You may have read lately about “gray divorce,” the term for couples who are divorcing after many years of marriage. This phenomenon has many people wondering why these numbers are growing, and others coming up with theories and answers. Some report that retirement itself forces couples to spend more time together and they realize that they have grown apart. Others are saying that now that women have their own money and settlements in divorce are more equal, couples no longer have to stay together for financial reasons and can leave an unhappy marriage.
Whatever theory you believe, gray divorce also means a growing number of gray marriages. Many divorced Boomers are remarrying and finding new hope in relationships that will ideally last for the rest of their lives. But the reality is that second marriages also have a high divorce rate and many couples enter into late marriage without understanding that new marriages bring new issues and for some, new problems.
First there are the problems related to money. Often a problem in any marriage, when two people who have their own money come together there may be a clash of long established spending styles. Then there are the expectations of the children of each and what they consider their inheritance.
For example, if she moves into his house, who gets the house when the owner dies? If he kept it in his name and he dies first, the will may provide that his children inherit the house. Or perhaps he has arranged it so that this second wife owns the house and when she dies, her children may get it to the exclusion of his children. I have heard too many stories of adult children kicking the second wife out of the house so they can sell it and share in the proceeds. If he puts the house in both of their names and she dies first, what are the rights of her children? These are matters that must be spelled out at the beginning.
Then there is that awkward moment of the pre-nuptial agreement. Women entering second marriages are often reluctant to ask for one, but assuming you both are bringing assets to the marriage, this is important. If you don’t have such an agreement, the surviving spouse often inherits the bulk of the estate. That is fine if that is what they both want, but again, if there are surviving children from either marriage it can be awkward. If you are already in a second marriage and didn’t have a pre-nup, ask an attorney to prepare a ‘post-nup.’ That way the lawyer can bring up the awkward questions that neither of the partners want to be the first to mention.
Which brings us to beneficiaries. If you are entering a second (or third) marriage and have life insurance, retirement plans or other assets, don’t forget to change your beneficiaries. Do you want your assets to go to your new spouse, your ex-spouse, your kids? Your ex-spouse may be out of the picture in your life, but if you forgot to take him or her off the assigned beneficiary list, this takes precedence over a will. This applies to your stock accounts, IRAs and anything else that asked you to name a beneficiary when you opened the account. Some people originally assigned these things to their parents who may be long gone, but forgot about updating their accounts. Take care of these things now.
But most of all, don’t put off the conversation about money when you plan to remarry. Each of you should know the other person’s financial status, whether one has co signed for his or her children’s college or home loans or other financial obligations. If you plan to combine accounts, do you really want him to know how much you spend on haircuts and shoes? Maybe two separate accounts as well as a joint one is best for you. In all marriages, honesty is the best policy.