Preparing for A Second Marriage
Dec. 11, 2011
Many factors affect whether a second marriage will last: the relative age and incomes of the partners, whether either party has children, cohabitation prior to the second nuptials, and the education level of the parties.
And, of course, how could we forget the personality of the ex-spouse; perhaps the most important factor of all.
According to statistics published by the National Institute of Health, approximately 15% of second marriages end within 3-years; and 23% end within 5-years. Overall, however, the divorce rate for second marriages has drawn even with that of first marriages; about 40%. Also, in its 2009 report Marital Events of Americans, the Census Bureau claims first marriages last, on average, about as long as second marriages: about 8-years.
Here are some things to think about, and some steps to consider, before tying the knot for the second time.
For those with assets, this document is a must. To be enforceable, the prenuptial agreement largely depends on two things: a) full disclosure by both parties of all their respective assets; and b) legal representation of each party by separate lawyers. If your partner does not want to sign such an agreement, then you should seriously consider cohabitation rather than marriage. This is a harbinger of trouble in the event of a split.
Couples with only modest estates going into second marriages generally do not need the complication of a prenuptial agreement. If a marital estate grows during the second marriage, that estate will be subject to an equitable property division in the event of divorce.
Solid Estate Planning.
Prior to a second marriage, assets may be transferred into a trust for the benefit of the owner’s children. Also, retirement asset rollovers (from a 401(k) plan into an IRA, for example) can operate to protect the new spouse with survivor benefits, or not, as the case may be.
A Qualified Terminable Interest Property trust (QTIP) typically provides for interest income going to a surviving (second) spouse, with the principle going to the settlor’s children from her first marriage upon the death of the second spouse.
Children from a prior marriage can also be provided for using an Irrevocable Life Insurance Trust. This way, the new spouse can be designated as the beneficiary on the person’s retirement assets and the children are designated beneficiaries of the death benefit from the life insurance policy.
Another common practice is to create a separate trust to provide for the distribution of separate property to the children from the first marriages and to create a joint trust to provide for the distribution of the marital estate of the second marriage.
Good Premarital Counseling.
One of the best things a couple can do prior to tying the second knot is to participate in joint counseling. This should include religious counseling or premarital couples therapy, financial advice, and (separate) legal consultation. Once separate legal counsel is received, the couple can certainly compare notes in order to get on the same page.
Going into a second marriage with your eyes open improves the chances of a successful nuptials. When selecting an attorney to assist you with the necessary planning, find one that truly listens to your expressed wishes and pays close attention to the characteristics of your estate.