Dear Savvy Senior:
What are the financial issues that come with remarrying later in life? I've been seeing a wonderful man for two years, and we've been talking about marriage, but I want to make sure we understand all the possible financial consequences before getting hitched.
That's a great question. Getting remarried later in life can actually bring about a host of financial and legal issues that are much different and more complicated than they are for younger couples just starting out. Here are some common problem areas you need to think about, and some tips and resources that can help.
Estate planning: Getting remarried can have a big effect on your estate plan. Even if your will leaves everything to your kids, in most states spouses are automatically entitled to a share of your estate -- usually one-third to one-half. If you don't want to leave a third or more of your assets to your new partner, get a prenuptial agreement where you both agree not to take anything from the other's estate. If you do want to leave something to your spouse and ensure your heirs receive their inheritance, a trust may be the best option.
Long-term care: You may be surprised to know that in many states, spouses are responsible for each other's medical and long-term care bills. This is one of the main reasons many older couples choose to live together instead of marrying. Staying unmarried lets you and your partner qualify individually for public benefits, such as Medicaid (which pays nursing home costs), without draining the other one's resources. But, if you do remarry and can afford it, consider getting a long-term care insurance policy to protect your assets.
Real estate: If you're planning on living in his house or vice versa, you also need to think about what will happen to the house when the owner dies. If, for example, you both decide to live in your home, but you want your kids to inherit the place after you die, putting the house in both names is not an option. But, you may also not want your heirs to evict him once you die. One solution is for you to give your surviving husband a life estate which gives him the right to live in your property during his lifetime. Then once he dies, the house will pass to your heirs.
Social Security: Remarriage can also affect the benefits of many divorced or widowed seniors (especially women) who receive Social Security from their former spouses. For instance, getting remarried stops divorced spouse's benefits. And getting remarried before age 60 (50 if you're disabled) will cause widows and widowers to lose the right to survivors benefits from their former spouse. Remarrying at 60 or older, however, does not affect survivors benefit. For more information, see ssa.gov/women.
Pension benefits: Widows and widowers of public employees, such as police and firemen, often receive a pension which they can lose if they remarry. In addition, widows and widowers of military personnel killed in duty may lose their benefits if they remarry before age 57, and survivors of federal civil servants that receive a pension will forfeit it if they remarry before 55. If you're receiving one of these benefits, check your policy to see what the affect will be.
Alimony: If you are receiving alimony from an ex-spouse, it will almost certainly end if you remarry and might even be cut off if you live together.
College aid: If you have any children in college receiving financial aid, getting married and adding a new spouse's income to the family could affect what he or she gets.
To get help with these issues, consider hiring an estate planner who can draw up a plan to protect both you and your partner's interests. Also see elderlawanswers.com, a contributor to this column and a great resource on many other legal topics.
Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit SavvySenior.org. Jim Miller is a contributor to the NBC Today show and author of "The Savvy Senior" book.