Marriage second time around, how to manage your money

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It may be a second marriage for one or both of you, but it’s the first time you’ll have made a legal commitment to each other and it’s the start of a new life together. This time round you’re probably a little older and a lot wiser; you know yourself better and understand where you’re prepared to compromise and where you won’t. You’re also likely to be wealthier in your own right and that means you have to think about how getting married may affect your finances.

Prenuptial agreements
Sorting out an agreement that will spell out who gets what if you split up probably isn’t your priority when you’re about to remarry. But, according to David Allison, a partner with law firm Family Law in Partnership, an increasing number of couples who aren’t particularly wealthy consider pre-nups when they are on their second marriage.

1. Pre-nups aren’t binding in England and Wales, however, courts do take account of them – which means their contents may well be taken into account if you were to split up. In Scotland pre-nups are seen as legally binding.

SAVVY TIP: Post nuptial agreements are far less common but are legally binding in England and Wales.

There are rules about how a pre-nup should be drawn up to make sure it’s fair (for example, both of you should take independent legal advice and you shouldn’t be made to sign the pre-nup within three weeks of your wedding). There’s more about this in the article entitled Why more couples should think about pre-nups.

Maintenance payments
If you were receiving maintenance payments from your ex husband they will stop when you remarry.

1. Child support isn’t affected by you remarrying as your new husband isn’t expected to provide financially for children that aren’t his.

2. Maintenance payments will stop automatically when you remarry.

SAVVY TIP: It’s possible that maintenance payments will stop if you and your new partner live together but it’s not an automatic process. However, your ex husband may well go to court to have the maintenance order set aside and, even if you’re not being financially supported by your partner, the fact you’re living together will be taken into account.

Buying property
Many couples who remarry already own their own property. It might make financial sense to sell up and to pool your money, but think about how you will finance your new home.

1. If one of you puts in a much larger amount than the other, it may be worth reflecting that in the way the property is owned.

2. Specify how much you each own in writing. If you own your home as tenants in common (rather than the traditional way, which is as joint tenants), you can draw up a written document — called a declaration of trust — that spells out the share in the property each of you owns.

Life insurance
If you’re getting married for the second time you may already have some life insurance, but it may not be right for your needs.

1. Joint policies aren’t generally the best idea because they can’t be divided if you split up.

2. Joint policies only pay out once – when the first member of the couple dies, which leaves the surviving partner with no life insurance.

SAVVY TIP: You may think that buying two separate policies would be far more expensive than taking out a single policy, but in some cases it isn’t (it will depend on the age and health of each of you). It’s worth getting a quote from a life insurance broker – Lifesearch is one firm of brokers that knows the market well.

Pensions
You must make sure that you’ll be able to benefit from each other’s pensions:

1. If you’re a member of a company pension scheme make sure you change the ‘nominated beneficiary’. This is the person who receives any death benefits if the member of the pension scheme dies.

Sorting out your will
Many people put off sorting out a will but it’s vital that you draw up a new one if you remarry. Many people — wrongly — believe that divorce invalidates a will. It doesn’t, but getting married does (except in Scotland).

If you already have a will: if your will was drawn up before you remarried it will be invalid unless you knew you were going to get married at the time you drew it up and it contains a clause stating that it should be valid after your marriage.

SAVVY TIP: If you have children from a previous relationship or marriage and leave everything to your new husband or wife, be aware that your will may be challenged by your children if you supported them financially while you were alive. You can read more about When can you challenge a will? How a will can be contested on SavvyWoman.

1. In Scotland getting married doesn’t invalidate a will, so make sure it reflects your current wishes.

2. If you don’t have a will: if you don’t have a will your estate – the money, property and possessions you leave behind – will be distributed according to the rules of intestacy.

Related articles

How post-nuptial agreements work

Why couples should think about pre-nups

Married couples and civil partners can cut their inheritance tax bill

VIDEO: What is life insurance?

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