MARRYING LATER IN LIFE? SECURE YOUR FINANCES

Even if you are about to marry or remarry, a lot of twists and turns will come your way. While challenges and hardships are inevitable, at least we can do something to secure our finances. Speaking of finances, here are the five areas you must talk over with your future significant other to ensure your best interests.

Finances. This is one of the most important aspects in marriage. Those who marry late have had more time to become familiar with their respective spending habits and money management styles, as well as to collate significant assets.

To ease this transition, talk to your spouse about the following:

• Credit histories and scores
• Indebtedness and comfort levels with debt
• Agreements on splitting paychecks, savings, and bills
• Opening a joint banking account and individual account for each partner
• Monthly expenses
• Investment strategies and styles
• Emergency fund as a couple
• Retirement plans
• Current and future house

If one of the spouses has young children from a previous marriage, establish a new set of issues to talk about, specifically child support. Determine how you will manage daily child expenses, especially if these children are in the picture. Forget not to prepare a formal agreement with ex-spouses (or ex-partners) about this matter.

Estate Planning. It is a must to organize your property to guarantee the financial security of your family after you have died. This aspect becomes more significant when the kids are involved or a former spouse has passed away. Each state has their own laws about estates.

Aside from estates, update your respective powers of attorney. Couples may want to modify the beneficiaries for wills, life insurance policies, investment funds, and other financial accounts.

Several financial planners recommend creating a prenuptial agreement, a document outlining the provisions and conditions related to disbursing assets and responsibilities should the marriage nullify. Couples should discuss the agreement with a lawyer. Especially if remarrying later, it can help figure out what will be left separate for respective families to inherit in case of a death or divorce.

Regardless if the trust is affected, it will depend on the beneficiary (or beneficiaries) and the way it was set up, whether within the context of a divorce agreement or child support agreement. Certain trusts provide protections for the first family, such as a qualified terminable interest property trust (QTIP). These trusts ensure his or her assets will go to the children from his or her first marriage rather than to the new spouse.

It is prudent to prepare separate wills. This step alleviates potential complications regarding property distribution in the future, given life circumstances can change throughout the years you are married.

Medicaid. A marriage can impact the Medicaid benefits paid. Since it is a health benefits program for low-income individuals, those who marry a person with a higher salary could lose his or her coverage. Make sure to check its eligibility rules to find out how a marriage could affect the benefits. Different state, different Medicaid rules.

Social Security. Update the Social Security Administration when a name change occurs for your earnings to be reported properly. If you get married after full retirement age, and the Social Security benefit is less than half of your new spouse’s, the benefit will be on your record plus an additional amount, bringing you up to half of your spouse’s benefit. It normally appears one year after the marriage. For widows or widowers, benefits are not available to an individual who remarries before the age of 60. But if you get married again after age 60 (or 50 if disabled), you will still obtain the benefits according to the former spouse’s income history.