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REMARRIAGE CAN MEAN FINANCIAL HEADACHES
By JOYCE M. ROSENBERG

Getting married is always a financial adjustment, as any couple knows. When the bride and groom are baby boomers, it's often more complicated -- particularly if one or both are remarrying and have children.

Many boomers have financial obligations to previous spouses. Many are putting children through college. Many are looking after and perhaps supporting elderly parents. And often the new spouses have differing levels of wealth and attitudes about spending and saving.

Financial planners say these issues actually aren't the biggest problem facing engaged and remarried boomer couples -- it's not talking about money before it turns into conflict.

"They need to have the trust and willingness to say, 'These are the things that are really important to me,'" said Diahann Lassus, a certified financial planner from New Providence, N.J.

If a couple doesn't openly discuss finances, one or both spouses could run into some very unpleasant surprises.

"One of the things I find people don't think about in remarriage is that life insurance or retirement funds often have been dedicated to the prior family" as part of a divorce agreement, said Ginita Wall, a certified financial planner from San Diego. And on the death of a spouse, the ex-wife or ex-husband has a right to part of an individual retirement account, 401(k) plan and life insurance proceeds.

Estate planning can be another area of difficulty, especially if there are children from a previous marriage. For example, some parents want to leave their homes to their children, but they also want to be sure their surviving spouses have someplace to live. Often the spouse is granted the right to live in the house for as long as he or she wants, but that means the children will have to wait for their money. Sounds simple, but in some families that might cause hard feelings.

Another issue where children are concerned has to do with how equally they should be treated when it comes to college education and in estate planning. What if one spouse has more money than the other and doesn't want to leave it to stepchildren? Will that lead to resentment and a family rift? What if one set of children want to go to Ivy League schools while the others don't have the grades and have to settle for state schools? It's not just family issues that need to be discussed. Engaged couples should find out if their partners have big debts or tax liens against them, or if they've ever declared bankruptcy.

Then there's the question of a couple's spending philosophy, which, of course, is an issue at all points in life. Does one like to spend more than the other? Do both agree on how much to save? Without up-front discussion, money -- and all the emotional baggage tied to it -- can dispel the euphoria of finding a mate.

Some planners say couples can avoid at least some problems by creating a prenuptial agreement that would spell out how money will be handled during the marriage and in the event of a divorce.

"What prenups do is they force us to deal up-front with these kinds of tough issues before they become a crisis in the marriage," Woodhouse said.

Many couples shy away from prenuptial agreements because it is unpleasant to think about the prospects of divorce when you're in love and getting married. But they do offer protection when things go wrong.

Carole Cox, 58, a professor at California State University,Long Beach, credits a prenuptial agreement with saving her finances from complete disaster when her second marriage ended. She had plenty of debts from lawyer's fees and a payment she had to give her husband.

But, she said of the agreement, "it did protect the house and my retirement."

Moreover, it shielded the royalties she earned from textbooks she'd written.



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