Often, when people talk about newlyweds, they conjure images of individuals just starting out on life’s grand adventure. The fact is though, that over half of Americans over the age of 55 are remarried. So, when we discuss marriage and newlyweds and the things that come along with that, we should certainly also be thinking of Baby Boomers and beyond.
Of course, the things that come with a later in life marriage or a re-marriage can (and should) still include the fun stuff. Just because you’re marrying for the second or third (or fourth or fifth) time doesn’t mean you can’t have a big, beautiful wedding with all of your family and loved ones. The bonus of a “mature marriage” is that older couples often experience less of a financial burden in marrying, ie paying for a wedding, buying a first home, having children etc.
When you’re entering into second marital union in your 40’s, 50’s, 60’s and beyond, you’re more likely to have assets and savings, and are probably at the height of your earning potential. You may have kids in school. Or, your kids may be grown and through college. This means that you don’t just understand the value of your marital budget, but you probably actually have a wedding budget to work with. Plus, your friends are probably financially stable, which may mean a destination wedding or small ceremony in a beautiful location are in the cards. There really are so many perks!
In addition to planning your wedding, you should also consider a prenuptial agreement. After all, the wealth and assets you’ve accumulated throughout your life bear more weight in your golden years. You’ve probably gone through a divorce before. You’ve worked hard for what you have and you’ve earned the right to protect it. You may also have children you support if you have younger kids, or kids in college, or you may financially support young adult children as they are getting their first apartment, moving across the country for a job, among many other expensive scenarios that come with having young adult children. You may also plan to leave something to them in the future– like that vacation home they spent summers in throughout their childhood.
Protecting Your Retirement Nest Egg
Marrying later in life often looks quite a bit different than marrying in your 20’s. In all likelihood you’ve built a career. You’ve bought and sold and maintained various assets and you’re definitely wiser. If you have kids, the last scenario you want to imagine is your children from a prior marriage fighting with your spouse over your assets. If this sounds like you then you should consider drawing up prenup with your soon-to-be spouse.
In addition to planning your wedding, you may also be planning your long-awaited retirement. What better way to start out a new life with your loved one than in the throes of your golden years after bringing a professional career to a close? If you plan to retire, though, this means you’ve invested significantly into various retirement savings plans. You need to consider protecting that nest egg!
While it is true that in most cases the income earned and saved prior to marriage will be considered a separate asset in terms of a divorce, it is still imperative that you protect your retirement savings. If, for example, you are still another 10 or 15 years away from full retirement, the pension or income earned by you between the time you marry and the time you retire could be considered jointly owned. Retirement savings warrant extra protection because your ability to generate new income after the age of 65 wanes dramatically.
It may be difficult to express to your partner that you would like a prenup to protect your retirement assets but if there is one thing true about getting married at any age, it is that open and honest communication will always serve as the bedrock of the healthiest relationships.
Adult Children Benefit from Your Prenup
You may think a prenup for older couples or couples getting married a second time is completely nuts. After all, you are so much wiser now and you’ve certainly figured out how to maintain a happy and healthy marriage without the use of a prenuptial agreement. You plan to keep your bank and investment accounts separate, anyway. This argument is understandable, albeit not entirely accurate. Prenups are often misunderstood because you only hear about them when people are arguing over them. Much like your Last Will and Testament, however, prenups often prove to be a valuable estate planning tool.
Disputes over property of a deceased spouse with children from a prior marriage is a tale that repeats itself over and over. The comedian Robin Williams had not been deceased for very long when a legal fight erupted over his assets between Williams’ children from a prior marriage and his third wife. What is worse: a prenuptial agreement or a rift between your spouse and children over your stuff? A prenuptial agreement spells out how assets should be split up if the marriage comes to an end or in the case that a spouse dies, and arguably, if you want to protect assets in a second marriage, you should have both a trust and a prenup.
The need for a prenuptial agreement is especially true if you or your spouse has children from an earlier marriage or relationship. Depending on the laws where you live, if you die before your spouse does, all of your estate may go to your partner. There are of course factors that play into this scenario, like whether or not you have a will. If you die without a valid will, then your estate will pass to your heirs according to the state laws for intestate succession.
