Planning a wedding is an exciting time, but it’s also important to think ahead and consider the legal implications of marriage. For many couples, that means considering estate planning before they tie the knot. From understanding how your assets will be divided in the event of death or divorce, to making sure all your wishes are legally binding, estate planning for newlyweds is a crucial step to ensure both partners are adequately protected in the long run.
Here are 5 things to consider before tying the knot:
Creating a Will
One of the key steps involved with estate planning for newlyweds is creating an estate plan that provides for a surviving spouse in case of the other’s death. When deciding which type of estate plan is best for your situation, you’ll need to think about what types of assets each partner has and whether those assets should be passed on jointly (in a joint trust) or separately (in individual trusts or wills). For example, if one partner has significant debt from before marriage, creating an individual trust may be the better option so that debt does not pass on to the other partner upon death. On the other hand, if both partners have similar assets, a joint trust may make sense. A joint trust simplifies asset transfer in case something happens unexpectedly, leaving the surviving partner with ownership rights to the agreed upon assets and simplifies transfer to beneficiaries when both spouses have passed away.
Understand State Laws
It is important to consider how state laws impact asset division in the event of death or divorce. Each state’s estate planning laws can differ. It is essential that couples understand the laws and regulations in their state regarding asset division in the case of marriage dissolution or death, as well as if any premarital agreements are needed.
Consider a Prenuptial Agreement
A prenuptial agreement (pre-nup) is an agreement between two people who are about to marry, which sets out and formalizes terms regarding who will receive which assets in the event of a divorce. A pre-nup is not only used for wealthy couples to protect their money. They are important for any couple looking to protect their assets and outline financial responsibilities.
Update Beneficiary Designations
Couples should consider updating any beneficiary designations on any assets to provide for each other in case of a death. It is especially important to update beneficiary designations for insurance considerations such as life insurance policies and disability income protection plans. These policies can provide financial security in case anything happens unexpectedly while you’re still alive or even after one partner passes away.
Plan for Incapacity
Planning for the possibility of death is essential when getting married to make sure decisions can be made with the couple’s wishes in mind. Creating a durable power of attorney and health care proxy will allow partners to make financial and medical decisions on each other’s behalf when they are not able to do so themselves.
When tying the knot, newlywed couples should consider including estate planning in their preparations. Planning ahead can help ensure that newlywed couples are adequately protected financially now and into the future. Although the considerations above may seem daunting, an experienced attorney can help simplify the process.
Contact Our Estate Planning Lawyers Today
At Dempsey, Roberts, & Smith we are committed to helping couples protect their assets and set their growing family up for long-term financial success.
Reach out to our experienced estate planning lawyers today to get started with a free consultation. We are here to answer any questions you may have about the estate planning process and how to get started.