Don't Let Lack of Planning Ruin Late-in-Life Romance
New love in your golden years can be a wonderful surprise, but before you walk down the aisle again, work with an attorney to identify any unexpected consequences of new marriage. You should consider your estate plan, the assets each person brings to the marriage, tax consequence, pensions, alimony, survivor benefits and other beneficiaries.
Careful planning before a new marriage in retirement may save you from costly mistakes.
- Prenuptial agreements can protect assets of the bride and the groom at death or divorce. This is especially important when one of you has property that he/she intends to pass to children from a previous marriage. Putting your plans in writing before you tie the knot can avoid misunderstandings by your new spouse and keep your children’s inheritance intact.
- Be cautious about comingling funds and ownership of homes and real estate. Some advisors suggest each spouse keep separate banking and credit accounts and add a joint account for mutual expenses. A qualified estate planning attorney can make sure your home and property don’t pass to your new spouse and his/her family unless that is what you want.
- Be fully aware of your new spouse’s debts and how they will affect you and your financial future.
- Taxes are another consideration. Will marriage boost you into a higher tax bracket? How will your combined income affect your Social Security benefits?
- Update your estate plan before the marriage to make sure that the beneficiaries you name for life insurance, employment benefits etc. are exactly as you want them to be.
- Your new combined income may affect whether you can qualify for Medicaid when you need it in the future. Marriage may also affect alimony payments or pension benefits. What about financial aid your college-age child is receiving?
Even after marriage, there is unilateral planning one spouse can take without the consent of the other. We can help with that, too.
While this list may seem daunting, it is important. By thinking through your finances and intentions in advance, your new romance has a better chance to bloom without thorns.