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John's second wife-to-be is more financially independent than he is. How should they manage their finances as a couple?
Q: I am a 50-year-old divorced male. After dating for 3 years, I am about to propose to a lovely lady (48-years-old). She is very financially independent. With my lack of retirement savings (long story involving a divorce settlement and a business venture that did not work out), I plan on working as long as I physically can. I need some sage advice on how we might organize our finances when married that is fair to both parties.—John
A: Money can be a difficult enough topic in a first marriage, let alone a second one. Many surveys show that money is the primary fight inducer for couples and when you’re combining your finances later in life, it’s that much more important to talk about money with your partner and with professionals.
First and foremost, John, I think you should speak with your lovely lady about money. You both seem to know some of the details of each other’s finances and I think an initial, high level discussion is a good starting point–even if the end result is that you guys both agree that you don’t really know how you should handle things financially. At least if you both come clean and determine you need some professional input, you can seek it out without seeming like you’re avoiding your partner and talking to lawyers and financial planners before each other.
I’d say you should both consider a consultation with a family lawyer to make sure you understand the implications of cohabitation in a common law relationship or within a second marriage. Since you’re divorced, I assume you have a family lawyer you can speak with, John. An initial consultation may cost a few hundred dollars and will at least help highlight the risks for both of you and the potential remedies. Potential remedies may include a cohabitation agreement or marriage contract that dictates what happens in the event of a relationship breakdown. This may cost a few thousand dollars, but could be a very good investment. Or maybe if you don’t do a “pre-nup,” the advice could impact the way you pay for your home together or split your expenses or otherwise plan your finances.
Beyond that, I think it’s helpful to consider the services of a financial planner. You guys may have your own planners, but it might be best to speak to a neutral third party.
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