Remarriage for seniors is not uncommon.
Although many people envision young couples when they think of weddings, people get married and remarried at any age.
For some, divorce or death leads to being single again.
For others, they have simply waited longer to find the love of their life.
According to a recent MSN article titled “Planning to remarry after a divorce? 6 tips to protect your financial future,” marriage and remarriage at any age can be both exciting and a little scary.
As seniors embark on a new adventure with a partner, they can either make risky moves or wise choices.
What are ways to protect hearts as well as finances?
Set up a prenup.
Although prenuptial agreements are not exactly the most fun (or romantic) part of preparing for a wedding, those who have been married previously often wish they had set up this agreement prior to saying “I do.”
A prenuptial agreement is helpful in remarriage or marriage later in life because it makes finances and expectations clear.
While the worst-case scenario may not happen, it is helpful to be prepared in the event it does.
Create a trust.
Estate planning is essential at any stage in life and is especially important during major life changes – like marriage and remarriage.
A revocable living trust (RLT) allows you to distribute assets held in the trust efficiently after death, as well as manage such assets while you are alive.
If you become incapacitated while you are alive, your RLT is effective and can be used to provide for you and your loved ones as outlined in the RLT document.
Consider life insurance.
Life insurance can help replace income and pay for funeral expenses after your death.
Prior to marriage or remarriage, you should review your life insurance, property casualty insurance, and umbrella insurance to ensure your coverage amounts are accurate and premiums are paid.
You should also review titling and beneficiaries.
Some people choose to create an irrevocable life insurance trust (ILIT) to enable proceeds from the policies to pass free from estate taxes to children from a previous marriage or to a surviving spouse.
Remarriage is a significant life event.
It is an important time to review beneficiary designations and recreate power of attorney documents.
You should work with an experienced estate planning attorney to create a plan to meet your needs in this new marriage.
Married couples are able to benefit from unlimited marital deductions.
This means they can gift assets to their spouse during life or through an inheritance without incurring gift or estate taxes.
In fact, marriage is an opportunity to minimize or eliminate federal estate taxes with the exemptions ($12.92 million) available to both spouses.
On the other hand, couples who choose to remain unmarried will need to identify and incorporate other estate planning strategies to reduce their federal estate tax liability.
If your upcoming wedding is a remarriage, you should review all retirement accounts, pensions, 401(k)s, life insurance policies, and power of attorney documents for both health care and financial matters.
Some state laws or your prenuptial agreement may require that a certain portion of your estate pass to your spouse.
An experienced estate planning attorney will be able to help you safely navigate these changes.
Choose trustees and executors wisely.
Blended families are by their very nature fairly complex.
No, they can be extremely complex, relationally and financially.
Depending on your family dynamics and those of your new spouse, conflicts may be unavoidable.
You may consider appointing a non-family, objective outsider to serve as your executor or trustee to reduce the tensions.
By using a corporate trustee, your estate will also benefit from the professional knowledge of the tax and administrative complexities of estates and trusts.
Taking these steps will help you create a more secure foundation for yourself and your loved ones in your remarriage.
Reference: MSN (Feb. 11, 2023) “Planning to remarry after a divorce? 6 tips to protect your financial future”