Getting Married

You will probably spend many months planning your wedding. But in all the rush, be sure to find time to plan for the financial partnership your marriage will bring. Savings and investment accounts, property ownership, insurance and more are now shared opportunities and responsibilities. They have the potential to draw you closer together, or come between you if you don’t agree on how to proceed.

Open communication and shared goals can be a great foundation to living happily ever after. Here are some guidelines.

Pre- And Post-Nuptial Agreements

It may be a sensitive subject, but a pre-nuptial agreement can be worthwhile, especially where significant assets and/or children are involved. Post-nuptial agreements may be less widely discussed, but they can be entered into between a husband and wife at any time after the marriage. Both types of agreements can address issues in the areas of assets and liabilities, divorce, and estate planning.

Situations that may encourage you to consider an agreement include:

• Having children and/or grandchildren from a previous marriage
• Having much more or less wealth than your intended
• Being in line to receive a large inheritance
• Supporting your spouse’s education
• Owning a business

The best pre- or post-nuptial agreements protect the interests of both spouses without causing mistrust. It is recommended that each party consult a lawyer.

Financial Goals And Money Management

No matter how compatible you may be, it is fairly unlikely that any two people have the same knowledge or approach to saving, spending, budgeting and investing. It will be useful – and maybe enlightening – to make a list together of your goals and discuss how you intend to reach them.

Here are some issues to discuss:

• Should you have joint accounts, or keep some or all of your money separate? Maintaining a joint account can have advantages, such as easier record keeping and lower maintenance fees. However, it may be more difficult to keep track of how much money is in the account when you both have access to it. This isn’t an either/or proposition. Sometimes the best balance may be having both shared and separate accounts.
• Should you apply jointly for a loan or credit cards? If you do, both of your credit histories will be evaluated. If one of you has a poor credit history, it may affect your joint eligibility and interest rates.
• Do you know what debt your intended will bring to the union? Be aware that you are not legally liable for your future spouse’s pre-marriage debt, unless you choose to take it on by refinancing with a new loan together, or consolidating credit card debt. Whatever course you choose, it is best to find out now and plan for it, rather than be surprised by unexpected bills.
• How are you going to manage your budget? Will one or both of you be in charge of keeping records and paying bills? If both you and your spouse are going to be involved, make sure that you develop a record-keeping system that works for both of you.
• Do you agree on near-term goals, such as buying a new car, or taking a vacation? What about long term goals. such as having children and what kind of education you’ll plan for them? How will these be paid for? And what about saving for your retirement. More on that later

Insurance

It’s a good idea to examine your insurance plans, as it may be cost-effective to pool your policies. Here are some areas to consider:

• Health Insurance –If you each have health coverage, you may want to compare the two plans. Be sure to consider the quality of coverage, as well as co-pays and deductibles. Evaluate the difference between a family plan and the two separate plans you have presently. If only one of you has health insurance, the spouse can be added to that plan without having to wait for the open enrollment period.
• Auto Insurance–If you and your spouse own separate cars, you may have different auto insurance carriers. Many insurance companies offer a discount when insuring more than one car with them. If you have a poor driving record, however, make sure that changing companies won’t mean paying a higher premium.
• Homeowners/Renters Insurance–Homeowners or renters insurance is important. It allows you to rebuild and refurnish your home after a catastrophe and to help cover the costs of lawsuits if someone is injured on your property. If you have insurance, now is the time to review your policy and cover any new items of value that are brought into the combined household.
• Life Insurance –If you don’t have life insurance, this may be the time to get serious about it. It is a good feeling to know that your spouse and loved ones are protected if something unforeseen happens. And in some cases, the younger you are when you buy permanent or term life insurance, the less it may cost you on a monthly basis.

Updating Beneficiaries

It’s important to officially designate each other as beneficiaries on your retirement plans and life insurance policies. Marriage alone does not make your spouse your beneficiary. Should you wish for your spouse to be designated, you must fill out the necessary forms.

Retiring Together

As you begin to build a life together, there’s no time like the present to look toward the future and start a foundation for your retirement together. Review our Retirement pages for more information.

If both of your employers offer employer-sponsored retirement plans, it’s usually wise to participate to the maximum in both, if at all possible. If you can only choose one plan, it’s wise to choose the plan that offers the best benefits, including:

• Employer matching contributions
• Investing schedules for matching contributions
• Investment options

If you’re self-employed or you don’t participate in an employer-sponsored plan, there are a number of plans that can help you save on a tax-advantaged basis. It may help to talk to a financial professional about finding the right balance that works for you.

Wills And Estate Planning

It may be a difficult subject, but it’s important to ensure that:

• Your loved ones are provided for and
• Your wishes concerning your assets are fulfilled upon your passing

You may also have more complex goals, such as avoiding probate or reducing estate taxes.

As a married couple, as long as each spouse is a US citizen, you can conceivably give or leave your entire estate to your spouse tax-free. However, when the time comes for your spouse’s estate to pass to children or others, there may be tax impact, so estate planning is important. See our Transferring Your Estate page for more information.

If you're married and have children, you and your spouse should each have your own will. For parents, wills are vital because they can name a guardian for minor children in case both parents die simultaneously.

Life insurance is a significant part of estate planning. If one spouse depends on the other financially, or if you have children, it can provide much needed income to the survivors.

Ensuring a smooth transition from single life to a partnership involves a firm commitment to each other, and to facing issues together. It’s advantageous to have common goals and a financial safety net in place as you move forward as husband and wife.