Creating an Estate Plan as Newlyweds: Combining Finances and Future Goals
This article will guide you through the process, providing valuable insights on how to effectively combine your assets, protect your shared future, and ensure your wishes are carried out should any unforeseen circumstances arise.
Summary:
- Understanding Estate Planning
- Combining Finances as Newlyweds
- Identifying Your Goals as a Couple
- Protecting Your Assets
- Establishing a Will
- Creating Trusts for Future Generations
- Reviewing and Updating Your Estate Plan
- Working with an Estate Planning Lawyer
- FAQs
1. Understanding Estate Planning
Estate planning goes beyond simply writing a will; it involves making decisions about how your combined assets will be managed during your lifetime, and how they’ll be distributed after your death. It encompasses everything from designating beneficiaries for retirement accounts and life insurance policies, to planning for potential health issues. An estate plan can provide peace of mind, knowing that your financial affairs are in order and your loved ones will be provided for.
2. Combining Finances as Newlyweds
As newlyweds, combining finances is a crucial step in establishing your joint estate plan. This involves merging your individual financial lives to reflect your shared commitments and ambitions. From consolidating bank accounts and investments to synchronizing spending habits and saving targets, merging finance for most newlyweds includes every aspect of your financial life but every couple is different.
3. Identifying Your Goals as a Couple
Identifying your goals as a couple is a critical part of creating an effective estate plan. Your shared objectives will influence how you manage your combined finances and what measures you put in place to protect your assets. These goals can range from saving for a vacation or paying off student loans, to larger goals like buying a home, starting a family, or planning for retirement.
4. Protecting Your Assets
Asset protection involves implementing strategies to safeguard your financial resources from potential lawsuits, creditors, or bankruptcy. This can be accomplished through various means such as purchasing adequate insurance, transferring assets, re-titling assets, and making retirement plans. Additionally, separating your personal and business assets by transferring your personal assets into a trust can provide an additional layer of protection.
5. Establishing a Will
Establishing a will is a fundamental step in creating your estate plan as newlyweds. A will provides a legal blueprint for the distribution of your assets after you pass away, ensuring that your possessions go to the people you choose.
To craft a will, start by accounting for all your assets—property, investments, savings, and even digital assets. Decide how you want these distributed among your beneficiaries. You’ll also need to name an executor, who will be responsible for carrying out the terms of your will.
If you have or plan to have children, it’s crucial to name a guardian to care for them if you’re unable to do so. An experienced estate planning attorney will walk you through the process of setting up a will to ensure nothing is missed.
6. Creating Trusts for Future Generations
Creating trusts for future generations is an essential part of estate planning, especially for newlywed couples who are looking to secure their financial future. Trusts are legal arrangements that allow you to control how your assets are distributed after your death or in the event of incapacitation. They offer a level of flexibility and security that traditional wills do not. You can dive further into this topic in our previous post, “What to Know About Wills and Trusts.”
By establishing a trust, you can ensure that your assets are passed on to your children, grandchildren, or other heirs according to your specific wishes. This can include anything from providing for their education to setting up monthly allowances, to ensuring they receive a significant inheritance when they reach a certain age. Trusts can also provide significant tax benefits, helping to preserve more of your wealth for your descendants.
As newlyweds, taking the time to establish a trust as part of your estate plan can provide peace of mind knowing that your loved ones will be taken care of, no matter what the future holds.
7. Reviewing and Updating Your Estate Plan
It’s recommended to review your estate plan at least every three to five years, or whenever there are major changes in your life. Some key events that should prompt a review include the birth of a child, a substantial increase or decrease in net worth, changes in tax laws, or a change in marital status, to name a few.
An outdated estate plan may not reflect your current wishes and could potentially lead to disputes among heirs. By regularly reviewing and updating your estate plan, you can ensure that your wealth is protected and distributed according to your evolving goals and circumstances.
8. Working with an Estate Planning Lawyer
Working with an estate planning lawyer is a crucial step in creating an effective and legally sound estate plan. An experienced estate planning lawyer can provide valuable guidance on tax implications, property ownership laws, and probate procedures to name a few. They can also help you draft critical documents like wills and trusts, ensuring they comply with state laws and truly reflect your wishes.
Beyond document preparation, an estate planning lawyer can also advise on strategies to protect your assets, minimize estate taxes, and ensure a smooth transition of wealth to your designated beneficiaries. While hiring a lawyer may involve a financial investment, the peace of mind and financial security it can bring for you and your family make it a worthwhile consideration.
If you are looking for a Milwaukee estate planning lawyer, contact Margerie Law for a free, personalized consultation. Trust us to help you achieve peace of mind and financial security for you and your loved ones. Call Margerie Law today.
9. FAQs
What is an estate plan?
An estate plan is a set of legal documents that outline how your assets will be managed and distributed after your death or incapacitation. It includes creating a will, establishing trusts, and making other necessary legal arrangements.
Why is estate planning important for newlyweds?
Estate planning is crucial for newlyweds as it not only secures their assets but also helps align their future goals as a couple. It ensures that their vision for the future is fulfilled and their assets are protected in case of unforeseen events.
What should newlyweds consider when combining finances?
Newlyweds should review and discuss their financial situation with each other, including any debts or liabilities they both may have. They should also consider how to protect their assets in case of divorce or death.
Is it necessary to update an estate plan?
Yes, it is essential to review and update your estate plan regularly, especially after major life events. This ensures that your plan reflects your current situation and goals. So, make sure to consult with an experienced estate planning lawyer to keep your plan up-to-date.
Why should I work with a local estate planning lawyer?
Working with a local estate planning lawyer like Margerie Law ensures that your estate plan is tailored to the specific laws and regulations of your state. They can also provide personalized guidance and support throughout the estate planning process. So, don’t hesitate to reach out for professional help when creating your estate plan.
By Paul Margerie, Owner of Margerie Law
Paul Margerie of Margerie Law is a knowledgeable and experienced estate planning attorney based in Wauwatosa, WI. With years of experience helping families and individuals with their estate plans, he offers a gentle touch that puts his clients at ease. He understands the sensitive nature of this work and ensures that all details are taken care of with precision and accuracy. He strives to help each client achieve peace of mind that their future is protected by providing personalized advice and creating tailor-made solutions that fit their individual needs.
