Financial Answer Center

Name Changes and Filing Status

If you are adopting your new spouse's last name, you will need to notify Social Security by completing the proper forms. Try to do this well in advance of filing your first tax return with your new name. Be patient with the IRS on your first tax return; the agency does not always register your new name correctly, so you may need to respond to an IRS notice on the matter.

If you get married before the end of the year, you can file a joint return with your new spouse. In some cases, this may actually cost you more than filing as single taxpayers. If your tax preparer projects that you will pay less tax by remaining single compared to getting married, you may want to consider not marrying until January of the following year.

Effect on Alimony and Support Payments

Review your separation agreement and divorce decree carefully. If you are receiving alimony or rehabilitative support payments, getting remarried usually causes you to lose this income. We are not suggesting that you avoid marriage for this reason, but you should take this into account in your budgeting.

If you are the custodial parent and you are remarrying (especially to someone who earns a significant amount of money), the non-custodial spouse may go to court to try to reduce his or her child support payments.

Prenuptial Agreements

For many people who have lived through the horrors of a long divorce battle, the thought of another such battle could be enough to cause them to never remarry. A tool exists that allows a couple to agree in advance on how to handle a divorce. This can result in a much easier divorce (if this ever happens again) and more peace of mind until that possible day. This tool is called a prenuptial agreement (also called a pre-marriage contract).

A prenuptial agreement is a contract between two people who are about to be married stating how assets and debts should be divided in case of a divorce. Prenuptial agreements can also be used in some estate planning situations. Unlike other contracts, when signing a prenuptial agreement, one person does not have to give value (consideration) to the other. No money or property has to change hands.

An attorney for each party should be retained to draft this agreement. The cost can vary widely based on the complexity of the agreement, but it may be cheap insurance to make certain the agreement is legally sound. A mediator can also help you work out the terms of an agreement, often for less money than an attorney.

If you are concerned with the impact of a future divorce, keep your premarital assets in separate accounts. Commingling assets can defeat the goals that caused you to sign the agreement.

Social Security

If you are divorced and receiving benefits on your ex-spouse's Social Security record, your benefits as an ex-spouse will end if you remarry. If your prior spouse is deceased and you are age 60 or older (or age 50 or older, if disabled), you will continue to receive widow(er)'s Social Security benefits. However, if your new spouse is currently receiving Social Security benefits, you may want to apply for a spouse's benefit on the new spouse's record if it would be larger than your own benefit (if you are entitled to Social Security based on your own work record).

You are not eligible for benefits as both a widow(er) and a spouse.

Also, if you change your name for use in employment, report the change to Social Security to be sure your earnings are properly recorded. If you have any questions regarding benefits or applying for benefits, contact your local Social Security office.

Estate Planning

Review your will and other estate planning documents to determine if revisions are necessary. If you do not want your entire estate to go to your spouse, you will need to specify this in your will. Review all beneficiary designations and joint accounts carefully (these override your will). Be certain your ex-spouse does not appear on any of these (unless this has been ordered in your divorce agreement).

Remarriage Involving Children

Starting a new life with a spouse can be both rewarding and challenging. There is almost always a period of adjustment. This can be much more complicated if either one (or both) of you have custody of children from a prior marriage.

Although you may have children of your own, you will also be assuming some responsibilities for your new spouse's children. While their non-custodial parent may continue to make support payments, you will probably help make financial decisions about the children. The costs that your spouse has to pay for child support (whether he or she is the custodial parent or not) will certainly have an impact on your family budget.

Although you may feel morally responsible for the financial support of your new spouse's children, you are generally not legally responsible for their support. Keep your priorities, such as retirement planning, in focus before offering any large-scale support.

Benefits Planning

Review your and your new spouse's employer health benefits (if he or she is employed at a company offering benefits). You may discover that your plan offers better insurance for the children. If your plan does not allow for coverage of stepchildren, you may be able to seek a qualified medical child support order from a court or other agency that would extend these benefits to your stepchildren. Speak to your company's benefit representative for more information.

Adoption of Stepchildren

You may want to adopt your spouse's children if it is beneficial to them (for example, if the non-custodial parent is dead, has abandoned the family, or has stopped paying child support payments). Based on state law, you may need the written permission of the other parent.

By adopting a stepchild, you are terminating the child support obligations of the former parent and assuming them yourself. You will now have to meet your state's standards, as well as be responsible for some child support payments if this marriage fails. Even though the former parent has no further child support obligation upon your adoption of a stepchild, he or she still owes any unpaid amounts. If your spouse is in contact with this person, you may want to offer adoption in exchange for payment of prior unpaid child support. If this person is not in communication with your spouse, discuss with your spouse the costs of pursuing back child support; the legal fees could be expensive.

Estate Planning

To protect your children upon your death, you must have a will and have engaged in some degree of estate planning.

Estate planning can be a particularly tricky matter when you have children born or adopted prior to your new marriage. The basic estate planning strategy for families not facing this challenge is relatively straightforward: leave money to the surviving spouse and then he or she will decide how to distribute assets on his or her death. It is assumed that the children from this marriage will be treated fairly.

With children born or adopted from a previous marriage, you may be concerned that your spouse will not be fair to your children after you die. After your death, will your spouse include your children in his or her will?

Many couples in this situation include a Qualified Terminable Interest Property trust (QTIP) in their wills. It provides that the deceased spouse's property goes into a trust from which the surviving spouse receives income annually (and principal when the income of the trust is insufficient for the needs of the spouse). Whatever is left in the trust when the surviving spouse dies goes to the beneficiary(ies) as stated in your will, which can be your children from a previous marriage.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.