Merging Lives, Merging Assets in Remarriage

    Once you have made the decision to be remarried, there are so many steps in the process. Where will the wedding be? What will you wear? The task list seems endless. Often, the less-fun tasks, such as figuring out your financial game plan, falls toward the end of the list. According to many experts, discussing your financial portfolios should be the first order of business.

Thea Glazer of Glazer Financial Advisors, a San Diego, Calif.,-based financial planning firm, says couples should identify and discuss their money personalities before they begin planning a wedding. Glazer has specialized in financial planning for couples for more than 20 years and has developed a “money personality quiz” on her Web site, which gives couples a comprehensive understanding of each person’s money management style.

“If you have two different styles and different backgrounds, it can be a nightmare,” she said. “I have seen the underlying cause of divorce being not necessarily a lack of money, but couples struggling with their different ways of managing money. What proper money management means to people can be very different.”

After couples have identified their money personalities, it is then time to establish a financial plan, she said. The couple should bring their most recent copy of their credit report to the table. “As much as you love each other, people hide things,” said Glazer. “I once had a client who married someone who had a huge IRS problem and she had no idea. They were able to work out a payment plan, but it was rough for a while and they barely made it.”

Going through each person’s credit report will give the couple an idea of what they are facing financially. It also gives couples an opportunity to put together a plan to clean up any indescrepencies. Glazer recommends that each person try to clean up their own credit problems before opening joint accounts. “I prefer this method so that bad debt doesn’t spill over into the other person’s financial pictures,” she said. “It’s best to keep things separate until any credit messes are cleaned up. “

Glazer advises her clients to maintain separate bank and credit accounts and then have one account for household bills. “I always say it’s best to keep something separate,” she said. “My plan of choice when it comes to accounts is that you have yours, I have mine and we have ours, for a number of reasons.”
 
Don Taylor, Ph.D., CFA, CFP, of bankrate.com, agrees. He advises couples not to confuse the issue of bank accounts credit accounts. “Avoiding bounced checks and insufficient funds is important, but won't have a big impact on your ability to get credit. That comes from managing your credit and paying as agreed on credit accounts,” he says. “You'll each have your own credit report, but joint credit obligations show up on both credit reports. That's where things tend to go bad if a couple splits up.”