Second marriages are increasingly common in the US. As of 2013, 40% of all weddings involved at least one partner who had been married before. As a result, it’s more common than ever for engaged couples to need to consider how they’ll blend families and finances when they get married.
Blending families presents unique challenges, but it can be handled smoothly if the couple prepares in advance. Below, we discuss some of the demands placed on couples entering a second marriage, as well as techniques for addressing these demands before they cause additional complications.
Demands Involved in Blending Families
Blending families and finances requires careful handling of both emotional and financial concerns. Unlike many first marriages, second marriages are more likely to require couples to consider the following:
- Managing significant assets. People who are remarrying are likely to be older and have had more time to acquire assets and investments. As such, they have more property that they may want to protect in their upcoming marriage than younger couples. For example, if one partner owns a business, they may prefer to keep it separate from the marital estate instead of commingling it with other joint assets.
- Addressing other financial obligations. Previously married people are likely to have financial commitments such as spousal or child support from prior marriages. When entering their new marriage, they must ensure they can continue to meet these obligations despite blending their finances with their new spouse.
- Protecting children from previous relationships. If either partner has children from a prior relationship, they may want to protect assets they have set aside for those children. For instance, many parents may opt to protect assets like 529 plans and intended inheritances when remarrying to ensure that their children will receive those assets regardless of what occurs in their new marriage.
- Handling the emotional impact of previous marriages. Finally, when considering a second or subsequent marriage, many people find that they are wary of combining their finances the way they did previously. As such, many engaged couples choose to use more structured methods of blending their financial lives than simply relying on California’s state laws regarding marital assets.
How to Blend Family Finances Effectively
The concerns above may sound familiar if you’re preparing to merge families with your partner. There is no right or wrong way to blend your finances. Some couples choose to combine everything with no reservations, others prefer to retain completely separate accounts and bills, and others find a compromise in between.
When discussing how to manage these concerns, the goal is to find the solution that works for your specific relationship. The following four techniques can assist you in finding the right way to merge finances in your unique relationship with less stress and fewer risks.
Talk Things Through in Advance
The best thing any engaged couple can do for their joint financial future is to discuss their expectations before getting married. Regardless of how well you believe you know your partner, it’s still valuable to sit down and discuss how you want to structure your finances. Topics worth talking about include:
- Details about your current financial situation, including earnings, assets, debts, obligations, and spending habits
- How you prefer to save or invest your funds
- Whether you would prefer to merge accounts or keep them separate
- How you will share bills and expenses
- Whether you both intend to work or expect one of you to remain at home
In addition, you may benefit from discussing how finances were managed in your previous relationships. This allows you to talk about any points of financial conflict with your previous spouse/partner and develop a plan to prevent the same problems from occurring in your current relationship.
Think About the Future
Though it may seem unusual, it is critical to consider all future possibilities when preparing to blend your finances. It is worth considering what will happen to your assets should either of you pass away.
If you have any assets or loved ones you want to protect, you can take the time to do so now. Discussing these details in advance ensures that you and your partner are on the same page. If you make your wishes clear before you get married, there is less risk of misunderstandings or disputes in the decades to follow.
Create a Prenuptial Agreement
One of the most common ways couples address the above concerns is by creating a prenuptial agreement. While drafting your prenuptial agreement, you will exchange comprehensive financial disclosures with your partner. You will be obliged to discuss details of how you want to handle your finances, both on a daily basis and in the future. It’s an excellent way to ensure you’re on the same page before you get married.
Furthermore, the prenuptial contract itself protects both parties. You can use your agreement to keep certain assets separate if you choose. That can be reassuring for people who have divorced before. It also simplifies matters such as guarding your children’s inheritances or protecting a family business. If you have any concerns about blending finances, a prenuptial agreement can be invaluable.
Simplify the Process of Combining Families With Madigan & Lewis, LLP
Getting remarried is exciting, but it may come with financial complications. If you’re preparing to blend families during a second or subsequent marriage, you should consult with the expert attorneys at Madigan & Lewis, LLP. We understand the financial demands you face when remarrying. We have years of experience providing legal counsel to clients regarding these financial concerns and drafting mutually satisfying prenuptial agreements. Discover how we can simplify the process of merging your finances through a comprehensive and well-written prenuptial agreement by scheduling your consultation today.
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