Young Professional : Marriage

Financial Advice for Couples

Getting married is an exciting event for many couples, but you don’t want to overlook the financial issues that come along with marriage.

A financial plan
Take some time to discuss long-term financial goals like buying a home and planning for retirement. Once you have established mutually agreed upon financial goals, the next step is to prepare a financial plan for meeting those goals.

Begin by establishing your net worth -- that is, the value of what you own minus what you owe. Then put together a budget that shows how much you earn and how much you spend.

Use this information to establish a realistic plan for saving and investing toward your goals. You can also hire a Certified Financial Planner professional or a CPA with the PFS (Personal Financial Specialist) designation to help you.

Try to update your net worth calculation and discuss it together at least once a year.  Your goals will change over time and it’s important to have open communication and agreement about your financial plan.

An ownership manual
The form of ownership you choose for property and other assets determines what you can do with them, how protected they are from creditors, and where they go when you die.

Laws are complicated and vary from state to state, so it is a good idea to seek professional advice when determining whether to call the property you own yours, mine, or ours.

A security blanket
Sufficient life, disability, and health insurance can provide your partner with key financial security in the event of an untimely death, illness, or accident.

If you and your spouse are both employed and do not have children, your group life insurance coverage at work may be enough. But once you start a family, you will want additional life insurance to protect your dependents.

Health and disability insurance are equally important. Be sure that you are adequately covered with disability insurance that replaces a lost salary and with health care coverage that protects you from the high cost of medical treatment.

If you are both employed, check your policies carefully to be certain that you are not paying for duplicate coverage you don't need.

A comfortable retirement prospect
One way to ensure a long happy life together is to regularly fund a retirement plan for you and your spouse. Knowing how much retirement income you will need to maintain your current lifestyle through retirement is the key to establishing a successful plan for retirement savings.

And remember, the earlier you begin saving, the lighter the burden. If one spouse has no earnings, consider the possibility of contributing to a Spousal IRA.

Peace of mind
Spare your loved one the pain of making the difficult decision about continuing or discontinuing life sustaining medical treatment by creating a living will.

A living will details the kind of treatment you want or do not want in the event you are terminally ill and cannot make that decision on your own.

Be sure that your family and your physician are aware that you have a living will and that they know where you keep it.

It's also a good idea to have a durable power of attorney, a legal document that gives your spouse (or another designated individual) permission to manage your money, make decisions about your investments, or sell real estate on your behalf if you should become mentally disabled.

You also need a HIPPA form that allows your spouse and/or other designated to speak directly to your doctors.

A credit card to call your own
Each spouse should establish credit in his or her own name, so that if one spouse should die or leave the marriage, the other will still have some credit.

If you don't currently have a credit card in your name, apply for one now. It is also a good idea to have utility coverage in both spouse’s names. That way each person can more easily apply for utilities on their own if ever needed.

A financial records road map
Make sure you each know where important financial papers such as wills, insurance policies, bank and tax records, personal papers, and retirement and employee benefit plans are filed or stored.

Prepare a comprehensive document that you each can refer to in the event of an emergency. Make sure your attorney or a trusted person always has an updated copy of that document.

A will to die for
Planning for your death may not appear to be an appropriate topic for a candlelit dinner, but without a will, you die "intestate," meaning that your state's law will determine what happens to your estate and to your minor children.

To assure that your beneficiaries will inherit exactly what you each intend, have a will drawn up by an attorney. Keep copies of your will somewhere safe and accessible and update it as necessary.

Update your beneficiaries
If you already have life insurance or retirement plans before marriage, be sure to consider updating the beneficiary to your new spouse in order to protect and provide for them.

An appointment with a CPA
Be aware that as a married couple, you are likely to face a higher combined tax bill than you would as single taxpayers. That's why it is important to make tax planning a year-round priority. A trusted tax professional can help you make the most of tax saving strategies.

Copyright The American Institute of Certified Public Accountants