Thursday, July 18, 2019
Old Blue Eyes, the one and only Frank Sinatra, serenaded the words "love is lovelier, the second time around." But the reality is that the rate of divorce of second marriages are even higher than first ones, coming in at 67%. Planning is necessary to beat the odds, and financial planning should definitely be considered.
Here are 11 thinks to remember to keep your second love as your last love.
- Be honest about your financial situation.
- Let your future spouse know all the details about your assets, your debts, and things that may occur upon remarriage - such as loss of alimony.
- Communicate your desire to support children, friends, or an aging relative.
- If you are paying for an adult child or aging parent, make your future spouse aware of it.
- Open a joint checking account.
- This is a practical way of unifying your lives together.
- Account for differences in income.
- If there is a large disparity in incomes, each person paying 50% of the household bills could put one party at a great disadvantage.
- Have monthly planning meetings and pay your bills together.
- This does not have to be perpetual arrangement, but at least for the first few years start a habit of getting together solely to pay your bills and talk about each other's financial goals.
- Have a written plan on how to pay for education.
- If one person has already put a child through college solo then gains a stepchild that is in middle school, they may be less willing to contribute as much, so an honest discussion is necessary.
- Establish a “Yours, Mine, Ours”.
- Some people may want to have joint assets while also maintaining individual ownership of pre-marital assets.
- Consider a pre-nuptial agreement.
- Though the document may seem like a passion killer, it can be wise protection for both partners.
- Set up revocable trusts for pre-marital assets.
- Some may consider this a devious way to keep assets away from a new spouse, but it is more likely a way for you to protect your children from whatever the future may bring, such as an evil step parent.
- Consider life insurance to equalize your estates.
- This can ease any tension if one partner has a much larger estate to pass on to their children compared to the other spouse.
- Jointly hire a financial adviser.
- By both spouses signing the paperwork, it can prove that the advice and planning does not favor one partner over the other.
See Mark Avallone, Love is Lovelier the Second Time Around: 11 Tips to Keep it That Way, Forbes, July 17, 2019.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.