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Marriage is a time to start a bright future with someone you love. It’s also an optimal time to think about your long-term future, including what could happen if anything goes wrong. After all, you not only have yourself to think about now, but also a partner you’re sharing your life with whose well-being you’re partially responsible for.
Some of the key things newlyweds need to consider as they plan for problems include what could happen if either spouse becomes sick or passes away – either before or after children come along. To prepare for these possibilities, some basic estate planning documents should be created including:
- A last will and testament: A will specifies who’ll inherit your money and property if something happens to you. If you don’t make a will, intestacy laws in your state determine who receives your assets, and these laws don’t always reflect your wishes.
- A revocable trust: Revocable trusts allow assets to pass outside of the probate process and can also provide some protection for assets in case of your incapacity. A backup trustee can take over management of wealth held in the trust.
- A healthcare proxy: Healthcare proxies give you the chance to specify who will make healthcare decisions if something happens to you and you’re incapacitated.
These are just a few of the many documents you and your spouse should consider creating so you’re prepared in case tragedy strikes. There are other estate planning tools that could also be appropriate for your situation. You can read more about estate planning for newlyweds and learn how to find a lawyer to help you.
First Comes Marriage, Then Comes Baby— Then Comes Estate Planning?
For many couples, marriage comes first and babies soon follow. But, when you have children, these little bundles of joy come with a whole host of additional financial and legal responsibilities. You want to make sure your kids are taken care of if something happens to you, and it can sometimes be beneficial to make a plan even before kids come along.
Some of the different estate planning documents and tools newlyweds may need to put in place to protect their kids include:
- Choosing a guardian: Your child’s guardian will take care of them if you become unable. You’ll want to choose someone you think is up to the task so the courts aren’t left to decide what happens to your kids.
- Preparing for college: Whether you’re there to see your kids graduate or not, paying for college is a huge financial burden. Opening a 529 account can help you claim tax benefits so you can more easily set aside funds to cover your child’s education.
- Transferring assets: Children can’t manage an inheritance until age 18, so you’ll need to determine an appropriate method of transferring funds and name a trustee to control the money. You may also need to use tools such as a Grantor Retained Annuity Trust to reduce taxes on substantial gifts to children or other family members.
These are just a few of many key estate planning steps newlyweds may need to take to prepare for future children. You can find out more about estate planning for kids here, and find the legal help you need to make your plans.