Estate Planning for Newlyweds
June is considered to be the most popular month for weddings! And after planning for their big day, young couples starting their lives together need to also start planning to protect both themselves and their finances.
Here is a list of essentials for Estate Planning for Newlyweds
- CHANGE YOUR ACCOUNT BENEFICIARIES
The quickest and easiest thing to update is the beneficiary, or “transfer on death” designations for your accounts:
- Insurance policies
- Existing Will or Trust
- Bank accounts
- Investment accounts
- 401(k) plan or other employee-sponsored retirement account
- Health savings account
- REVIEW YOUR LIFE INSURANCE
Marriage is a good time to review life insurance needs. Workplace life insurance can be limited and if a couple depends upon having both incomes to pay for the rent or mortgage, or to maintain a certain marital lifestyle, then additional life insurance may be warranted.
* If newlyweds want to have children in the future, it may be best for them to getting additional life insurance while they are young and healthy, so they can lock in premiums at favorable rates.
- UPDATE YOUR LAST WILL AND TESTAMENT
Even young newlyweds without many assets should execute basic wills that leave all assets to their spouse. Without a will, state law will dictate where certain property passes when an individual dies – and not all such laws leave 100% of property to the spouse.
Additionally, if newlyweds have prenuptial agreement, they should execute wills to reflect the terms of the agreement. It’s important to understand that signing a prenuptial agreement is not enough. The estate plan must mirror what the agreement provides in the event of the death of a spouse.
- GET DURABLE POWERS OF ATTORNEY & HEALTH ADVANCE DIRECTIVES
Marriage does not give a spouse the absolute right to make decisions for the other in the event of incapacity. To ensure the spouse is the one who can make medical and legal/financial decisions, each of your newlywed clients should execute a durable power of attorney and a medical advance directive. This will provide them with the ability to make decisions for one another in the case of an accident or other unexpected incapacity. In addition to naming the other spouse under these documents, they should name an alternate in the event of an accident where both spouses are injured.
- ENSURE YOUR ASSETS ARE TITLED PROPERLY
If either spouse owns real estate and financial accounts prior to their marriage, they likely have it titled in their name alone. After the wedding, couples should consider having things re-titled in their spouses name as joint owners, or to record a transfer on death designation or deed. This will help avoid the probate process. The probate process can be very lengthy. During this time, your family will not have the full use of the assets or the ability to mortgage, sell or rent the real estate.
Please contact the Bolinger Law Firm to discuss how to protect your future as you begin the rest of your life with your new spouse!