There are financial considerations a couple should contemplate and address before remarrying. From alimony to social security, the decision to remarry can have consequences that affect each person’s bottom line. A prenuptial agreement can address concerns the parties may have – or any concerns the children may have, about family heirlooms and family businesses.
Financial Considerations for Remarriage: Discuss Assets
Before remarrying, a couple is wise to discuss their assets, as well as their expectations about their assets. Couples should discuss their assets. They should decide which assets they wish to comingle. They should also discuss and clearly identify which assets should remain separate. If one or both parties have children, they should have a discussion about the children’s inheritance. In addition to whether the children will inherit, couples should consider when the children will inherit. Will they receive an inheritance immediately? After the second spouse dies? A bit of both?
Financial Considerations for Remarriage: Talk with the Family
When a couple has a good idea of what they want to do about their assets, it might be a good idea to discuss their choices with the adult children. This is not a good idea for every couple or for every family with adult children. However, for many families, a frank and open discussion about areas where the children might otherwise be concerned can ease tensions.
Financial Considerations for Remarriage: Talk with Shared Business Owners
If there is a business owned by one of the parties to the marriage, it may be a good idea to have a discussion with the business partners, once the couple decides how they view the business during the marriage. If the marriage ends either in divorce or with the death of the spouse who owns the business, the business, and the business partners, may feel an impact. Thus, the couple may want to address their intentions with the business partners directly.
Financial Considerations for Remarriage: Retirement Accounts
Often, a couple’s retirement accounts are a critical source of income for an older couple. How will retirement accounts receive continued funding? Will funding continue on an ongoing basis? Does one partner’s retirement account require more attention than the other partner’s account? There isn’t a “right” answer. However, it is a good idea to have a discussion about how the retirement accounts will be treated.
Financial Considerations for Remarriage: Estate Planning
Even if someone has an estate plan in place already, this should be reviewed. Each party should review their living will, ensuring the party named in the living will remains the party they wish to make end of life decisions for them. Wills may need rewriting. Living trusts may need modification. If one or both parties have not yet done any estate planning, they should address this – particularly for couples who have children.
Financial Considerations for Remarriage: Life Insurance
Whether one needs life insurance, and how much, are questions each person should ask themselves. Life insurance proceeds may pay for funerals, as well as provide ongoing financial assistance to those left behind. Every situation is different. However, what remains constant is the need for every couple to evaluate what they, and their potential heirs, may need.
Financial Considerations for Remarriage: Alimony
Typically, one stops receiving alimony once they remarry. However, one does not typically have to stop paying alimony just because they remarry. Couples should consider how remarriage may impact their particular alimony situation.
Financial Considerations for Remarriage: Check Your Account Beneficiaries
Despite being encouraged to do so, many people fail to change their beneficiary designees on their financial accounts after a divorce. When remarrying, it is a good idea to review the beneficiaries of all accounts, including bank accounts, retirement accounts, investment accounts, annuities contracts, and other financial accounts.
Financial Considerations for Remarriage: Talk About Your Financial Philosophy
Most people don’t like discussing money. However, it is a good idea to discuss your financial philosophy before a remarriage. Some people consider providing for their elderly parents an obligation, while others do not intend to assist their parents. Similarly, some people provide financial support to their adult children, while others do not. There isn’t a right answer to what one does with their money, however, both parties should have an understanding of the other person’s attitudes toward money.
Financial Considerations for Remarriage: Get a Prenuptial Agreement
For couples remarrying, a prenuptial agreement provides an excellent way of ensuring a couple’s joint desires are respected. A prenuptial agreement provides a mechanism for families, designating which assets will be jointly held, and which assets will remain the property of one party to the marriage. Couples can designate assets, such as jewelry or art, that will be passed down to their children. Once identified, a prenuptial agreement can prevent any asset from inclusion in divorce proceedings. A prenuptial agreement can also address:
- Whether either party will receive alimony.
- The appropriate amount of alimony.
- The division of joint assets, acquired during the course of the marriage.
- The responsibility for debts acquired during the marriage.
A prenuptial agreement protects both parties to the marriage. It can also provide peace of mind to adult children and business partners.
If you are considering remarriage, contact Fait & DiLima to discuss a prenuptial agreement. Prenuptial agreements protect both parties in the event of a divorce. They also provide the courts and the parties with a clear roadmap about the division of assets and debts in the event of a divorce. While everyone hopes the marriage will succeed, some marriages will not. A prenuptial agreement saves time and money in a divorce, as the prenuptial agreement addresses most, if not all issues couples argue about during a divorce. Contact the attorneys at Fait & DiLima today to schedule a consultation to discuss your family’s situation. We look forward to working with you to create a prenuptial agreement that addresses the needs of you and your family. Call today at (301) 251-0100.