Most people think of newlyweds as young couples moving into new homes fresh from their honeymoon and ready to start families, but statistics show that as many as 50% of single individuals over age 65 remarry. It’s never too late for a fresh start, including finding the person you want by your side during your golden years.
With today’s medical advances, many people enjoy good health and remain active far into their senior years. But when walking down the aisle late in life, many aging or elderly individuals bring with them significant assets and savings gathered over a lifetime and/or left to them by a deceased spouse.
Should betrothed elderly individuals go into new marriages with pre-nuptial agreements to protect their individual assets? Many financial experts say prenups are more important than ever during late-in-life marriages.
Protecting Children’s Inheritance
The most important reason financial experts and divorce attorneys urge elderly individuals to sign prenuptial agreements before remarrying after retirement is to protect their grown children’s inheritances.
If you’re planning to remarry and have children from an earlier long-term marriage, it’s important to protect your assets by clearly retaining them as separate property during your new marriage. Keep in mind that this doesn’t mean that you don’t trust your new spouse. It only means you want to protect your children’s inheritance while also protecting your spouse from a potential future fight with their stepchildren.
A prenup becomes an important tool for estate planning. It not only defines separate assets in case of a future divorce but also in case of death, whether you’re prepared with a last will and testament or not. In addition, a good prenup goes both ways. It also protects the new spouse’s separate property and clearly defines any individual assets they plan to leave to their own children.
Saving Your Retirement Funds
By the time you’re ready to retire, it’s likely that you’ve spent decades directing resources into your retirement accounts so you can comfortably enjoy your golden years. It’s important to protect not only the principal amount you’ve saved before your marriage from becoming commingled with a new spouse’s assets late in life but also to protect the interest.
Without a prenuptial agreement to clearly define this as a separate asset, any interest the accounts accumulate is subject to equitable distribution in the event of a divorce.
Defining Home Ownership
In many cases, elderly spouses come into a remarriage owning their own homes and sometimes vacation properties as well. A prenuptial agreement sets the parameters for each spouse to retain their homes or the funds from a home sale as their separate property.
A prenup may specify that a home be held in trust for an heir with a specified amount of time allowed for the new spouse to remain in the home—even until their death—after which the property goes to the heir. This arrangement protects both the heir’s inheritance and the new spouse’s right to remain comfortably in the home until their death or for as long as they need to find a new home.
Additional Benefits of a Prenup for Elderly Remarriage
Drafting a prenuptial agreement provides a good opportunity for older couples to have an important practical conversation about their finances before their marriage—a gesture of mutual respect and dignity. The conversation should clearly define each spouse’s expectations regarding assets, property, and debts. A prenup provides an organized inventory of assets, the full disclosure of debts, and facilitates important conversations about spending habits before going into the new marriage.