You've walked down the aisle, exchanged rings, and made vows to love, cherish, and support one another from this day forward. Now it's time to build a life together. A big part of starting off on the right foot involves the smart handling of financial matters. Below, learn a few financial estate planning tips that will help lay a solid groundwork for your fiscal future.

A Financial Estate Planning Guide for Newlyweds

1. Make Sure Your Financial House is in Order.

Ideally, you should have done this before you got married, but if you haven’t, this is a top priority. One of the top causes of divorce is money, and divorce is one of the biggest destroyers of an estate plan, so get this issue nailed down, ASAP. Communicate with each other (this means you need to both clearly state your thoughts and feelings as well as listen to your spouse’s thoughts and feelings) and get on the same page with your daily budget and long term goals. Is one of you militantly organized and more tightfisted than Scrooge McDuck? Maybe that one should take a heavier portion of the budgeting duties of the house while the other takes up other tasks. Some couples can do this on their own, but there is no shame in seeking the advice and higher skill level of a budgeting professional. 

2. Look to the long-game (retirement and happily ever after)

The second financial estate planning tip for newlyweds is to set a retirement goal (time, location, and lifestyle), compute the cost, and start working backward to now. Make a plan, stick to it the best you can, and start working on it now.

Don’t know where to begin or don’t know what you don’t know? Talk to a financial professional. Ask if the person you’re working with owes a fiduciary duty to you, or if they are simply required to use the “suitability” standard. A fiduciary puts your interests before their own. “Suitability” under FINRA only requires that the agent believes the recommendation is suitable for you. Seek out an advisor who is putting your needs ahead of their own.

3. Determine Whether to Join or Separate Accounts

As a married couple, you can choose to have joint checking and savings accounts or continue with separate ones. Every couple is different, so this is a topic to discuss case-by-case. 

Joint accounts typically allow for easier money management and give both you and your partner freer access to funds, but there are dangers to joining accounts. From an estate planner’s perspective, joint accounts are dangerous when there are children from a previous marriage, creditors, or concerns about the costs of long-term care. 

Individually held accounts remove concerns about joint accounts but can lead to disproportionate power issues or accessibility problems if there are no incapacity documents in place (another reason for an estate plan).

Your mix of individually held accounts, jointly held accounts, and other types of ownership should be tailored to your needs and should be discussed with your advisors and attorney.

 

To design a custom estate plan for your marriage, consult a professional. Trailhead Estate Planning is here to help. Located in Signal Mountain, TN, they offer estate planning guidance for clients of all ages and have recommendations available for other professionals you may need. They also provide representation in elder law issues. They will assess your family, finances, and estate planning needs, then create a framework that achieves your estate planning goals. Call (423) 228-7029, or visit them online to learn more about their areas of practice.