Estate Planning for Newlyweds
Getting married is an exciting experience. Beyond two lives and families coming together, newlyweds are also linking their finances to varying degrees. Once you get married it’s important to create or review your estate plan, so that you can ensure your assets as a couple are arranged according to your wishes. Here are five things to consider:
1) If you work at an employer offering benefits, talk to HR about your life insurance and retirement accounts. Make sure your beneficiary designations reflect your wishes, since some assets don’t pass directly to your spouse if you die. Different states handle this differently, so it’s important to declare your wishes clearly.
2) Review your life insurance. If you and your spouse depend on both incomes to pay rent or mortgage, consider revising your coverage. If something unfortunate happens, you don’t’ want one spouse struggling to pay the mortgage because of lost income. Additionally, younger couples can lock in lower life insurance premium by adding policies earlier in life. The later you wait, the more expensive it becomes.
3) Execute a will. State probate laws dictate what property passes to whom when you die without a will. And remember that these laws can vary greatly from state to state. Just like beneficiary designations, a will can make your wishes known. It’s better for you to make these decisions than the court system.
4) Now that you’re married, you probably want your spouse to have durable powers of attorney. This means that if you become incapacitated your spouse can make medical and/or financial decisions for you. This is important, since your spouse is better equipped to make important decisions than medical staff.
5) Sign a living will along with durable powers of attorney. A living will directs medical providers how you wish to proceed if you ever require life support to live. This is also an important decision, as prolonged medical treatment and life support can drain your assets quickly. Just like your will, it’s better to make this decision yourself rather than saddle someone else with it after it’s too late.