Clients with ‘late blooming relationships’, whether following divorce or widowhood, have a new set of choices to make.  Should we marry, or continue our relationship less formally? I know, for many of you some less-than-wonderful terms from the past for these relationships come to mind- but let’s let them go.  Those were for different times, different people. This is about YOU.

You’ll need to talk with your families, and perhaps deal with religious issues, but let’s think about the financial impact of the decision.  There are multiple impacts, and you need the best financial and legal advice, to help you decide.

Talk to your honey about money.  If you are already living together, I hope you have had the ‘money talk’ before deciding whether to merge finances.  Who pays for what? And- of paramount importance to an older population, what happens if one of you can’t live independently any more? Issues of long term care- how would it be done? by whom? How is it paid for?  What is the impact on the independent partner? These are often concerns of When- not If. If you’re concerned about whether assets can be insulated from Medicaid spend down, the government does not recognize either prenup or post-nup agreements for this purpose.  There are some protections for spouses both in the Medicaid rules and in Medicaid planning, but you need to examine the pro’s and con’s and see how marriage may impact your responsibilities and the impact on your families before making a decision.  

Do you want to execute a Prenuptial or Post-nuptial Agreement?   If you have established a business or accumulated assets, prenups and post-nups are valid tools to clarify your wishes about how your business, money and property will be distributed.  It could state that each of you have certain assets that are not marital assets, and that you name your children, for example, as beneficiaries of those assets, rather than your new spouse.  Those assets would be disclosed, and listed, for clarity. You can make other decisions regarding assets gained during the marriage.

There are some advantages to being married. If you marry, and your new your spouse has healthcare insurance through work, you can likely be covered under his or her plan. This could save substantial money. There may be also be veteran’s benefits for a spouse.  

If your spouse dies, and you inherit IRA/401k funds, there is more flexibility in payout alternatives for spouses, than non-spouse beneficiaries. There are also potential Social Security spousal benefits, both at death and during your lifetime.

If you’ve been previously divorced, there may be some disadvantages to being married.  Some benefits you may have from your ex may be lost in remarriage.

 If you have been receiving Social Security under your deceased spouse’s benefit and you remarry before age 60 (before age 50 if you are disabled), you will likely lose the prior benefit.  When your new spouse passes away, you may be eligible for that benefit, or a new one based on your new spouse’s record. 

If it doesn’t work out.  It’s hard to ‘uncouple’.  You already know that. As far as relationships are concerned, it may not be any easier to separate regardless of your legal status.  Marriage can offer some asset protection that cohabitation might not.

Do you get my point that there is a lot to consider before making this decision?  

Consult an experienced  financial planner-(ME!)- for what you need to know about your money, how to structure it  and how to manage it, to make the most of whichever choice you make. Don’t forget to check with your attorney, as well, for critical legal documents to protect yourselves and your families, once you have your finances straightened out. 

Avoid the common mistakes most women make about money, especially when they are in crisis- divorce, widowed, etc. Schedule a free consultation with me at Calendly.com/contactagrace; or call me at 716-817-6425.

Securities and Advisory Services offered through Cadaret, Grant, Registered Investment Advisor and Member FINRA/SIPC., Transitioning Finances, Davis Financial Services and Cadaret, Grant & Co., Inc. are separate entities.