Newlyweds’ Financial Fitness: Estate Planning Tips

Starting a new chapter as newlyweds is exciting, but it also comes with new responsibilities, especially when it comes to financial planning. One crucial yet often overlooked aspect is estate planning. 

Creating an estate plan not only protects your assets but also ensures that your spouse is taken care of should the unexpected happen. Here are some essential estate planning tips for newlyweds to help safeguard your financial future.

1. Create or Update Your Will

A will is an essential estate planning document that outlines how your assets will be allocated after you pass away. As newlyweds, you may want to leave your assets to your spouse or other family members, but without a will, state laws will determine how your estate is divided, which may not align with your wishes.

Steps to Take

• Draft a new will: If you’ve never created a will before, now is the time to do so.
• Update existing wills: If you already have a will, update it to reflect your new marital status and any joint assets you may have acquired.
• Name an executor: Choose someone you trust to ensure your wishes are carried out as outlined in your will.

2. Designate Beneficiaries

Your will doesn’t govern all of your assets. Some accounts, such as life insurance policies and retirement accounts (401(k), IRA), pass directly to the beneficiaries named on those accounts. As newlyweds, it’s essential to update these designations to ensure your spouse is the primary beneficiary.

Key Accounts to Update

• Life insurance policies
• Retirement accounts
• Pension plans
• Payable-on-death (POD) or transfer-on-death (TOD) bank accounts

By keeping these beneficiary designations current, you avoid potential delays or disputes in asset distribution.

3. Establish Joint Ownership of Assets

Many newlyweds combine their finances, and joint ownership of assets can simplify estate planning. Consider holding major assets like homes, vehicles, and bank accounts in joint tenancy with rights of survivorship. This ensures that if one spouse passes away, the other automatically inherits the asset without it going through probate.

Benefits of Joint Ownership

Assets held jointly can transfer directly to the surviving spouse without the lengthy probate process. It also makes managing and accessing your shared assets much easier during your marriage.

4. Set Up a Power of Attorney

A financial power of attorney allows your spouse (or another trusted person) to manage your financial affairs if you become incapacitated. Without this in place, your spouse may face legal hurdles to access your finances or pay bills on your behalf.

Medical Power of Attorney

Similarly, a medical power of attorney gives your spouse the authority to make healthcare decisions if you’re unable to do so. It ensures that your spouse can make critical decisions about your care during emergencies.

5. Consider a Living Trust

A living trust allows you to transfer assets to a trustee to manage for your benefit during your lifetime and for your beneficiaries after your death. It offers more control over asset distribution and can avoid the probate process altogether. Newlyweds with significant assets or complex financial situations might find that a living trust adds a layer of protection and flexibility.

Just Married? Start Estate Planning With LPEP!

Estate planning might not be the most romantic task on your newlywed to-do list, but it’s one of the most important. At LPEP, our experienced estate planning attorneys specialize in the preparation of estate planning documents, such as wills, revocable living trusts, and more.

Financial fitness for newlyweds isn’t just about managing day-to-day expenses; it’s about securing your future together. Contact LPEP to set up your free consultation. 

Disclaimer: this article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.