Category: Prenuptial Agreement

A Few Words of Advice for Getting Married in Your Golden Years

If you're in your senior years, you may want to think twice before tying the knot. The love bug can bite at any age, and that can include pain in your wallet. This advice comes from The Hartford (CT) Courant in its recent article “Fit to Be Tied? Think Twice About Marriage in Your Golden Years.”

A late marriage can mess up your previous plans for your estate, personal finances, as well as any advance directives for your end-of-life health care. It can also impact decisions you've made and will make, in addition to those of your spouse and heirs. 11-11-16

No one is saying that older folks shouldn’t marry. They just need to be aware of the impact it may have on their plans. Elder law attorneys advise that those thinking about marriage later in life, at the time when personal wealth is typically the highest, understand the laws on the property rights of both spouses.

Property owned jointly or exclusively by either spouse is deemed to be marital property when it comes to divorce settlement or settling an estate in many states. If you understand the applicable property rights before the marriage, it’ll let you modify your wills, powers of attorney, health care proxies and designated beneficiaries to avoid legal conflicts in the future. Those who marry later in life must face several estate planning issues younger couples don’t. For example, there may be an accumulation of considerable assets or both may have children from earlier relationships.

Marriage is a legal contract between two people that can only be ended by death, annulment or divorce. The laws concerning marriage typically aim to protect the rights and interests of both spouses. One spouse can’t entirely “disinherit" their surviving spouse, regardless of what he or she writes in a will. Under the law of some states, a surviving spouse is entitled to the income generated from a third of their late spouse’s estate for the rest of their life after all its liabilities are settled.

A good idea to eliminate possible hard feelings is a professionally drafted prenuptial agreement. This document details the legal course to be followed in the event of divorce and decreases the possibility of major disagreements.

Reference: The Hartford (CT) Courant (Sept. 24, 2016) “Fit to Be Tied? Think Twice About Marriage in Your Golden Years”

Be Smart When You Say “I Do” the Second or Third Time

Can you believe that 37% of second marriages and 74% of third marriages end up in divorce? Those are not good odds. CBS Boston’s recent article, “Breaking Up Is Hard to Do: Second or Third Go Around,” asks, “What is it about marriage that makes folks want to try it again and again?”

It sort of goes without saying that when you land at the altar for the second or third time, you need to do some more planning than you did the first time. Use your past experience to pinpoint some of the pitfalls because there are studies—believe it or not—that show most individuals actually repeat their mistakes. 10-11-2016

Before the ceremony, have an open and honest conversation about money, children, estate planning, and maybe even a prenuptial agreement. A prenuptial agreement can be a wise move for almost anyone with assets; they aren’t just for celebrities or the very wealthy.

A prenup can provide a fair and equitable way for a couple to start a relationship—particularly when: one has more assets than the other; one spouse is expecting to inherit future assets; or there are children from a previous marriage for whom you want to provide.

It’s important to remember that the older you are when you enter into a second marriage, the more concerned you should be about planning. Love at any age can throw things out of kilter in a good way, and you want to provide for this new person in your life.

But marriage has its advantages and disadvantages. One of the disadvantages is potentially losing benefits from your first marriage such as a pension or health care coverage if you remarry. In addition, it could impact your Social Security benefits.

If you’re entering into a relationship, and you both have adult children, assets, and a home from a previous marriage, consider a prenup and a conversation with an estate planning attorney.

If you’re married, the law says that you’re financially responsible for your spouse’s care. If you don’t have an estate plan, most states will assume that you want everything to go to your spouse and children if you should pass away, with 50% going to each. That may not be what you wanted, and if you want everything to go to your children upon your death, you need to speak with a qualified estate planning attorney and create a sound estate plan.

Reference: CBS Boston (August 18, 2016) “Breaking Up Is Hard to Do: Second or Third Go Around”

Prenup Isn’t a Four-Letter Word

Young couples going into their first marriage with little or no assets don’t usually have much to lose by combining their assets as they start to build a family and plan for the future. However, The Pittsburgh Post-Gazette says in a recent article, “Financial planners: Prenuptial agreements shouldn't be a deal breaker in remarriages,” that marriages can be more complex when they happen later in life. This is especially the case when both spouses have children from past relationships and separate assets they’ve acquired over the years. It can be even more complicated if one spouse has more assets than the other. 9-19-2016

When you start out early with very little and you acquire your assets together, arguably they should be shared, but that’s not necessarily true if you come to the marriage with assets. In contrast, when you enter the marriage with assets, many feel that those assets should be held separately—but assets built during the marriage should be put together. Keep assets entering into the marriage separate to protect the heirs of both spouses.

Pew Research Center in 2013 found four out of ten new marriages included at least one partner that had been married prior. The researchers concluded that there were two reasons for the increase in remarriage: (i) divorce rates in the U.S. have increased since 1960, so more divorcees may be looking to remarry; and (ii) Americans also are living longer, so divorcees, widowers and widows have more time to marry and divorce and marry and divorce.

Prenuptial agreements give both parties the ability to identify exactly what each of their assets are at the time of marriage, so they can show what they brought in if they divorce in the future. In order for a prenup to be enforceable, there must be a full and fair disclosure of all assets and liabilities. Any hiding of assets could void the agreement. There also must be no duress—no pressuring a bride to sign a prenup as the organist is playing the wedding march and threatening harm if she doesn’t. It should be done well in advance of the wedding, and when considering a prenuptial agreement, the fiancée should seek independent legal advice.

A big benefit of a prenuptial agreement is that it frequently can mesh with a person’s estate plan—including life insurance, wills, trusts, retirement plans and beneficiary designations. If the assets remain separate in a marriage, the prenup will protect the surviving spouse and the heirs of the deceased spouse.

A spouse entering into a second marriage with more assets than the other spouse can leverage a prenup to create a trust that will pay interest income to the surviving dependent spouse for as long as he or she lives. When that person dies, the money from the trust is distributed to the children of the first spouse who passed away. This is used a lot with higher net worth couples when at least one of them has been married before. The same strategy to provide protection to heirs can also be accomplished via a will, but a will is restricted to death while a prenuptial agreement covers the possibility of a divorce as well as estate planning.

Prenuptial agreements have a negative connotation, but think of them as an estate planning tool—not a divorce planning tool. This makes it easier for people to grasp their importance and agree to sign one, especially in second marriages.

Prenuptial agreements have been thought of as taking the romance out of a relationship, but what truly removes romance is when someone tries to take advantage of the other spouse who enters the marriage with more assets.

Reference: Pittsburgh Post-Gazette (July 29, 2016) “Financial planners: Prenuptial agreements shouldn't be a deal breaker in remarriages”