Financial woes in Remarriage and in Boomer marriages - 9/24/01

Smartmarriages ® cmfce at his.com
Mon Sep 24 17:20:28 EDT 2001


subject: Financial woes in Remarriage and in Boomer marriages - 9/24/01

from: Smart Marriages

The new Money PREP book, due in time for next year's Smart Marriages
conference promises to address these issues:


Remarriage can mean financial headaches

September 23, 2001

By JOYCE M. ROSENBERG THE ASSOCIATED PRESS

NEW YORK -- Getting married is always a financial adjustment, as any couple
knows. When the bride and groom are baby boomers, it's often more
complicated -- particularly if one or both are remarrying and have children.

Many boomers have financial obligations to previous spouses.

Many are putting children through college. Many are looking after and
perhaps supporting elderly parents. And often the new spouses have differing
levels of wealth and attitudes about spending and saving.

Financial planners say these issues actually aren't the biggest problem
facing engaged and remarried boomer couples -- it's not talking about money
before it turns into conflict.

"They need to have the trust and willingness to say, 'These are the things
that are really important to me,'" said Diahann Lassus, a certified
financial planner from New Providence, N.J.

If a couple doesn't openly discuss finances, one or both spouses could run
into some very unpleasant surprises.

"One of the things I find people don't think about in remarriage is that
life insurance or retirement funds often have been dedicated to the prior
family" as part of a divorce agreement, said Ginita Wall, a certified
financial planner from San Diego. And on the death of a spouse, the ex-wife
or ex-husband has a right to part of an individual retirement account,
401(k) plan and life insurance proceeds.

Estate planning can be another area of difficulty, especially if there are
children from a previous marriage.

For example, some parents want to leave their homes to their children, but
they also want to be sure their surviving spouses have someplace to live.
Often the spouse is granted the right to live in the house for as long as he
or she wants, but that means the children will have to wait for their money.
Sounds simple, but in some families that might cause hard feelings.

Another issue where children are concerned has to do with how equally they
should be treated when it comes to college education and in estate planning.
What if one spouse has more money than the other and doesn't want to leave
it to stepchildren? Will that lead to resentment and a family rift? What if
one set of children want to go to Ivy League schools while the others don't
have the grades and have to settle for state schools? It's not just family
issues that need to be discussed. Engaged couples should find out if their
partners have big debts or tax liens against them, or if they've ever
declared bankruptcy.

Then there's the question of a couple's spending philosophy, which, of
course, is an issue at all points in life. Does one like to spend more than
the other? Do both agree on how much to save? Without up-front discussion,
money -- and all the emotional baggage tied to it -- can dispel the euphoria
of finding a mate.

Some planners say couples can avoid at least some problems by creating a
prenuptial agreement that would spell out how money will be handled during
the marriage and in the event of a divorce.

"What prenups do is they force us to deal up-front with these kinds of tough
issues before they become a crisis in the marriage," Woodhouse said.

Many couples shy away from prenuptial agreements because it is unpleasant to
think about the prospects of divorce when you're in love and getting
married. But they do offer protection when things go wrong.

Carole Cox, 58, a professor at California State University,Long Beach,
credits a prenuptial agreement with saving her finances from complete
disaster when her second marriage ended. She had plenty of debts from
lawyer's fees and a payment she had to give her husband.

But, she said of the agreement, "it did protect the house and my
retirement."
                   
Moreover, it shielded the royalties she earned from textbooks she'd written.

*******
And a slightly different version, published in another paper:

Published Monday, September 24, 2001, in the Akron Beacon Journal.

Financial woes in boomer remarriage

Planners says it's essential couples discuss money, obligations and
attitudes about spending, saving

BY JOYCE M. ROSENBERG Associated Press

NEW YORK: Getting married is always a financial adjustment, as any couple
knows. When the bride and bridegroom are baby boomers, it's often more
complicated -- particularly if one or both are remarrying and have children.

Many boomers have financial obligations to previous spouses. Many are
putting children through college. Many are looking after and perhaps
supporting elderly parents. And often the new spouses have differing levels
of wealth and different attitudes about spending and saving.

Financial planners, who advise people how to structure their financial
lives, say these issues actually aren't the biggest problem facing engaged
and remarried boomer couples -- it's not talking about money before it turns
into conflict.

``They need to have the trust and willingness to say, `These are the things
that are really important to me,' '' said Diahann Lassus, a certified
financial planner from New Providence, N.J. ``It's all about communication
and being able to talk to one another, which is a big issue for many
people.''

If a couple doesn't openly discuss finances, one or both spouses could run
into some very unpleasant surprises.

``One of the things I find people don't think about in remarriage is that
life insurance or retirement funds often have been dedicated to the prior
family'' as part of a divorce agreement, said Ginita Wall, a certified
financial planner from San Diego. And on the death of a spouse, the ex-wife
or ex-husband has a right to part of an individual retirement account,
401(k) plan and life insurance proceeds.

Estate planning can be another area of difficulty, especially if there are
children from a previous marriage.

Violet Woodhouse, an attorney and financial planner from Newport Beach,
Calif., said couples struggle with the question, ``How do we handle our
responsibility to our own respective families and balance that with our
responsibilities to our spouses?''

For example, some parents want to leave their homes to their children, but
they also want to be sure their surviving spouses have someplace to live.
Often the spouse is granted the right to live in the house for as long as he
or she wants, but that means the children will have to wait for their money.
Sounds simple, but in some families that might cause hard feelings.

Another issue where children are concerned has to do with how equally they
should be treated when it comes to college education and in estate planning.
What if one spouse has more money than the other and doesn't want to leave
it to stepchildren? Will that lead to resentment and a family rift? What if
one set of children want to go to Ivy League schools while the others don't
have the grades and have to settle for state schools?

It's not just family issues that need to be discussed. Engaged couples
should find out if their partners have big debts or tax liens against them,
or if they've ever declared bankruptcy.

Then there's the question of a couple's spending philosophy, which, of
course, is an issue at all points in life. Does one like to spend more than
the other? Do both agree on how much to save?

Without up-front discussion, money -- and all the emotional baggage tied to
it -- can dispel the euphoria of finding a mate.

Disclosing finances

Woodhouse suggests engaged couples fully disclose their finances to each
other.

``They need to exchange tax returns for the last five years, exchange bank
and check registers for the last three years, get copies of all credit
reports and exchange those,'' she said, and added, ``Married people should
be doing this, too.''

Some planners say couples can avoid at least some problems by creating a
prenuptial agreement that would spell out how money will be handled during
the marriage and in the event of a divorce.

``What prenups do is they force us to deal up-front with these kinds of
tough issues before they become a crisis in the marriage,'' Woodhouse said.
These agreements are ``about clarity, about how we're going to live, how
we're going to spend, how we're going to save.''

Many couples shy away from prenuptial agreements because it is unpleasant to
think about the prospects of divorce when you're in love and getting
married. But they do offer protection when things go wrong.

Carole Cox, 58, a professor at California State University at Long Beach,
credits a prenuptial agreement with saving her finances from disaster when
her second marriage ended. She had plenty of debts from lawyer's fees and a
payment she had to give her husband.

But, she said of the agreement, ``it did protect the house and my
retirement.''

Moreover, it shielded the royalties she earned from textbooks she'd written.

``It's a substantial amount of income I would have had to give him half of
without the prenup,'' she said.

**************************
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