You are entering the later stages of your life but meet a new love, or want to cement an existing long term relationship, and wish to marry.
How you deal with the assets you have built up over the years is essential before you tie the knot and could prevent expensive costs and heartache in the long term.
A major financial consideration for couples deciding to marry in later life, as well as younger couples who stand to inherit assets from previous generations, is the degree to which their existing assets may become part of the new marriage’s matrimonial assets, if there was a divorce or one party dies.
Family law director Lindsey Canning and private client director Suzanne Porter discuss protecting your assets.
Lindsey said: “The decision about whether assets should be kept separate or shared with a new partner should be taken soon into a relationship, so that the implications are fully understood.
“If either party has children from a previous relationship, this can cause particular friction when discussing inheritance.
“Should the marriage end in a divorce, it will ensure the process is as smooth and trouble-free as possible.
“One way of ensuring that assets owned before a marriage are kept separate from a new partner is through a pre-nuptial agreement.
“'Pre-Nups' are becoming increasingly popular and can be tailored to individual circumstances. They should follow full financial disclosure by both parties, be signed at least 28 days before the wedding to avoid claims of duress at a later date and include a statement that both parties understood they were entering into the agreement.
“A legal advice certificate by both parties' lawyers, confirms that each has received independent legal advice and that it has been fairly drafted to meet the parties needs; and to meet the reasonable requirements of the family.
“Pre-nups can deal with the testing task of dividing assets after a break up”.
Latest research from the Office of National Statistics showed the number of older women marrying or remarrying has increased in recent years with the marriage rate for women over the age of 65 has increased by 56%.
Suzanne added: “We could now view that marriage is as much about financial well-being as it is about love.
“People who are married or registered civil partners do not have to pay any inheritance tax on money or property left to them by their spouse.
“Couples looking to save inheritance tax need to understand the IHT spouse exemption and nil rate bands.
“Talking about money can be uncomfortable but it is practical to think about what happens if the marriage breaks down or a loved one dies. It is important to have an inheritance strategy whether you are divorced or widowed.”
Marriage has a number of financial benefits, but it is essential to have the correct advice to know what these are, and to avoid the difficulties that can arise from its early end.
Lindsey said: “After a divorce, at least one party is often left isolated; having relied on their partner’s bank and financial advisors.
“Most people want to be able to sustain their own lifestyle and preserve wealth for future generations.
“Issues around inheritance tax, pensions, capital gains tax and tax free allowances can be confusing and are often overlooked.
“Divorces can be an emotional, distressing and uncomfortable but if you have clarification from the start of your relationship about which of your assets should be kept separate or added into the matrimonial pot, you can avoid some uncomfortable discussions later on.”
Family law director Lindsey Canning and private client director Suzanne Porter can be contacted on 0114 266 6660.
