When you decide to remarry, especially either of you have children, here are some tips to create a solid foundation for your continuing relationship.

Consider a Prenuptial Agreement

When you have your own assets, intending to pass them on to your children, and your new spouse has the same-  a prenuptial agreement can be particularly helpful. Honest and open communication about money and what came before, is an important part of a new relationship so it can be be built on trust and fairness.

(For help here, email me for a copy of “How to Talk to Your Honey about Money”)

If either or both of you have gone through a divorce, you’ll want to avoid that contentious negotiation about dividing assets and protect each other the best you can. Consider what’s in those divorce settlements. Receiving alimony likely will end with remarriage, but the obligation to pay a former spouse does not end. Child support continues, and life insurance beneficiary designations may need to remain in place. Many prenups will state that premarital assets, what you own before this marriage, may go to the children, but assets you acquire during the marriage, are split between you.

States have their own rules, most requiring that a half or a third of marital assets pass to a surviving spouse. It’s important that this is specifically addressed in the agreement, to avoid problems later.

Update Estate Planning Documents

It’s important to do this after divorce whether you remarry or not. All of your legal and financial documents, account titles, and beneficiary designations should be updated.  Who should act as your health care proxy? Who is the beneficiary of your life insurance policy? Etc.

Wills: Do you have a will? A will states your wishes about who gets what when you pass away. You’ll want to make certain that your former spouse is not still your beneficiary! If your children are still minors, who will act as their Guardian?

Your children are the ‘natural objects of your bounty’- a legal concept. But your stepchildren, however close your bond with them is, are not.  If you want to leave something to a stepchild, you need to list it specifically.

Do you have a Living Trust? Review the terms of the Trust and who is acting as Trustee.

If you don’t have a Trust, consider putting one in place.

Trusts can be especially useful for blended families. You can  ensure that your assets benefit your surviving spouse during his/her lifetime, while providing that what remains after the spouse’s death passes to your own kids. Consider choosing an independent, neutral trustee, to minimize friction for everyone.

Check Beneficiary Designations

Review the beneficiary designations on 401(k) accounts, IRA’s and other retirement accounts, life insurance policies, or any account with a directly named beneficiary. These assets pass outside of your will, and must be separately updated. Your prior divorce does not necessarily revoke a designation of an ex-spouse as a beneficiary on everything.  Your prior settlement may give retirement assets to your ex- and these cannot legally be revoked. Spousal rights in retirement plans governed by the Employee Retirement Income Security Act of 1974 (ERISA) are subject to special rules and may require your new spouse to sign off if you want your 401(k) to go to your children.

Consider Life Insurance

Life insurance can be a valuable tool to create an inheritance for your new spouse and your children. It’s not uncommon for a pre-existing policy to name your former spouse as beneficiary as part of the settlement, perhaps to secure child support payments. A new Life insurance policy can create the funds to benefit everyone you wish- your kids, your new step-kids, and anyone else.

Family structure is increasingly fluid. As your family structure changes, it is important to make sure that your estate and financial plans reflect your these dynamics. Your financial planner and estate planning attorney can help you take a holistic approach to your future, so you can enjoy the present.

If you need guidance on securing your financial future, contact me at adrienne@adriennegrace.com or schedule your free Financial Clarity session at www.calendly.com/contactAGrace to get started.

We may retire earlier than we think we will. Some of us envision leaving the workforce at “full” retirement age (66 or 67) so that we can receive “full” monthly Social Security benefits rather than slightly reduced monthly payments. Will that happen? It might not, according to data released this spring by the respected Employee Benefit Research Institute.

In EBRI’s most recent Retirement Confidence Survey, 21% of the respondents thought they would retire at age 65. Another 26% expected to retire at age 70 or later.

These expectations may not correspond with reality. In surveying current retirees, EBRI found that only 6% had worked into their seventies. Only 9% had retired at age 65. Sixty-five percent of the respondents had left work before age 65, up from 61% in EBRI’s 2010 survey.

We may see retirement as an extension of the present rather than the future. This is only natural, as we live in the present – but the present will not go on forever. Things change, and the costs we have to shoulder five or ten years from now may be greater than the expenses we face at the start of retirement. As many of us will likely be retired for 20 or 30 years, it becomes essential to take a long-term view of the retirement experience – which is why retirees may want to consider growth investing and long term care coverage.

Beyond that basic question, we need to think about insurance from a couple of other angles. Will we need long term care coverage? It seems to get more expensive each year, but as medicine and health care continue to advance and evolve, the possibility of a gradual rather than sudden death may increase. The wealthy may have the assets to contend with long term care costs, but the middle class rarely does. In Genworth’s 2015 Cost of Care Survey, the median annual cost for a semi-private room in a nursing home is $80,300. In California, it is $89,396; in Florida, $87,600.

Disability insurance and long term care coverage may prove more essential to retirement planning than many of us realize.

Age may catch up to us sooner rather than later. Generationally speaking, are we healthier than our parents and grandparents were? Anecdotally, it would seem so: we see people running 10Ks in their eighties, climbing mountains in their seventies, and so forth. Then again, we have diabetes and obesity plaguing American health.

We may be alone sooner than we assume. Many couples retire with a reasonable assumption that they will be together for some time – but something may happen to leave one spouse alone. As anyone who has ever lived alone realizes, a single person does not simply live on 50% of the income of a couple. Keeping up a house – or even a condo – could be arduous for an eighty-year-old man or woman. Driving is a concern. All this means that we may need someone or some group of people to care for us when our spouse is gone. Is that kind of support currently available? Could it be available twenty years from now? If not, what will take its place?

These are some of the blindspots that can surprise us in retirement. They may quickly affect our money and our quality of life. If we age with an awareness of them and recognize them in our retirement and estate planning, then we may be betterprepared when or if they emerge.

Let’s face it – this is not a subject anyone likes to talk about. In fact, whenever we get an email or a voicemail from a life insurance representative we tend to cringe, turn away, or simply just “delete.”

And yet, life insurance is the single-most important step in making sure that your family is protected if the unthinkable occurs. According to the life insurance industry group LIMRA, 30 percent of US households have no life insurance whatsoever. Today, there are 11 million fewer American households covered by life insurance compared with six years ago. The bottom line is that a majority of families have no life insurance or not enough, leaving them one accident or terminal illness away from a financial catastrophe for their loved ones.

What if you were suddenly no longer here and your family had to manage on their own? When was the last time you worked through your budget to be sure your family would be OK? Here are some simple steps you can take to get started on protecting your family financially:

1. Check with your employer to find out what insurance is available as a benefit, and if your current policy can be increased
2. Have your life insurance policy reviewed by a professional to be sure you have adequate coverage for now, and in your family’s future
3. Consider your family’s future financial needs: College tuition, weddings, debt payoff, car purchases, home maintenance, etc.

Having the right life insurance coverage provides much more than just peace-of-mind, it can keep a family – a family