As remarriages usually occur later in life, there can be different types of risk involved for either or both parties. Children and increased assets for example, may have a larger part to play for an older couple, than they would first time around.
Findings from the Pew Research Center in Washington DC revealed recently that four in ten new marriages involved at least one party who had been married before.
It is common for one spouse to earn considerably more than the other, giving rise to the question whether or not joint assets should be shared or kept separate.
In the Pittsburgh Post Gazette, Tim Grant explores a scenario whereby a husband who possessed a substantial quantity of assets died first, leaving everything to his wife. When she died a number of years later, she left everything to her own children and nothing to those of her late husband. To avoid this problem, financial experts will often advise couples who are remarrying – particularly those with children from other marriages, to keep individual assets brought into the marriage, separate. Prenups are the most effective way to document all assets both individual and joint, and to forge an agreement with regards to what should happen if the marriage breaks down.
In the scenario outlined above, a prenup agreement could have seen a trust created so that the wife received income for the rest of her life. On her death, the money held in the trust would have been automatically passed onto the husband’s children.
There is of course the argument that the subject of prenups is hardly romantic and demonstrates a lack of trust between the couple. However, prenups for remarriages can also be viewed as part of the arrangements which the couple should be making together, to protect not just themselves, but their own children and grandchildren, too.