Remarriage: Financial Tips for Seniors

Updated 8/31/15 9:20am | Here at Alert1 we love to hear the chimes of bells and the sound of sweet wedding vows being exchanged. Frank Sinatra was on to something when he sang, "love is lovelier the second time around.” Today, many seniors are getting hitched, for the second time around!

Finding love later in life is unexpected and exciting. Love is the gift every senior woman wants. This breath of fresh air will make Mom feel young again!

You can’t predict when love will come along and change everything. But that’s the catch, it changes everything. Marriages in the golden years are joyful, but it will take time to get used to the idea of Mom getting married. But, hopefully you can share some of her joy.

However much you may (or may not) love your new stepparent, your first question is probably about the family’s assets. Encourage Mom to stay open about the planned financial set up. A third party attorney will help relieve some tension and make the whole process easier for everyone.

Elderly couples have more significant assets than a young couple. Seniors must be wise when establishing financial responsibilities. Here are some things to think about when helping Mom with her finances.

• Family home

Is Mom remaining in her own home, moving in with her spouse, or buying a new house? Moving in together is a big change that will require more than just a financial discussion. Talk openly with Mom about what moving will entail. If she needs to downsize, she might need your help in deciding what she needs to bring and what she can toss. Regardless of where your senior moves, they can always bring a personal emergency response system to their home away from home.

• Estate plan

Seniors should understand the fiscal responsibilities and legalities of each state. In many states, up to one-half of the estate will automatically go to Mom’s partner - even if the new spouse is not in the will. Talk with Mom about where she wants her estate to go. Consider estate waivers or bonus payments so that the surviving partner is able to stay living at home.

• Premarital agreement/prenuptial agreement

The new couple should discuss this early on. A prenuptial agreement does not mean they are planning a divorce or don’t trust the new spouse. Instead, it shows that they recognize the seriousness of a marriage commitment. They have more significant assets than a young couple and must establish financial responsibilities.

An attorney will need to carry this agreement out. Be sure Mom’s wishes are heard. Matrimonial lawyers are trained for creating these documents and will show your Mom how to make sure her assets go where she wants them to.

• Retirement plans

Your parent and new spouse should establish their retirement plans together. Will they have enough retirement income to live in comfort? Will they want to relocate? Encourage the couple to talk about their plans before they tie the knot.

• Assets

Mom and her new spouse should think about keeping assets in separate bank accounts. They can also open one joint account where they both equally deposit income every month. They can use the combined account to pay utility or phone bills, buy groceries, and take out money needed on a daily basis. This can reduce the hassle of combining accounts.

• Will/inheritance

If Mom wishes for you and their grandchildren to receive an inheritance, she needs to update her will. Urge her to consult an attorney so that her wishes will be carried out.

• Social security and pension payment

If Mom has a survivor benefit payment plan, benefits from her former spouse’s earning are lost if she is remarrying before age 60 (or if she’s disabled, 50). This will affect Mom’s retirement income and ability to age in place, worry and risk-free.

On the other hand, Mom’s new spouse might bring with them better benefits. Talk with an attorney about how Mom’s income will change.

• Long term care

Medicaid provides long term health care and services for those that need financial help. Mom’s marriage can be affected if she qualifies. All assets from both spouses are taken into account, regardless of whose money it is. Medicaid also ignores prenuptial agreements. Learn the advantages of a medical alert system and how it compares to long-term care.

• Alimony

Alimony from a former spouse is also usually cut off when the other gets married. It could even be terminated when Mom moves in with her new partner. Mom should plan appropriately.

You might be concerned that Mom’s spouse will take advantage of her financial situation. While Mom is creating agreements with her new spouse, she should consider what will happen if one of them breaks that agreement. Consider using financial penalties and a trust agreement just in case. 

Marriage is a big step. The financial aspect can be overwhelming, but with your help Mom will get everything set up the way she wants it. Then everyone can celebrate the new relationship with the joy that it deserves! 

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