More than half the nation's citizens who are over 55 years old are in second, third or subsequent marriages. This number includes seniors in all states including North Carolina, and it represents research by the Pew Research Center -- a neutral entity that researches and provides information on public opinion, social issues and demographic trends that shape the United States.
It may surprise some that further reports indicate that six in 10 of these gray marriages end in divorce. While couples may look forward to having another chance at love, happiness and companionship, it will only be natural to consider the fact that the death of one of the spouses will likely occur during their time together. For that reason, updating estate planning is vital; however, considering the quoted numbers for divorces in this age group, it may be wise to address that eventuality by drafting a prenuptial agreement.
Later-in-life marriages can be extremely complicated
Some of the questions and concerns associated with these marriages include the following:
- If your new spouse moves into your home, what happens if you die? Will he or she be entitled to remain there? What if he or she becomes romantically involved with another person and invites him or her to move in -- or get married?
- Who will get your benefits like pensions, IRAs, Social Security and more under your changed marital status?
- What will happen if your new spouse needs long-term medical or nursing care? Can your assets be drained for that purpose?
These are but some of the questions typically asked, and you may have many more if you are entering a blended family with children and grandchildren on both sides. Prenuptial or postnuptial agreements can address some of the issues that relate to death or divorce. However, proper drafting and procedures are vital to avoid the risk of such an agreement being challenged or declared invalid.
In some gray marriages, one or both spouses are not too keen to divulge all their financial information because they try to protect any rights their biological children might have. However, you may find that honesty and practical planning with the professional guidance of an experienced estate planning attorney can overcome those obstacles.
Why is estate planning important?
You must ensure that you modify your will, any living trusts, health care proxies, durable powers of attorney and other estate planning documents according to your changed marital status.
- At this time, you may want to ensure the documents reflect your current wishes, and beneficiaries that are no longer part of your life are removed.
- You may name whomever you want as your IRA beneficiaries -- your spouse's consent is not required.
- Your new spouse will have certain rights to your 401(k), pension and other qualified retirement plans.
- Any assets that you may hold jointly with one of your children will automatically go to him or her upon your death.
- If your spouse dies, or if you divorce before you turn 60, it will affect any Social Security benefits from your former spouse.
- In circumstances in which your children receive financial aid for graduate school or college, your new spouse's salary -- when added to the family income -- may affect the amount of the financial aid.
- If you die without a will, things become even more complicated, and your estate planning attorney will provide the necessary information.
Conversations about estate planning can be difficult, but certain decisions are required and the longer you wait, the more difficult it may be. The alternative is to leave the family -- and possibly the court -- to make important decisions that may lead to contention between your surviving family members. Consulting with an experienced estate planning attorney may provide peace of mind to both spouses and the children and grandchildren who may be concerned about their inheritances.