Financial planning for a second marriage

Citizens Wealth Management Staff

Getting ready to wed is an exciting time. When emotions are high, the financial implications of a new marriage may be ignored. Financial planning can be complicated. Particularly if it is not the first marriage for either soon-to-be spouse.

Each newlywed brings their own personal feelings about how to manage a shared financial plan.  When remarrying, however, partners may have added responsibilities—children, parents, assets, and liabilities—tied to prior relationships. Engaging a professional to build a comprehensive financial plan, before beginning your new journey, could offer multiple benefits and avoid problems.

Put this fresh start on the right track by establishing a coherent plan to safeguard your future. An experienced financial advisor could help you navigate those waters by addressing each person’s financial interest and aligning them to an integrated view for your life ahead.

The following considerations may inform your discussions and decision-making when beginning the financial planning process.

Start with transparency and communication

Honesty and full disclosure are essential when examining joint finances. Being organized and committing to clear communication about assets, liabilities, and spending or saving habits—early on—go a long way in level-setting expectations. Children, work, and other personal obligations should be identified and openly discussed. If the conversations are difficult, an experienced advisor can guide discussions, identifying strengths, weaknesses, opportunities, and threats.

Your financial advisor could help you gain perspective on dynamics that might impact potential outcomes. While many topics may seem obvious, some aspects of financial planning might be overlooked without professional help. A little planning goes a long way.

Considerations for Understanding Your Financial Situation 

• Assets coming into the marriage
  • Income
  • Cash balances
  • Stocks and bonds
  • Real estate
  • Business entities
  • Retirement plans
  • Employment benefits
  • Estate and probate plans

• Debts and liabilities
  • Mortgages
  • Credit card balances
  • Loans and lines of credit
  • Credit ratings

• Family obligations
  • Child support
  • Education support
  • Other dependent family members
  • Divorce agreements

Put the building blocks into place

The foundation for a robust financial plan comes down to finding the right combination of accumulating, managing, preserving, and distributing your wealth. A challenge, when entering a second marriage, is how to align separate trajectories into a single productive future. Having a detailed understanding of each partner’s current financial standing is wise.

An advisor could help smooth the fact-finding process by facilitating collaboration and bringing together shared objectives. Thinking about basic questions, in advance, allows time to reflect on your goals and objectives.

Fundamental Joint Financial Planning Questions

• Is there a prenuptial agreement?
• Do you intend to hold all, or a portion of your assets individually or combine them as marital property?
• Will you integrate your taxes and file returns jointly?
• Where do you plan to live and will children, parents, and/or pets reside there, as well?
• If one partner passes away, who will remain in the home and how will dependents be looked after?
• How will you align healthcare, life insurance, and employee benefits?
• What are your plans for retirement?

Remember estate planning

When it comes to putting your estate in order as a newlywed couple, it is important to express your desires and wishes clearly and early on. Pre-existing documents—wills, trusts, powers of attorney, medical directives, etc.—may need updating to reflect your new situation. Reviewing these instruments, together with a financial advisor, could help set realistic expectations and avoid unnecessary expenses.

Another key element is confirming your property is titled properly. Incorrect titling may lead to confusion and the state (not you) deciding how those assets are distributed, should one spouse outlive the other.  To minimize confusion, establish beneficiary designations for bank, investment, and retirement accounts, life insurance and annuity policies, real estate, and other property.  Determine what assets you prefer to pass to children, friends/family, or charity.  Define your last wishes, how your decisions should be carried out, and by whom.

Be savvy about your future

While the process of aligning your finances may seem overwhelming, the attention you put into it now positions your marriage for the long-term. Having a consultative relationship with a financial advisor could ease that effort and reveal solutions to challenges you might not have considered on your own.

Citizens Wealth Management offers powerful tools and experienced professionals to address your financial picture and guide you through the planning process. Schedule an appointment with a financial advisor for a customized, actionable plan suited to meet your unique family needs.