Is it smarter to get married or to live together after 45? It all depends on whether you want a contract or a commitment, in my opinion. If your attitude about marriage is it is a contract, that you will only stay in it as long as everything is going your way, then for sure you are smarter to live together, never get married, and keep all your money separate. All you have to do is consider the cost of divorce, as well as the emotional wreckage, to know it makes more sense to stay since and not comingle money.
However, if your attitude is that marriage is a commitment, and you are both committed to doing whatever it takes to make it work, it makes a lot more sense to get married and to combine finances. There is incredible synergy that I see with my clients who are happily married that you never ever see with couples that are in more of a contract situation. You definitely see 1 + 1 = 5. I have seen newly married 40+ couples who decide it is important to get out debt and start saving serious money and it is incredible how much they can accomplish in just 5 years working together.
Should you have a prenup? My opinion is it all depends on how much money is at stake and where you stand on the contract/commitment issue. If there is a disparity in assets of $1m or more and the couple is older than 40, a prenup can make sense. However, it is important to remember that the law of attraction is really powerful. Any prenup assumes you will probably get divorced and you are planning for it. I tell my clients if they think they need a prenup, they probably should not marry that person.
Of course if you are a billionaire like Paul McCartney, it makes sense to have a prenup for the simple reason that you will waste millions in legal fees otherwise.
There is a much, much easier solution that gives the same outcome for most people. That is, always keep any money you had prior to your marriage in separate accounts. Each person should prepare a net worth statement as of the day before the marriage. So say Sally has $300k in her 401(k), $200k in personal savings and $100k in equity in her house. Harry has $200k in his 401k, $100k in personal savings and $100k equity in his house. They each do a net worth statement to document this.
After the marriage, they each sell their homes. They use the $200k as a downpayment on the new house, which they own jointly. Sally continues to keep $200k in her own name, Harry keeps $100k in his own name. They begin a new joint savings account together with money they earn after the marriage. In the event of a divorce, all the money they had prior to the marriage is "off the table" in terms of negotiation, since they can document they owned it prior to the marriage. More than likely, what they accumulate after the marriage will be split 50/50 in the event of a divorce.
Likewise, if one of them gets an inheritence during the marriage, they should keep it in their name only and document the amount received. Divorce laws clearly state you keep you own inheritence, so long as it was never combined into a joint account.
If there are kids, there are a million issues that can't be covered in a brief email. Again, lots depends on how much money is at stake. If there is a lot of money, you need to be careful to set up your wills correctly. Most people will set it up so if they die, what they own separately will go into a trust for the benefit of their children, but will allow the income from the trust to be paid to the surviving spouse during their lifetime. Sometimes it makes sense to get a life insurance policy, put it in an ILIT (irrevocable life insurance trust) and have that money go to the spouse so that the assets can go directly to the children. There are a million variations on what you can do -- much depends on ages and the amount of money.
I remarried at 43. My prior marriage was miserable. This one is going on 16 years and it is beyond fabulous. We were really clear we wanted to make a commitment and do whatever was necessary to make it work. And we had to cash in on this commitment as we spent several years in counseling in the early years of our marriage. Our net worth today is 1000% of what it was 15 1/2 years ago when we married. Much of that is we really work as a team and we have a 1 + 1 = 7 or 8 or 9 marriage. We both bring out the best in each other. My husband today makes more than triple what he made when we married and he credits me with a lot of that -- nothing better than living with a full time encourager and cheerleader.
So much of marriage is what you decide to make it. Whatever you think about is going to grow. So if you don't trust the other person and think you need to be really careful about protecting your money, you are likely to create a divorce eventually. If you treat the other person like they are magnificent, most people will grow into that expectation.
I am not saying to be foolish. I definitely would document net worth prior to the marriage and I would never combine pre-marriage assets. However, there is a certain amount of acting like you trust the other person needed to really grow a healthy thriving wonderful marriage. The key thing is to be sure you are comfortable with the other person's character before you marry. If they tell you stories about cutting corners and trying to screw other people, it is just a matter of time until you are the screwee. If they tell you things and demonstrate things that show honesty and integrity, they are good marriage material!
