Estate Planning Steps for Newlyweds
Congratulations on your new journey together as a married couple! While you’re likely still basking in the joy of your recent nuptials, you will need to start considering some practical aspects of your new life together, including estate planning. Estate planning may not be the first thing on your mind post-wedding, but it’s an important step to ensure your mutual peace of mind. Here’s a guide to help newlyweds navigate the essential steps of estate planning:
- Discuss Your Financial Goals and Values
Start your estate planning with an open conversation about your financial goals and values. Discuss your short-term and long-term financial objectives, your views on saving and investing, and how you would like to handle debt. Understanding each other’s perspectives on money will lay a solid foundation for your joint financial and estate planning.
- Update and Create Essential Documents
As newlyweds, it’s important to update or create key estate planning documents. Here are a few to consider:
Wills: Both of you should have a will, even if you don’t have substantial assets. A will dictates how your assets should be distributed and can also include guardianship wishes if you plan to have children.
Trusts: If you have more complex financial situations or want more control over how your assets are distributed, consider setting up a trust. Trusts can help minimize estate taxes and offer greater flexibility in how assets are managed and distributed.
Powers of Attorney: Establishing a durable power of attorney allows you to designate who will make financial and legal decisions on your behalf if you are unable to do so yourself.
Healthcare Directives: A healthcare directive, including a living will and healthcare proxy, allows you to outline your wishes for medical care if you’re unable to communicate and designate someone to make healthcare decisions on your behalf.
- Review Beneficiary Designations
Review and update beneficiary designations on all your financial accounts, including bank accounts, retirement accounts, and life insurance policies. Make sure these are updated to reflect your new marital status. This is critical because beneficiary designations can override instructions in wills and trusts.
- Consider Life Insurance
Life insurance can be a vital part of estate planning, providing financial security to the surviving spouse. Assess your life insurance needs to cover potential future obligations like mortgage payments, children’s education, and outstanding debts.
- Plan for Taxes
Understand how being married affects your tax situation, especially concerning estate and inheritance taxes. Consider consulting with a tax professional to understand potential impacts and plan accordingly to minimize tax liabilities for your spouse.
- Keep Your Documents Safe and Accessible
Once your documents are prepared, keep them in a secure, yet accessible place. Inform trusted family members or friends about where these documents are stored and consider storing digital copies in a secure cloud storage.
- Regularly Review and Update Your Plan
Life changes, and so should your estate plan. Review your estate plan regularly, especially after major life events like the birth of a child, a significant purchase, or receiving an inheritance. This ensures your estate plan always reflects your current wishes and circumstances.
- Consult Professionals
Estate planning can be complex, especially with larger or more complicated estates. It’s wise to work with professionals, including estate planning attorneys and financial advisors, to ensure that your plan is comprehensive and tailored to your needs.
Starting your marriage with a clear, carefully considered estate plan not only protects your assets but also ensures that you both have peace of mind knowing that you’re prepared for the future, whatever it may hold. Taking these steps early in your marriage sets a solid foundation for all your plans together. If you’re uncertain about where to begin or need help crafting a plan that fits your unique needs, we’re here to help. Contact Wills, Trusts, Probate & Elder Law Firm, PLLC at 941-914-9145, or fill out our online contact form. We’ll arrange a meeting at your convenience to guide you through the process.
