Getting married in later life? What to know about your wealth

A wedding is always cause for celebration – especially in later life when there’s a good chance the happy couple has already been through a thing or two.

But whether it’s a first, second, or third marriage, when marrying couples are older, it can be a more a complicated union. You’re much more likely to have children from previous relationships, have your own homes and acquired more wealth.

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So, in addition to the challenge of blending your families, you’ll also need to give some serious thought to what happens to your wealth when you die and take steps to ensure that everyone you love is looked after, when the time eventually comes.

Write a new will

In England and Wales, when you get married, any previous will you’ve made will be revoked. That means you need to start any new marriage or civil partnership with a fresh will.

Without a valid will, your wealth would be distributed according to the rules of intestacy when you die.

“In practice, these rules prioritise the new spouse and so may not align with your personal wishes, especially if you have children from a previous marriage,” says Nina Sperring, partner at Price Slater Gawne and member of STEP, the professional body for estate and trust practitioners.

“If you do have children, your new spouse will inherit the first £322,000 of your estate as well as all personal chattels (personal possessions) and half the remaining estate. The other half is divided equally between your children.”

Sperring says that there are a number of ways to protect your children. “A will could include a trust structure, for example one that gives the spouse a right to income during their lifetime but capital is ultimately preserved for the children.

“Without a structure like this, the spouse could inherit everything, later remarry, update their will and give everything to their new spouse. The result is that the original children receive nothing.This is a common scenario that can easily be prevented.”

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Other options that could be considered include gifts – either direct or by using a trust if more control is required - and life insurance policies where children are named as beneficiaries.

Even though marriage will revoke older wills, it is still possible to write a new will before you walk down the aisle – you just need to ensure that it is written “in contemplation of marriage” and names your future spouse.

In Scotland, wills aren’t revoked when you get married – but it’s still important to ensure it reflects your current wishes and write a new one if necessary. The rules of intestacy are also different in Scotland.

Using your will to cut your IHT bill

If you’re likely to pay inheritance tax (IHT) when you die, there are also measures you can put in your will to cut your bill.

Transfers between spouses on death are tax free. That means if you have been widowed, any unused nil rate band (NRB) - your tax-free allowance for IHT, currently £325,000 - can be passed on to you.

This additional allowance would usually be lost if you remarried as only two nil rate bands can be claimed on the second death.

However, with a bit of planning it is possible to get the benefit of three NRBs. Wilson explains: “This can be achieved by allocating the value of the NRB transferred from the previous marriage to chargeable beneficiaries or a NRB trust, on the first death of the second marriage. One NRB will be used up on the first death, allowing for double NRB for the last survivor.”

If your spouse has been widowed as well, they can also do this, potentially enabling you to take advantage of all four NRBs between you.

Sperring adds: “It’s worth noting that it’s also possible to preserve the residence nil rate band (RNRB) in a will so that the RNRB isn’t lost, for example should you sell your home, downsize or if your estate is over £2 million, when the RNRB starts to taper away. The will structure should be carefully drafted in order to preserve the RNRB and could include an RNRB friendly trust, for example.”

Inform your pension providers

“A will doesn’t dictate who a pension is passed to in the event of death,” warns Adam Wilson, a financial adviser at ii advice. That means you need to complete a nomination form to tell each of your pension providers who you would like to inherit your pot when you die.

It can be left to one person if you prefer, or divided between a number of people.

Ideally, you should have done this when you originally took out the pension. But when you get married – or have any major change of personal circumstances, it’s important to update your nominations to ensure they reflect your current wishes.

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However, while these instructions are important (and can save your family a lot of stress when you die), it’s important to note that they are not legally binding.

While your instructions will be followed in the vast majority of cases, the pension’s trustees do have the discretion to decide how funds are distributed and, in certain circumstances, they could override them.

Wilson says: “Those with a sound, solid family base can be reassured a nomination will normally meet their needs. Those with a complex family make-up may want to check that a nomination does what is intended. If not, there are other solutions that can help. Trusts are often the next best step for those requiring bespoke instructions that must be followed.”

How will you own your home?

If you decide to buy a new home together, it’s also important to consider how you will own it.

There are two options: joint tenants and tenants in common.

Under a joint tenancy agreement, you’ll each own the whole property, so if you die, full ownership of the property will automatically pass to your spouse.

With tenants in common you’ll each own a share in the property – this could be an even 50/50 split or an unequal split if one person contributed more to the purchase than the other. When one of you dies, their share won’t automatically go to the spouse. Instead it will go into the estate and be distributed according to your will.

Sperring says the latter option may be “more flexible in terms of estate planning or care fee planning”.

However, what’s right for you will depend on your circumstances.

Consider a pre-nup for extra peace of mind

It’s not just your death that could affect the passing of your wealth down the generations. An unexpected divorce could also throw a spanner in the works and see less money pass to your children when you die.

A pre-nuptial agreement could be used to ringfence wealth for your family. They aren’t legally binding, but so long as they are completed following the proper procedures and both parties agree, they will usually carry weight should you divorce.

If you’ve already tied the knot, you can also take out a post-nuptial agreement.

Talk to professionals

Estate planning is complicated at the best of times. But the combination of a later-life marriage with children from previous relationships can make it particularly difficult and cause untold stress if proper plans aren’t put in place.

You may want to preserve wealth for your children, but you’ll also want to ensure that your spouse is looked after and doesn’t lose their right to remain in the marital home.

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That means, whatever your situation, it’s important to get professional financial and legal advice.

Sperring suggests starting the process as soon as possible. “Have the conversations about wills and nuptial agreements early. This helps to avoid pressure, rushed discussions and arguments.”

“Clients can be embarrassed or fearful about raising these discussions, but it can be reframed as clarity rather than mistrust. It’s about good succession planning that will help prevent ambiguity further down the line.”