Starting a new relationship second or third time round can be a time of both excitement and trepidation in equal measure.
Whether it’s following a marriage breakdown, long term relationship or the loss of a partner, starting fresh can be scary.
When we enter a new relationship there is always the hope it will provide the “happily ever after” we didn’t have the first time around.
However it pays to be cautious, not just emotionally but also financially.
There are a few questions you should ask yourself as you enter a new relationship, the answers to which will help you make more sensible decisions going forward.
Did someone say kids?
Depending on your age this is probably the first and most important question you need to resolve at the start of a new relationship – will you be having children?
It’s also important that, if one or both partners are bringing children to the relationship, you discuss how any assets will be dealt with in the unfortunate event of a separation or death.
Blended families are becoming increasingly common and if all children are to be considered equally then steps should be taken at the outset to ensure this.
Who’s making the money?
If you’re still in your prime and will continue to accumulate wealth while in the new relationship you should clearly document how it will be divided should the relationship fail.
Similarly if you or your new partner has financial commitments from previous relationships or other debts, the way in which these obligations will be met should be clearly spelled out for both parties.
These and other considerations can be addressed in a Financial Binding Agreement. This document allows for clear and concise guidelines which articulate what you each bring to the relationship and what you would take with you should it end.
Your place or mine?
Often new couples elect to move into one property and sell the other, some will sell both homes and buy a new one together.
There is no “right way” to approach this situation as everyone’s circumstances are different.
If you are the mortgage holder and choose to keep the property solely in your name there is nothing wrong with doing so, but you need to be aware of a few things.
If you retain one property, the partner moving in to the existing home may well commence contributing to the mortgage and/or other costs associated with maintaining a property.
This could include rates, water and electricity or simply providing domestic duties. Both parties should understand that moving in together and sharing the cost of living can entitle each to a financial share should a later separation occur.
This becomes even more important if the original owner has children who would also expect a share of the property should the owner die.
Who gets my stuff?
While there’s no need to rush out and write a will after the first date it is important that both you and your partner agree on distribution of your estate should one of you outlive the other.
Consideration should be given to distribution of assets, superannuation and insurance beneficiaries and your wishes for medical treatment should you fall ill.
Taking the time to think about the answers to these questions early can make a huge difference if things do go awry in the future.
Bringing in an objective third party is a great way for both partners to be able to address these issues without feeling like it infers an end to a relationship which has only just started.
A financial planner can provide you with advice and peace of mind too so you can focus on your new relationship and the many years ahead of you.
Dianne Charman is a mother, accomplished business woman and authorised representative of AMP Financial Planning Pty Ltd, ABN 89 051 208 327, AFS License No. 232706.
Any advice given is general only and has not taken into account your objectives, financial situation or needs. Because of this, before acting on any advice, you should consult a financial planner to consider how appropriate the advice is to your objectives, financial situation and needs.
