Transcript

Voiceover: [00:00:00] Welcome to Retirement Unlocked with Larry Heller, Your Life Your Way, unlimited possibilities. Join us as we explore how tailored financial planning and investments can help you navigate life transitions with confidence. Let’s dive into this week’s episode. 

Matt Halloran: Welcome back to Retirement Unlocked with Larry Heller.

Every day about 1300 new stepfamilies are formed, and nearly half of us households involve remarriage or recoupling. Now, most people are finding love again in their fifties, sixties, seventies, but later, life unions can bring complex financial, legal, and family dynamics. How do you protect your wealth?

Honor your commitments to your children and your heirs, and still celebrate. A fresh start in love. Well, we’re gonna break that down today with the big question, Larry, which is, how do you protect your wealth, honor those commitment to your children and heirs, but still celebrate this new chapter in love.

Larry Heller: Yeah. Thanks Matt. [00:01:00] Uh, yeah, this is a complicated, complicated one and one that we’ve been addressing more and more with new clients or existing clients. Um, and there’s a lot of financial realities with later life love, and there’s. More people that are entering into either marriages or cohabitating and has significant assets, retirement funds.

Inheritances money from previous marriages. They, they each, both may have kids from previous marriages. So there’s a ton of complexities when this, when this goes. Some people choose not to, you know, get married because of the financial, uh, situations, but then. People are living together or buying a place together.

And how do you address that? How do you, who inherited what on a, if you do get married a second, marriage, who gets what? And then how do the children factor in? And then how do the laws treat [00:02:00] remarriage versus co-habitation? We’re not gonna really go into the laws now, but you should know kind of each state is a little bit different.

So there’s a lot of moving parts and there’s a lot of things that come in here. Should you do a. Premarital agreement or if you haven’t done one, a postmarital agreement. And we find sometimes people don’t address this. They just wanna get married and they worry about it afterwards. And that it has it a, a whole nother issues.

So we’re gonna address a lot of these considerations. By the way, there’s gonna be a, uh, checklist and the description below, uh, to address all the items that we’re covering. So you don’t have to take take notes. We’re gonna address that. You’ll be able to download that at the end of the, at the end of the podcast.

Matt Halloran: Alright, so thank you very much for offering the audience the checklist. Please make sure that you all click on that link and download it. But Larry, you just, you just dumped a whole bunch of stuff on the audience, man. Where, where do we even begin this conversation? 

Larry Heller: All right, well, let’s, let’s begin with social security [00:03:00] considerations, because that one is, kind of, has a, a, a set number and that magic number is age 60.

And what is, why is that age 60 so important? Well, if you are, um, a widow and you’re receiving survivor benefits and you remarry before age 60, we’ve actually had a conversation with somebody who was planning on getting remarried, a widow, uh. Um, and it turned out to be a non-issue, but they were planning getting married and they were gonna schedule the marriage literally six weeks before she turned 60.

And I brought up the conversation that you realize you’ll lose your survivor benefits if you remarry before age 60. So age 60 is the magic number than if you are gonna get remarried and you wanna continue the survivors. Benefit based upon your deceased spouse earnings records. That is an important, you know, important number.

Also, if [00:04:00] you’re planning on getting, getting remarried, uh, the spousal benefits, you may be eligible for spousal benefits on your new spouse’s records. So, uh, and possibly be able to receive the higher of the two benefits, your own or your new spousal, you know, benefit. So, you know, a lot of rules. There’s also, you know, certain rules and how long you are married.

The important date is age 60, and make sure that you address what it, what is the best way on the social security benefits. 

Matt Halloran: So the next big humongous question, which you alluded to at the top of the show, was to merge or not to merge assets. Where do we go with that? 

Larry Heller: Uh, I mean, th this one is, you know, is, is really complicated because you’ve got assets that you may have had beforehand and now.

One spouse or both spouses now are working. So you now you’ve got new possible savings accounts. So what do you do with all these? What do you do with all these accounts and [00:05:00] how do you address all these accounts and all this money that you’re is gonna be now, now combined? And it’s really important because if you’re married and you don’t address this, that your wishes may not be befouled.

