Remarriage: Sharing Assets and Debts

When it comes to sharing assets and debts in remarriage, how “to have and to hold” can take some thought.

Type of Asset or Debt Factors to Consider
Debts incurred before remarriage

Keeping these debts separate protects the non-debtor spouse’s separate property from creditors

Debts incurred during the marriage

Sharing debt only for jointly acquired property protects both spouses’ separate property from creditors of the other spouse

Debt for property owned separately should be the liability of the owner spouse only

Property owned separately before remarriage

Separate assets may be used to provide for children of a previous relationship

Separate assets may be used to take advantage of both spouses’ estate tax applicable exclusion amounts

Separate ownership protects each spouse from losing his or her assets to the other spouse’s creditors

Home

Owning your home jointly as tenants by the entirety can help protect it from many potential creditors

Seek advice before placing a debtor spouse’s name on the title to the home–there are numerous considerations

Consider a Homestead Declaration for additional protection

Checking account

Having one joint checking account to pay household expenses is convenient

Each spouse can contribute equally or in proportion to earnings

Investments

Even if you keep your investments separate, make investment decisions together

Consider the effect on your combined portfolios when making investment decisions; keep your overall portfolio diversified

Insurance policies

Prevent duplicate coverage and make sure that you have adequate coverage for your combined needs

Check whether it’s less expensive to carry separate policies or combine both spouses under one policy

Check that the correct beneficiary has been named to life insurance policies