7 Financial Considerations for Remarriage

  • Consider the income, assets, and debt you both bring to the relationship.
  • If you’re still working, discuss when you’ll retire and how you’ll fund your life together in retirement.
  • Discuss how you’ll care for your blended family.

Managing your finances when you remarry

Tying the knot after age 50 is a great opportunity for both of you to do a little financial house cleaning. Start by assembling your financial team: attorney, accountant, and Financial Advisor. You likely each have your own professionals. You can discuss how they can work together – or if you will consolidate services.

Here are some issues to start your discussions.

1. Your current financial status

You and your partner may come to the marriage with similar or very different financial resources. Either way, it’s time to take a candid look at your income, assets, and debts. Be sure to review all your income sources, as you or your new spouse may lose alimony payments or survivor benefits when you marry.

It’s time to take a candid look at your income, assets, and debts.

Other items to check include bank accounts and investments. This is also a good time to discuss credit scores, jobs, and whether you have debts from an earlier marriage.

If you do encounter debt from an ex-spouse, find out from your attorney if you're legally responsible for helping pay it. It may be best to keep the debt in one person's name. You also may have the opportunity to refinance debt under both your names under more favorable terms. Work with your financial team to develop a payoff strategy.

2. Managing money together

If you haven't tied the knot yet, consider a prenuptial agreement. Not all couples need a prenup, but it’s one way to help create a common understanding about money. If there’s a significant gap in age between you and your spouse, a prenup can help ease the fears of family members.

This is also a good time to discuss how you’ll manage money. Decide whether one person will be the primary bill-payer or whether you'll split the duties. At the same time, you need to address whether you'll keep separate accounts or put everything into a joint account. Talk to your accountant about how remarriage may affect taxes for both of you.

3. Supporting children and grandchildren

One of the biggest challenges with remarriage can be finding the right balance with your new blended family. If you’re supporting children or grandchildren, it’s important to agree on how support will continue when you’re married.

Have open discussions with family members about your plans. Helping them understand your decisions may help avoid resentments.

Have open discussions with family members about your plans. Helping them understand your decisions may help avoid resentments and make everyone feel part of your new life.

4. Your homes

Both of you may own a primary residence. Discuss where you’ll live once you’re married and what you’ll do with the other home. Remember, buying and selling property can affect your taxes. Discuss with your accountant the pros and cons of continuing to own other properties, such as a condo at the beach or rental property.

5. Retirement planning

If you’re still working, discuss when you’ll retire. Figure out how you’re going to fund those retirement years. Remarriages may involve an age gap between spouses. One of you could still be working when the other retires. Consider how that would impact your finances and your life together.

Remarriage can also affect your Social Security benefits. You lose spousal benefits from your ex-spouse's work history, but can get them from your new spouse (after at least one year of marriage). Change beneficiaries on life insurance policies, 401(k) accounts, and Individual Retirement Accounts (IRAs) if your ex was previously designated.

6. Healthcare

It’s vital to review your future health care needs. If one or both of you still works, evaluate your disability benefits. As a new couple aging together, you should also consider planning for long-term care. If your partner always planned to live at home and you picture yourself in a retirement community as you age, now’s the time to talk about it.

Infographic - Seven considerations for remarriage

Spouses must understand each other’s pre-existing medical conditions and be aware of healthcare directives or healthcare powers of attorney. Have a candid talk about what happens if one of you becomes seriously ill or is gravely injured.

7. Your legacy

Newlyweds, especially those marrying later in life, should review five key estate planning documents:

  • Wills
  • Durable powers of attorney
  • Healthcare powers of attorney
  • Living wills
  • Revocable living trusts

If you have wills, how do they need to be revised? Be sure to check on any existing trusts to make sure the trustee or successor trustee and beneficiaries understand how they'll be funded now. Knowing where to access your spouse's documents and what their wishes are will make touchy situations later in life easier.

The choices you make with your new partner may impact what you leave to your beneficiaries. Talk to your Financial Advisor, attorney, and accountant about your new estate planning goals.

A new chapter

As you have these discussions about your finances, keep in mind this marriage may be much different. Avoid bringing preconceived notions about spending habits, debt, supporting children, or other issues into your new union. Talk things out and start with an open mind.

Next steps

  • Have an honest conversation with your spouse or fiancée about all your income, expenses, assets, and debts.
  • Identify what items, such as wills, insurance policies, and investment plans, might need to change.
  • If you have children, have an open conversation about your new relationships to assure them of their place in your life.

Wells Fargo Advisors is not a legal or tax advisor.

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