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    Tying the knot raises multiple financial issues

    Decisions regarding joint vs. separate accounts, wills, power of attorney must be made

    Joel M. Blau, CFPJoel M. Blau, CFP Ronald J. Paprocki, JD, CFP, CHBCRonald J. Paprocki, JD, CFP, CHBC

     

    What financial issues need to be addressed when getting married?

    The marriage process, regardless of age, requires careful thought about a number of financial situations a couple will likely face. With financial disagreements being a leading cause of marital problems, why not tackle them ahead of time? This may include reaching out to your financial planner and other legal and tax advisers well in advance of the nuptials.

    Related - IRAs: How to make an early withdrawal

    The starting point is to have a candid discussion with your fiancé about your overall finances. For example, how much debt is each of you bringing to the marriage? What about savings? How is your credit rating? The older you are, the more (good and bad) financial baggage you're likely to bring to the partnership.

    Next, from a savings standpoint, you’ll need to decide if you will be combining accounts or keeping them separate. Your financial adviser can walk you through what will be needed to combine checking, savings, and money market accounts. He or she can also advise you about adding or changing beneficiaries on your individual retirement plan and other retirement plans.

    Even if you decide to maintain separate accounts, it may be helpful to have at least one joint account to pay for shared expenses, such as mortgage or car payments, rent, household expenses, and childcare. This account is meant strictly for household needs, and it allows you both to keep track of how you are spending money. A joint account can also help avoid trouble in case one spouse dies. When a spouse or common-law partner dies and there are separate accounts, the survivor will be excluded from the other separate account if the estate goes into probate. That could take months and add additional expenses due to court and attorney fees. 

    If you are both employed, you must take time to review and coordinate your employee benefits. You might save money by eliminating duplicate health care, for example. This process also allows you to determine, and then make any changes to, the beneficiary designations on retirement plans and insurance policies held through your employers.

    Next: Make financial goals as a couple

    Joel M. Blau, CFP
    Mr. Blau is chief executive officer of MEDIQUS Asset Advisors, Inc., in Chicago. He can be reached at 800-883-8555 or [email protected]
    Ronald J. Paprocki, JD, CFP, CHBC
    Mr. Paprocki is chief executive officer of MEDIQUS Asset Advisors, Inc. in Chicago.

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