For Couples In Second Marriages, Long Term Care Planning Is Vital

According to U. S. Census Bureau statistics, an increasing number of Americans are divorced, remarried or living as domestic partners (referred to as “cohabitation” by the Census Bureau).

A 2007 report from the Census Bureau shows that in 2004:

  • 12 % of men and 13% of women had married twice.
  • 3% of each had married three or more times.
  • 58% of women and 54% of men age 15 and older had married only once.

What statistical studies do not show is the extent to which financial, estate and long term care planning help protect and sustain the fundamental needs of individuals once they depart their original marriage.

The trauma of going through a divorce, particularly if there are children involved, frequently causes both parties to lose sight of some of the long term financial safeguards they originally set up when they married and began their family. In addition, the financial stress that accompanies divorce often leads to significant cost cutting, with both sides often letting go of insurance plans that once seemed essential.

Couples beginning second marriages today face many complex issues that require them to rethink financial plans. For example, it is not uncommon for one or both parties to have offspring from their first marriage. Accordingly, when they consider remarrying, these couples frequently agree upon the need for a prenuptial agreement that will protect them against some of the legal and financial hurdles they faced when dissolving their first marriage.

Although their financial and emotional ties to their previous spouses have generally been severed, frequently both parties want the assets they are bringing to the second marriage to provide a legacy for the offspring of the first one. Vividly aware of the potential for divorce, many of these couples choose to keep totally separate bank accounts?EUR”and harbor the illusion that by doing so, they are limiting their financial responsibility for their second spouse.

But what these couples frequently do not realize is that the arrangements set forth in the prenuptial agreement only serve their purpose if either spouse requires little or no medical care.

Couples entering second marriages need to understand that under current law, their assets are no longer separately categorized and protected as originally intended in the prenuptial agreement. As in any marriage, all assets are considered as belonging to the couple as one entity, regardless of who brought them into the marriage, and therefore are to be used by either or both persons to cover the costs of LTC should the need arise.

For this reason, it is imperative that couples entering second marriages carefully redefine their respective goals and immediately set up a new, well-designed LTC plan to diminish or eliminate this risk. By carefully selecting suitable insurance benefits to offset some or all of potential LTC costs, couples can preserve and protect their individual assets, and those set aside for children of their previous marriage, as they originally intended when drafting their prenuptial agreements.

Most importantly, taking the time to address such possibilities, however remote they may seem at the start of a second marriage, helps avoid the intra-family and inter-family battles that can arise among children, siblings and previous spouses when one or both partners require LTC. Instead of families banding together when facing the enormous physical, emotional and financial stress of the need for LTC, a breach occurs.

The lack of coordination between the patient’s first and second families frequently serves to destroy rather than to preserve the bonds between them?EUR”bonds that may be tenuous to begin with. In the absence of proper planning, the prospect of LTC for a loved one often serves to tear old and new families apart.

Vivian P. Gallo, CLU, CSA, AEP, CLTC, is a long term care insurance specialist and certified senior advisor at Choices For Long Term Care, Hartsdale, N.Y. Her e-mail address isĀ