Divorce is probably the fastest way to lose half of your money. Since the failure rates of second marriages & relationships are quite high, then they can be an even faster way to lose half of your money (and if you are divorced, you might have lost 50% already).
The fact is that there are predator men out there preying on lonely woman. Some of them seek wealthy woman and go to all sorts of means to steal their money.
Some of them seek women who are comfortably off, and live well helping her spend her money. When it’s all gone, they move on to another woman and repeat it all over again.
Most of us have seen at least one of these men in action in our wider circle of friends and acquaintances, and it’s never a pretty sight.
Gold digging women
Some of these women seek to marry a wealthy man and enjoy all the financial benefits without having to earn it themselves.
Some of them seek older men with a view to enjoying the financial benefits now, and getting their hands on his money after he has passed away.
Again most of us have seen at least one of these women in action – never a pretty sight.
Love is blind
There are none so blind as those in love, or extremely lonely, so that is why some people get caught out - and cleaned out.
Your adult children may be the first ones to notice if things don’t look quite right, and sometimes they will speak up, and sometimes they won’t.
Sometimes it can look like your adult children are concerned with helping you preserve their inheritances – this may be the case, but it is more likely that they are simply concerned about you.
They are less likely to tell you since they know that love is blind and even with the best of intentions, they can lose a good friendship if they speak up.
Your best protection is your lawyer, accountant, & financial advisor
Use your advisers.
Before getting married or moving in together, you both need to be very open about your finances - if appropriate, both of you should disclose all your assets and debts.
Especially debts !!
You should consider what assets you will keep in your own names (separate property).
Make new wills straight away.
Make a pre-nuptial agreement, especially if you have more money than your new partner.
This is pretty hard to do though, as you are bringing up the realities of money at a time when you are supposed to be thinking about love and romance.
But ignore it at your peril!
An easier way may be to set up a family trust before you marry again and put the bulk of your assets in it. A trust will protect you quite well in the early years of a new marriage or partnership.
Longer term the Matrimonial Property Act may override a trust, especially if your new spouse has been a good contributor to the marriage.
If you get cleaned out later in life, it will be hard to recover financially. Be prudent or your retirement could be wrecked.
Try to put aside your rose coloured glasses
Insist on open talk about your finances and theirs
If something looks odd, ask your advisers
Put all legals in place immediately – wills, EPA’s & pre-nuptial agreements
Get advice about a family trust
Remember agreements and trusts are not impregnable
So go into a new relationship with your eyes wide open
Use your advisers
This article was supplied by Alan Clarke who is the author of a book entitled “Retire Richer” which is a practical guide for everyone age 25 to 85.
Alan also writes regular articles on www.acfs.co.nz
Alan is an independent authorised financial adviser (AFA) and his disclosure statement is available on request and free of charge.