Raymond McCauley loves >Kristina Hathaway. He just doesn t want to marry her. For the last six years, the two 40-somethings have been living together in Mountain View, Calif., where they re raising their three-year-old twins. Why not tie the knot? They ve been there, and done that, and for reasons emotional and financial they don t want to do it again. This works for us and we re happy, so why get married? says McCauley, a scientist in the biotech industry.
They re part of a growing minority of Americans who aren t sure they want to re-board the marriage train and the recent economy hasn t exactly encouraged a change of heart. As financial issues take top priority for many Americans, the costs of getting remarried losing benefits tied to an ex-spouse, for example have grown to outweigh the emotional rewards. According to the most recent Census Bureau data, a little more than half of divorced men and fewer than half of divorced women are remarried, proportions that have been dropping over the last decade. And last week, the Pew Research Center reported that 78% of divorced and widowed survey respondents said they didn t want to remarry or weren t sure they wanted to. Remarriage, it seems, is no longer the brass ring it once was.
|>||Protecting your estate If you do remarry, take these steps to protect your assets:Hire an estate attorney An attorney can help you figure out how to strategically protect your assets should you divorce or die. This is especially important if you have children or significant assets.Sign a pre-nup If you want your children or another heir to inherit all or most of your estate, consider a prenuptial agreement that declares that your spouse forfeits his or her rights to your estate. Update your beneficiaries Change the beneficiaries on your 401(k), IRA, annuity, pension and insurance forms to reflect how much you will give your new spouse and your children or other heirs. Consider your new health-care responsibilities You will each be responsible for nursing home and long-term care costs for each other if they re needed. They can easily reach $300,000 or more, so save accordingly or consider a long-term care insurance policy to cover those costs.>|
For starters, many couples don t want to deal with merging assets again. After McCauley s first marriage, he split everything with his ex-wife, which made the divorce even more difficult, he said, adding, I don t want to go through that again. For other people, the loss of income like alimony, or Social Security and pension benefits from a former spouse have become a greater concern in the last few years, says Nicky Grist, the Executive Director of the Alternatives to Marriage Project. And there are other heady issues to wade through, like how child support or college costs are handled, estate planning, beneficiary designations on retirement and insurance policies, and more, says Rick Salmeron, a certified financial planner and president of Dallas-based Salmeron Financial. Money is a big, sticky issue when it comes to remarriage, he says.
Meanwhile, it has also become easier to stay unmarried but committed. Many companies now extend health insurance and other benefits to cohabitating couples who qualify. And living together has gone from taboo to norm: Cohabitation among Americans 50 and older shot up 50% from 2000 to 2006, according to research from Bowling Green State University.
Of course, there are also lots of reasons to remarry. There are tax benefits, legal advantages and other financial protections. But many of the benefits have nothing to do with logistics and practicalities: Emotionally, marriage can offer a sense of security; numerous studies have shown marriage generally improves mental health. And for many people, religious or moral beliefs prohibit cohabitation without marriage or remarriage.
If you re on the fence, there are there are some situations where delaying or avoiding remarriage and even cohabitation might be the better option.
When you depend on your ex for income
If you get alimony from your ex-spouse, you ll likely lose it once you remarry. Ask yourself whether you will still be able to pay your bills and keep up with your savings if this income stream ends, says Lisa Osofsky, a certified public accountant, CFP, and partner at WeiserMazars, an accounting and consulting firm based in New York. But attorneys and states are also increasingly intolerant of people who cohabitate, but don t legally marry, in order to keep their alimony payments. Some states and divorce settlements now allow for an end to alimony once the dependent ex moves in with someone else. If keeping alimony is a real motivation whether financial or emotional check the state laws before shacking up.
When a child will need college financial aid
When a child will need college financial aid
The formula used to calculate federal student financial aid includes income and assets of the custodial parent, defined as whomever the child lived with longest during the past year. The calculations often include the income of that parent s current spouse, too. So your new wife s income and assets could decrease the aid your college-bound senior receives, even if you privately decided she wouldn t contribute. On the other hand, you may have little control: Some private schools add the non-custodial parent s assets into the equation, and a few even include the assets of a primary parent s cohabitating partner. If you do plan to remarry, review the financial aid guidelines and talk to your ex and current partner about how the two of you will pay for college tuition ahead of time it can save you a lot of time and effort down the road, says Paula Bisacre, publisher of RemarriageWorks.com, a resource for remarriage and stepfamily living.
When you have specific plans for your estate
A will that bequests property, possessions and investments isn t necessarily enough to carry out your wishes, Osofsky says. Assets pass to heirs in a particular order: first by a right of survivorship by joint owner, which includes assets in two people s names (a home owned jointly, for example); second, by contract, like a designation on your life insurance or retirement benefit form. A will is the last thing considered. So even if you leave your entire estate to your kids in that document, a right of survivorship by joint owner can trump this, she says. What s more, even if you take special care not to jointly-own assets, some states allow a surviving spouse to claim up to half of the estate including property, possessions and retirement and bank accounts regardless of the will. A prenuptial agreement can circumvent some of this but a widow or widower can still take their plea for more to court.
When you need your ex s Social Security or pension benefits
If you re collecting Social Security benefits from your ex-spouse s record, remarriage can put an end to that, says Radon Stancil, CFP and co-founder of Diversified Estate Services in Raleigh, N.C. The exceptions: If your former spouse is deceased and you remarry after you turn 60, or if your remarriage ends, you can still collect those benefits. So, if you re nearing 60 and hoping to remarry, consider waiting until after you blow out those candles to tie the knot. Less common but worth checking on: If you're receiving pension benefits from a former spouse who has died, the plan may call for an end to payments on remarriage, says Salmeron. Call the plan administrator and look over the plan documents carefully to figure out the benefit rules.