During a beach vacation while having dinner, Hoda Kotb’s boyfriend of six years, a Wall Street financier named Joel Schiffman, proposed to her. Kotb, the 55-year-old Today show host, said yes, joining a growing number of people giving marriage another shot.
According to Pew Research, two-thirds of previously married individuals between the ages of 55 and 64 had remarried as of 2013, up from 55% in 1960. Meanwhile, half of those 65 and older remarried, up from just 34% in 1960.
Embarking on a new chapter of life with a new partner by your side is both exciting and romantic. Still, more pragmatic considerations, like financial and estate planning, cannot be overlooked.
Kotb, for one, is worth approximately $30 million, while Schiffman has wealth and assets worth $19 million. Kotb also has two adopted children, the oldest of whom was also adopted with Schiffman, and he has a grown daughter of his own.
No matter your family situation or net worth, the following seven things must be checked off your list before you say, “I do.”
Written by Melissa Attanasio, CFP®, CDFA®, MAFF®. Attanasio is the founder and CEO of Abundant Wealth Strategies (www.abundantws.com) and Divorce Strategies Group (www.melissaa.net). The firm specializes in financial matters and comprehensive cash flow management for high net worth individuals, among them, women in transition.
Compare financial goals and dreams
Before getting into the details of anyone’s accounts or assets, it’s important to simply open the dialogue. Hopefully, honest conversations are already a cornerstone of the relationship, but make sure often-uncomfortable talks about each party’s financial status don’t get left out of these conversations. Talk about each person’s ideal lifestyle. These may include income needs, travel, multiple homes and locations, clothing and transportation expectations. It’s important to know how they compare and what compromises, if any, are needed.
Create a spending policy
Next, bring the conversation to the present by discussing cash flow management. It’s important to explicitly create a spending policy that will move you toward the goals and visions reached in the prior step. During this process, it can be useful to look at historical spending for each person, to tally fixed expenses, and to discuss if you will establish joint accounts. It is often useful to bring in a CERTIFIED FINANCIAL PLANNER™ to guide these decisions and to help diffuse any tension. They can also open the conversation to areas like debt and liabilities that might otherwise be uncomfortable to bring up on your own.
Take a full inventory of assets
When remarrying at a later age in life, there’s a greater chance that each person has accrued wealth and property. This should be mapped out as well. Both parties need to create detailed inventories of their individual assets, from real estate and automobiles to jewelry and other valuables. Banking, investment, retirement, pension and 529 accounts should all be documented before the eve of the ceremony, too. This is particularly important if you are considering a prenuptial agreement.
Map out joint purchases
Many couples about to tie the knot have already been combining income and assets. Don’t leave those out of your documentation! Joint major purchases should be jotted down as well. In addition to helping with a prenuptial agreement, both the separate property and joint asset lists can be used for estate planning as well. Be sure to list gifts as just that, i.e. engagement rings, autos, any items that are a gift in nature will alleviate difficulties later.
Establish property trusts
In many remarriages, separate property trusts are utilized. Thus, each party should obtain his or her own separate legal counsel. Estate planning tools, like trusts, will allow you to designate a beneficiary. Allocation of assets to children or each other can and should be reviewed over time.
Talk about tax issues
Next, it’s time to talk about taxes. Once again, this is where your CERTIFIED FINANCIAL PLANNER™ is an indispensable resource. Oftentimes they can assist in raising issues that should be addressed with the couple’s tax advisers.
Make a legacy plan
Finally, not unrelated to opening separate trusts, it’s important to make sure that your own heirs — not just your new spouse’s heirs — will receive what you intend after you pass away. Once again, the division or allocation can always change over time as your marriage and relationships evolve. For example, if you are newly married you may have your children be the beneficiary of your separate property home. After a number of years and commitment you may choose for your spouse to remain in the home until their demise and then give to their estate or to your own children. This is usually for long-term marriages where you don’t want your spouse to be removed at the time of your passing. Indeed, that’s why it’s important to emphasize that this checklist isn’t a one-time occurrence. You need to discuss everything from assets to trusts before the wedding, but that open dialogue should continue well into the marriage.
Remarriage is the start of a new chapter, romantically and financially. Don’t let anything fall through the cracks. Having the appropriate conversations early on will give you and your spouse the best peace of mind and chance of success.
Melissa Attanasio, CFP®, CDFA®, MAFF®, is the founder and CEO of Abundant Wealth Strategies (www.abundantws.com) and Divorce Strategies Group (www.melissaa.net). Abundant Wealth Strategies is a wealth management firm founded in 1992. The firm specializes in financial matters and comprehensive cash flow management for high net worth individuals, among them, women in transition.
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