And one of the common things that I get. A lot of times is we don’t have to worry about it. If I die, my new spouse is gonna take care of my pre my, my children from my previous marriage. And I’m like, you know, that’s all great. And that’s, you know, a lot of people really believe that, but. What happens if you, you die and you are, you live another 20, 30 years.

Are you really gonna take care of the children from the previous marriage? Or we’ve even seen times where the child of somebody, um. Comes to them when they’re older and kind of talks them out of changing, changing their will where maybe they were taking care of the [00:06:00] children from the previous, previous marriage.

So there’s a lot of things to consider here because you can have a wills and you can have it, everything in the will, but if you don’t have certain, um, ways of protecting the first, uh, the, the children from the first spouse, the wills can be changed. So just having a will and putting this all in place may not, may not be sufficient.

Hmm. You may need to have clauses in here and trust set up, either now or on the first death to make sure that, that the previous children, uh, the children from previous marriages are properly taken care of. Uh, so, you know, this gets really, really complicated and can hit a lot of nerves. When you’re trying to figure out, we’ve had scenarios where not only do we have children from previous marriages, but then they have a child together, so that even throws even more fuel to the fire.[00:07:00] 

So, uh, so some of the things to, uh, to 

Matt Halloran: really think about. So obviously you need to meet, you need to sit down with you and your team and attorneys to really hash this stuff out. But I mean, we’re, we need to just keep diving more deeply into this because one of the things that, uh, you know, I’ve been in financial services for a long time is, is beneficiary designations too.

You wanna talk a little bit about that? 

Larry Heller: Yeah, so I mean, there, there’s a, there’s a couple, you know, a couple different things here is, um, that you, you know, one of the ways, if you’re can, um. Qualify for life insurance. Life insurance could be an easy way of making this work. ’cause you can have life insurance on the death that goes to your new spouse and all the previous assets go to your kids, or vice versa.

Mm-hmm. So there’s a lot of different ways of, uh, of, of making sure that that’s, that that’s done. Um, like I mentioned before, you can have some prenuptial agreements to clarify this. You can have wills, you can have trusts, but then you also have to make sure the [00:08:00] accounts are titled properly because I’ve seen these great plans put together and then they go out.

So just to give you an example, um, client want to have certain assets go to their children on the first, on the first death, and they put it all in the will. And then when we looked at the assets. All the accounts were titled Joint and explain to them that your wills won’t work because you have the money going to the surviving person in a joint account.

So making sure how your accounts are titled is so important, making sure the beneficiaries, um, um, you know, we’ve seen, we’ve seen, um, some crazy things, Matt, but we’ve seen people that actually have had their ex-US. Still. Yep. Listed as the beneficiary on a retirement account. So making sure that you have all these things put into place so you don’t, um, you don’t mess up.

You don’t wanna have it happen when it’s too late. You wanna [00:09:00] address these things. Great to address it before you get married. Uh, but if you have it, you still have time to address it after you’re married. 

Matt Halloran: Yeah. Alright. Prenups, we, we have to talk about that. 

Larry Heller: Yeah, and the prenups get really, you know, you know, can get really, um, you know, touchy along these, along those lines, even on a first marriage talking about prenups.

But when you’re talking about significant assets and you’re talking about a second marriage later in life. Um, you want to kind of put something together. Um, we’ve had instances where there’s a business owner in, in, in place, and how do you make sure that you protect that the business, um, and they have the child working in the business.

So having those conversations, although they might not be the most comfortable, um, finding advisor, finding an attorney to work this through so you can discuss it and both parties are clear on what their wishes are. Are, 

Matt Halloran: are, are so important. Alright. Any, any other thing along here that, uh, we want to address before we move on?

Yeah, 

Larry Heller: just be careful. Well, I [00:10:00] mean, we’re talking about New York, which is not a community property state, but we know the podcast is watched by, by people all over the country. So each state has different rules. So you may not be remarried, but you may be cohabitating. So make sure you know the rules in your state before you even kind of co, before you even decide to coha cohabitate.

