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Feb. 26, 2020, 5:00 a.m. EST

Money mistakes to avoid if you remarry later in life

How to accomplish your goals, and avoid financial infidelity

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By Jennifer Nelson

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A 2015 TD Bank Love & Money study polled 1,339 Americans and found that couples who talk about money openly and regularly are happier together.

Mistake No. 3: Skipping a joint emergency fund

Creating a shared emergency fund for household and joint crises is beneficial and extremely important. “When bringing two families together, start this process immediately,” says David Hryck, a New York City-based personal finance expert and partner at Reed Smith, an international law firm.

Hryck recommends setting up automatic distributions from each partner’s paycheck to help build an emergency fund. It’s an easy way to protect your future.

A working paper by three university professors (at UCLA, Notre Dame and University College London) found that long-term committed couples who pooled their money into joint bank accounts were happier in their relationships than those who didn’t.

Mistake No. 4: Not drawing up a pre-nup or cohabitation agreement

When you marry in midlife, you likely bring more assets into the marriage than when you wed in your 20s or 30s. So, if you’re in a new, midlife marriage, you and your love will want to protect what you own.

“Come prepared by having a clearly stated agreement that identifies what your assets are, what your liabilities are and what terms are agreed upon regarding these assets and liabilities,” says Dannell Stuart, CFP, the Santa Barbara, Calif. director of business development at Mission Wealth, a financial management firm.

Related: Flip the prenup into a financial planning tool

Having a verbal agreement is not enough.

Work with a lawyer to create a document that respectfully identifies both partners’ financial condition and how future marital assets will be treated. If you’re not married, you can enter into a contract that hammers out who owns what percent of the home in the event of a split or death.

Mistake No. 5: Neglecting joint financial goals

Just because each of you has personal savings, retirement and financial goals, doesn’t mean you should neglect your mutual objectives.

“Establishing financial goals together should be a priority,” says Hryck. You and your new partner should develop a plan regarding retirement living, vacation expenses, estate planning and other large shared goals.

Don’t miss: This couple never talks about money — and they never fight about it either

Take the time to review life insurance, investments and estate planning together. Hopkins says that once you’re in a new relationship, the two of you may want a trust (a fiduciary arrangement that lets a trustee hold assets on behalf of beneficiaries); a will to catch things that fall outside the trust, like personal items and jewelry, and updated beneficiary designations.

Avoid these five mistakes and you’ll likely help yourselves get on the road to financial bliss.

Jennifer Nelson is a Florida-based writer who also writes for MSNBC, FOXnews and AARP.

This article is reprinted by permission from NextAvenue.org , © 2020 Twin Cities Public Television, Inc. All rights reserved.

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