Second marriage in later life, how would you organise finances?

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A second marriage, a bit later in life, both people have adult financially independent DCs.

They each come into the marriage from very different financial circumstances,’ A’ owns a house outright, has some modest investments and cash but due to health reasons works only a few hours a week and has a very small income which is not enough to live on.

‘B’ had no assets following a financially catastrophic marriage, but has a good job with an above average income.

Is completely separate finances the only fair way to deal with this situation? And how would you split the expenses?

We are happy together but money is a bit of an elephant in the room sometimes.

Are you actually married now or planning it?

If married then in law what is yours is his and vice versa.

Have you ensured you are now a joint owner of the house?

I don't know what you can do. How did you manage finances in your first marriages?

DH and I have always pooled everything regardless of who earned the most and when. We have a joint account into which all our earnings go, and we have our own ISAs ( to use our tax allowances).

Surely it comes down to trust? You have each benefited from what the other is providing- one person a house, the other an income, so why don't all your earnings go in one pot? You've got to trust each other to spend wisely.

Well if you are getting married assets become joint don't they? Unless there is something which states otherwise.

I'm thinking about the house........

If the house was mine and I was on a low income once he moved in I would expect a contribution towards running it and all costs associated with living there.

You need to discuss before you marry though. Otherwise there could be trouble ahead

If one person is not named as a joint owner of the house, they need to ensure what is in the owner's will. I know of couples who have married late in life with adult DCs and they have wanted to leave the house or their savings to their children- not to their new spouse and their children.
If you are not a joint owner then the person who owns the house could pass it on to someone else when they die via their will.

You could contest this is court but not a nice process.

I agree that all of this ought to be discussed before the marriage not after.

How has 'A' managed previously if their income is not enough to live on?

How would it work for you to both put an equal percentage of your incomes into a joint account to cover all bills? If you're worried about the capital in the house then discuss that and have it written into a will or deed of trust.
DH and I put all our money into a joint account bar a fixed (equal) amount that we each keep for personal spending.

I'm getting married in a couple of weeks and we're 'older'! We've decided to open a joint account for bills , food and holidays etc and both pay a set amount in each month but apart from that keep our finances seperate. Would something like that work with B paying in a higher proportion?

Watching with interest.

If one person is cash-rich and asset-poor and the other person has a mortgage-free home but only a small amount of disposable, I would have thought the person with the job, I.e. Cash rich, would reasonably need to contribute (an agreed sum) each month to the other person, eg their share of the bills plus an amount that might otherwise be spent on rent or mortgage.

The cash-poor person would presumably be getting some form of benefits due to ill-health? Or be able to liquidate some investments for living expenses?

Probably need more information for example is the cash-poor person living in the mortgage free house but not paying towards that "advantage"?

We are already married. I know it should have been sorted out before. The house is in one name, the house owner pays the utilities and half the council tax. The income earner pays for all other household running costs. Big expenditure is 50:50, new kitchen, bathroom, patio etc. Holidays nominally 50:50 but usually income earner subsidises. Most socialising is covered by the income earner, otherwise 50:50.

The cash poor person subsidises their lifestyle from savings - therefore is concerned about ever dwindling resources. There are no benefits, as far as I can see the higher income coming in rules out any form of disability related benefits.

The income-earner needs to have a fair share in he house. Presumably legally once you've been married a few years this will be 50:50 anyway. The non-worker can't help not having much cash but there are plenty of marriages where one partner has no income at all and it doesn't cause problems.

It's obvious that the current situation is breeding resentment but there's no real need for it. You need to spend some money on proper legal advice and draw up complicated wills to decide how each set of offspring will benefit when one of you dies. That's the real elephant in the room - the house-owner's offspring may have assumed that they would inherit the whole house on his/her possibly premature death but now it's not fair that should happen.

daisychain if the cash rich person would reasonably need to contribute to the other person, would you say they should also accrue some kind of interest in the assets?

I am about to marry DP. We have a declaration of trust covering the capital we put into out joint home. Also wills leaving assets to our own DC not each other. This will not be cancelled on marriage. Person A is on high income and pays 2/3 household bills and holidays home improvement etc. Person B has secure but low income and is retired so runs home does DIY and lots of cooking. It works for us so far.

Please get some legal advice, at the very least about wills / inheritance.

My DM got together with a new man when they were both in their 70s. Both have children from previous marriages and they discovered that although they consider themselves "married" from an emotional perspective, to actually marry was going to make the legal position incredibly complicated.

They both have houses and have kept these and all other finances separate. All the children get on well and are happy that the couple are happy, but we are all keen that the inheritances are kept entirely separate - it just would not be appropriate to deal with them as one "estate", as would be the case if my DM and her partner had married. Neither my DM nor her partner will inherit anything (other than small mementoes) from the other.

Day to day, they generally deal with finances 50:50, taking turns to do the food shopping. HTH.

Bath thank you for the perspective from the offspring. We married @ 50 ish, we could enjoy a 30 year marriage, which I think merits more consideration than a small memento - especially if one of the spouses has worked full time for a lot of that period and their financial contribution has preserved assets which would otherwise have been spent. This is why it is so complicated.

Bath normally the spouse would inherit the house. But the children might try to have a claim on it, if it is a short 2nd marriage. The home owner can of course leave it to children in their will.

If your mother isn't married then of course she doesn't stand to inherit the house of the man she lives with unless he has said so in his will.

But the OP is married- so it's different.

