A marriage between two power players hopefully brings future happiness. But you also need to protect your assets while merging life goals.
A Forbes article, “Wealth Planning For Couples: How to Wisely Merge Your Financial Plans,” says that if you’re an adult with accumulated assets, you need to approach the financial side of your marriage like a business decision. While planning your wedding, you and your partner should discuss several serious topics and consult with an estate planning attorney. Think about where you want to live, how you will treat dependents, and who gets what if the marriage ends.
Although a possible divorce isn’t an easy subject to broach with your future spouse, it’s important. A prenuptial agreement is now a standard document for those who want to protect their wealth. You should negotiate a prenuptial agreement six to eight weeks before the wedding to avoid potential future claims of being pressured into signing the agreement. Things to include in a prenuptial agreement include what assets each partner owned before the marriage and what should happen to them going forward. Children from previous relationships must also be considered.
Even though most states don’t require it, each person should have his or her own legal representation.
Next, let’s look at your day-to-day life as a married couple. You’ll need to address some issues about the assets you each have now and those you’ll accumulate during your marriage.
Maintain a joint checking account for regular expenses, but think about having separate stock and investment accounts. Men and women tend to have different investing styles, with women particularly concerned about maintaining their lifestyle in retirement. Women can be more cautious because they know they generally live longer and will need to take care of themselves. Men are typically more optimistic about their ability to continue making money.
Each spouse should sign a financial durable power of attorney to allow access to retirement accounts or other accounts that are held only in one spouse’s name.
Couples should also discuss financial and emotional decisions about any future healthcare problems, especially if they are getting married later in life. Couples in their 60s or older may have already discussed healthcare directives with their children or other relatives, but now will need to review their choices in light of their new marriage. This includes whether you have long-term care insurance or plan to self-fund care issues in the prenuptial agreement. Make it clear where the money would come from to pay for long-term care.
A written healthcare directive is essential to establish who makes decisions in case you become incapacitated. In addition, you should sign a HIPAA (Health Insurance Portability and Accountability Act) release in order for your health information to be shared.
Even if a couple doesn’t combine all their assets, they should mesh their financial plans to avoid future conflict with each other or among their heirs.
Reference: Forbes (November 27, 2015) “Wealth Planning For Couples: How To Wisely Merge Your Financial Plans”
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