In theory, the results of intestate succession may not sound bad. After all, if you do predecease your spouse then you would want them to be taken care of financially and your assets can help ensure this. That said, what about the adult children from your first marriage? You probably do intend for them to inherit some of your hard earned wealth. In particular, there may be certain family heirlooms that are uniquely special to your children. In most circumstances, you can rely on your surviving spouse to do the right thing, but occasionally life just gets in the way. If you prepare a prenup that designates the distribution of your assets in the event you pass before your spouse does, then you won’t be leaving your children’s inheritance to chance.
At the end of the day, it is a good idea to have detailed estate plan and you should consult a legal expert in estate planning to preparing the division of your assets after your death. Still, a prenup can be an additional tool that serves to add context and specificity to your Last Will and Testament or other estate planning instruments. Sometimes a will may be invalidated or contested by your heirs and when this happens, having a prenup in place can better ensure that your final wishes are carried out as you intended.
In many second marriages, the deed of the marital home may only be in one name, likely because it was one of the spouse’s home prior to the marriage, rather than a home purchased together. In some instances, one spouse may want to keep the home in their name alone, the home may be a listed and accounted for Separate Property asset in a prenuptial agreement, or held in trust for the spouse’s heirs. In this instance, a death clause in a prenuptial agreement can address what should happen to this asset in the event of the death of the spouse owning the property, in the event that the parties are still married, and no legal action for separation or divorce is pending. In one example, the deceased spouse can detail that the surviving spouse should be able to remain in the property for a period of time, may buy the property from the estate at a certain price, or may have the option to sell the property and maintain a percentage of the profits. A prenuptial agreement can be really creative in how the parties want to structure this unfortunate situation, leaving them with the decision making power before it is too late!
Do You Really Need a Prenup? (Yes!)
In addition to protecting your retirement and ensuring your adult child’s inheritance, prenups offer a whole host of other benefits. When people get married, they don’t tend to believe that the marriage will end in divorce and you are probably no different. But, with all of the accumulated wisdom you developed in your 20’s, 30’s, and 40’s, you likely understand that life happens and sometimes it doesn’t happen the way we intend for it to. That doesn’t mean we can’t add a few buffers here and there to make these unpleasantries a little more bearable.
Divorce is hard and litigating a divorce is even harder. When you prepare a prenup, you can include provisions that dictate how the divorce will be handled. For example, you can both agree that instead of litigation, you’d prefer to pursue less adversarial alternatives. Mediation is a great alternative dispute resolution option that can enable a divorcing couple to keep the peace. You can even decide how many sessions of mediation are required before any divorce action can be filed in court. After a few sessions of mediation, it is far more likely that you and your soon-to-be ex have cooled down and can think more clearly about how to divide assets without engaging the Court. You can sort of think of a prenup as an insurance policy. You probably wouldn’t forego health insurance because you don’t think you’ll get sick, would you? Oh, and yes, who must continue providing health insurance in the event of a split is also something you can agree to in a prenuptial agreement. The best time to prepare for the worst is while you are at your best. Making such preparations when you’re happy and stress free helps you make the kind of clear-minded decision that can save time, money, and heartache in the future.
Not only does a prenup help you circumvent the complexities of death or divorce, but it can also help you move through your marriage with a pre-determined financial plan. If one spouse is less monied than the other, then you may wish to determine an allocation of the wealthier spouse’s assets during the course of the marriage. Or, perhaps you are still putting a nearly adult child through college and you need a little extra help maintaining your financial obligations until they graduate. Each marriage has its own unique set of financial circumstances that could benefit from the creation of a prenup!
Making Mature Decisions
The silver foxes and cougars of the world all have one thing in common—the maturity that comes with life’s lessons. When you reach the top of that proverbial hill and look back at the many paths that have brought you to where you are today, you should remember that sometimes hard conversations bring the most peace of mind.
Asking your partner for a prenup can be difficult because of the stereotypes that we often associate with these legally binding agreements. Furthermore, the creation of a prenup requires a full financial reporting of each individual’s assets and debts and few things can make a person feel more vulnerable than sharing their financial missteps. Similarly, you may feel hurt if your partner asks you for a prenup. When talking about prenups both partners should approach one another with love and compassion and express a desire to truly share a life together. After all, that’s what marriage is!
The good news about prenups is that they can be changed. Flexibility is often the key to navigating financial situations in a marriage at any age. Perhaps the adult child you were protecting with your prenup wins the lottery and no longer needs the safety net of their inheritance. Or, maybe you yourself come into an unexpected lump sum of cash that requires you and your spouse to reconsider the way you’ve allocated your marital assets. So long as you and your partner both agree to the changes, all you need to do is make them!