How to Protect Your Finances Before a Second Marriage

All divorces cause financial stress, but a divorce later in life can make financial situations complicated. As it becomes more common to divorce at an older age, it's natural that second (or third…) marriages later in life will become more common too. When couples remarry at this stage of life, they need to consider things that probably weren’t considered before their first marriage, such as retirement accounts, estate plans and Social Security. It's important to be aware of the necessary precautions to take to ensure finances are protected. An article from U.S. News recommends the following steps:

Sit down with your spouse (or future spouse) and talk about finances. This includes assets, liabilities, financial goals, and financial challenges. You should discuss budgeting and if either of you have children, you should discuss any finances that relate to them. Also dicuss future joint financial plans, such as mortgages, usda loans, retirement accounts etc.

Make sure your estate plan is up to date. If you have children from a previous marriage, it's extremely important to clearly spell out where you want your assets to go. With a new spouse in the picture, this can be a touchy subject with the spouse and your children. So it's important to be clear with everyone.

Update your will. You need to update your will every so often and have a plan for the possibility of one spouse passing away before the other. You should also set up documentation for potential health care decisions.

Consider a prenup or a postnup. Talking about this can make people uncomfortable but it's a must. Decide what happens to the properties and retirement accounts each spouse is bringing to the marriage. Life is full of surprises (at least one of you is on your second marriage after all), so no one should take it personally for being responsible and setting up a prenup.

Review all your documentation. With a second or third marriage, you may need to update your estate plan, beneficiary designations and emergency contacts. Make sure all documents clearly spell out your wishes and that none of the documents contain conflicting information.

Getting remarried later in life can also affect your Social Security. Before taking that trip down the aisle, financial advisors recommend reviewing your Social Security prospects. There are basic rules you'll want to be aware of before remarrying to ensure you aren't missing out on any benefits. Under certain conditions, you can claim Social Security benefits earned by your ex-spouse. You will no longer be eligible to collect benefits on your ex-spouse's record if you remarry, so if you're currently collecting or plan to, you'll want to take that into consideration.

A marriage later in life can be an exciting time. Get your finances squared away so that you can fully enjoy your new marriage with your mind at ease.

 




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