by Laurie Israel, Esq.

Divorce rates for seniors are climbing, led by the Baby Boomer generation. Seniors are remarrying in record numbers. People are now using the term “gray” divorce for divorces of people in their 50s, 60s and older. Many of these people have assets, retirement assets, homes, businesses, and children from their prior marriage. Understandably, they are very concerned about the financial consequences of the new marriage. They may want to consider having a “gray” prenup before they remarry.

Balancing a legacy for your children with protection for your new spouse.

One of the major concerns that seniors consider when remarrying is how to balance their loyalty between their new spouse and their children from their previous marriage.

Many seniors remarrying want to leave a legacy to the children of their first marriage when they die. Depending on their financial situations, very often they are also concerned about protecting the financial security of their new spouse. Balancing these interests is an important way to create harmony and trust in the newly blended family.

Some ways to achieve this is for the senior to divide his or her estate between the children and the new spouse. But since estate plans can be changed at any time, a prenup could be a good way to set the requirements of the new estate plan as a binding contract.

The prenup could set a minimum “floor” on transfers to each other upon death, which can be exceeded if one wishes. All or some of the assets designated for the surviving spouse can be put into a credit shelter trust or QTIP trust. These trust assets can be used to support the surviving spouse during that spouse’s remaining lifetime, with the remainder going to the children of the prior marriage.

How the newly formed couple will provide for themselves and pay their expenses.

In a prenup, a gray couple can decide how they will support themselves during the marriage. They can make a cohesive plan for withdrawing retirement assets, depending on their relative wealth. For instance, if one of the spouses has a very large retirement plan, and the other does not, the couple can make a mutual decision to rely more on the larger plan.

The couple can commit to spending household expenses equally, or in proportion to their income or assets. Many couples do this informally, and can make decisions without wishing to memorialize them in a prenup. Having some discussions about these issues (and sometimes a written commitment in a prenup) can be useful for couples.

Prenups can also set the terms of how the new couple will financially assist their children from their previous marriages. Will there be lifetime gifts made equally to all of them? What if one child needs more help than the other children? What funds should this assistance come out of – previous premarital assets or assets and income earned and accumulated during the marriage?

What happens if there is a divorce?

A gray prenup can set into place a fair and reasonable financial result if the gray marriage ends in divorce. This should entail careful thought when one of the parties to the marriage is not financially secure. A prenup can show loving care at the beginning of a marriage by making adequate plans in case the marriage ends.

In addition, a prenup can reduce or eliminate the risk of litigation if the new marriage ends in divorce. This is because an alternative dispute resolution (ADR) method such as mediation, collaborative law, or arbitration can be written into the prenup as a requirement to address disputes. This solution works to address conflicts that might arise between a surviving spouse and the administrators of the deceased spouse’s estate.

If you decide to have prenup, make the process gentle.

People want the best for the person they love – that includes providing security and a fair financial result even if the marriage ends in divorce. Marriage relies on a great deal of mutual consideration and trust. Planning for a thoughtful and equitable prenup is giving your intended spouse “consideration” in the broadest sense of the word.

Published on Senior Outlook Today on December 17, 2018.

© 2018. Laurie Israel. All rights reserved.

Laurie Israel is a Massachusetts lawyer who works with clients planning for second marriages. Her writings on prenuptial agreements have appeared in the New York Times, the Wall Street Journal, and the Huffington Post. She is the author of “The Generous Prenup: How to Support Your Marriage and Avoid the Pitfalls,” available on Amazon.

Laurie Israel
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