Getting married means that it's time for a lot of paperwork and updating. While most newlyweds know that they need to create and change names on joint accounts, they may overlook estate planning. Taking the time to sit down and create a plan is an important post-nuptial activity that can ensure that your new family gets off on the right foot. The following tips can help.
Tip #1: Check All Beneficiary Plans
Everything from savings accounts to retirement accounts and investment plans can have a named beneficiary. For these types of plans, the stated beneficiary is where the money will go, regardless of any other documents you have drafted, so it is vital that you make sure the beneficiary is accurate. Soon after your wedding is the perfect time to make sure you have the beneficiaries named correctly. For most newlyweds, the beneficiary should be the new spouse. If it is a second marriage, you may decide to name your children from a previous marriage as the beneficiary, either in whole or shared with the new spouse.
Tip #2: Create Your Will
Hopefully you already have a will, but if you don't, it's not too late to have one drawn up. Even couples with few assets should begin with a will. State laws vary, so there is no guarantee that the few assets you do have, or even your personal affects and belongings, will automatically revert to your spouse. Another good reason to draw up a will together at the start of your marriage is that it will simplify updates in the future. You should both sit down with your estate or financial planner once annually to review your assets and to update your will. As your assets, and the size of your family, increases, these annual meetings will keep planning simple.
Tip #3: Update Legal Documents
Powers of attorney and medical directives should be updated upon marriage. You and your spouse need to sit down together and decide who you want to speak for you or act upon your behalf in the event that you are incapacitated. Generally, this should be your spouse, but you may opt for an adult child if this is a second marriage. The key is to be up front about these decisions now so they do not cause strife or stress later.
Tip #4: Increase Your Coverage
As your family grows, so does your life insurance needs. Chances are you carried a minimum amount as a single person – enough to cover end of life costs was sufficient. Now you may want to carry sufficient insurance to cover house payments and loss of income if you are a primary breadwinner, or a sufficient amount to cover future costs, such as college tuition, with your young children.
Tip #5: Set Up Trusts
You may want to consider trusts if this is a second marriage and you want to make sure that the children will be well cared for. You can set up a trust for just your biological children, or for your biological and stepchildren. These can even be separate trusts. The benefit of a trust is that the money is guaranteed to go to the children, even if the will is contested.
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