that either of you
    have can affect whether or not you can obtain
    credit as a couple once you’re married and
    can lead to arguments that can strain your
    marriage. Before remarrying, make sure that
    you and your fiance understand what debts
    each of you owe and determine whether one
    or both of you have marks on your credit
    history. Consider ordering copies of both your
    credit reports from a major credit reporting
    bureau, then sit down and honestly discuss
    your current financial position. Even if you’re
    embarrassed about how much you owe or
    how poor your credit history is, don’t hide that
    information from your partner. Although he or
    she may be surprised to find out that you’ve
    had past financial problems, it’s better to
    disclose this.
    There are positive steps you can take to
    improve your financial position as a couple.
    For example, you can go through credit
    counseling together, keep your credit and/or
    finances separate, and take measures to
    protect the assets of one or both partners
    against the claims of an ex-spouse or creditor.
    Children from a former marriage or
    Children, while a blessing, can strain a
    marriage financially, particularly when the
    children are from one or more former
    marriages or relationships. You or your fiance
    may have an obligation to pay child support or
    may have joint or sole custody of one or more
    children. You may be concerned that an
    ex-spouse will demand even more child
    support in the future, or you may wonder who
    will be obligated to pay for the children’s
    expenses or for their future college education.
    Adult children present special problems. In
    particular, you’ll want to carefully plan your
    estate to avoid the conflicts that can erupt if
    your adult children resent your current spouse
    or fear that he or she will inherit or mismanage
    your estate.
    Claims an ex-spouse has on your present
    or future finances
    One or both of you may have an ex-spouse
    who may be entitled to a portion of your
    current or future earnings or benefits. For
    example, you or your fiance may have to
    make alimony payments that may seriously
    affect your finances as a couple, particularly if
    the ex-spouse goes back to court seeking
    more money. In addition, an ex-spouse may
    be the beneficiary of a life insurance policy or
    may be entitled to a survivor’s benefit from
    your spouse’s pension plan. When you
    remarry, you should review your will, your
    insurance policies, and your pension plan.
    You may want to change your beneficiary
    designations, although this may not always be
    possible. For example, if you’re divorced and
    your ex-spouse has been awarded a
    court-ordered survivor’s annuity, you may not
    be able to name your new spouse as
    What you can do to ensure that
    your future financial
    relationship stays healthy
    Before getting married, have an honest
    talk about your finances
    Before getting married, you and your partner
    need to discuss how you handle money,
    because money is a leading source of conflict
    in a marriage. Differences in how you and
    your partner handle and think about money
    can lead to hurt feelings, insecurity, and
    arguments. One person may be a saver, the
    other a spender. Also, you may have different
    issues can be especially troublesome when
    you remarry, because you or your fiance may
    feel financially vulnerable if a previous
    marriage ended in divorce, particularly if it
    ended, in part, because of financial troubles.
    You and your fiance must work out the terms
    of your financial relationship, setting up a
    mutually agreeable plan. Now is the time to
    decide if you want to keep separate bank
    accounts and to determine whether you want
    to pay expenses together or separately.
    Consider disclosing all your obligations and
    income to your partner to avoid any conflicts in
    the future and so that you can make sure that
    any budget you set up is realistic.
    Consider using prenuptial and postnuptial
    Prenuptial and postnuptial agreements are
    contracts used by couples of all ages to define
    their rights, duties, and obligations during
    marriage and to determine what happens in
    the event the couple separates or divorces or
    one partner dies. If the contract is written prior
    to the marriage, it’s called a prenuptial,
    premarital, or antemarital agreement. If it’s
    written during the marriage, then it’s called a
    postmarital agreement. Couples who are
    remarrying should consider using marital
    agreements if they have substantial assets or
    children to protect and/or want to avoid some
    of the financial trauma that could occur if their
    marriage ends. They can spell out what assets
    and liabilities each partner is bringing into the
    marriage and determine how the assets
    brought into the marriage, and those acquired
    during the marriage, will be divided. They may
    also have an impact on your estate planning.
    Consider keeping credit separate
    One way to help you and your future spouse
    maintain a good financial relationship is to
    continue keeping your credit separate even
    after you marry. Instead of applying for joint
    credit cards, each partner can keep his or her
    own credit cards. This can protect you in
    several ways. If one of you has good credit but
    the other doesn’t, it can help the partner with
    good credit keep it. If you experience financial
    difficulties as a couple, keeping your credit
    separate will ensure that if one spouse’s credit
    suffers, the other spouse’s credit rating will
    remain unaffected. Keeping credit separate
    will also make it likely that if this marriage
    ends in divorce, only the individual who
    incurred the obligation will have to pay it. In
    short, you won’t end up paying your
    ex-spouse’s debts. If you or your partner have
    been burned financially in a relationship
    before, keeping separate credit might make
    you feel more in control and may prevent
    arguments that can hurt your current
    The downside to keeping separate credit is
    that it can be complicated. If one spouse is
    working while another isn’t, the nonworking
    spouse may have trouble qualifying for his or
    her own credit. Trust issues and arguments
    over credit may also arise should one spouse
    have more credit or more accounts than
    another. In addition, you and your spouse may
    be able to qualify for a credit card or a loan
    much more easily if you apply together rather
    than separately, so keeping your credit
    completely separate may not be feasible.
    Furthermore, if you and your spouse run up a
    lot of expenses on both your separate credit
    cards, you may have to face the option of
    paying off only one spouse’s card, while
    sacrificing the good credit of the other; this
    scenario could generate some tension or
    Pay close attention to the way your
    assets are titled
    There are several ways ownership of assets
    can be designated. Couples who are
    remarrying should pay close attention to the
    way assets acquired after they marry are
    titled, because how their assets are owned
    may affect their current finances as well as
    determine who will receive the assets after
    they die.
    For example, if you and your partner buy a car
    and sign the loan paperwork together, you
    own the car jointly (as joint tenants). Owning
    your car this way can be advantageous
    because it means that neither of you can sell
    the car without the other’s permission, and if
    one of you dies, ownership of the car will pass
    immediately to the other. (Note: Either of you
    can sell your interest in the car, even if you
    can’t individually sell the car outright.)
    However, joint ownership can also have
    certain disadvantages. For example, if your
    partner owes back child support, his or her
    ex-spouse may be able to claim that the car
    should be sold and the money used to pay
    back child support, and the court may order
    this. Or, if your spouse owes money to a
    creditor, the creditor may be able to place a
    lien on the property or force you to sell it to
    pay off the debt. The fact that you aren’t
    responsible for the debt won’t affect the
    creditors right to your spouse’s share of the
    In addition, individuals remarrying should
    carefully consider how holding assets can
    affect their estate planning goals. For
    example, if you have children from a previous
    marriage and you want to make sure they
    receive your assets when you die, consider
    setting up a trust for the benefit of the children.
    To make sure that your spouse has access to
    funds immediately after you die, you may want
    to set up a joint savings account.

    The MONEY® Network