We are told that close to 40 per cent of first marriages end in divorce, and the rate of failure of second marriages is even higher.
Divorce is probably the fastest way to lose half of your money. Since the failure rates of second marriages and relationships are quite high then they can be an even faster way to lose half your money - and if you are divorced you might have lost 50 per cent already.
Many second marriages are a great success and certainly I do not wish to discourage people, nor deter anyone from seeking happiness. However, money is not always easy to accumulate so avoiding losses is very important, especially as you get older.
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 may seem as if 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 that even with the best of intentions they may lose a good friendship if they speak up.
Use your advisers
Your best protection is your lawyer, accountant, and financial adviser. 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.
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 finances. If something looks odd, ask advisers. Put all legals in place - wills, enduring power of attorney (EPA) arrangements and pre-nuptial agreements. Get advice about a family trust. Agreements and trusts are not impregnable. Go into a new relationship with your eyes open.
This article was supplied by Alan Clarke, author of Retire Richer - A Practical Guide For Everyone Aged 25 to 85. Clarke also blogs on www.investandretire.co.nz and is an authorised financial adviser whose disclosure statement is available on request and free of charge.