Second Marriages: Financial Finesse
Of all the questions we ask a potential spouse before tying the knot, they seldom include:
“Who are the beneficiaries of your investment plans and insurance policies?”
“Do you wish to be resuscitated if your heart stops or if you stop breathing?”
“Do you want your ex or me to be guardian for your children if you die?”
These are not exactly the whispers of sweet nothings upon which romance thrives. They are, however, practical considerations couples engaged in a second marriage need to tackle either before or shortly after exchanging vows. In addition to figuring out who pays for what household expenses, spouses should consider plans for health care, saving for the future and estate planning for both the surviving spouse and all beneficiaries.1
Finances are a big part of the marriage contract, and they can be even more controversial when one or both spouses already have experience from prior relationships. According to the American Psychological Association, spouses who share accounts and financial decisions report higher family satisfaction than those who opt to keep their money separate.2
However, it’s important to emphasize that this is a highly subjective decision that should be made by both partners based on their circumstances. It may be prudent to work with a financial professional to help determine a household budget strategy, as well as insurance and designated beneficiary decisions to help protect family assets and income from unexpected events. Please contact us if you need such help.
Note, too, that how you handle your marital legal affairs may depend on where you live.
In a community property state, what each spouse brings to the marriage remains his or her own, but assets acquired during the marriage are considered owned by both spouses. In common law states, asset ownership is determined strictly by titles, registrations and other documents.3
According to the most recent census data, 50 percent of first marriages and 60 percent of second marriages end in divorce.4 Yet second marriages in the U.S. are so common now that blended families are considered “the norm.” Unfortunately, the comingling of children from prior relationships can bring all sorts of financial complications — even when the children are grown. What was once sibling rivalry over who gets the most expensive birthday gifts can morph into who gets what assets when a stepparent dies.
Despite bleak statistics, there are definite advantages to a second marriage. For one thing, the partners are generally older and have already witnessed the fallout of prior mistakes. Many couples enter a second marriage with the knowledge of what works and what doesn’t and have accepted the fallacy of their own mistakes. They may commit to correcting the error of their ways and engage in more open communication to ward off problems before they steep. As one seasoned spouse proclaimed, the next time around offers “a second chance for a first great marriage.”5
Content prepared by Kara Stefan Communications.
1 Janet Kidd Stewart. The Seattle Times. Nov. 7, 2017. “How to avoid the stress that a 2nd marriage can put on a retirement plan.” https://www.seattletimes.com/business/how-to-avoid-the-stress-that-a-2nd-marriage-can-put-on-a-retirement-plan/. Accessed Dec. 22, 2017.
2 American Psychological Association. 2017. “Making stepfamilies work.” http://www.apa.org/helpcenter/stepfamily.aspx. Accessed Dec. 22, 2017.
3 Mark Eghrari. Forbes. June 2, 2017. “Second Marriage and Estate Planning: 5 Things You May Not Have Considered.” https://www.forbes.com/sites/markeghrari/2017/06/02/second-marriage-and-estate-planning-5-things-you-may-not-have-considered/#71d3ad261db1. Accessed Dec. 22, 2017.
4 Terry Gaspard. The Good Men Project. Sep. 27, 2017. “10 Things to Improve Your Second Marriage Today.” https://goodmenproject.com/marriage-2/10-things-to-improve-your-second-marriage-today-fiff/. Accessed Dec. 22, 2017.
5 Jill Lipton. Boston Globe. Nov. 17, 2017. “We’re newlyweds over 50, and the best is yet to come.” https://www.bostonglobe.com/magazine/2017/11/14/newlyweds-over-and-best-yet-come/EL6m1jU0sosMxSRSnXALxK/story.html. Accessed Dec. 22, 2017.
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