There are, admittedly, challenges when people decide to get married after fifty. There are also many myths, as reported by Forbes in “6 Money Myths About Marrying After 50.” If you or your intended has children from a prior marriage, there are added complications that need to be addressed.
Myth #1: Pre-nups are just for the rich or famous. If you’ve been married before and have children from a previous relationship, a prenuptial agreement is important to ensure your assets will pass to your children from the prior marriage. What about a first-time marriage? There still might be a need for a pre-nup, especially if you own significant assets. Don’t think of a pre-nup as preparing for divorce, but rather more like creating your estate plan. If you don’t have your affairs in order, the state will decide for you—just like dying without an estate plan.
After age 50, the focus of a pre-nup should be on protecting your children and grandchildren. For instance, some states—like Massachusetts—allow a surviving spouse to claim his or her “elective share,” instead of what’s detailed in the decedent’s estate plan. A pre-nup allows your spouse to waive the elective share, meaning odds are your estate plan won’t be challenged by your surviving spouse.
Myth #2: Don’t talk estate planning with your step-family. Estate planning is critical when you have children from an earlier marriage. Otherwise, your entire estate could pass to your new spouse and not to your own children, which may not be your intention. Have a candid discussion about your estate planning and pre-nup with your adult children and your new spouse. This will alleviate some of the concerns adult kids may have about how it will affect their inheritance, when their parent gets remarried.
Myth #3: Holding assets jointly is always preferable. Before the ceremony, couples should decide how they want to own their assets. The way you own your assets is what actually determines what happens to that asset when you pass. If you’re looking to use trust-based estate planning, you’ll want to ensure your assets are aligned with the plan, verify the correct alignment with your financial institutions and then track the changes in your assets over time. It’s best to discuss your preferences and even create the estate plan before the wedding.
Myth #4: Your new spouse’s debt won’t impact you. This is a big one. Marrying a person with a large amount of debt, whether it’s college loans or credit card debt, can be a major issue in second marriages. Spouses should be candid about their debts before marrying. That way, you can plan together how you’ll address the debt.
Myth #5: It always makes financial sense to get married. This is not always the case; it depends on your personal and financial circumstances. Tying the knot may reduce your Social Security benefits, especially if you didn’t work while you were married the first time and can claim spousal benefits that are much higher than your own Social Security benefits. If you have an ill or disabled partner on Medicaid, then you might want to stay unmarried so he or she can to continue to qualify for benefits, although there may certainly be other Medicaid planning options. The combined marital income could make your partner ineligible for Medicaid, so you’ll want to consult with an experienced estate planning and elder law attorney before making any big decisions.
Myth #6: Being married means your spouse can automatically make medical decisions on your behalf. This is one of the things you really want to take care of before you need it. The only way to be sure that your new spouse can make medical decisions for you, is by having a Health Care Proxy drafted and executed detailing your wishes regarding end-of-life care. This is something to address when you don’t need it, and both of you should have this. It’s part of a number of documents that you should have prepared by an experienced estate planning attorney when you sit down to update your estate plan. Paired with it should be a HIPAA release. Without this document, doctors may not be able to speak with your spouse or other loved ones about your medical history. Make sure you set these up well before you’ll need them.
One final note: blended families do better when there is a lot of communication between parents, step-parents, kids and step-kids, whether the kids are in elementary school or grown adults with kids of their own. That’s why we at Family Estate Planning Law Group advocate for a Family Care Meeting. This meeting allows clients to outline their plan to their heirs and other loved ones with a role in the plan. Those you care about have the opportunity to hear directly from you about your wishes regarding your estate planning and end-of-life care.
For more information, explore our website and contact us to schedule your consultation today!
Reference: Forbes (February 13, 2017) “6 Money Myths About Marrying After 50”