If you’re marrying for the second, third, or even fourth time, your finances can become more complicated.
To pave the way for a long and happy new marriage, it’s useful to consider ways that can help you manage your money both as a couple and as individuals.
When remarrying it’s likely you’ll be a little older, but also a lot wiser and know where you’re prepared to compromise and where you aren’t. You may be wealthier in your own right as well and have various assets to consider like property and pensions that you’ve acquired over time. To protect your assets and plan for the future, it’s important to think carefully about how your finances might be affected by remarrying.
Here are some of the things that you might want to consider before you re-tie the knot.
A prenuptial agreement is essentially a contract made between two people before they get married, which outlines how their finances and assets would be split if they were to divorce.
Lots of us might initially think prenups are only for the very wealthy, but reports show many more couples are now choosing to sign prenups. While planning for a breakup is probably the last thing on your mind when you’re about to remarry, having a prenup in place can bring clarity to your financial position and avoid potential disputes in the future. In some instances, it can also take pressure off the relationship knowing that if the worst were to happen, you have clarity on your situation.
It’s important to note that while Prenups are legally binding in Scotland, they aren’t in England and Wales, however courts do usually take them into account if you split up.
There are rules about how a prenup 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 prenup within three weeks of your wedding. You can read up on present and future prenup laws here.
If you’ve been receiving maintenance payments from your ex-partner, these will automatically stop when you remarry or enter a new civil partnership. It’s also possible that maintenance payments will stop if you and your new partner live together but are not yet married, however this is not usually an automatic process.
For example, if your ex-partner went to court to have a maintenance order changed, even if you were not financially supported by your new partner, the fact that you’re living together would be taken into account.
However, generally speaking, child support isn’t affected if you remarry. When calculating how much child support should be paid or received, the only income that should be considered is that of the biological parents. There are some specific factors and circumstances that may affect this however which you can find out more about here.
Many couples who remarry already own their own property. If you aren’t already living with your spouse-to-be, it might make financial sense to sell your current homes and pool your money to buy a new property together.
It’s important to think about how you’re going to finance your new home, and how much each of you will contribute. For example, 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.
If you own your home as tenants in common (where you each own a share of the property), rather than as joint tenants (where you both jointly own the whole of the property) you can draw up a written document – called a deed of trust – that outlines the share in the property each of you owns.
It’s important to have life insurance if your partner or family relies on your income. This can provide valuable peace of mind that in the event of your death, they will be financially protected. Learn more about why life cover is important in our article Why life insurance matters.
When you remarry, it’s possible that your current life insurance may no longer fit your needs and you might need to review it or consider a new policy.
If you are updating an existing policy, it’s a good idea to check who your current beneficiary is and consider any changes you’d like to make. A beneficiary is the person who would receive the death benefits of a policy if something were to happen to you.
Getting a joint policy with your new partner may seem like a good option, bear in mind however that joint policies only pay out when the first member of the couple dies, which leaves the surviving partner with no life insurance.
You may think buying two separate policies would be far more expensive than taking out a joint policy, but this isn’t always the case (it will depend on the age and health of each of you).
It’s a good idea to get quotes from several different insurers before buying life cover, as premiums will vary depending on who you go to.
We work with two different life insurance brokers who can help you compare the cost of cover and find the right policy to suit your needs. They are LifeSearch* and ActiveQuote*. With LifeSearch, you simply enter your name and contact details and a LifeSearch adviser will call you at a convenient time to provide you with fee-free advice and no obligation quotes.
With Active Quote, you can compare term assurance quotes and arrange cover online, choosing how much cover you want, how long for, and whether you want a level or decreasing quote. Again, the service is fee-free.
As with all forms of insurance, you must be completely honest in your answers to the questions on your life insurance application – for example your medical history – otherwise the policy could be invalidated and those you are looking to protect might not receive what you expect them to.
The money saved up in your pension forms a part of your assets, just like your possessions and personal savings, so it’s important to think about where you’d like the money to go if something were to happen to you.
When remarrying, it’s likely both you and your partner will want to update your wills so that you can benefit from each other’s pensions. If either of you is a member of a company pension scheme, you can make sure your partner would receive any benefits from the pension if something were to happen to you by making them your ‘nominated beneficiary’. Nominating someone you trust as your beneficiary can help give you peace of mind that your money will go where you want it to if anything were to happen to you. You must notify your pension provider if you want to change or add a nominated beneficiary.
By law you’re allowed to use your husband or ex-husband’s national insurance record for your state pension if you’d end up with a higher pension as a result.
You lose that right if you remarry before you reach state retirement age.
Whilst rare these days, it’s also worth noting that some final salary pensions may have a clause that allows their pension income to be transferred over to a spouse or civil partner after the main pension holder dies. In these instances, it is likely that these payments might be stopped if you were to remarry. If you think this might impact you, it’s vital to seek advice from a regulated financial advisor as the financial implications can be significant.
You can find a local financial advisor on VouchedFor or Unbiased, or for more information, check out our guides on How to find the right financial advisor for you or How to get advice on your pension.
Sorting out your will
It’s important to update your will when you remarry because you want to be sure that when you die, your estate passes to who you want it to – which is unlikely to be your ex-partner.
While getting divorced does not invalidate your will, getting married does (unless you live in Scotland or have included a specific clause stating it should still be valid after your marriage), so it’s vital to amend it. Writing a will is one of the most important things you can do to protect your loved ones from unnecessary extra stress and anxiety after you pass away. You can read more about the importance of writing a will here.
To update your will, you should contact the solicitor or will service where you originally sorted your will, or you could create a new legally binding one online.
If you’re looking for somewhere to start, we have partnered with Farewill*, a reputable online wills provider who have an excellent trustpilot rating. They are offering Rest Less members a 20% discount off the cost of writing your will if you use the code ‘restless20’ at the online checkout. The normal cost of writing a will online (before the discount is applied) with Farewill is £90 for a single will or £140 for a couples will. If you want to make your will over the phone this rises to £120 for a single will, or £190 for couples. It’s important to note that the service provided by Farewill is only available for people residing in either England or Wales.
If you’re looking for more information on where to start with your will, you might find our article How to write a will useful. If you don’t leave a will, your estate – the money, property and possessions you leave behind – will be distributed according to the rules of intestacy. This is a complex and arcane set of rules that almost invariably won’t distribute your estate as you would have wished and can result in significant family tensions at an already emotional time.
It may seem a bit complicated – and slightly unromantic – thinking about money matters if you’re planning to remarry, but doing so means that you can move forward with peace of mind that your finances are in order and you’re prepared for whatever lies ahead.
Have you found these ideas useful? Have you got any of your own suggestions for managing money when entering a second marriage? We’d love to hear from you. You can share your experience by joining the community discussion, or by leaving a comment below.