Man Photographing A Family In A WeddingGetting married? Congratulations! New spouse-to-be has children? Double the fun! It is important to note when blending your families, your finances will become a lot more complicated as you take into account the needs of your spouse and any children who join your household.

Take comfort in knowing many of the issues you confront will be the same issues that any couple marrying will face including budgeting, insurance, and integrating your employee benefits. In addition, you’ll need to consider issues related to rearing the children of someone else, such as providing for the children now and in the future, considering the impact of child support on your finances, and determining the tax implications.

How will your finances change?

Before getting married, sit down with your fiancé and discuss what assets, liabilities, and responsibilities each partner is bringing to the marriage. Although your joint income may be substantial, if you and/or your spouse have children from a previous marriage or relationship, your money will need to stretch further than it used to. You’ll need to set up a new budget to accommodate the needs of your growing family and consider what new expenses you’ll have. You may need to budget for both everyday expenses, such as food, clothing, and child care, and future expenses if you determine that you’ll need to save for a larger car or move to a larger home.

Does it matter who pays for what?

When you and your fiance get married, you should consider whether to keep your finances separate or combine them. Like many individuals who remarry, you may want to keep your credit, bank accounts, and property separate if you or your spouse have past credit problems or if you want to protect yourself in the event that you divorce in the future. You may decide that it’s fair that your spouse pay for the expenses of his or her child (such as child care or a college education), while you pay only for general household expenses.

However, you may feel that combining finances will solidify your family and make your finances less complicated. Like many stepparents, you may want to contribute a certain amount toward your stepchild’s expenses or even pay all of his or her expenses. Usually, this causes no problems, but you also need to consider what will happen in the event that you and your spouse divorce. Will you want to continue supporting the child financially? In general, even if you have been paying the expenses of your spouse’s child, your spouse can’t force you to pay child support if you haven’t adopted the child. Because your responsibilities to him or her are voluntary, you most likely won’t be held responsible to pay for your stepchild’s expenses.

How will child support or alimony payments affect your finances?

If your prospective spouse has been divorced and is receiving alimony or child support, you’ll need to decide whether this money will be put into a separate account or will be used by you as a couple in order to support your combined family. However, it’s best not to count on alimony or child support payments to offset your increased living expenses. Depending on the terms of the divorce, your spouse may stop receiving alimony when he or she remarries, or alimony payments may be reduced. Although child support payments will likely continue for a specified period (often until the child reaches age 18), there’s no guarantee that the amount of the child support payment will remain the same. If your spouse’s ex loses his or her job, for example, he or she can petition the court to reduce the amount of the child support payment.

However, if you’re marrying someone who’s obligated to pay child support, you should understand what your spouse’s obligation is and realize that it could increase in the future. It’s even possible that your spouse’s ex can go to court and ask that child support be increased because your spouse has remarried and you’re contributing to the household income, thus leaving your spouse more income to pay child support.

Why is estate planning particularly important when you marry someone with children?

When you marry someone who has minor children, you’ll want to consider what will happen to those children in the event you or your spouse dies. Do you want to provide for the children in the event that you die? If your spouse dies, will the children live with you or with their other parent or family member? Because child custody issues can be complicated when the person who wants custody isn’t biologically related to the child, you’ll want to make sure that you get advice from an attorney on this issue. If either of you brings substantial assets into your relationship, you may also want to make sure that your children retain the right to those assets in the event that you and your spouse divorce.

Adult children from a former marriage or relationship can pose special problems. Don’t assume that your spouse’s children will love you as much as your spouse does. They may see you instead as a competitor or a villain, taking their place in your spouse’s heart and in his or her will. Whether this is actually true is irrelevant. After your spouse is gone, they can make your life miserable unless you both plan ahead. One way to plan ahead is to make sure that your estates are distributed according to your wishes. Both spouses and any children must clearly understand what those wishes are. For example, you and your spouse may want to set up one or more trusts for your children and/or one another, or you may want to execute a prenuptial agreement along with your will. You may want to agree to leave a specific amount to the surviving spouse and the rest to any surviving children, or you may want to use life insurance to provide for your children or your spouse.

We hope you’ve found this article helpful. If you need help devising a trust, let’s talk. Our financial planners can help. At The Bank of Missouri, we are here to help you keep your finances in check as you travel along life’s wonderful journey.


Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual’s personal circumstances.
To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
This communication is strictly intended for individuals residing in the state(s) of MO. No offers may be made or accepted from any resident outside the specific states referenced.
Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2014.
The Bank of Missouri
The Bank of Missouri has been building relationships and serving our communities since 1891. Our staff consists of neighbors and friends committed to their customers and involved in the communities where they live and work. Whether you are a member of our family or want to learn more about our bank, we welcome the opportunity to visit with you.
The Bank of Missouri
The Bank of Missouri
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