Walsh College

Tying the Knot, Senior Style

Call the caterer.  Order the flowers.  Reserve the hall.  Send a change of address to AARP.  It’s not uncommon for people of retirement age to remarry after the death of a spouse — or even to marry for the first time.  Here are a few items to add to the wedding checklist:

Insurance — Review your health insurance options.  If one or both spouses are still employed, will both have separate coverage at work, or would it make more sense to drop one policy and elect dependent coverage on the other’s company policy?  Compare premiums and coverage available.  For an older couple, life insurance can help provide estate liquidity.  Determine whether the new spouse will be the beneficiary or whether children from a previous marriage are to receive the proceeds.

Whose money is it? — Some couples like to put all their income into one pot and pay all expenses jointly.  Others like to keep income separate.  Many couples fall somewhere in between.  A joint account may be handy to pay expenses that can’t be neatly divided — utilities, groceries, etc.  But it’s a good idea for each spouse to establish credit in his or her own name.  Decide who is in charge of paying bills and balancing the checkbook.

Home sweet home — If either or both spouses already own a home, there may be tax considerations on a sale and repurchase.  For example, consider a bride who owns a $600,000 house which she originally purchased for $250,000.  She might owe capital gains tax on as much as $350,000 if she sells prior to marriage.  The couple might want to live in the home for at least two years, enabling them to shelter up to $500,000 of gain and avoiding capital gains tax entirely.  However, if the husband also owns a home, he may have to consider how any capital gains in his house will be treated.

Will you... — All couples should prepare wills.  Consider what happens if they are in an accident together, with the wife dying immediately and the husband the next day.  Depending on state law, the wife’s entire estate might pass to the husband.  At the husband’s death, his estate could pass to his family, leaving the wife’s family with nothing.  A will or living trust is a must for couples with significant assets — especially those who have children from a previous marriage.  Special trusts can be created to provide the surviving spouse with income for life, with assets then passing to the children.  A prenuptial agreement could also address many of these issues, but should be done in conjunction with wills for both parties.