Avoiding Financial Ruin The Second Time Around

While love may be lovelier the second time around, it may be much more complicated if it does not last.  Second marriages already struggle, as they have a divorce rate exceeding 60 percent.  Most of these divorces will not result in the $974 million payout that Texas oil tycoon Harold Hamm gave to his ex, but all second marriages require special planning.  Below are a few things to consider:

• Prenuptial Agreements.  Sorting out the legal and financial issues ahead of time can prevent soaring costs later.  Prenuptial agreements are also being used to address issues within the marriage such as spending priorities.
• Postnuptial Agreements.  Even if you did not do a prenup, married couples can opt for a postnup.  This often deals with housekeeping issues and lifestyle disputes.  These agreements are useful in times of marital crisis.  Monetary penalties for indiscretions are commonly incorporated into the document.
• Estate Planning for a Second Marriage.  If the couple escapes divorce, the marriage will end at death.  The competing interests will be one’s adult children and the new spouse.  One solution is to grant the surviving spouse a “right of occupancy” in the house, which can be done with a will or trust and gives the survivor the right to reside in the home until the earlier of her death, departure, or a fixed number of years. 

See Ann-Margaret Carrozza, How to Avoid Financial Pain If Your Second Marriage Fails, New York Daily News, Jan. 26, 2015.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.