Matt Halloran: Alright, well, do you want to, do you want to dive into that a little bit more deeply, uh, for your people? 

Larry Heller: Yeah. So, um, so like I, like I said, many, many, many older couples are choosing to live together without getting, you know, without getting married. So, um, you know, there are certain things that you have to, you know, talk about, and one of them is medical decisions.

Who makes those decisions if you’re not married? Power of attorneys, healthcare practices. I’ll dig into that a little bit. More in a few, few minutes. But, um, you know, just as why I talked about before, making sure that items are, are not titled properly. Um, [00:11:00] and, and drafting out a, a, you know, a, you know, co cohabitation agreement, um, which is very, you know, um.

Very interesting. We, we, we’ve actually had this happen twice. So, um, one has been going on for a, for a long time. So we had a couple, um, later in life, um, got together. They both had children from a previous marriage. They decided not to get married. Um, however, they, they, one spouse owned the, the, uh, condominium they were living in, and the other spouse was like, well, I’ve been living here, you know, for a long time.

What happens if you die? You am I forced to move out of this place that I’ve made my home. So in this scenario, the spouse, the, which was the wife. Put an agreement together that she was the one that owned the condo. Her boyfriend, whoever she was cohabitating later in life, uh, was living with her. And if she died first, he could stay there.

They put an [00:12:00] agreement together, he could stay there, he’d be responsible for all the upkeep. And then when he died, then it would go to go to theirs. That was her wishes. Um, she died when he wa when he was 75. He’s still living there. He’s, he just turned 90, so, uh, the children have to wait. But that was her wishes.

Uh, the children understood that the children from. From her marriage, her first marriage. So it’s put together. Now, we just had another client, same, almost the same scenario. Um, she owns the house and we put together an arrangement and we had a legal, uh, a legal team put together a legal document that would describe what would happen.

So therefore, it’s clear, and not only is it clear, one of the things that we actually do is we actually encourage them to tell the children ahead of time. Yeah. So in both cases. The children were told ahead of time. So although they have to wait for the, they knew this was their, [00:13:00] both cases, their mother’s wish, so they’re very comfortable with this and it makes the relationship with, um, if in the first case, one who passed away, they still have a relationship of a comfortable relationship going.

So it, it’s so important to kind of put that together. And again, you know, each state may have different rules in this, but it’s so important that if you are living together or planning on living together and whether you’re getting married or not, if one spouse owns that property, trying to figure out exactly what you’re gonna do with that.

Or, or even if both thousands own the property, trying to figure out what happens to 

Matt Halloran: that particular asset. Well, and, and so this might sound. Unbelievably archaic, uh, but without documentation, the law defaults to blood relatives, right? I mean, is that pretty standard across the states? 

Larry Heller: Yeah, so, well, no, there are again, there are some states which will consider a community property.

Okay. And, and, and certain states, [00:14:00] um, you’re talking if you’re not, if you’re not married, but yeah, if you’re not, if you’re not married, if you’re not married and your assets are all held, you know, separately and they’re not joint with your new significant other, yeah, they will, they will either pass. If you have your own will, they’ll pass through your own will.

If you don’t have a will, which. Yeah, that’s a whole nother issue. But then, then it would actually go by the, by the lineage. So, uh, so don’t. Don’t try to guess what’s the right thing. Make sure you sit down with an advisor with an estate planner and uh, and put this together. Put the plan together to make sure it works how both of you want it to work.

Uh, and sometimes we actually go through this. We’ve actually had a couple clients. They still choose to have a will going all to their spouse and then. Still rely on their spouse to take care of their, their previous children later in life. Is there [00:15:00] sometimes, you know, you, you can kind of address all the issues and people will still make the decisions that they are more comfortable with.

Matt Halloran: You talked a little bit about, you know, healthcare decisions and, and this can get very, very messy if there isn’t some good. Legal stuff in place. Do, do you want to talk a little bit about that? 

Larry Heller: Yeah. Most people, when they’re married, they, they have, uh, a, a medical directive and medical decisions with their spouse controls once they get divorced.

