There’s nothing quite as romantic as talking about death, am I right?? Kidding! While it may not be romantic, it is logical…and being logical is attractive, in our opinion! Talking about estate planning with your new bride or groom should be at the top of your to-do list once you’re officially married. And don’t think for one second that estate planning is just for the ultra-rich or the elderly. It’s not! It’s an important step for anyone, especially newlyweds, to protect themselves and plan for their future. So, without further ado, let’s get into all of the newlywed estate planning considerations you should be thinking about.
Why estate planning matters for newlyweds
First, let’s talk about why estate planning matters for newlyweds. Here are some reasons you and your new bride/groom should have the “death” talk ASAP:
- Provide for each other: Estate planning is mostly about providing for your loved ones after death. It is crucial to make sure your assets pass to your spouse (or other people) in the way you want them to. Without an estate plan in place, default laws will control who gets what.
- Protect each other: If one spouse passes away unexpectedly, there is an extreme emotional and financial burden that comes along with it. It is important to protect each spouse from dealing with the hassles of probate, final arrangements, and other matters upon death.
- Planning for the unexpected: Even though you just rang those wedding bells, life is unpredictable. You may be young, but things do happen. Accidents, illnesses, etc. Power of attorney, medical proxy, and healthcare directives are great ways to plan for the unpredictable future.
- Guardianship for children: Appointing a guardian for your minor children is another way to put you both at ease. This can help make the transition to newlywed life easier by making sure minor children have the correct guardian no matter what life throws your way.
As you can see, it’s all about protecting each other and planning for any unexpected future circumstances.
Key estate planning documents for newlyweds
Now, let’s go over what estate planning documents you actually need to consider as newlyweds. Here’s what to know:
Wills
A last will and testament (a.k.a., a “will”) is the meat and potatoes of estate planning, the “OG,” if you will. It is a way for someone to devise their assets, appoint guardianship of children and pets, choose an executor of their estate, and make final arrangements for themselves. Wills can be very simple or a bit more complex, depending on each person’s situation. In some states, you can also do a “joint will” with your newlywed spouse, but that sometimes has unique consequences and downsides, so make sure you speak with a lawyer to understand if that makes sense for you.
Trusts
Ever heard of a “trust fund?” A trust is just a fancier, more complex way for people to devise their assets. It’s a legal document that requires a trustee to hold property for someone else (the beneficiary). The trustee may be directed to distribute assets to you (the settlor) while you’re still alive and then to certain beneficiaries after you die. Creating a trust as a newlywed is a great way to avoid probate, reduce certain taxes, and have total control over your assets.
Power of attorney (financial and legal)
Given the status of “newlywed,” you might want to consider executing a power of attorney to allow your new spouse to formally manage your financial and legal affairs on your behalf. For example, let’s say Jane and Marie just got married. If Jane appoints Marie as her power of attorney, Marie will have the ability to pay Jane’s bills, manage her investments, sign legal documents on her behalf, and make financial decisions for her, even if Jane is incapacitated or unavailable.
Medical proxy
Another consideration for newlyweds is appointing a medical proxy. This estate planning tool allows new couples to ensure that the right person is allowed to make medical decisions on their behalf (should they become incapacitated and unable to do so themselves). It likely makes sense to appoint your newly wedded spouse to this role.
Beneficiary designations
Appointing beneficiaries to all other accounts and insurances, such as life insurance, retirement accounts, and bank accounts, is a good idea. For example, shortly after the wedding, you may want to either take on a life insurance policy for the benefit of your new spouse or make sure they are the updated beneficiary of your existing policy. Same goes for all other accounts that require you to list a beneficiary.
Discussions newlyweds should have
Estate planning can be a launching pad for important discussions that newlyweds should be having. The estate planning process necessitates certain important conversations with your new spouse, such as about money, children, beneficiaries, death, and much more.
Here are some talking points to consider diving into:
- Disclosing finances to each other: If you haven’t already disclosed your assets to your spouse through a prenuptial agreement, you should discuss your asset structure (and debt) with your spouse now. It’s important for each spouse to understand what the other has so that if the unthinkable happens—they know what to expect in terms of inheritance.
- Beneficiary preferences: Whether this is your first marriage or fifth marriage, it’s important to disclose to your new spouse who will be inheriting your assets when you pass away. If this isn’t your first marriage, and you have children from a previous relationship, there’s a good chance you’ll want to pass most or all of your stuff to your kids. If that’s the case—tell your spouse. This can prevent surprise and conflict down the road.
- Healthcare wishes: This is tough but important! Discuss with your new bride or groom certain end-of-life care preferences should you become incapacitated and unable to communicate your wishes to them yourself. These may include things like whether you’d want to be kept alive in a coma, pain management, spiritual practices, etc. You can also use a healthcare directive to formally write these wishes out.
- Guardianship for children: Whether you have children already or plan to have some in the future, discuss with your new spouse who you want to take care of your children should you both pass away.
- Location of estate planning documents: Make sure to inform your spouse where you are storing any estate planning documents. Maybe you store them in a hidden filing cabinet in the attic or in a shoe box under the stairs. Whatever the case may be, make sure they know where to find it if you pass!
Regular review and updates to your estate plan
And, remember folks, this isn’t a “set it and forget it” type of deal. This is an ongoing affair for the rest of your life. Things are always changing—family structures, relationships, influx of money, etc. You will likely need to continuously update your will as the years pass by. For example, you may want to update your will after having children (if you plan to have any, of course). You’ll also want to consider adjusting for any beneficiary changes (if you get a divorce, become estranged from certain people, or certain beneficiaries die). And definitely consider updating your will if you start a new business, receive a large inheritance, or obtain any new change in assets.
Final thoughts
So, there you have it! While death planning isn’t typically on your mind right after ringing those wedding bells, it can be a logical step to secure both spouses’ futures no matter what life throws your way! From drafting a will to appointing a medical proxy, there are plenty of estate planning documents that newlyweds should consider. The journey of estate planning facilitates important conversations that you both should be having anyway, leaving you closer than ever before. Happy planning!
Nicole Sheehey is the Head of Legal Content at HelloPrenup, and an Illinois licensed attorney. She has a wealth of knowledge and experience when it comes to prenuptial agreements. Nicole has Juris Doctor from John Marshall Law School. She has a deep understanding of the legal and financial implications of prenuptial agreements, and enjoys writing and collaborating with other attorneys on the nuances of the law. Nicole is passionate about helping couples locate the information they need when it comes to prenuptial agreements. You can reach Nicole here: Nicole@Helloprenup.com
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