5 Financial Questions to Ask When You’re About to Get Married in Your Later Years
Couples who want to get married must discuss their finances to avoid potential risks later. However, if the couple is 50 or older, it is likely they have generated a larger estate, a higher volume of debts, and have their own preferred lifestyle. When getting married at this later stage, the couple must discuss more pressing matters, such as retirement, since they are closer to retirement age and need to generate a higher amount of savings. Couples who are getting married later in life should review 5 financial questions to ask their future spouse about their lives and current financial status.
1. How Much Debt Do You Have and What is Your Credit Rating?
The total volume of debt owed by each party is another important factor to consider when a couple plans to marry. After marriage, creditors could come after either spouse to collect outstanding balances. If either party’s wages are being garnished or their tax refund was seized for a tax lien or student loans, they should inform their fiance about what happened. If more wages are scheduled for garnishment or if the tax refund is supposed to be seized the following year, it affects their potential spouse negatively.
A bad credit rating could be applied to both parties if they want to get a loan or financing at any time after the marriage. With overwhelming debt, the union could present a new spouse with a financial nightmare. The credit rating applies to auto insurance policies and could lead to higher premiums if a new spouse has bad credit. Any joint accounts opened by the couple are based on both their credit scores and could increase monthly payments and lead to higher-than-average interest rates for borrowers or account holders.
The couple should sit down and review their debts and current credit scores. If either party has bad credit, it is important they sit down together and create a plan for settling the debts and improving the credit rating. Debt consolidation loans are a great way to pay off several debts at once and obtain a more affordable payment plan. Couples provide details about their outstanding balances to their lender and determine what debts to include in the new loan product. The lender provides details about how much the couple should borrow and how to pay off the loan more carefully. Couples who are interested in the loans can get more information from Debt Consolidation USA right now.
2. What is Your Current Estate Plan?
Estate planning with a new spouse enables each party to review their overall assets together and decide how the assets are divided among family members after they die. When disclosing details about the assets, the parties should sit down together and create a list of all assets they own individually. They should discuss the current value of each asset and how it is used. For example, if either party has separate real properties outside of their primary home, they should discuss how they use them and if any of the properties are used as rental properties or generate residual income.
Each party discusses what assets they own prior to marriage and determine if a prenuptial agreement is needed to protect the assets for their family if a divorce happens. A prenuptial agreement dictates the terms of a divorce according to the divorce grounds and other life events that occurred during the marriage, such as the birth of a new child. The agreement is signed before the couple marries and is enforced according to state divorce laws. For instance, if the couple files for a divorce in a state that doesn’t enforce a prenuptial agreement, the terms won’t apply to their divorce case.
When creating an estate plan, the couple must create a will for distributing their assets and identify a new guardian for all minor children. In addition to the will, the couple could create trust funds and an irrevocable trust for separating vital assets from the estate. Any existing estate plans are often altered after the marriage and beneficiaries are updated on life insurance policies. However, if a previous divorce requires certain provisions, such as the award of a portion of a life insurance policy, the terms must be honored in the new estate plan.
3. Do You Have a Retirement Plan?
Retirement planning is vital for new couples, too. The first matter to discuss is if any former spouses have access to retirement funds or pension plans. Often in a divorce, a previous spouse is awarded a portion of another’s retirement or pension plans if they were married at least 10 years. If this is true, it is important to review how much of the plan goes to the former spouse at retirement and if the individual must open additional retirement funds to generate enough funds to accommodate their lifestyle when they retire.
The couple should discuss and calculate how much they need when they retire. Creating a new retirement plan is beneficial for the couple and defines how much each party should contribute to it to generate enough money to stop working and retire. They should also identify how much Social Security each party will receive when they turn 65 and determine if additional funds are needed to cover their living expenses. The couple should discuss the possible tax implications of using any retirement funds earlier in life to cover sudden emergencies and how it will affect them both financially.
4. Do You Have a Bank Account and What Type of Account Is It?
Bank accounts in either party’s name should be discussed and determine how much money the couple has on-hand. They should disclose what types of accounts they have and how much they have in each account. Savings plans and interest-bearing checking accounts generate interest and offer income for the couple. If they have interest-bearing accounts, the couple should discuss how much interest they earn each month or quarter and how it affects their tax implications. The minimum balance for the accounts is another vital detail and prevents issues down the road.
The couple should determine if they are going to keep their money separate or open a joint account. Their history when it comes to finances is another vital fact as it could lead to overdrafts if either party doesn’t manage their accounts properly. This could lead to potential criminal charges, penalties, and hefty fines if either party has a history of writing worthless checks in the past. If either part is a financial risk, it is a better idea to keep finances separate, and the other party might want to keep their checks and debit card out of reach.
If the couple prefers, they could maintain separate personal accounts and set up a joint account specifically for mutual debts and financial obligations. However, it is a matter of personal preference when it comes to combining or separating their income or savings. A risk assessment of both parties and how they spend their earnings could bring new insight into how the couple manages their bank accounts and if they share access to the accounts.
5. What Type of Healthcare Plan Do You Have?
Healthcare insurance plans cover medical expenses and are purchased through an employer or the current insurance marketplace. The couple should review their current policies and compare them to find what policies provide the most benefits at the most affordable rates. When getting married, family health insurance is available and could present more savings for the couple. The parties should review the terms and stipulations of their policies and determine how their new spouse would be covered under the plan.
A healthcare savings plan allows consumers to deposit funds in the account at any time to cover medical expenses their insurance won’t pay. It isn’t required by law like health insurance, but it provides an alternative to more costly plans. Some consumers get tax deductions for their contributions to the health savings plans. Couples should discuss their savings plans if they plan to marry, and it is possible for them to generate more proceeds by contributing to one plan. It is recommended that the couple should meet with the account provider and weigh their options. Some consumers might even want to discuss their options with a financial planner to avoid issues when setting up or using the funds in the healthcare savings plan.
Couples who are marrying after they become a senior citizen must be more realistic when discussing their current financial status and their finances. Since seniors are retired or are planning to retire in the near future, it is vital for marrying couples to determine what they own individually and how their credit rating and income could affect their lives after marriage. A complete assessment of their finances and assets determines the best measures for protecting themselves and their heirs from potential issues after either party dies. An honest discussion and answers for vital financial questions ensure each party that marriage is the right choice for them and their families.