Legal steps to consider if you’re going to remarry later in life

Not only are people living longer these days, but there’s a growing trend of widows and widowers remarrying in their 60s, 70s and 80s. A remarriage late in life can bring happiness, but it can also create legal complexities.

For most elderly people who remarry, the chief issue is that they want to look out for their adult children and make sure those children have an inheritance. Lack of planning can result in a new spouse receiving the assets that could have gone to adult children and grandchildren.

Here are some things to consider:

► In most states, a spouse is entitled to a certain percentage (usually a third) of the other spouse’s assets at death even if the other spouse has provided differently in a will. If you don’t want this to happen, the best way around it for your spouse to waive this right in a pre-nuptial or post-nuptial agreement.

A pre-nuptial agreement is good for other reasons, too, because it allows you and your spouse to specify exactly how your assets will be divided when one of you dies.

If you’re thinking of signing a pre-nuptial or post-nuptial agreement, don’t do so without having it reviewed by an attorney. There are many technical requirements for these agreements, and an attorney can make sure that the agreement is legally valid and that you’re not inadvertently giving up important rights. (And make sure you have your own attorney review it; don’t assume that the same attorney can fairly represent both you and the other spouse!)

► When a person dies, many retirement accounts automatically go to the person’s spouse, unless the spouse has signed a disclaimer. This is true even if the person’s will and pre-nuptial agreement state otherwise. Be sure you know where your retirement accounts will go if something happens to you.

Lack of estate planning can result in a new spouse receiving the assets that could have gone to adult children and grandchildren.

► Many people who remarry later in life provide in their will that certain of their assets will go into a trust. The trust will pay income to their spouse for the rest of the spouse’s life, and when the spouse dies, the assets will go to their own children. This allows a person to take care of a spouse but also make sure that their own children ultimately receive an inheritance.

Oftentimes, such a trust is called a “Qualified Terminable Interest Property” trust, or QTIP. Another big advantage of a QTIP is that all the property in the trust is treated as having gone to your spouse for estate tax purposes, so there is no estate tax on the assets at the time of your death.

► While a QTIP can be a good idea, it might not be a good idea if you’re marrying someone considerably younger than yourself. If you’re 70 and you’re marrying a 50-year-old, then there’s a chance your new spouse will outlive your children and your children will never receive an inheritance. In such a case, it might be better to protect your children’s interest by buying a life insurance policy with your children (or a trust for them) as the beneficiary.

► Consider buying long-term care insurance. Generally, if one spouse requires expensive nursing home care, the other spouse is legally required to pay for it. And few things can drain a child’s potential inheritance faster than paying for a step-parent’s expensive medical care.

In one of the first cases of its kind, a company is using an employee’s LinkedIn profile as evidence against her in a lawsuit.

The company sued a former employee, claiming she took company secrets and client lists with her to her new job. (The employee was responsible for recruiting contract workers for a placement firm that specialized in IT work.)

The company said that judging from the employee’s LinkedIn profile, she had made connections with over 20 of the company’s workers. The company claims she violated her non-compete agreement by emailing the employees and asking if they were “still looking for opportunities” and inviting them to “visit my new office and hear about some of the stuff we are working on.”

Social media, including LinkedIn, Facebook and Twitter, can be a great way to stay in touch and make connections, but they can also lead to trouble as unguarded comments can be used later as evidence. (This is true not only in the employment context, but also in the contexts of divorce and criminal law.)

Many companies have begun implementing policies covering how and when employees can use social media, especially on company laptops, smart phones and pagers.

A Texas jury has sent a message about texting while driving, and it’s a wake-up call.

Megan Small, a senior at Baylor University who was returning to school after Thanksgiving break, was killed when a pickup truck crossed the center lane and struck her car head-on. A friend of Small’s, who was following behind her, swerved to avoid the wreck and suffered a concussion.

The two families sued the driver of the pickup truck.

But what really infuriated the jury was evidence suggesting that the pickup driver had made seven phone calls and sent or received 15 text messages in a short period before the crash, and that he was either sending or receiving a message at the moment the accident occurred.

The jury awarded more than $20 million in damages.

Of course, there’s no reason to think the families will ever actually collect anything more than the pickup driver’s insurance policy limits. But the jury still sent a strong message that drivers should put away the phone when they get behind the wheel.

Some people think they can handle a divorce on their own, especially if they don’t have children (or they have grown children) and they’re not fighting bitterly.

It sounds easy - you know what you and your spouse own, and you can figure out how to split it. Right?

Be careful - it’s not always easy to know what property you’re entitled to and how to divide it. In trying to end a marriage quickly or amicably, many people make big mistakes and come to regret them later - either because they overlooked assets they could have shared, or because they didn’t take all the legal steps necessary to protect their interests.

For instance, splitting a pension is difficult and legally complicated. The same can be true for an IRA or a 401(k) plan, and for Social Security benefits. If one spouse has stock options, how should they be divided?

Here are some other recent cases that show that it’s not always obvious who’s entitled to what:

Money from a lawsuit. Before getting divorced, a wife in Maryland brought an employment discrimination lawsuit and settled it for $550,000. Whose property is that?

A divorce judge ruled that it was solely the wife’s money. But the husband appealed, and Maryland’s highest court decided otherwise.

In trying to end a marriage quickly or amicably, many people overlook assets or don’t take the legal steps necessary to protect their interests.

The high court said that any part of the $550,000 that was to compensate the wife for lost wages should be shared with the husband, because it replaced wages she would have earned during the marriage. But any part of the $550,000 that was for other things (such as her emotional distress) was hers and didn’t have to be shared.

Accrued sick and vacation days. A husband in Illinois had accumulated 115 sick days and 42 vacation days at the time of his divorce. Whose property is that?

A divorce judge ruled that the wife was entitled to $15,000 for her share of the days.

But the state’s highest court disagreed, and said the wife wasn’t entitled to anything. It said the value of the days was “speculative,” since the husband might use them before retirement and never receive payment for them.

Windfall during divorce. A wife in Tennessee filed for divorce from her husband, who was a lawyer. After the filing - but before the divorce was granted - the husband settled a huge case and received a $17 million fee. Whose property is that?

The state’s highest court said the wife could share in the fee, because property can be divided if it is acquired any time up to the final divorce hearing. But other states may have different rules.

Company-paid benefits. A North Dakota husband was the co-owner of a trucking company with his father. Although he didn’t receive a large salary, the company paid many benefits for him, including clothing, housing, health insurance and out-of-pocket health costs, legal fees, life insurance, disability insurance and many personal expenses.

A court decided that the wife was entitled to have these payments considered as part of the husband’s  income when calculating how much he should pay her as support.