Now, that usually is not the case, and a lot of times if you’re have an adult child, you’re making an adult child, the medical, um, di um, uh, able to make medical decisions for you. But now if you’re planning on getting either remarried or living with someone. Hmm, maybe your thoughts change a little bit. Do you want your new, significant other, your new spouse to make these medical direction, uh, um, decisions Or do you want your adult child to make these medical decisions?

So it [00:16:00] can lead to, you know, tension, it can lead to confusion and it, and sometimes even litigation. If somebody’s on life support and there’s some medical decisions to make. Um, so making sure that you have that, uh, talking it through and even discussing it with your adult child so everyone is clear on what your healthcare directors, directors are, um, and also even your power of attorney on, on who to pay your bills, make financial decisions.

Is that gonna be the significant other, or is that gonna be an adult, an adult child, or somebody else? So those two things are also critical in when you’re, you know, finding love later in life. 

Matt Halloran: Now you have, as evidenced by the stories that you have just shared, uh, you know about past clients. You have a lot of experience with this.

And an advisor can be in a very good position because, and I’m quoting you here, we’ve talked about this for many moons, communication is everything. So let, let’s, let’s dive into how somebody like [00:17:00] you can actually help facilitate these conversations. 

Larry Heller: Yeah. You know, I always say love is emotional, but wealth transfer is practical.

So, uh, so if they come and they sit with us, we’re neutral. So when we can facilitate any conflicts that, that they have any conflicts with the children, address all these considerations that we’ve talked about. And in some cases we’ve actually had open conversations with the adult children. So everybody’s on the same page.

Like I said, we were talking about the housing situation. The, um, well, well, actually they’re not married, but the, the, the woman brought in her three adult daughters and we had open conversations of what she should do at the house and what her wishes are, and all the children were aboard. Uh, but she wanted to have that open conversation right up front, exactly how it would work.

So, uh, so everyone is clear. The children are clear. She’s clear and then we have the conversation with the significant other. So now he’s [00:18:00] clear. So everybody and he was fine with how they worked it out makes life a lot easier. We are all not gonna live forever, Matt, so it makes a life a lot e easier when that.

Does happen and sometimes it ha you know, sometimes it happens earlier. So communicate, communicate with your adult children, communication with your, with your significant other or your new spouse just makes life so much, so much easier rather than surprises. Yeah. When somebody 

Matt Halloran: passes away. I’m gonna sound dorky here, but that actually makes your job even more difficult because if those conversations didn’t happen and then there are surprises, you, you’re putting the professionals in your parents who passed lives, uh, in a very, very difficult position.

So that open line of communication is vitally, vitally important. Alright, Larry, let, let’s, let’s bring this home, man. 

Larry Heller: Okay. 

Matt Halloran: So 

Larry Heller: again, getting married later in life can bring a lot of, a lot of joy, you know, fresh beginnings, but a lot of [00:19:00] unique financial and legacy challenges that, that we, that we talked about.

So just to recap, you know, to protect your love and your legacy, update your estate and your healthcare documents so, so important. Understand your social security rules. Uh, be intentional with your, with your assets, your, um, account titling your beneficiaries, uh, potentially trust and prenup, prenuptial agreements or cohabitation agreements that we talked about.

And finally, communicate openly with your family and your heirs. That’ll make so much that’ll make love, um, gray, love, gray Union so much, so much better. 

Matt Halloran: Well, and make sure everybody, and just to, to, to. Drive this home. Number one, please go ahead and look at the link below for the checklist. This is a wonderful checklist that you all can use in order to answer some of these questions and really get yourself thinking about all of this.

But as you step into this new chapter of love, have you [00:20:00] taken the steps to truly protect your legacy? So thanks for listening to The Retirement of Lock podcast. If this episode gave you insight into planning for love and legacy later in life, please like, subscribe and share it, of course, with somebody.

Who will benefit? If you wanna explore more about how to protect both your heart and your wealth, check the episode for a link to schedule a complimentary 20 minute call with a team at Heller Wealth Management. Your next chapter deserves a solid plan. We’ll see you next time on Retirement Unlocked.

.