Second marriages offer an opportunity for a fresh start. Couples are given a chance to wipe the slate clean, learn from past mistakes, and experience love and happiness.

They’re also given an opportunity to correct previous financial missteps, build a prosperous shared financial future, and leave a legacy behind for their children and beneficiaries.

Before you can realize any of these outcomes, however, it’s important to have the “money talk.”

Financial disagreements are often cited as one of the top reasons for conflict in a marriage. And if you decide to get married again, you probably have more assets to protect than you did the first go-round. You may even have dependents in your care and even greater need for a sound retirement plan. Taking all of this into consideration, sitting down to discuss your financial future may be one of the best things you can do for the health of your marriage.

That’s not to say having these conversations is easy. If you’re wondering what your remarriage financial talk should entail or how to proactively plan for the financial road ahead, consider the following financial tips for a successful second marriage.

Build a Financial Strategy Before Marrying Again

The cornerstone of any successful marriage is honesty. Second marriages are no different. Before you commit to living your life with someone, it’s important for both parties to share their complete financial picture, including all assets and liabilities.

You don’t want to wait until after the wedding night to find that your spouse’s once-healthy checking account, 401(k), and IRA were negated by mountains of debt. Also, if you’re going to share your spouse’s home or car, it’s important to know early on how much is left on the mortgage and how much their monthly payments are.

If children are in the picture, you’ll also want to be transparent about how much you’re spending on them. Costs such as child support payments, medical bills, 529 education account contributions, as well as school supplies and extracurricular activities should be discussed.

Despite the potential discomfort of these conversations, this exercise isn’t about chastising a person’s financial choices or shaming them for bad decisions. It’s about getting a clear picture of your current financial baseline and your ideal shared financial future. The goal is to build a roadmap that will get you from Point A to Point B.

Get Clear on Which Assets Will be Protected and Which Will be Shared

In second marriages, nearly every couple comes into the union with their own financial track record. Figuring out how to tackle this accumulation of debts and assets as a couple will take some planning and discussion.

For example, one party may want to put all the household income in one account. The other may want to remain in control of their own finances. In a similar vein, one person may want to keep their house, while the other may want to sell both homes and buy a new one.

Deciding how you ultimately merge your lives together will require some compromise and creativity—and ideally, a formal financial plan. Your plan should allow you to determine how to manage your various assets and how combining or separating different assets can impact your financial future.

In cases where one member of the couple is entering the union with significantly more wealth than the other, a prenuptial agreement should be considered. Beyond being a critical tool in helping preserve your wealth in the event of divorce, a prenuptial agreement can help you make sure you have something to leave your beneficiaries or heirs when you’re gone.

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Update Your Paperwork and Adjust Your Estate Plan

Updating your will is important when entering a second marriage. But when you do, make sure to update your designated beneficiaries as well. Beneficiary designations supersede anything listed in your will. So, if your previous spouse is the beneficiary on your 401(k) or IRAs, they could end up inheriting the assets in those accounts, despite whatever’s listed in your will.

Life insurance policies are another area that could benefit from some updating. If you share your old life insurance policy with an ex-spouse, and that policy is set up to pay out to your children, it might make sense to keep that policy and start a second life insurance policy with your new spouse—or even an irrevocable life insurance trust (ILIT).

If you or your new spouse are bringing significant assets to the marriage, or if you both have children from previous relationships, you’ll want to create a new estate plan that takes those needs and assets into account. An estate plan allows you to divide your assets up in a specific way, which can come in handy, considering most probate laws aren’t typically written for blended families.

Estate planning will involve amending your will, reevaluating legal documents (like a power of attorney), and adding health care directives. If your children are older, you may want to consider naming them in some of these instances instead of your new spouse, especially if your new spouse is the same age as you.

At this stage, depending on your needs, you may also want to establish a trust (or trusts), as these can help ensure your assets are distributed to your exact wishes as your family grows. Something like a qualified terminal interest property (QTIP) trust can even protect your assets if your new spouse outlives you, inherits your assets, and wants to bequeath them to someone outside your family.

Leave No Stone Unturned: Get Second Marriage Financial Advice

Being proactive about your financial health and creating a strong financial strategy before tying the knot can set your second marriage off on the right foot. There are a lot of considerations, and it can be difficult to keep track of everything. That’s why including an experienced advisor into your financial planning can make a world of difference.

The financial advisors at Wealth Enhancement Group have decades of experience and have guided countless clients through second (and even third) marriages. If you’re about to remarry, reach out to a financial advisor today to help make sure you have all your bases covered.

This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.

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