A new marriage feels like a fresh start and a chance to move forward in life. However, before your wedding celebration, consider these steps recommended in Nasdaq’s recent article, “Getting Remarried? 5 Financial Steps to Take Before Tying the Knot (Again).”
Create a consolidated net worth statement. One fundamental mistake many couples make is failing to look at their combined net worth, until they start talking about how they will pay for their wedding or another big-ticket item. Those who remarry frequently have more complex financial responsibilities; they have to consider child support, liquid and illiquid investment assets, and different estate planning and tax-planning strategies. The best course is to be upfront from the start to avoid damaging your relationship in the long run. Take time to review your individual financial situations, including liabilities, before you create a consolidated statement of net worth.
Sign a pre or postnuptial agreement. This can be uncomfortable, but can be valuable for both parties. A pre or postnuptial agreement is particularly important, since it’s the only way to legally claim specific assets within a marriage. In addition, a prenuptial agreement may ensure that any children within the marriage are financially protected, in the event one spouse dies. It’s also important to remember, even if you’re recently married and don’t have a formal prenuptial agreement, state law will often have one for you.
Think about all of your kids. Some spouses who were married previously may bring children into their new relationship. This creates many financial issues. Determine as a couple how you’ll financially address major expenses, like health care, child care, and tuition. When you’ve decided, discuss your plan of action with an attorney to be sure you’re considering all potential options and their long-term implications.
Update your beneficiary designations. This is a common error. Assuming you want to name your new spouse as a beneficiary, you should review all your accounts and update the documents.
Review and update your estate plan. This step often gets forgotten in the rush of planning the ceremony, reception and honeymoon. You’ll both need to meet with an experienced estate planning attorney to review your individual wills and trusts from the past and prepare new wills and trusts, powers of attorney, and health care directives to reflect your new status. Updating your estate plan is important, again because of children. Since there can be children on both sides from a previous marriage, it is best to address how children will be taken care of in the event of death of one or both of the spouses.
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Reference: Nasdaq (April 20, 2018) “Getting Remarried? 5 Financial Steps to Take Before Tying the Knot (Again)”