Four Financial To-Dos After You Get Married

Getting married is a wonderful time in your life. It signifies a permanent devotion to your partner, and is often accompanied by a wedding where the closest people in your lives gather to help you celebrate.

In the weeks and months after you get married, reality sets in as you fall back into your routine. Party goers go home, you and your spouse return to work, and life goes on.

What some couples don’t realize is that their financial picture has changed now that they’re legally married. So to help you keep your “financial house” in order, here are four to-dos every couple should work through after the wedding buzz has died down.

1) Consolidate Your Finances

If you and your spouse lived together before getting married, you might already have a monthly household budget you’re working with. If you don’t, it’s time to build one. The good news is that if you’re cohabitating for the first time, you’ll be able to save some money by consolidating homes. The not-so-good news is that creating a joint budget sometimes includes some growing pains.

Beyond a budget, it might be time to consolidate your bank accounts and credit cards. Every couple handles this differently. Some prefer to combine everything, while others opt to retain their individual accounts.

There isn’t necessarily a “best practices” here, just keep in mind that combining accounts fuels communication. It’s easy to avoid discussing money issues when you have separate accounts. And since money is one of the top causes of marital stress, joint account might be just the boost you need to keep the money conversation going.

2) Draw Up a Will

Now that you’re married, you’ll probably want to revisit your estate plan. Whereas you may have had a parent, sibling, niece or nephew in line to inherit your assets if something happened to you, you’ll want to revisit your plans now that you’re married.

The best way to make these decisions legal is to have an attorney draw up a will. Most attorneys can help you and your spouse draw up a simple will that’s not overly costly.

Not all assets are passed by will though – some are passed by contract. Retirement accounts like your 401k and IRAs, life insurance death benefits, pensions, and annuities are distributed according the beneficiary designations you make on each account.

Since you’re already creating a plan for your assets that are addressed in a will, this is a great opportunity to review the beneficiary designations on your retirement accounts and life insurance as well. Chances are you’ll want to name your spouse on most, if not all of them.

3) Think About Powers of Attorney

On the same theme of estate planning, powers of attorney are an important piece of the puzzle. A power of attorney allows you to delegate decision making power to someone else if you become incapacitated. This person is called your “agent” or “attorney in fact”.

There are two main types of powers of attorney. One is for financial decisions and the other for medical decisions. Financial power of attorney allows your agent to access your accounts, pay bills, and execute transactions on your behalf. Medical, of course, allows someone else to make decisions on health related issues and treatments.

Just like a will, most attorneys can help you establish powers of attorney for you and your spouse. Most will actually suggest executing them at the same time they draw up a will for you. If they don’t, make sure to ask in order to cover your bases.

4) Re-assess Insurance Coverage

Another big benefit of being married is the health coverage. If you and your spouse are both covered through work, you’ll be able to compare medical plans and jointly participate in the better option. There’s a good possibility that one plan is superior, and you can save a few bucks by consolidating to one plan.

You’ll also want to reexamine your life insurance coverage – especially if one of you makes significantly more money than the other. Term life insurance is my personal preference, since it’s very simple and cost effective. Whatever type of policy you choose, make sure the coverage amount is sufficient. If you’re unsure how much you need, there are several rules of thumb to use as a starting point:

• Multiply your income by ten
• Add up the cost of your long term financial goals and subtract assets
• Multiply your annual income by the number of years you wish to cover, and add your total debt

Getting married is a special moment. After the dust settles and you fall back into your routine, start working these four to-dos to ensure your financial house is in order.

Grant Bledsoe, CFA, CFP®, is a Portland financial planner and the founder of Three Oaks Capital Management. He also runs the personal finance blog Above the Canopy.