If you recently got married, then congratulations! Now that the wedding craziness is behind you, you can turn your attention to something less time-consuming but still super important: estate and financial planning.
Unless you are already very well-established (in which case you may want to meet with a financial advisor and an attorney), creating or updating a last will and testament, or trust fund to reflect your married should be fairly straightforward.
Here's things you need to do after getting married.
1. Create a Will
Most people do not have wills in place when they get married. If you do, great! If you do not, you will want to create wills specifying who gets your assets and belongings—if you leave it up to state inheritance laws, your spouse may not actually inherit what you have.
Also, if you signed a prenuptial agreement, make sure your will reflects the terms of that agreement. If there is a conflict between your will and your prenup, courts may choose to follow the terms of the prenup.
If you have children or plan to, it’s wise to include a guardianship provision for your current or future children in your will.
Once your wills are ready, make sure they are properly executed and that they are on file with an attorney or kept where both of you (and your executor) can find them.
2. Power of Attorney
You might think that being married to your spouse will allow you to make medical decisions for them if anything should happen. Or that you would be able to access their financial accounts. That is not necessarily true. If you execute a durable power of attorney and an advance medical directive, you will be able to make decisions for your spouse in case of an accident or unexpected illness.
Your durable power of attorney and advance medical directive should also name an alternate in case both of you are injured or incapacitated.
3. Don’t Forget Insurance!
If you or your spouse have life insurance through work, talk to HR to update your insurance beneficiary. Do the same for any term or whole life insurance plans that you have.
If you do not have any kind of life insurance, or if you only have life insurance through your work, now is a good time to consider adding a term life or whole life plan. In most cases, your coverage through work is going to be insufficient to provide for your family going forward.
4. Update Retirement Accounts
While you are changing the beneficiary on life insurance (or adding a new policy), don’t forget about your retirement accounts. If you have an IRA, 401(k), or pension plan, be sure to add your spouse as a beneficiary.
If you do not update your beneficiary designations, retirement funds may end up going to your parents or another beneficiary instead of your spouse, regardless of what it says in your will.
5. Real Estate Decisions
If either or both of you own a home, you might consider adding your spouse to the title. One advantage is that if something happens to either of you, the home stays with the surviving spouse without having to go through the probate process.
Whether adding your spouse to the title is an advantage or a disadvantage depends on your state’s laws and whether your loan status is in good standing. Adding your spouse to the title may give you a tax advantage, but could also increase your exposure to creditors, so talk to a financial adviser or check your state laws first.
An alternative would be to create a revocable living trust, place the home in the trust, and make sure the terms of the trust reflect your wishes regarding your home should anything happen to you.
Do the Work Now Rather Than Later
Getting your estate and financial documents in order now does require some tolerance for paperwork, but you will be glad you did it. Too many people put it off until it’s too late, leaving an even larger bundle of stress for their family to handle after their passing.
So, channel your planning energies into your estate and financial plans today! Having the basics in place will make it so much easier for you in the future, because you can make minor changes as the years go on, rather than starting from scratch.
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