Married or soon to be? Time to talk about finances.
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Congratulations on getting married or soon to be married! As you prepare for this next exciting chapter in your life, talking very openly with your partner about finances is so important. Here is some help in getting started!
Why talk about finances when getting married?
Couples that are open, transparent and aligned on their finances tend to have longer and happier marriages. Thus, understanding each other’s financial history, habits, fears and aspirations will be helpful in forming trust and aligned approaches. Also, marriage provided certain legal risks and opportunities to be aware of, including for example:
Opportunities: Certain tax benefits when filing jointly, naming spouses for health and life insurance purposes, claiming spouse’s Social Security Benefits, proving for spouse in the estate plan
Risks: In certain states, marriage makes you the spouses fiduciaries of each other, and if assets are jointly held, partners take on each other’s debt liability
What are the key financial considerations when getting married?
Ideally, couples should have open and honest conversations regarding every aspect of finances including your individual short- and long-term financial goals. The more candid you are with each other, and the more comprehensive you are about the financial topics you discuss together, the more likely you will get yourselves on solid financial footing as a couple — consider discussing the following:
Goals – What are your financial goals as a couple over the short-term (up to 3-10 years), mid-term and long-term (10+ years)?
Budgeting / Cash Flow – If you don’t have one already, build a joint budget, an overview of all your income vs. all your expenses (split fixed vs. variable)
Credit and debt – Prior to marriage, clean up any credit and debt issues as much as possible; during marriage, manage and monitor your credit
Insurance – Review your (life) insurance needs, in particular if/when children come into the picture
Bank accounts – Align on whether to use accounts, and if so for what purposes
Taxes – Decide if you want to file jointly, which can have benefits including higher standard deductions, higher income brackets, and certain credits
Retirement planning – Consider what happens to your retirement and pension accounts when you get married
Estate strategy – Revisit your Will, Healthcare POA and other key estate docs
Please do not hesitate to contact me in case of further questions. Also, you may want to discuss details with tax and legal advisors.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.