Should You Protect Your Retirement Before a 2nd Marriage?
Between 1990 and 2010, the divorce rate of adults aged 50 and above doubled. According to a study by Jeffrey Dew at Utah State University, couples that fought about money more than once a week were 30 percent more likely to get divorced. Some of these adults choose to remarry. Remarriage can pose its own sets of financial challenges. If you are planning to throw your hat in the ring and remarry once more, there are ways in which you can manage these complexities.
Learn how to talk about your money with your spouse before it becomes a problem by following these useful tips:
Talk Openly About Your Finances
Talking about money matters may not be at the top of your to-do list, but it’s important to avoid arguments, underfunded savings accounts, and budget busters. You might feel awkward about it but if you are moving into a second marriage, take time to talk to a trusted financial planner for some expert advice.
Also, take time to talk to your partner about your future financial life. Will you be combining your finances? Will you keep each of your assets separate? Can you create a realistic budget together? If your relationship is progressing fast and you see yourself going into a serious marital commitment soon, be open enough and broach the topic. Older people generally have different objectives from younger couples. While they want to see their spouse well taken care of, they might also want to discuss if they’ll pay for their children’s college education, how they see their retirement and what their retirement dreams are. It is important to be as open as possible about your current finances to avoid financial tension later in the marriage.
Know about your partner’s credit profile
If you are going to marry someone and share assets and liabilities, then you have every right to know about their financial profile including debts and credit profile. Have they been delinquent or do they meet their financial obligations on time? If you are married, your partner’s debts might be a joint liability. If someone is coming into the marriage with significant debts, then discuss this openly and plan how you are going to repay the debt. One of the most common reasons couples divorce is due to financial issues. Transparency and honest conversation upfront can help avoid unmet financial expectations and enable a happier marriage.
Have a prenuptial agreement
A prenuptial marriage agreement puts financial expectations on the table prior to your wedding. Granted, broaching the topic of a prenup can seem awkward. However, if you are open with one another and if your relationship is built on a strong foundation, it is a hurdle that should be easy to surmount. A prenuptial marriage agreement spells out which assets a spouse may want to give to children or other family members in the event of death. In the event of a divorce, a prenuptial agreement eliminates battles over assets.
Have an up-to-date estate plan
Smart estate planning can reduce snags and maintain harmony in your second family. While second chances can bring a lot of joy, they can also present challenges with respect to planning how your estate plan provides financial support for blended family members.
Talk to your spouse about your goals, and to what extent you want to leave assets to your children. Contract the services of an estate planner or trusted financial advisor to help facilitate the conversation and take the emotion out of it. Expressing your intentions clearly through legal documents will likely allow you to create a well thought out plan to address the needs of your blended family.
Have an Updated Will
A remarriage is a major life event and it is important to update your will to reflect the new changes in your life. A will and other beneficiary designations can help ensure the other party is well taken care of and forestall any future conflicts or contestations.
A remarriage can be a rollercoaster ride. There are various emotional and financial hurdles that you have to cross when remarrying. A lot of these can be surmounted through upfront and open communications with the help of a trusted financial advisor.
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