OP I think it would be easier to advise if you came clean on your thread about who is A and who is B. Women tend to outlive men so unless we know who is cash rich /asset poor then it's harder to help you!

What is wrong with having a joint account for all your money? The earning spouse would have their income paid into that and the non-earner would also put their small earnings into it. All household bills would be paid from it. You would each take what you wanted for clothes and personal items too.

Looking at my own marriage, DH earns about 10x what I do, but he doesn't forbid me from using his earnings to buy whatever I need! Marriage is about sharing.

You both seem to be behaving more like flatmates, not a couple.
One spouse providing a home for the other is a huge contribution and to my mind balances out the other sharing their income.

I honestly can't understand why this has become a problem.

OP* reading your last post- is your concern over inheritance and DCs or how to live now?

BTW 50 is not old for a 2nd marriage- I thought you were talking more about 65+.

The thing about flat mates is what concerns me. In my previous marriage we shared everything. For a long time I didn't work, but we had a joint account and no separate money. This is different and I'm not ok with it. On the face of it if we pool our resources we look great. Own house, have savings and good income. I'm the earner, he is the house owner. He took advice before we married and was told to ring fence his assets, so that if he died first the money could not be accessed for any care I may need in old age, or indeed spent by me on anything else. It didn't happen because neither of us thought that was fair, I think I may have suggested I ringfence my income so it wasn't being used to preserve his assets for the sole benefit of his DCs . We need to sort it out so we both benefit fairly from the situation, it should be a good situation.

Some disability benefits are notaffected by having a spouse with a good income (eg DLA) of course the disability has to be quite marked to qualify for these but I would look into it.

I can't honestly see how it is that different now to your first marriage- and i think the advice about ringfencing is both incorrect and muddying the waters.

What are you each afraid of? That ought to be your starting point. And how is it any different from a first marriage where one person is a higher earner?

eg when I married, DH already had a house- but a mortgage. I was immediately named as a joint owner. I earned very little for a long time ( p/t work) but that didn't mean we didn't share his income.

We - and you- are a couple- not business partners who have put their assets into a business.

I am actually appalled at the advice he was given- why on earth would be not want you- his widow- to be financially secure if he dies first? Who would his estate go to? Unless he had made a will stating otherwise then it would go to you.

I think what you might need to look into- and this is something slightly different- is to put your house ownership into a tenancy in common. This is a way of avoiding a home being sold to fund nursing home fees if one spouse is left in the house ( and needs to go into a care home) when the other has died. But his is different from ring fencing assets- not a term I have heard of.

What you need to look at are your WILLS- not your day to day living expenses.

Yes as drudge said, PIP (which has replaced DLA) is not means-tested. Find out more here:
PIP

Your H should definitely apply as this may contribute significantly to his income.

I would personally have gone for a pre-nup agreement. But I am a pessimist and tend to take the attitude that 90% of marriages will end in divorce.

Watching . Having children and step children and currently discussing marriage with DP I worry what would happen In regards to inheritance . I bring a lot to the pot - own home and good income , and he brings hardly any . I worry that my children will loose out on inheritance as my assetts would automatically become ours on marriage and then stepD would automatically have a claim to it. I don't want this as I have saved and earned and have done what I have done for my children. Not someone else's. ( I know it sounds harsh) also my dad has substantial assets which would be left to me and my sister but he is also worried about what would happen after that!

It's all so confusing !

OP I think the previous post explains it well.

I have a friend- actually she's a friend of my parents- who was in a similar 2nd marriage - or was (DH recently died.) They married in their 50s as widows- each of them.

They each had homes when they remarried but she had no income and he was a high earner. The value of her home was less than his.

He has now died. my understanding is that her children will benefit from her assets ( pre marriage) and his will inherit his once she has died ( ie his house.) she is allowed to live in the house forever. I assume it could be sold to fund nursing home care if necessary, but any money left from 'his' side would go to his 2 children, and not be divided into 4 to include her 2 children.

It's quite normal for older couples to leave their assets to their own children and not step children too. But this is about inheritance- whereas your post seems more to do with day to day living costs and how to share those.

You need a good family lawyer who can advise on wills.

I think you should consider point of view of children. For instance if the house was previously an asset of first marriage but one spouse died the other inherited but the children of that marriage would reasonably assume a share of this..why should a new partner inherit this because they live there and contribute their living costs. Believe me this causes massive impact. Am sure deceased spouse would not envisage their children being disinherited and am not sure why a parent would chose to disinherited their children over a new partner.

The inheritance side of it is an 'aside' though.

The Op asked how to share day to day costs as he is a low earner and she earns a good salary.

I think it would be fair for him to dip into his savings to help their day to day expenses if necessary but that perhaps his house goes to his children after the OP dies- if she outlives him.

I think you OP should be willing to use your income to support you both because if you were single you'd be spending that money anyway - on rent or a mortgage ( and yes you could still get one at 50-ish) and other outgoings. You are benefiting I assume from a better standard of living - larger home than you could have alone- so it could be argued that your only additional expenses are larger bills for utilities and food.

I think it is really difficult to completely merge finances later in life. We both are working.
My long term partner and I are not married, we have adult children and grandchildren. We live in my mortgage free house and his is privately let. We have a joint household account which we contribute equal amounts to.
He often pays for holidays, household items etc out of the rent money. We use our own separate accounts for buying stuff like presents for our own children. It is all ok on a present day basis.
I think the problems are more likely to arise when one is working one is not, or inheritance issues.
It is definitely a very very different scenario than for first time couples with no baggage .