How Older Newlyweds Can Create Financial Harmony

Like so many things, finances between newlyweds can be far more complicated when spouses are older. One or both partners may have accumulated sizable assets they want to protect. Both may be used to being independent and uncomfortable answering to another about how they handle money. You may have new goals to go with your newly married life. Or adult children may worry that a parent's new partner could affect an inheritance.

Here are some tips on handling some of the financial issues that may crop up for couples walking down the aisle later in life:

Be transparent. It's important to have a candid discussion about your finances and — expectations — ideally before marriage. To be fully transparent, both partners should exchange credit reports that reveal outstanding debt, overdue payments, and much more. You can get a free copy of your reports from each of the major credit reporting agencies at www.AnnualCreditReport.com.  

Consider legal protections. A prenuptial agreement — or postnup if you recently married — can head off disputes by spelling out expectations upfront. It can, for example, detail who is responsible for debt brought to the union or outline what happens financially if the marriage fails. A prenup is more common in later marriages where one or both spouses have accumulated substantial assets.

You can also use a revocable trust or establish a trust under a will to protect the inheritance of children from a prior marriage. It can be set up so that when one spouse dies, the survivor will receive income from trust assets. After the second spouse dies, the children inherit the assets. A parent can also name children the beneficiaries of life insurance, so they receive a partial inheritance before the second spouse dies.

Update beneficiaries. Review accounts, insurance policies, and estate documents to make sure the beneficiaries and designations listed still match your wishes. This is also important for your retirement accounts.

To review or update your beneficiary designations for your ICMA-RC account, log into Account Access. Simply click on the Beneficiaries option on the drop-down menu next to the plan of your choice on the homepage. Be sure to review and update your beneficiary designations for all accounts and, if applicable, survivor designations for your VantageCare Retirement Health Savings account for qualified health-care expense reimbursements. While logged in, check and, if needed, update your contact information such as your mobile phone number and email address.

Maintain separate accounts, perhaps. If you've managed your own finances for decades, it can be difficult to suddenly combine accounts. Older newlyweds wanting to maintain independence often keep three accounts: yours, mine, and ours. The "ours" account can hold money for household expenses or other shared costs, with the higher-income spouse contributing more.

Or, if you do merge accounts, you can maintain some independence by agreeing to a sum that each of you can spend at one time without having to discuss it with the other.

Spouses should also keep at least one credit card in their own names that they use regularly and pay off on time. Being merely an "authorized user" on a spouse's card means that account will be closed when a spouse dies. And though you can open a new account, you might not get the best terms if your individual credit history is limited.

Please note: The contents of this publication provided by ICMA-RC is general information regarding your retirement benefits. It is not intended to provide you with or substitute for specific legal, tax, or investment advice. You may want to consult with your legal, tax, or investment adviser to review your own personal situation. Some of the products, services, or funds detailed in this publication may not be available in your plan. This document contains information obtained from outside sources and it references external websites. While we believe this information to be reliable, we cannot guarantee its complete accuracy. In addition, rules and laws can change frequently.

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