| Avoid a Collision When Merging Finances. By Kathleen Thomas |
So you’re getting married. In addition to planning your wedding, your preparations should include planning how your finances will blend in
your new joint household. Since money is a frequent sore spot for couples, you can get your union off to a stronger start with a proactive
approach to merging your finances.
Start by laying your cards on the table before the vows are exchanged. There should be no surprises about lingering debt or unpaid child
support after the nuptials have occurred. Current and future obligations, earnings, savings, and also personal spending habits, are all fair
game for this heart-to-heart talk.
If you’ve previously been married, your former marital status and the presence of children could affect your combined financial picture
significantly. For instance, under certain circumstances, an ex-spouse may be entitled to some or all of your retirement benefits (if a
Qualified Domestic Relations Order is in effect). An obligation to pay alimony and/or child support can also significantly impact current and
future income. You should also discuss your intentions regarding financially helping your kids with future expenses such as college or a first
home. Will that help be an individual or a joint effort?
Check with an attorney to determine how remarriage affects your child support agreement. In addition, you should determine if remarriage
affects child support obligations that you pay and/or receive.
A serious problem that can rear its ugly head is shared debt with a former spouse. Even if a divorce decree split debt down the middle, if
one debtor reneges on the deal, the other might still be held responsible. In other words, if you or your new spouse has a debt-ridden ex-
spouse, old debts may come knocking at your door.
If one or both of you owns property, it is important to decide if you will add the other spouse to the title. You may want to sell property before
your marriage to avoid excess taxation if you both own homes and plan to keep just one after the marriage. Your tax preparer can give you
guidance in this area.
Check the beneficiary status on all of your insurance policies and retirement plans as soon as you remarry. Most insurance plans require
policyholders to complete a beneficiary form to change beneficiaries if they wish to prevent a former spouse from claiming an insurance
payout intended for a new wife or husband. Check with your attorney as to rights to your 401(k) because generally the new spouse is
entitled to the proceeds at your death, unless that spouse officially waives the benefit. Check to see that your levels of insurance coverage
are adequate to provide for you, your new spouse, and all dependents.
Once you’ve dragged all financial skeletons out of the closet, the two of you can decide if you are comfortable with a complete merger of
checkbooks and savings accounts or if you wish to retain separate resources going into the marriage. You may want to consider a pre-
nuptial agreement if one of you is entering the relationship with significant assets and a desire to protect those assets in the event of
divorce.
Talk to a financial advisor to discuss ways to help protect your finances individually and as a new couple. Determine how to best save for
your future goals, including a shared retirement. Professional advice can help take the emotion out of how to effectively manage your
finances and achieve your dreams.
Kathleen Thomas is a Senior Financial Advisor with Thomas and Associates, a Private Wealth Advisory practice of Ameriprise Financial
Services, Inc., with offices located in Hampton, NH and Wakefield Mass. Kathleen works with individuals, families, and small businesses to
help them make the most out of what they have. She can be reached at (800) 640-0433 or by accessing her web site at
www.kathleenmthomas.com.
your new joint household. Since money is a frequent sore spot for couples, you can get your union off to a stronger start with a proactive
approach to merging your finances.
Start by laying your cards on the table before the vows are exchanged. There should be no surprises about lingering debt or unpaid child
support after the nuptials have occurred. Current and future obligations, earnings, savings, and also personal spending habits, are all fair
game for this heart-to-heart talk.
If you’ve previously been married, your former marital status and the presence of children could affect your combined financial picture
significantly. For instance, under certain circumstances, an ex-spouse may be entitled to some or all of your retirement benefits (if a
Qualified Domestic Relations Order is in effect). An obligation to pay alimony and/or child support can also significantly impact current and
future income. You should also discuss your intentions regarding financially helping your kids with future expenses such as college or a first
home. Will that help be an individual or a joint effort?
Check with an attorney to determine how remarriage affects your child support agreement. In addition, you should determine if remarriage
affects child support obligations that you pay and/or receive.
A serious problem that can rear its ugly head is shared debt with a former spouse. Even if a divorce decree split debt down the middle, if
one debtor reneges on the deal, the other might still be held responsible. In other words, if you or your new spouse has a debt-ridden ex-
spouse, old debts may come knocking at your door.
If one or both of you owns property, it is important to decide if you will add the other spouse to the title. You may want to sell property before
your marriage to avoid excess taxation if you both own homes and plan to keep just one after the marriage. Your tax preparer can give you
guidance in this area.
Check the beneficiary status on all of your insurance policies and retirement plans as soon as you remarry. Most insurance plans require
policyholders to complete a beneficiary form to change beneficiaries if they wish to prevent a former spouse from claiming an insurance
payout intended for a new wife or husband. Check with your attorney as to rights to your 401(k) because generally the new spouse is
entitled to the proceeds at your death, unless that spouse officially waives the benefit. Check to see that your levels of insurance coverage
are adequate to provide for you, your new spouse, and all dependents.
Once you’ve dragged all financial skeletons out of the closet, the two of you can decide if you are comfortable with a complete merger of
checkbooks and savings accounts or if you wish to retain separate resources going into the marriage. You may want to consider a pre-
nuptial agreement if one of you is entering the relationship with significant assets and a desire to protect those assets in the event of
divorce.
Talk to a financial advisor to discuss ways to help protect your finances individually and as a new couple. Determine how to best save for
your future goals, including a shared retirement. Professional advice can help take the emotion out of how to effectively manage your
finances and achieve your dreams.
Kathleen Thomas is a Senior Financial Advisor with Thomas and Associates, a Private Wealth Advisory practice of Ameriprise Financial
Services, Inc., with offices located in Hampton, NH and Wakefield Mass. Kathleen works with individuals, families, and small businesses to
help them make the most out of what they have. She can be reached at (800) 640-0433 or by accessing her web site at
www.kathleenmthomas.com.
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weddings etc. Each issue has a feature section as well. Many of our articles are written by local business people who provide information
relevant to their business expertise. The Applaud Women website is also a resource center for local women including the most comprehensive
listings of Restaurants, Weddings, Female doctors and Hotels. It also includes a number of informational pages with links, articles and RSS feeds
to both local and national websites of interest to women in NH & n. MA. To read the publication click here then click on the cover image to turn
pages, print or download the entire magazine. For past issues visit the Applaud Women Library.
applaud local women. The core of the magazine is our inspirational women's articles, most of which feature local women but occasionally we are
able to interview national women who we feel provide a unique inspiration for our readers. Our other articles cover topics of interest such as food
recipes, home, garden, beauty, health, fashion, dating, parenting, seniors, finance, business, hair care, skin care, advice, real estate, insurance,
weddings etc. Each issue has a feature section as well. Many of our articles are written by local business people who provide information
relevant to their business expertise. The Applaud Women website is also a resource center for local women including the most comprehensive
listings of Restaurants, Weddings, Female doctors and Hotels. It also includes a number of informational pages with links, articles and RSS feeds
to both local and national websites of interest to women in NH & n. MA. To read the publication click here then click on the cover image to turn
pages, print or download the entire magazine. For past issues visit the Applaud Women Library.
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