The Business Side of a Second Marriage
A new marriage often presents an opportunity for a fresh start, a chance to move forward in life. Before your wedding celebration, however, there are many important things to consider if you are going to make the transition a smooth one. Are you combining households? Are you moving to a new space or is one of you “making room” for the other? Are other family members also involved, such as children or parents. People who remarry frequently have complex financial responsibilities: child support, aging and ailing parents or other loved ones, existing mortgages and other debt, tax liabilities, liquid and illiquid investments and conflicting estate and tax planning issues and strategies. Do not wait until it is time to pay for the wedding. The best course is to be candid from the start. Discuss all of the aspects of your new relationship, including the financial ones. Some couples even create a consolidated net worth statement. Take time to review your individual financial and family situations before you begin this task.
People who were previously married often have children from their former marriage. Apart from the fact that the children may resent or oppose the new relationship, you and your partner may have very different views as to child-rearing. You may not naturally agree on issues of support. Determine, as a couple, how you will 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.
Consider signing a pre or postnuptial agreement. Be aware that your partner may be sensitive about such a suggestion but the exercise may be valuable for both of you. Under the law in New York state, if you are married, you have a legal obligation to support your spouse. You have a right to opt out of the statutory obligations provided that both parties agree. A pre or postnuptial agreement is the only way to do that: to formalize your arrangement, to legally claim specific assets as your own and to specify the terms upon which your assets will be divided if you and your partner part – either by divorce or death. It is a means for ensuring that the children affected by the marriage are financially protected in the event one spouse dies.
Review each of your accounts. Discuss how to handle joint expenses. Decide whether to open a joint account(s). Update your beneficiary designations. People commonly forget this step and later realize that their former spouse is still named as a beneficiary! Do not just make a change, discuss whom to name as beneficiary to ensure that both of you are on the same page. Imagine how you might feel if you automatically named your spouse as beneficiary and later learned that your spouse had named his or her children and not you.
Review and update your estate plan. This step often gets forgotten in the rush of planning the ceremony, reception and honeymoon. You’ll both need to meet with an experienced estate planning attorney to review your individual wills and trusts from the past and prepare new wills and trusts, powers of attorney, and health care directives to reflect your new status.