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Develop and improve products. List of Partners vendors. When two people marry later in life, there is more to sort through than just wedding gifts.
Marriage between two people with longer histories involves important decisions concerning finances, children, assets, housing, and retirement—to name just a few. Here are five topics you will want to take up with your intended spouse right away to ensure your best financial interests as individuals and as a couple are protected in your new union.
Older couples tend to be more set in their respective ways, especially when it comes to money management styles. They've also had more time to accumulate ificant assets. This can make it a little harder to merge finances, especially when one partner is a spender and the other is thriftier—or when one partner has considerably more resources than the other.
If either partner has young children from a relationship, it introduces a whole other set of issues to discuss, such as the payment or receipt of child support and possibly alimony. Even when there are adult children, there are issues of inheritance to clarify. Some smart planning can help you ease this transition.
Here is advice from the Financial Planning Association and the American Institute of Certified Public ants that you can use, preferably before walking down the aisle:. If not, any tax refund could be delayed. Also, consider whether it makes more sense financially to file a t tax return or to file as married filing separately. Make sure each of you straightens out any tax issues with a spouse before remarrying. If your spouse dies and you remarry before the end of that tax year, you can file a t return with your new spouse.
Estate planning is imperative. This organization of your property is a means to see that your families' financial needs and goals are met after you die. Estate planning is especially important when children from relationships are involved because it ensures they will receive what is rightfully theirs. Keep in mind that state laws regarding estates vary. Many financial planners, estate planners, and ants also advise considering prenuptial agreements when you marry or remarry later in life. A prenuptial agreement is a written contract to which both parties voluntarily agree that outlines the terms and conditions associated with dividing up financial assets and responsibilities if the marriage dissolves.
A prenup is especially important if you and your intended have large income or resource disparities. The agreement should be discussed and finalized with a lawyer before the marriage because state laws don't always recognize postnuptial agreements.
The prenuptial agreement can help determine what will be left for each of your respective families to inherit if you divorce or when you die. Generally speaking, a prenup cannot address matters dealt with in divorce agreements, such as child support, visitation rights, or custody. Additionally, because a prenup is a financial tool, it cannot be used for nonfinancial matters.
A prenup can stop your spouse from challenging your will or any existing trusts. Whether or not a trust is affected will depend on who the beneficiary or beneficiaries are and how the trust was set up, such as whether it was within the context of a divorce agreement or support agreement, which could make the trust less flexible. Some trusts, such as a qualified terminable interest property trust QTIPoffer both support for your spouse after your death and protections for your first family.
A QTIP provides income for your spouse but ensures that when your spouse dies, the assets inherited from you will go to the children from your first marriage or other heirs you choose rather than to your spouse's heirs. Finally, AARP advises those marrying later in life to have separate wills rather than a t will.
Having separate wills eases potential complications with the future distribution of property, especially considering that life circumstances can change throughout the years you are married. Make sure to update your respective powers of attorneyincluding your medical powers of attorney or healthcare proxies.
Additionally, you may want to change your beneficiaries for the following items:. Newlyweds should contact the SSA when a name change occurs to make sure earnings are properly reported. If the marriage occurs after full retirement ageand your Social Security benefit is less than half of your new spouse's, you can receive the Social Security benefit on your record plus an additional amount to bring you up to half of your new spouse's benefit.
This will generally occur one year into the marriage. If you are receiving any divorced spousal benefits, generally, those benefits end if you remarry. Widows' or widowers' benefits aren't available to a spouse who remarries before age If you remarry after age 60 or after 50 if you're disabledthough, you will still receive benefits based on your former spouse's income history.
Marriage can affect benefits paid by Medicaida health benefits program for low-income individuals. Medicaid is based mainly on household income, so a person receiving Medicaid benefits who marries someone with a higher income could lose coverage. Check the eligibility rules for your state to learn how marriage could impact your benefits. Marriage can affect every aspect of your financial life. Sit down as a couple to learn more about each of your present financial situations and future goals and then talk to an attorney.
Consider keeping most assets and property separate to minimize complications, especially when you have heirs. Though a postnup may be considered less valid than a prenuptial agreement, some legal documentation is better than none. Most importantly of all: Don't end your discussion at the aisle. Maintain ongoing discussions about finances throughout your married life, for richer or poorer. American Institute of CPAs.
Financial Planning Association. Internal Revenue Service. Accessed May 26, California Legislative Information. Premarital Agreements. Accessed April 17, Social Security Administration. American Council on Aging. Your Privacy Rights. To change or withdraw your consent choices for Investopedia.
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Marriage and Taxes. Table of Contents Expand. Combining Finances. Updating Tax Filing Information. Estate Planning. Updating Social Security. Reviewing Medicaid Benefits. The Bottom Line. Key Takeaways Older couples who plan to marry should discuss issues such as finances, children, assets, housing, and retirement before their wedding.
When combining finances, it's best to be open about everything from your degree of indebtedness to investment strategies and retirement plans. Be sure to update your tax information, determine your filing status, and update your name and benefit status with the Social Security Administration SSA. Complete estate planning to see that your families' financial needs are met after you die, and update beneficiary information for wills, life insurance policies, and the like.
Consider creating a prenuptial agreement to ensure that your financial assets are protected in the event of a divorce and to clarify property division when one of you dies. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts.
We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Compare s. The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. Related Articles. Prenup: Marriage Roulette Protection. Partner Links. Related Terms Legal Separation A legal separation is a court-ordered arrangement whereby a married couple lives apart, leading separate lives.
Equitable Distribution Equitable distribution is a legal theory guiding how property acquired in a marriage should be distributed between the two parties in a divorce. Postnuptial Agreement A postnuptial agreement is created by spouses after entering into marriage that outlines the ownership of financial assets in the event of a divorce. What Is an Irrevocable Beneficiary? An irrevocable beneficiary has guaranteed rights to assets in an insurance policy or a segregated fund.
Palimony Palimony refers to court-awarded financial support following the end of a nonmarital relationship. Learn what palimony is and how it works. What Is an in Trust? An in trust is a type of financial opened by one person for the benefit of another. Investopedia is part of the Dotdash publishing family.Married bottom here
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What You Need to Know About Marriage and Money