One of the greatest things about reaching midlife is that you’ve (hopefully) learned a thing or two about yourself and what you want out of life. So if at this point you’ve found your soul mate and decided to marry — whether for the first time, or the second (or third or fourth) — you already know how you want your fiscal partnership to operate in addition to the love connection.
Bambi Holzer, author of Financial Bliss: A Couple’s Guide to Merging Money Styles and Building a Rich Life Together, offers a “financial temperament quiz” to help reveal each of your respective attitudes about money. But even if you are a “Ritz-Carlton” and your partner is an “Econo-Lodger” when it comes to spending, Holzer says you can still be successful as spouses.
“When I think of marrying in midlife, I see two divorcees trying again, using the wisdom they gained from age and life’s experiences, each with their own assets, usually very protective of what they were able to get out of the divorce,” says Roland Santini, CPA, a Plantation-based personal financial specialist and author of Winning in Biz: The Ultimate Business Guide. He stresses that it’s important for each partner to gain knowledge about the other’s financial life. “It’s not being nosy,” he says. “It’s knowing if you’ll be getting calls from bill collectors or, worse, the IRS. It’s about engaging in frank talks about long-term goals and retirement planning. It’s knowing if you’re still financially supporting a child with child support or tuition.”
Santini also says that a legally binding prenuptial agreement is a wise idea for most couples, regardless of whether one or both are wealthy. “A person who has accumulated $75,000 in a 401K is rich by the standard of the partner who has no 401K,” he explains. “I always recommend a pre-nup if either or both have any assets — retirement accounts, homes, rental property investment accounts or interest in a business. The pre-nup requires full disclosure. In the event of a divorce, greed and spit rule.” He adds that government employees, such as teachers, firefighters and police officers with guaranteed pensions, will forfeit rights in a divorce if there is not a prenuptial agreement in place.
Once married, keeping finances separate has its advantages. Many couples find the best way to go is to have a joint account from which to pay shared bills and save for vacations, but separate retirement and investment accounts. “Be aware that putting your spouse’s name on your bank/brokerage accounts equals a gift of half,” Santini warns. “Don’t do it, just in case something happens to you. Cover that in your will, revocable living trust, payable on death clause or beneficiary designation.”