This probably is about you or someone near and dear to you. It certainly is about me, and about amazingly many of our neighbors, friends, and kin.
So many of us are in, or emeritus from, our second or even third committed domestic partnerships of one sort or another. I guess that shouldn’t be a surprise, considering today’s longer and healthier life spans, the 50 percent divorce rate, our out-and-about lifestyle, and less-rigid social mores. Financial planning and social sciences gurus tell us that between one-third and half (depending on which guru you’re reading) of marriages are the second-time-around. And that’s just marriages alone, not counting co-habitations.
We thought we were pretty savvy the first time around, about anticipating and managing the issues that coupled togetherness raises. This time we’re a lot older, wiser, more experienced, and even more aware and concerned about issues. Besides, as attorney Ann Margaret Carrozza quips: “Love may be lovelier, but it’s a whole lot more complicated the second time around.” The annual holiday-season multi-sided tug-of-war about who hosts and who goes to whose house for which competing Thanksgiving, Christmas, New Year’s and Super Bowl Day family dinner, is the least of it.
You don’t need me to tell you that each other’s children, their children, and all the other relatives, can’t be expected to blend with and love each other automatically and instantly, or similarly accept the new person that’s being grafted into the family, just because we want them to. How many of our families have members, usually children (not necessarily young ones) who resent the intrusion into their turf and their future inheritances, and might not even say so up-front?
By now, both new partners have built elaborate worlds of family, career, social, financial, avocational, residential, community, and life-style worlds of their own, and shaped to their own liking. So, how much of those precious roots must each be happy – not just willing – to sacrifice in order to “blend” with the other’s? And how will the changes, plus the joint new world that will emerge, disrupt family members’ feelings, inheritances, and their worlds?
Addressing second-timers, Author Maggie Scarf, in her long-term study of a group of remarrieds observes: “They (second-timers) run into the kinds of problems they never anticipated because they thought ‘We’re all going to love each other on the spot’.”
Many experts agree that remarriage rates in today’s society would be even higher, but a growing number of couples opt to cohabitate instead, in order to avoid those issues and the sacrifice or reduction of benefits such as Social Security, alimony, and insurance. In return, cohabbing generates new ones, such as ineligibility for spousal rights, dependents’ insurance and survivors’pension benefits. So, on balance, which arrangement is better?
Pundits often proclaim: “Look, partnering means ‘commitment’.” And commitment means complete and total mutual sharing of facts and feelings about everything, including finances, obligations, attitudes, and family dynamics. Talk it all over fully in advance, unrestrained and uninhibited, including the families about their issues. Respect and understand everyone’s views and psychological defense mechanisms. Come to amicable agreements and understandings. Paper the essentials into a pre-nuptial agreement covering the ‘what if’s’. If you can’t ascend to that level of commitment, then you don’t have a partnership, so don’t pretend that you have one. Forget it – Just be friends!”
In addition to togetherness harmony and family dynamics, financials, assets titling, and estate planning are huge issues. We’ll give them special attention in the next two segments.
A few examples:
Financial planner Ric Edelman writes: “A new bride is likely to gain more than just a husband; she might find herself married to his alimony and child support payments, as well. A groom suddenly can be a father (and grandfather) if his bride has children” He also observes that re-marriages occur later in life, when the partners often have accumulated estates for their children, to insulate from new partners’ marital election rights while at the same time being fair and generous to the new beloved.
Ex’s can have continuing claims to assets, even those innocently contributed in good faith to the new partnership by their replacement spouses, or assets negligently left in vulnerable forms of titling.
A common failure, so frequent that it deserves a special alert here:
Employee benefits, life insurance and annuities, and financial accounts often go astray to no-longer-intended beneficiaries. How woefully many of us never remember that there’s a “pay on death” question, a little detail on the application form for many financial accounts — and guess who we named, and still is there!
The intended, deserving, needful beneficiaries get nothing, and have no recourse. Similarly, we’ve failed to change the beneficiaries on old and overlooked life and accident insurance and various money accounts, long-ago vested employer benefits that we don’t remember and maybe never even knew that we have, IRA’s, annuities, and credit-account death benefits that we aren’t aware of.
A true, but frequently-happening story: Roger’s nasty “ex” received a windfall this way, banked the money, and eventually it wound being distributed by her estate to the children of her second husband. Sorry, Roger’s family!
Even if we dutifully did change our primary beneficiaries, are we disinheriting our second, but equally cherished and loved group of children by retaining one or another of the old “standard” contingent-beneficiary designations, such as “Children of the marriage of the Insured and (first spouse’s name)”, or just “Children of the Insured”?
Bizarre, but true, in some places new spouses’ creditors even can grab the innocent new beloved’s assets if they aren’t titled and nuptial-agreement papered defensively. Goofy, but true: Unmarried partners aren’t entitled to most spousal partners’ dependents’ entitlements, but ex’s can remain entitled to them.
New spouses’ new marriages must outlive new eligibility waiting periods for some entitlements benefits, such as Social Security Surviving Spouse Income (SSI).
Fred and Sue’s marriage blended his three adult children and her five. Consolidating into one house, they embraced a neighbor’s “wonderful blended-family idea” to gift the other house to all eight jointly. “What a bright idea to get them, two sets of five and three strangers who have barely just met, to know each other and to do things together!”
So, can you just picture it now when one of the eight wants to sell, another wants to move in, a creditor of one sues to lien the house, one wants to buy the others out, none of them wants to be responsible for its business and the maintenance, they all disagree on its resale value, and they all suffer income tax on the gain at time of sale because of their zero cost basis? Thanks for the wonderful, bright idea, neighbor!
Also, whole new estate plans are absolutely essential, need to address children’s and new partners’ interests, and must be bulletproofed from unwanted former and newly-acquired relatives’ claims and the claims of their creditors.
So, stay tuned.
At least, today’s maturing baby boomers, gen-X’ers, and millenials don’t also have to contend with our parents’generation’s taboos against divorce, women working, unchaperoned dating, premarital sex, re-marriage, and cohabitation.
By the way, you can access volumes of detailed guidance by Googling keyword phrases, such as “blended families family, financial, and estate planning marital issues.”
Contact Gary Newman at firstname.lastname@example.org. Your ideas and comments are always welcome.