Estate Planning for Newlyweds

There's nothing quite like the experience of being a newlywed and feeling as though there's a whole new world of possibilities ahead of you. While that may be the case, it's also time to connect with a Huntsville attorney to discuss estate planning. Even if you're young and not thinking about what will happen that far down the road, now is the most important time (and opportunity) to lay some plans. Attorney Sarah S. Shepard can help you every step of the way.

What Is Estate Planning?

As a newlywed, you’re likely thinking about buying a home, having children, traveling the world, or engaging in full-time careers (or a combination of these things). Yet, an estate plan can be a vital tool now, creating a few legal tools that can help to protect you and your rights for years to come. It’s not just a component of end-of-life, but a plan to achieve your biggest and long-term goals. There are a variety of components that go into estate planning, including wills and trusts, but also insurance products.

When you work with an attorney in estate planning in Huntsville, AL, you'll quickly learn more about your rights and options. Every person's plan should be different to accommodate their unique needs and long-term goals. Now that you're married, here's where to start when it comes to estate planning.

What to Consider Now as a Newlywed When It Comes to Estate Planning

As you begin to plan your future, consider what could help support your significant other and your heirs over time. The sooner you put some components into place, the easier it will be for you to have safeguards present to support many of life’s challenges and unexpected occurrences.

Life Insurance

One of the core components of protecting the future for yourself and your family is having life insurance in place. As a newlywed, it may be time to consider the following:

·       Purchasing a life insurance policy: If you do not have a current life insurance policy, setting one up now is valuable. It could help cover many of the costs your loved one will have to pay should something happen to you. In addition, both spouses should have life insurance in place, especially if they are wage earners or you plan to have significant debt, such as a mortgage.

·       Updating existing life insurance policies: Take a few minutes to update your existing life insurance policies with a new beneficiary – your spouse. In most situations, this is a simple process to update, but it is also a good opportunity to review the coverage you have. For example, is it enough to provide for your family for 5 or so years?

The younger you are when purchasing life insurance, the more affordable it may be for you, especially if you are healthy, a non-smoker, and live an active lifestyle. More so, depending on the type of policy you purchase, it could become an investment opportunity for you, growing in value during your lifetime and contributing to your retirement income.

Ask your Huntsville attorney, Sarah S. Shepard, about the types of life insurance that could be best suited for your specific needs.

Set Up a Will

Wills are one of the most important components of estate planning because they work like a set of directions, telling others what to do when you have passed on. However, wills do much more than just pass on assets.

When you work with your estate planning attorney, you will learn just how powerful and all-encompassing wills can be for you. Your will can communicate a few key things for you:

·       Who will care for your children if you can no longer do so?

·       What will happen to your estate – do you have any heirs you want to obtain specific assets?

·       What do you want to happen when it comes to your pets?

Do you have other specific and important wishes that need to be carried out? Be sure you update any existing will, too, to include your new spouse.

Drafting a will is important because it can preserve your assets and help minimize confusion after your death. That is why you should work with an estate planning attorney to complete this process.

Consider the Value of Trusts

Trusts are valuable tools because they offer a way to protect and control your assets. Trusts allow you to protect your assets, like your home and other valuable items, from probate court when you die. At the same time, trusts also provide a way for you to pass your wealth or other assets on to others while minimizing the risks associated with taxation.

As a newlywed, consider the value of trusts as you need them. If you have children, you may want to establish a trust to provide funds for your child should something happen to you and perhaps set up a life insurance policy to help fund that value. Name someone to care for those assets so that they remain protected for your loved ones.

Health Care Directive and Power of Attorney Decisions

If you or your spouse were suddenly in a bad car accident, who would you want to make decisions for you? What would those decisions be? Many people have very strong wishes and beliefs about what should happen in situations like this, and that's why investing in a healthcare directive and power of attorney can be very valuable.

Generally, now that you’re married, your spouse will hold the power of attorney and decision making abilities for you, but if you are both hurt, you should name someone to help with those decisions.

A health care directive provides some key information about your overall wishes should you become unable to make decisions for yourself. For example, do you want doctors to do all that can be done to protect your life? Do you have strong feelings about being on machines? Use these tools to help with those decisions.

Updating Beneficiaries Is a Must

Now that you are married, it is time to consider the beneficiaries of various accounts. Making a few changes now may be critically important should a sudden accident or loss of your life occur.

Start with updating the ownership or beneficiary information on the following documents. Take the time necessary to ensure each of these areas is carefully planned for, minimizing any confusion should something happen:

·       Savings and checking accounts: Be sure your spouse is listed as a second account holder, or the beneficiary should something occur to you. This ensures that, if you suffer an accident, your spouse isn't cut off from funds.

·       Investments: Do you own stocks and bonds? Perhaps you have mutual funds? No matter what types of accounts you have, update them to provide your spouse with access to those funds. List your loved one as a beneficiary or an account holder. Depending on the type of ownership and investments, you may want to consider the use of a trust to protect these assets as well.

·       Retirement accounts: Whether you have an IRA, a 401(k), or other types of retirement accounts, update them to reflect your new spouse as your beneficiary. This is not an automatic process. You will need to contact the organization managing your retirement accounts to get this changed.

·       Pension: If you have a pension, even if it is years away, be sure you’ve updated the information on it to include your spouse’s data.

·       Military benefits: Depending on your service, your spouse may be eligible for military benefits. It's a good idea to add them to your military accounts, including any type of health insurance you have.

Any type of asset like these should be updated to reflect the current information about you – don’t assume that just because you are married, your spouse will gain access to these accounts. That’s not always the case, especially if you currently have someone else listed.

Updating Real Estate Titles

Now that you are married, if you own any type of real estate, it's time to make some updates to this. Updating the real estate title for your home, vacation home, or other property is a bit more complex than other tasks listed above. That is why it often is beneficial to turn to a lawyer in estate planning in Huntsville, AL, for some help.

You don’t have to add your spouse to your real estate titles, but doing so helps to ensure they have decision-making abilities about these properties. It also helps ensure they will maintain control over them should something happen to you.

Here’s an example – you own a home that you rent out. Currently, your sibling is listed as the beneficiary should something happen to you. Update that to reflect your spouse.

Moving forward, the purchase of real estate is likely to be in both of your names. If that’s not the case for any reason, be sure your spouse is named as the beneficiary to inherit that property.

Car and Other Insurance Updates

Do you have to add your spouse to your car insurance, or should you keep them separate? With insurance products like this, adding a spouse could help you save money. Married drivers tend to have lower insurance rates than single drivers. You may also be able to get savings if you bundle your costs together instead of paying for separate policies.

Consider this same thing with other insurance you have, such as your health insurance, any specific asset coverage (for RVs or jet skis, for example), as well as your current home insurance.

Bringing It All Together

Now that you're married think about how this changes your future in terms of financial management, decision making, and overall protections you want to have in place for your loved one. Work with a Huntsville attorney to gain more insight into the decisions you may wish to consider at this point in your life. No matter your age, health, or long-term goals, it’s always beneficial to have a plan in place for your estate.

Attorney Sara S Shepard can help you with many of these tasks. As a lawyer in estate planning in Huntsville, AL, you can count on her to be there to advise and guide you in learning what your legal options and rights are. As you get older and make changes, you can rely on your attorney to be there to continue to help you to safeguard what's most important to you. Set up a consultation today.