Shawn Britt was divorced for 17 years after a relatively short and unhappy marriage. When she finally met someone and decided to get married again, she was cautious. "I had been badly burned once and I was really gun-shy," she says.
"I had lived independently for so long, and this time around, nobody was going to take away from me what I had worked so long to rebuild."
Britt, who is the director of advanced sales at Nationwide Financial, says she and her new spouse decided to keep their finances as separate as possible. They were particularly concerned about what would happen if one should die before the other. "We both had kids from a former marriage and both of us wanted our money to go to our own kids."
Britt says it wasn't until after they had been married for several years and bought a house together that they realized that the "yours, mine and ours" was going to be harder to manage than they first thought. "You have a lifestyle dependent on two incomes and, ultimately, two Social Security checks. If he died prematurely and left all those assets he brought to the marriage to his kids, I wouldn't be able to afford to continue to live in the house," Britt says.
At that point, they began thinking about ways to protect the both of them from the consequences of widowhood.
Britt advises couples in her and her husband's situation to see a retirement planning expert -- a financial planner or an attorney with a specialty in estate planning -- to examine all the couple's assets. The expert should work with them to ensure that when either of them dies, the surviving spouse will have enough to live comfortably, and when both of them have passed on, the remaining money will go to the heirs they specify. Britt and her spouse set up a trust that gives the surviving spouse an income; then the children each get what remains of their particular parent's estate after both have died. "They don’t get cheated, they have to wait a little longer," Britt says.
Britt also suggests that couples consider buying life insurance on each other -- either to replace money they plan to leave to heirs or to leave directly to heirs. She acknowledges that such a solution can be expensive, but she says, "When you spread it out on a monthly plan, you realize that you can do it."
While you are still fairly young -- well before retirement -- is the time to think about things like this, Britt adds. "People assume that their spouse will do right by them, but they need a plan to avoid leaving either spouse high and dry."
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