Financial planning can be complex but when our circumstances change, it’s essential to review arrangements. This will make sure that everything is set up for the best returns and the best protection. With divorce rates in the UK last year at their highest in half a century, we’d like to look beyond this to what happens to our finances should we choose to remarry.

A New Chapter

In the event of remarriage, it’s best to approach things with a fresh slate as you both adjust to new financial responsibilities and obligations.  First, you need will need to consider the financial holdings that both parties will bring to the marriage. This includes whether you have any assets to your name (e.g. property, businesses, savings and investments) and any outstanding debt such as mortgage expenses. You may also wish to consider your investment portfolio and review its components, as well as reassess your savings plans and adjust them (where necessary) in the interests of your new partnership.

You should also be prepared for when life does not go to plan. This might include investing in private medical insurance, assessing any current health concerns and the potential financial impact if things escalate in the future, and preparing to cover funeral expenses.

Retirement Planning

Another key consideration is future expenses, which are likely to exist as part of a wider retirement planning picture. What does your dream retirement look like? Does it involve buying a second home in the UK or abroad, or downsizing to help your children onto the property ladder? Do you plan to take international travel during your golden years? Even if your retirement ambitions don’t initially align, it’s important to keep an open dialogue to reach a resolution that satisfies both spouses.

Ambitions aside, you must both consider whether there are any financial implications or commitments that may impact your plans. Have you put any money aside or plan to do so to support your child through university? One or both of you may also have outstanding child support and/or maintenance payments that need to be factored into your financial situation.

Life Insurance and Future-Proofing

Life insurance is one of the most important areas to address in the event of remarriage but a common mistake that people make is forgetting to update the beneficiaries on their policy. If you don’t take affirmative action, there is a risk that your policy could pay out to an ex instead of your current spouse.

When it comes to your pension and if you’re a member of a company pension scheme then you may wish to update the nominated beneficiary on your plan too so that any pay-outs are made to your current spouse. You will also need to create a new Will as any current Will you have becomes void once you remarry.

As one or both spouses may have children from a previous union, this can make things more complicated. You can choose to name more than one beneficiary on your life insurance policy but it’s important to make sure you have covered all your wishes. This might mean ensuring that your children can pay for future expenses, as well as providing for your spouse to ensure that he or she will be financially comfortable in the event of your passing.

You may need to consider enhancing your coverage as well as updating your beneficiaries. This is especially pertinent if you have joint obligations such as a mortgage.

The Value of Professional Advice

While divorce is becoming more and more common, the complexities of remarriage remain much the same which is why it’s essential to take a pragmatic approach to protect your interests. Making new financial arrangements when two families merge can be a sensitive process and difficulties often arise even with the best intentions and especially when it comes to issues such as family inheritances.

Taking impartial, expert guidance from a qualified financial adviser will help you both to ensure that the essentials are covered and any more complex or pressing challenges are settled satisfactorily.

A professional adviser will support both parties in arranging a financial plan where no one feels under any pressure over how to arrange distribution of assets on their passing and everyone’s wishes and obligations are fulfilled satisfactorily.

For older couples, life insurance premiums are often more costly. This makes it essential to choose your cover as soon as possible and do your research to find the most cost-effective options. An independent adviser will assess the market from an informed viewpoint to find the best products to suit your situation. Contact our advisers today to find out more.