In order to avoid that next trip down the aisle from creating a host of new financial challenges here are some financial steps to consider before getting remarried.
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, such as child support, liquid, and illiquid investment assets, as well as 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, if there’s a divorce. 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.
Update your estate plan. Estate plans can be forgotten with all of the details of a wedding. Talk with an experienced estate planning attorney to review your situation and update or create wills, powers of attorney, and health care directives to be certain that your new spouse, or another trusted person, has the decision-making authority that reflects your wishes.
Reference: Nasdaq (April 20, 2018) “Getting Remarried? 5 Financial Steps to Take Before Tying the Knot (Again)”