A Financial Wedding Registry
By Paul Hynes, CFP®
Marriage is a major life event. If you’re getting married, things are not only about to change personally. They will also change legally and financially. While you’ve likely spent considerable effort preparing a wedding registry, what about your personal “financial” wedding registry?
For many couples, getting married means merging different aspects of their financial lives. Here are five tips for organizing your “financial” wedding registry.
- Decide if you want a written agreement before you get married. Before getting married, consider whether either or both of you want a prenuptial agreement. This can be a sensitive topic. Yet in reality, it can be important protection for each spouse and perhaps the interests of any children from a previous marriage. Consult with an experienced family law attorney. If an agreement is warranted, each of you will need your own attorney to represent your interests.
- Communicate about money. After the wedding and honeymoon, have a frank financial discussion about the following practical issues:
- How much do we need to spend each month on basic living expenses?
- Who will be responsible for paying the bills?
- In general, what are each person’s point of view and experiences with money?
- Do we have any shared money goals, and if so, how should we strive to reach them?
- Decide whether to combine accounts, keep them separate, or both. Each of you will be bringing assets, income, and perhaps debt into the marriage. For an asset such as a car, home, or savings account, consider adding “joint tenants with rights of survivorship” to each one. Or, add a “transfer on death” (TOD) provision. For retirement savings and life insurance, update your beneficiary designations. As for any debts, individual debt brought into the marriage should remain individual. As for any income earned after the marriage, in a community property state such as California, it’s all joint property. Having a joint checking account to pay common household expenses may be a good idea. Some of these decisions could have important legal and tax ramifications. Make sure you get good legal and tax advice in advance.
- Update your estate plan. You each will need at least these three legal documents in place:
- Advanced healthcare directive and Power of Attorney for Healthcare
- Power of attorney for financial matters
- Will and/or trust These are important legal documents. Carefully consider your options with the help of a good estate planning attorney. And, keep in mind that things will change. It’s a good rule of thumb to have your documents reviewed by an attorney at least every five years, or when important life changes occur.
- Review your insurance coverage. You can probably save money by combining your auto coverages with your homeowners or renters insurance. Also, research whether it makes sense to have health insurance coverage for both spouses under one plan. Marriage marks a significant change, and you don’t have to wait until open enrollment to change your health coverage, but you might only have a brief enrollment window to add a spouse. As for life and disability insurance, make sure the coverage is adequate. And, make sure you update your beneficiary designations.
All this may seem daunting, and it may be unfamiliar territory for one or both of you. Talking with an advisor about complicated issues can help relieve concern and allow you to focus on what matters most—your life together. Talk with us. Whether you're a current client, or related to one, we're here to help.