You’ve hit the age when you assume that you’ll be living independently for the rest of your life. Maybe you were married or partnered before or maybe you’ve been looking for love in all the wrong places. Either way, you’ve made peace with the fact that you don’t need a double bathroom vanity and you won’t have to fight for closet space.
Then, out of the blue, cupid’s arrow finds its way. For those of us long-time singles, this can be hard to believe, but that’s what happened to me. I was not planning on getting married, and somehow at age 46, I did. Surprise!
Getting married later in life has become a pretty typical scenario. According to Brides.com, “Research suggests that getting married in your early 20s was the norm in the mid-1900s. Now, millennials, a cohort of people born between 1981 and 1996, and Gen Z, those with a birthdate from 1997 to 2012, are waiting until their late 20s and early 30s to say ‘I do.’”
As far as Gen X women go, the first marriage rate for women 50-59 more than doubled from 6.2 per 1,000 in 1990 to 15.0 per 1,000 in 2019. Remarriages for adults 55 – 64 increased from 55% in 1960 to 67% in 2013.
In other words, cupid’s arrow has been busy.
Chances are that if you’re thinking about walking down the aisle (or at least combining dresser drawers), you’re not going into it as naively as you might have in your 20s. You have assets. You have a career. You have a lot of other things to consider besides your shotglass collection.
In this three-part series, we’re discussing what you need to know about your finances, the pros and cons of merging money, and how to handle family expectations (e.g., you don’t want to be supporting your partner’s pot-smoking, basement-dwelling 30-year-old).
Let’s start at the beginning: protecting what’s yours.
Why Marrying Later in Life is Different Financially
By the time you reach your 40s, 50s, or beyond, you’ve already established yourself financially. Maybe you own a home, have a solid retirement fund, or even have children and grandchildren who depend on you. These factors make financial planning a little more complex than when you were younger. Social Security benefits, pensions, and estate planning all become more important considerations when you decide to tie the knot.
Prenuptial Agreements: Are They Necessary?
Prenuptial agreements aren’t just for the super-rich. They’re a practical way to ensure both partners understand and protect their financial interests. If you’re bringing significant assets into the marriage, a prenup can outline how they’ll be handled in the future. According to the American Academy of Matrimonial Lawyers, 62% of attorneys have seen an increase in prenup requests, especially among those marrying later in life.
A prenup can help protect your retirement savings, real estate, and business interests while also clarifying financial expectations. Plus, if you have children from a previous marriage, it can ensure they still receive their intended inheritance. If you’re unsure whether a prenup is right for you, this guide can help.
Managing Real Estate and Property Ownership
If you own a home before getting married, you’ll need to decide whether to keep it in your name, add your spouse, or sell and buy a new home together. Each option comes with its own tax and inheritance considerations.
For example, if you want your children to inherit your home but also want your spouse to live there, you may need to set up a trust or special legal agreement. Talking to an estate planner can help you find a solution that works for everyone.
Legal and Tax Implications
Marriage can affect your estate planning, taxes, and even Social Security benefits. That’s why it’s important to update your financial documents, including:
- Your will and beneficiaries on life insurance and retirement accounts.
- Power of attorney and healthcare directives to ensure your spouse or someone you trust can make decisions if needed.
- Estate planning documents to clarify how your assets will be distributed.
Also, if you were previously receiving Social Security benefits from an ex-spouse, remarrying could impact those benefits. Be sure to check the Social Security Administration’s guidelines to see how this might affect you.
What to Consider if You’re Moving in Together Instead of Marrying
Marriage isn’t the only option for later-in-life partnerships. More couples are choosing to live together without getting legally married. While this can be a great way to share life without the legal complexities of marriage, it’s still important to consider how you’ll handle finances and protect your assets.
Here are some things to discuss with your partner:
- First, think about how you’ll divide expenses. Will you split costs evenly, or will each partner contribute based on income levels? Setting up a clear financial agreement can help prevent conflicts down the road.
- Next, consider what happens to your assets if one of you passes away. Unlike married couples, partners who cohabitate don’t automatically inherit each other’s assets. That means you’ll need to be proactive about updating your will, designating beneficiaries on accounts, and possibly setting up a trust to ensure your partner is taken care of.
- Real estate ownership is another key issue. If one partner owns the home, the other may have no legal claim to it in the event of a breakup or death. To avoid complications, discuss whether you want to add your partner to the deed, establish a cohabitation agreement, or outline specific arrangements in your estate plan.
- Healthcare decisions are another consideration. Without a marriage certificate, your partner may not have the legal right to make medical decisions for you in an emergency. A healthcare power of attorney can give them the authority to act on your behalf if needed.
- Lastly, think about Social Security and retirement benefits. Some people choose not to marry because remarrying could affect their Social Security payments or pension benefits. Be sure to research how your financial situation might change if you remain unmarried.
Whether you’re signing a piece of paper or just clearing space in your closet, it’s important to have conversations about money, retirement savings, estate planning, and real estate before you make a big move – and a financial advisor can help you with that. We’re here to be your sounding board and a resource when you make major decisions. One of the healthiest ways to enter into a committed relationship is on the same page with all the facts. And that’s what we’re here for.
The next blog in the series will cover whether or not you should merge your money and how to have healthy conversations right from the beginning. See you there!
