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Many people live in the blissful ignorance of a blissful marriage. Whether they’re young, not yet ready to think about the future, or just don’t care what happens with their estate should they pass away before they’re married, they’ll be shocked when tragedy strikes and learn that their partner was granted a divorce. A lot of these newlyweds quickly become overwhelmed with all aspects of estate planning for the first time.
Regardless of why people choose to get married, married people with children have an incredible responsibility to make sure their estate plans are as solid as possible. As a newlywed, you might feel it’s too much on you and your partner to navigate the difficult waters of estate planning, but the truth is that it’s not just up to you. It’s also up to your spouse and parents. And it’s important for the kids, grandkids, and future generations who will inherit everything your marriage has created together. Here are five estate planning tips for newlyweds.
#1. Prenuptial Agreement:
Many couples never even sit down and talk about the future. If you and your partner are already talking about children, the home your kids will grow up in, who pays for what, and who gets what when it comes to retirement and college savings, you should start thinking about the future rapidly. It is always better to plan ahead than to discover that your entire life is changed by suddenly learning that you’ve been divorced or widowed.
As a newlywed, you might think a prenuptial agreement is only for the super-wealthy. But the truth is, prenuptial agreements are more common than ever these days, especially among those marrying young. It could be that your spouse has more money than you, and your parents are really pushing you to make sure it’s protected in case things don’t work out in the future.
#2. Revisit your existing estate plan:
Once you get divorced, it’s important that you revisit your existing estate plan to ensure that everything is still in place. This might mean making sure that you and your spouse made sure to put everything in writing during the marriage. It also means going over all documents that have been signed to make sure they’re still valid and binding. Aside from making sure everything is above board, be open to hearing suggestions on how things can be improved or what else should be included in the estate plan.
3. Update your beneficiary designations:
One of the most important things people forget to update as they get married is their fiduciary designations. Once you’re married, you need to make sure that your retirement accounts, mutual funds, and bank accounts are updated with your spouse’s name. This includes any retirement accounts, annuities, and trust funds that you may have set up before you were married. This will make sure that your spouse is the beneficiary of your accounts and property when you pass away rather than having your assets pass to someone else without a will.
#4. Consider real estate:
When a couple decides to marry, they are able to add their spouse to any real estate that is already owned. However, this is often not the best thing for newlyweds to do before they’ve had time to really think about everything and discuss their options together. If you are getting ready to get married, it might be best to hold off or wait on purchasing a house together until after you’ve been married for a while. This is one of the few things that a newlywed will not be able to do for themselves. That being said, it is important to remember that everything will be much different after you get married, and things change rapidly. Having a partner in the house with you can be key when it comes to making sure your estate plans are in place.
#5. Manage Life Insurance:
If you are currently a non-married homeowner, you should also consider your life insurance policy. Some might think that the life insurance policy they take out during their young adult years is enough to cover everything that needs to be covered in the event of their death. However, it’s important to realize that this type of policy was designed for those who have a mortgage and no spouse to provide for. As a married person, you’ll need to make sure that your life insurance policy is also “spousal coverage. This will ensure that in the event of your death, your spouse will be provided for.
Married people who are getting ready to remarry should remember that life changes drastically after marriage. If you are lucky enough to get married before your first child or the loss of a parent, you should make sure that their estate plans are as strong as possible so that things can continue running smoothly and you don’t end up like the divorced partner that no one cares about anymore. A solid estate plan should be a priority as you get ready to remarry and mean that the new family created by your marriage will be protected for generations to come.