Getting married: A financial checklist
Editorial staff, J.P. Morgan Wealth Management
- The word gets thrown around a lot in the tabloids, but a prenuptial agreement can be a valuable tool to protect your rights in death or divorce. A fun convo to have with your fiancé(e)? Not so much, but it could be a necessary one.
- Your beneficiaries before your wedding could change after you say, “I Do.” Deciding before the ceremony who to leave your earnings to could negate possible marital disputes down the road.
- Laying out each of your respective employer’s benefit plans is an extremely useful exercise. And learning your new spouse’s health insurance could potentially save you thousands a year? Even better.
Marriage is a union not only of two people – but also of their financial lives. As you prepare for your wedding, there are some financial to-dos to consider both before and after the ceremony.
Have “the money talk”
Before you start a life with someone, make sure you agree on how you’ll save, spend and invest your money together. Discuss what goals you share and how you’ll invest toward them. Decide how you will hold your assets: in your individual names, as joint owners or some combination. Even if you want to keep your personal wealth separate after you get married, you may still want to open a joint account in time to deposit wedding gifts.
Setting out a budget together is key because it allows you to decide on your priorities, how you’ll spend money to achieve them, and who will be paying for which expenses. Talk about what level of expenditure requires you to discuss a purchase with your new spouse. It’s crucial that the two of you are in agreement about how you’ll behave with the money that belongs to both of you.
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Negotiate a prenuptial agreement early
A prenuptial agreement sets out each prospective spouse’s rights and responsibilities in the event of divorce or the death of one spouse. The agreement provides a roadmap for dividing and distributing assets instead of relying on default provisions under state law (which can change from time to time).
Frequently, these agreements are used either when one spouse or one spouse’s family is significantly wealthier than the other, or when one family owns a business and wants to ensure that only family members are able to be owners of – and manage – the business.
A prenuptial agreement can be a valuable tool for planning since it can override presumptions under the law regarding what is deemed community property, quasi-community property, separate property and marital property. In addition, a prenuptial agreement can also prevent one spouse from being responsible for existing debts (most frequently student debt) of the other in the event of death or divorce. You may wish to discuss the value of a prenuptial agreement with a lawyer.
If you know that you plan to ask your fiancé(e) to sign a prenuptial agreement, do not delay; under certain circumstances, courts have held some prenuptial agreements to be entered into under duress and, therefore, unenforceable when they were signed and negotiated close to the wedding date. Discussing this with a lawyer may make sense.
Make plans to change your name, if you choose
Make sure you apply for new identification and change registrations, including driver’s license, passport, airline frequent flyer programs, TSA Precheck, credit cards and anything else that’s in your name. In the case of air transportation, if your ID doesn’t match your ticket, traveling can be more difficult than it already is. There are certain companies that, for a fee, will perform the name-change process on your behalf.
Review beneficiary designations
Often, before you’re married, you will have named your parents or siblings as beneficiaries of such accounts as brokerage accounts, life insurance and transfer on death (TOD) and payable on death (POD) accounts. You may want to consider switching your beneficiaries to your new spouse – after the wedding, of course.
Examine employee benefits
Make sure you know how marriage will affect your employee benefits. If you and your spouse are working, would it be less expensive if you both kept your respective employers’ plans? Or would you save more if one of you switched to the other’s plan?
Does one plan offer significantly better coverage? Marriage is almost always a life event that will allow you to modify your benefits elections outside of the annual open enrollment period.
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Editorial staff, J.P. Morgan Wealth Management
