Financial issues the second time around

Posted on Aug 10, 2010

Over five million people will exchange marriage vows each year. Among the starry-eyed newlyweds walking down the aisle will be a number of middle-aged folks tying the knot for the second time around. These couples face some unique financial planning issues. If you’re marrying again in your 40s, 50s, or beyond, here are some suggestions you should consider.

* Enter into a prenuptial agreement. These agreements are not just for the rich and famous. They make sense for many people who bring assets into a marriage and wish to preserve their legal rights in those assets.

* Obtain retirement plan waivers. The law provides that your spouse is entitled to your 401(k) account and survivor benefits from your company’s pension plan in the event of your death. If you don’t want your new mate to receive these assets, he or she must sign a written waiver that renounces rights to them.

* Properly title your assets. If you and your spouse plan to co-own property, be careful how it is titled. Assets titled in “joint tenancy with rights of survivorship” automatically pass to your spouse if you die first. By contrast, if you title assets as “tenants in common,” you can leave your portion of the property to anyone you wish. Consult with your attorney.

* Maintain separate bank and brokerage accounts. Think twice before commingling assets since it can be difficult to determine property rights in the case of death or divorce. However, as a matter of practicality, you’ll probably want to maintain at least one joint bank account to cover routine household expenses.

* Update your will and trusts. Wills and trusts can give you a great degree of flexibility in disposing of property at death. For example, if you and your spouse own a home together, you can provide that your spouse gets to live in the home until he or she dies, at which time your interest in the property is to pass to your children. This is another issue to discuss with your attorney.

For assistance with this or any of your financial concerns, give us a call.