What You Need To Know If You Are Considering Remarriage.

A Question On Divided Loyalties and Shadows From Previous Relationships.

Money can be a tricky subject in a marriage. Marriage brings together two people from different backgrounds with different approaches to money.

The subject of money is more challenging in a remarriage. In remarriage, you have the added dimension of dealing with ghosts from the past- exes, and kids-and all the baggage that comes with them.

As an example of what I mean, here is the story about David and Lisa:

David, sixty-five years of age, had terminal cancer. He was in a common-law marriage for twenty-five years with Lisa, twenty years younger than him.

In his Will, he planned to leave his assets to his two adult children from his first marriage. His rationale was that Lisa was a high-income earner and did not need his money.

Lisa was angry when she learned what David had done regarding his Will. They still had a mortgage owing on their joint home, and she felt it was unfair that he was leaving her with the debt. And besides, they had been together for twenty-five years! Does that not count?

Financial Shadows From Previous Relations

Remarriages come with the added challenge of what I have termed “financial shadows” from previous relationships. These are financial commitments to prior partners, such as alimony, child support payments, and split pensions.

The following are some of the things you need to address before getting remarried.

Kids From A Previous Relationship

Your children’s ages at the time you decide to remarry will influence your approach to your finances as a couple.

If you are considering remarrying and your children are adults, you may be well established and want to keep your finances separate from your partner’s.

Your parenting styles will also impact your finances individually and as a couple. One partner may believe in helping their children, even if they are adults. The other may value independence. One parent may be on the hook for child support, whereas the other may be childless.

You may come to a compromise and decide to leave your children the assets you accumulated prior to your remarriage in planning your estate. And leave the assets that you acquire after your remarriage to your new spouse. Or you may split your assets-the home can go to the spouse, and the investments will go to the kids.

Assets & Liabilities

Do you want to combine your resources? And to what extent?. How about bank and investment accounts- joint or separate?

And what will you do with the debts you are each bringing into the marriage? One of you may have more assets than the other, and the other may be coming in with more debt.

Do you each own a home? Will you add your new partner to the title? Will you expect them to add funds to it?

Financial Commitments To Previous Relationships

Child and, or spousal support. Are you or your new partner on the hook for the child or spousal support? And to what extent? Is your new partner still fighting for custody of her children?

Outstanding legal battles. Are there still lingering or unresolved issues from the previous relationship (s)? Some contentious divorces take years to settle.

Pensions. Does your partner owe part of their future pension to their ex?

Estate Planning. Wills need to be updated to reflect the new relationship.

Bringing It All Together

You need to consider these financial issues if you want to get remarried. Openly discuss these issues with your spouse-to-be way before the marriage.

Understanding your partner’s view on these issues is essential to uncovering your financial compatibility. Also, discuss your values, goals, and hopes for yourselves as individuals and as a couple.

Get advice from a financial advisor. Both parties should take steps to protect their assets and their children. 41% of first marriages end in divorce, and 60% of second marriages end in divorce. Remarriage is a second chance at getting things right if you’re well-prepared.

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