This topic holds a rather special place in my heart. It is an exciting time where you can actively plan towards your future and the future of your new family! Every time you have a new life event, such as marriage, you should spend some quality time with your spouse reviewing your estate and financial planning. (maybe not as exciting as the honeymoon, but it doesn’t have to be as dull as it sounds!)
Moving your life forward! With marriage often comes new assets such as a house, joint bank accounts, cars and the like. It can be important to protect those assets from creditors. It is also important to have a clear picture of both your lives and know how you want to combine your property and which assets or loans you want to be kept separated.
Finances: The durable power of attorney is one important form all couples should have. This is especially true if you are not yet married or if some of your funds are not in joint accounts. If something happens to you, you want your spouse or significant other to be able to manage and avoid fees for all your property and assets, even the ones that are not jointly owned.
Health: An advance health care directive will allow your spouse or significant other to make decisions for you in the event you are unable to. Using the advance health care directive, you can also make important end of life decisions in the event you are near death or are diagnosed with a degenerative disease. No one likes to think about these things, especially while looking forward to a love-filled life with their sweetheart, but death is inevitable and the right planning can avoid additional pain for your loved ones.
Creating a cohesive plan for your future: The next (and more fun in my opinion) piece of the puzzle is to plan for your finances and property. Many couples choose a trust based plan in order to avoid probate, to make succession easier, to provide flexibility and control, and to provide some creditor protection. There are so many different ways to create a trust for a couple that I will be discussing this issue in depth in a future post. Talk to your financial advisor and CPA to discuss the best ways to combine finances. Is one spouse more susceptible to creditors due perhaps to a high risk job? Do you want “hers”, “his” and “ours” accounts or is everything going to be joint? When I create a trust plan I talk to your other advisors to ensure that the plan the financial advisor or insurance agent has set out for you is consistent with the estate plan I create for you.
Wills are also a good option for some people but you have to remember that wills require probate (link) which can be a long drawn out process and everything in a probate is public record. If you have a simple estate, wills may be appropriate, and if you have any high-risk assets or profession (like personally owned rental property or if you are a doctor) then a probate of a small part of your estate can be helpful to cut off future creditors.
Baby on its way? Once you have children the choices you make become even more important. Life insurance, planning for education, appointing a guardian, asset protection, and other issues all come into play when you have kids. I will be writing a post discussing kids in particular soon. Check back soon and feel free to call for a consultation.
What do I do if those kids are from a previous marriage? I’ve heard a lot the concern that “I know my spouse cares for my children from my prior marriage, but I still want to protect them and make sure they get some of my inheritance. What can I do?” There is good news! You can make sure your children from your prior marriage inherit some property and you can also leave money for your spouse and kids from your current marriage. Feel free to call for a consultation to discuss your particular situation!