5 Questions to Ask before you Tie the Knot Again

There's no one right way to handle money in a re-marriage. But since you can't escape responsibility for your partner's decisions, you better talk about it. Some couples maintain separate savings and chequing accounts, paying for their own personal and children's expenses and sharing the costs of running the household proportionately using a joint account. While they may still quibble over shopping habits, keeping some money separate leaves each partner free to indulge. That's the easy part. Here are 5 questions to ask each other to make sure your merger goes smoothly:

1. Who gets to decide? Couples have always struggled with how to save and spend their money. For the newly remarried this can be further complicated by their histories, particularly if spousal and child support are issues. To create a realistic picture of your financial state, keep tabs on where your money comes from and where it goes for about six months. Then you can make some decisions about how much each of you will contribute to the household, and how much discussion is appropriate (and who will prevail) when purchases are made.

2. Who we are with money? By the time we get to husband number two or three (or four), most of us have clearly defined money personalities that affect our decisions about education, housing, clothing, vacations, medical and dental services, investments and gift giving. Financial responsibilities are also a big part of this discussion. While many a newly wed may know that her spouse has financial obligations to another family (a previous spouse, a mother, or Great Aunt Lucy), living with the reality is often very different from the intellectual acceptance of that responsibility.

3. How do we use credit? While each of us may have a different money management style, understanding which styles are no longer appropriate in a new family is critical. If you've always chased the blues with a shopping spree, you may have to take up kick-boxing. You'll also have to get a grip on the impact of past decisions on your new family. One that's often overlooked is the fact that divorce financial settlements are not binding on creditors. If you and your former spouse continue to have both of your names on a loan or account, you are at risk for each other's financial behavior. That means the new family is also at risk. So take an inventory of your financial obligations.

4. Where will we live? You'll have to decide whose roof will work best. Or you may decide to both sell and buy a new home together. Keep in mind that if you're staying in the same home, when you put more kids and more stuff under the same roof you'll probably want to take a look at your insurance. From home insurance to car insurance — adding teenagers will be expensive so brace yourself — you need to do a full review. And if your divorce agreement assigns your former spouse as the irrevocable beneficiary on your life insurance to cover support responsibilities, it may be time to start shopping for new life insurance too.

5. Who gets what? You're also going to have to deal with how your property will be distributed after death according to the law, the needs of your new family and prior agreements. Remarriage makes a will more important than ever. Biological or adopted children of first and remarriages are treated the same. While that may appear fair at first glance, when you consider the fact the first group is through college and the second set are only in elementary school, the picture changes. Most children expect money and property to follow a bloodline, not a wedding band. If you have a good relationship with your adult children, make time to talk over their concerns and expectations. And make sure you've clearly identified your position to your new spouse so there's no misunderstanding about promises made.

Over time, the issues relative to merging your loves and your money will evolve. The issues you have to deal with initially will be very different than those that arise if you start having children together. Some of the things you should talk about may take some time to get to. And you may never be joined at the hip financially. But as long as you keep talking, keep sharing information and keep listening, you should be fine.

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