5 Essential Estate Planning Tips for Newlyweds
Estate planning might not sound like the most romantic way to connect with your spouse, but doing the work to protect each other in the event of unfortunate events is a true act of love.
The weeks and months following your wedding are full of new challenges. After you return home after your honeymoon, there are thank you notes to write, wedding photos to review, and vendor reviews to post. There’s one more important task to add to your to-do list: estate planning.
The chaotic, magical afterglow of your big day may have you on a high where you feel nothing can possibly go wrong. It’s important not to neglect this all too important chore, though. Should an emergency occur when you least expect it, you’ll be glad you and your new spouse had the foresight to make formal estate planning decisions.
Do All Couples Need an Estate Plan?
You might assume that estate planning is only necessary for those with assets like homes, businesses, and property. The reality is that every couple can benefit from an estate plan. While it’s never fun to think about the worst-case scenario, a little preparation can go a long way.
Without an estate plan in place, your assets – including any life insurance or retirement funds – may not automatically go to your spouse when you pass. Your spouse may end up sharing your estate with other family members. If you feel passionately about where your hard-earned money and assets end up, it’s important to meet with an estate planning attorney sooner rather than later.
An estate plan can also prove essential should you suddenly become incapacitated. While your husband or wife may be able to access your joint bank accounts and make healthcare decisions on your behalf, what happens if something also happens to your spouse? Creating a backup plan can help ensure your financial and medical decisions are in the hands of someone you trust.
Estate Planning Advice for Newlyweds
Not sure how to begin the estate planning process? It’s easier than you might expect:
1. Start with a Conversation
If you’re eager to get this post-wedding chore crossed off the list, begin with a discussion with your partner. It can be challenging to talk about planning for the very worst parts of life. However, it’s one of the most important things you can do to bring peace of mind to yourself, your spouse, and your families. Talk about the necessity of estate planning and why it’s so critical for the two of you to create documentation of your wishes.
This is a good point to discuss your goals in estate planning, too. You might want to leave a specific asset to a person or charity, provide for a special needs child, or protect assets from potential litigation. Even if you’re unsure of exactly how to reach these goals, talking about end goals can help point you in the right direction as a couple. These topics will come in handy when you’re ready to meet with an estate planning attorney.
2. Compile Documents
Next, start compiling important documents like your birth certificates, passports, social security cards, and any documentation relating to children you may have. You’ll also want to gather information pertaining to any retirement, insurance, and bank accounts.
Titles of vehicles, deeds of homes, and any other documentation of your assets will also be important to the estate planning process. Keep these documents in a dedicated file folder or safe to ensure they’re always easily accessible to you and your spouse. You’ll need to have them handy as you begin formalizing your estate plans.
3. Begin Formalizing Your Plans
With your documents assembled and your goals outlined, it’s time to begin formalizing your estate plans. This is where it can be useful to meet with an estate planning attorney, but online estate planning services can be just as effective.
While it’s possible to DIY your estate plans, it’s a good idea to have an attorney review everything first. Simply jotting down who you’d like to pass your beloved truck or family beach house down to isn’t enough – such statements are unlikely to hold up in probate court. Instead, trust attorneys and estate planning services to help keep you on track legally.
4. Create Wills, Trusts, and Powers of Attorney
Estate plans can be as basic or as thorough as you need them to be. Typically, though, a well-drafted will or trust is the beginning point in the creation of an effective estate plan.
A will is a legal document that allows you to select who will be the new owners of your assets once you’ve passed away. Assets can include your car, horse, property, jewelry, or financial accounts. The people you choose to leave these assets to will become your beneficiaries.
A trust is a legal document that gives the responsibility of maintaining your assets to a trustee, who is responsible for them until your beneficiary claims ownership. This comes in handy should you become incapacitated and need someone to handle your affairs. Should you pass away, the trust allows you to skip the complicated and often expensive probate process, allowing for an easy transfer of assets.
Medical and financial powers of attorney should also be prioritzed during the estate planning process. These documents allow trusted individuals to make important decisions on your behalf should you become incapacitated.
For financial power of attorney, the person you nominate will have the power to pay your bills, access your bank accounts, and pay for your expenses while you’re unable to do so.
Medical power of attorney works similarly; the person you select to represent you makes medical decisions in your stead. Documentation should reflect your wishes around artificial life support and the removal of life support.
5. Fund Your Trust
After your will, trust, and other documents have been properly drafted and executed, it’s time to fund your trust. This means transferring your assets to your trust by changing the “owner” of your assets from yourself to your trust. For tax purposes, not all accounts should be titled in the name of your trust. This is where an estate planning attorney can really come in handy – you need substantial tax experience to get this right!
Don’t Let Estate Planning Intimidate You
Estate planning might not sound like the most romantic way to connect with your spouse, but it’s necessary work. And while it’s easy to feel daunted by the prospect of estate planning, it doesn’t have to be a stressful experience. In fact, when you consider how much relief you’ll feel upon completion, cit’s definitely a worthwhile undertaking. You and your new spouse have a lot to look forward to in the coming years. With your estate plans settled early, you’ll both breathe a little easier.
Of course, it’s important not to just set and forget your plans. Be ready to make updates with every major new life event. The birth or adoption of children, the purchase of a new home, and other important changes should always be reflected in your estate plans. These are living documents in the truest sense of the term – keep them updated and they’ll serve you well. Taking these steps to protect one another in the event of unfortunate circumstances is a true act of love.
Have you and your partner discussed estate planning in your relationship? Join us in the community to talk about all things married life!