The number of remarriages in England and Wales increased by 418% in the half-century between 1969 and 2019.
The data also shows that second marriages are usually more likely to be successful than first marriages.
Maybe remarriages aren’t simply the triumph of hope over experience after all 🙂
However, there is still plenty of potential for conflict over financial matters, especially where multiple sets of children are involved.
Approaching your new marriage with honesty, transparency and trust can help build the foundations for a financially sound future together.
With that in mind, if you haven’t already, consider adding these six tasks to your “to-do” list before the big day.
1 Don’t shirk the hard questions
2 Evaluate your estate planning
2.1 Update your will and beneficiaries
2.2 Property
3 Discuss how you combine your finances
4 Talk about the “What ifs”
5 Resolve outstanding issues
6 Discuss your shared goals
7 Remarriage – Financial Q & A
7.1 How will my State Pension be affected if I remarry?
7.2 How will my employer or private pension be affected if I remarry?
7.3 What happens to spousal maintenance on remarriage?
7.4 What happens to my widow(er)s pension if I remarry?
7.5 How will my will be affected if I remarry?
7.6 How can financial advice help?
8 Conclusion
9 Further reading
Don’t shirk the hard questions
Getting married later on in life typically means having a much more complex financial picture than you had in your 20s or 30s.
Therefore, before saying “I do”, you’ll want to sit down with your partner and ask each other some tough questions that will help to paint a better picture of how you stand financially.
Some important questions to ask include:
- What are your financial assets?
- How much debt do you have?
- Do you have any obligations from your previous marriage, such as spousal maintenance or child support payments?
Approach this gently. The object is not to shame your partner for accruing debts or accuse them of poor money management.
Evaluate your estate planning
If you and/or your spouse have children from a previous marriage, then it is important that you figure out estate planning in the event that either of you passes away.
Take some time ahead of the wedding to discuss your various options and requirements.
Once you are married, you will want to have a clear picture of how you want your combined estate to be divided among children and stepchildren.
A financial adviser can help you to develop a plan that reflects the new changes to your family.
Update your will and beneficiaries
If you want your assets to end up where you intend, it is important to update your will.
Did you know?
Marriage or civil partnership automatically invalidates any previous will (except in Scotland, where it does not) but divorce does not.
In addition, the beneficiaries of pensions and life insurance policies should also be updated.
Also, if you want your children from a previous marriage to take ownership of a particular asset at your death instead of your spouse, it can take some extra planning.
If you don’t plan properly, you could die and have your spouse not sharing with your kids or vice versa.
Property
If you own a UK property as a joint tenant with your partner, your 50 per cent share passes to them when you die.
They then own the whole property and can potentially disinherit any children that you have from a previous marriage.
If you own the property as tenants in common and one of you dies and has left a will, the wishes set out in the will take precedence in deciding who will inherit the share.
You can leave your share to anyone that you choose.
For example, you can arrange for your share to pass to a trust on your death, meaning that ownership does not automatically pass to your new spouse, but they are still able to remain living in the home during their lifetime. After which ownership could pass to your children.
Discuss how you combine your finances
You and your spouse will want to discuss how you handle your banking needs.
You may find that keeping your finances completely separate is easiest (and most comfortable) for both of you.
Alternatively, you may be happier with combined accounts.
Another option would be to use what is known as the three-pot system.
Here, each of you has your own separate account. In addition, you also have a joint account. This account is used for joint expenses, such as living costs, groceries, etc.
Talk about the “What ifs”
Talking through some of the big “what if” scenarios isn’t necessarily fun, however with such an impending life change, it is important.
You should be aware of each other’s funeral wishes as well as any views around handling incapacitation.
Your partner should also know about any life insurance policies that you have as well as how to access accounts and other assets.
Additionally, it would make sense to run through all insurance policies and see where additional coverage may now be needed, or where coverage may be redundant based on any policies that your partner may already have.
Resolve outstanding issues
It is important that any loose ends from your previous marriage are tied up before walking down the aisle again.
Separated couples often agree their financial and childcare arrangements informally between themselves and it isn’t until one party wants to remarry that the other chooses to challenge those arrangements.
Another issue to keep in mind is that you may be prevented from making a financial claim against your previous spouse once you have married again.
However, your previous spouse may still be able to make a claim against you.
This could be particularly upsetting for your new partner, as it may involve them having to disclose details of their financial position.
You don’t want to leave it until retirement to find out that one of you wants to spend the sunset years on a beach sipping pina coladas and the other has dreams of battling midges while fishing for trout in the Scottish highlands.
This is especially the case if you are in your 40s or 50s, as you have fewer years where you’ll be working and able to save.
So, think about what your new combined future looks like and how the two of you will plan for your goals.
Remarriage – Financial Q & A
How will my State Pension be affected if I remarry?
The new UK State Pension focuses on individual entitlements and you usually can’t use your ex-partner’s National Insurance record.
However, if you reached State Pension age before 6th April 2016, you will continue to receive the State Pension under the old system.
See my expat State Pension guide for more information.
How will my employer or private pension be affected if I remarry?
If you are a member of a pension scheme and you decide to remarry or form a new civil partnership, you will probably want to change the nominated beneficiary.
This is the person who receives any benefits from the scheme if you die.
If your new family dynamic is complex (e.g. children from a previous marriage and/or step children, you may also want to consider a spousal bypass trust.
What happens to spousal maintenance on remarriage?
If you have a spousal maintenance order in your favour, this will automatically come to an end on remarriage.
You will therefore need to consider whether you can manage financially without the maintenance payments.
If you are the one paying spousal maintenance, will you still be able to afford the payments when you are living with a new partner?
What happens to my widow(er)s pension if I remarry?
If you are receiving a spouse’s pension from the scheme of a deceased partner, it is important that you check the rules to see where you would stand if you remarry.
I would also strongly recommend getting this confirmed in writing by the scheme trustees.
Some schemes don’t care if you remarry. Others will immediately stop your pension.
How will my will be affected if I remarry?
Remarrying or entering a new civil contract invalidates any existing will (except in Scotland).
You could add a clause to your will to prevent it being cancelled by your remarriage.
However, you would probably be better off making a new will that reflects your new circumstances.
How can financial advice help?
Independent financial advice can help to prevent disagreements over money by recommending an approach that suits you both.
When you see a financial adviser, go together and discuss your priorities as a couple to ensure your finances are fully aligned.
Conclusion
Whether your previous marriage ended due to divorce or death, there is a good chance that you and/or your new partner are entering your new marriage with a range of assets, debts and other financial obligations, not to mention children who may need financial support now or in the future.
This makes it vital to determine how you and your partner will handle the various elements of your financial life.
Doing so involves much more than deciding whether or not to keep separate bank accounts and who pays the bills.
