Are you remarrying?

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If so, don’t forget the financial implications

Whether through divorce or widowhood, many adults find new love in their golden years. Marriage is a celebration of companionship and love. But it s also the legal joining of two individual s finances for better or worse. Paula Bisacre, the publisher of www.RemarriageWorks.com, says careful planning is just as important in a second marriage later in life. When people remarry in their older years, there might be a misperception that the kids are grown, so [financial planning] won t matter anymore, Bisacre says. But it can be just as hairy. If you re considering remarrying, do yourself (and your future spouse) a favor by considering the financial implications before you pop the champagne.

What s in a name?

One of the easiest and most important things you should do when you remarry is update beneficiaries on everything from life insurance policies to savings accounts. Thoroughly review your affairs because there could be old 401(k)s or other small accounts you ve forgotten. One of the most common fallouts from inadequate estate planning is that children are accidentally disinherited, says Oregon estate planning attorney Candice Aiston. If a spouse leaves his estate to his second wife, when she dies, if she doesn t include his children in her will, it goes to her heirs not his, Aiston says. In many cases, she says, it s not that an evil stepmother or stepfather is trying to hoard money. More commonly, the deceased failed to update important documents to reflect his or her wishes.

Share your wealth

If you d like to give everyone a piece of your estate, Massachusetts lawyer and university professor Steven Weisman says one common solution is to leave life insurance proceeds to your spouse and other assets to your children, or vice versa. Or, he says, consider Qualified Terminable Interest Property trusts. So-called Q-TIP trusts allow you to leave the income from an asset like a rental property to your spouse for the duration of his or her life, but the asset itself is awarded to your children when your spouse dies. That way, there isn t that risk of having the asset depleted before it goes to your children, Weisman says.

It s not romantic, but

Weisman says it s critical to understand your beloved s financial situation before saying, I do. If your future spouse has lots of debt or income tax issues, you should know what you re getting into and seriously consider a prenuptial agreement to protect your own assets. I look at this as taking away potential problems, so they can focus on making the marriage work, Weisman says. Prevent fights before they happen. The last thing you want is your spouse and children battling over your money when you re gone. Danielle Mayoras, coauthor ofTrial & Heirs: Famous Fortune Fights!, says one of the best ways to preempt arguments is to appoint an objective third-party executor. Ted Kennedy chose a family friend that everyone trusted, and to this point, we haven t heard of any battles over his estate, Mayoras says. If you have good reason to believe your heirs won t get along, Mayoras suggests taking a cue from Frank Sinatra. Ol Blue Eyes put a no-contest clause in his will, which stated that any beneficiary who challenged the division of assets would automatically lose his or her inheritance. It might sound harsh, but at least it will keep your family out of court.

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