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Second Marriage Financial Advice: Considerations Before Tying the Knot Again

Personal Finance
mature bride and groom smile on their wedding day, thankful to receive second marriage financial advice

Heading down the aisle a second time could be a somewhat different experience than it was the first time around. Not only are you older, wiser and responsible for more than you were as a first-time bride or groom, but you also have a clearer understanding that even the best-laid marital plans can go awry.

Of course, there's plenty of second marriage financial advice out there that could make planning for your second nuptials sound less than romantic. But that's not to say you can't enjoy your wedding planning! Orange blossoms smell just as sweet for encore brides and grooms — and you should always celebrate the start of a loving union.

It's possible your new marriage could benefit from careful planning for the practical side of merging your lives. Consider the following financial checklist before tying the knot again.

Life Insurance & Your New Life Together

Life insurance for second marriages could be complicated, especially if you or your future spouse have children from a previous marriage. If you already own a life insurance policy, changing the beneficiary to your new spouse could be a challenge, especially if your ex-spouse is the original beneficiary. Depending on your divorce decree, you may not be able to change beneficiaries if you're required to maintain life insurance to fund child or spousal support. In this case, purchasing an additional life insurance policy would allow you to name your new spouse as the beneficiary.

You may also be thinking about ways to protect both your spouse and children when naming beneficiaries for your life insurance policy. If your new spouse is your named beneficiary, for example, then your children are not guaranteed to receive the money if their relationship sours with your spouse. On the other hand, your spouse will receive no money if you name your children as your beneficiaries.

One method of bypassing this predicament? Create a trust that you name as the beneficiary of the life insurance policy. You can set up the trust any way you like, but a common setup would allow the surviving spouse to live off of the interest in the trust — while ensuring the principal is eventually passed along to the children.

A Clear Path for Tomorrow

It might be time to revisit your estate plan, as it could help you and your future spouse establish a solid plan for the future. The most important part of your estate plan is your will, which you could make as detailed as you like to ensure the distribution of your assets and property follows your exact wishes.

An estate plan is especially important for couples who are bringing together a blended family. While inheritance conflicts could happen in any family, they could be more likely in one brought together by a second marriage. Spelling out the specifics of who gets what in the event of your or your spouse's death could help prevent unnecessary conflict among surviving family members.

You may also want to make a prudent choice of executor, which is the person in charge of handling the logistics of an estate after your death. Since this person will manage your assets until they're distributed to your beneficiaries, it's important to choose someone you trust to follow your wishes. While many people name their spouse as their executor, naming a nonfamily professional (such as a financial professional or lawyer) as a second executor could help protect everyone in the event of your or your spouse's death.

Before the Big Day

Prenuptial agreements have a bad rap. We tend to think of prenuptial agreements as unromantic at best, and selfish at worst. If you are entering a second marriage, it could be an excellent time to draw up a prenuptial agreement for a variety of reasons that do nothing to diminish the love you and your partner share.

In particular, a prenuptial agreement could help you protect your children from a previous marriage in case of death or divorce. Here's why: In most states, marital property will generally go to a surviving spouse after one partner passes away, which could leave the children of the deceased spouse without assets their parent may have wanted them to have. A prenuptial agreement could dictate that a portion of the assets the parent brings into the second marriage will go to the children from the previous marriage rather than the surviving spouse.

It's entirely possible your will won't be enough to ensure your assets go to children from your previous marriage. Combining a prenuptial agreement (spelling out what assets will go to children from a previous marriage) with a will (reaffirming the terms of the prenup) could be a smart way to help financially protect your children.

You could be a starry-eyed romantic and help protect yourself and your loved ones as you take your second trip down the aisle. Starting your second marriage with a commitment to clear communication about your finances could be a great way to cement the bond between you and your new love. And this second marriage financial advice could help you reach your happily ever after — financially.

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Information provided is general and educational in nature. It is not intended to be, and should not be construed as, legal or tax advice. Western & Southern Financial Group and its member companies (“the Company”) does not provide legal or tax advice. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. The Company makes no warranties with regard to the information or results obtained by its use. The Company disclaims any liability arising out of your use of, or reliance on, the information. Consult an attorney or tax advisor regarding your specific legal or tax situation.