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Second marriages increase need for financial planning

On Behalf of | Jul 9, 2019 | Divorce

Remarriage has become increasingly common in Michigan, especially among older adults. The Pew Research Center reported that two-thirds of married couples around the country in the 55-to-64 age group have gone through previous marriages. When people enter subsequent marriages, they typically have more assets and children than people starting their first marriages. This situation introduces questions about the division of assets among new spouses and children.

People typically want to shield assets from going completely to a new spouse in the event of a divorce because they had intended to transfer that wealth to their children. Prenuptial agreements provide legal tools for designating financial plans prior to entering a new marriage, and post-marital agreements can be entered into after the couple has wed. Executing both documents removes most doubts about future financial outcomes. Without these contracts that direct who gets what, the laws could favor the spouse. A divorce could then produce the undesired result of a child’s inheritance going to a parent’s ex-spouse and even the children of an ex-spouse.

With a prenuptial agreement, two people about to get married can address the allocation of assets. What people bring into a marriage could be maintained legally as separate property. The sole ownership status of the assets smooths the way for leaving them to heirs instead of them passing wholly or partially to a new spouse. The agreement might need to require a future spouse to waive rights to spousal inheritance.

When developing the terms of a prenuptial or post-nuptial agreement, a person could seek legal advice from an attorney familiar with state divorce laws. An attorney’s evaluation of personal finances could warn a person about unexpected outcomes for assets after a divorce.

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