Getting married is a joyous occasion, bringing together family and friends to celebrate the union of two people. However, beyond the excitement and preparations for the big day, it’s important to consider the practical aspects of your new life together. Financial planning may not be the first thing on your mind when preparing for your wedding, but it’s essential to ensure that your financial and legal affairs are in order to secure a stable future. Here’s what you should focus on before saying “I do.”
Review Your Protection Plans
While most couples think about life insurance to protect their loved ones in the event of their death, it’s also crucial to consider income protection. Although life insurance is often linked to covering liabilities such as mortgages, income protection ensures that you continue to receive a steady income if you’re unable to work due to illness or injury. Statistically, it’s more likely that you’ll face a period of illness or accident during your working years than an untimely death.
Many employers offer sick pay, but this is often limited and may not cover your expenses, especially if you change jobs. A private income protection policy can provide you with financial security, ensuring bills are paid, savings are maintained, and other important insurance premiums are covered during tough times.
In addition to income protection, other types of insurance, like critical illness cover and family income plans, can further safeguard you and your spouse against unforeseen circumstances. A financial planner can help you choose the right protection plans to meet your needs.
Set Financial Goals Together
Once the wedding is over, it’s time to focus on your future as a couple. Discuss your financial goals and start planning for things like purchasing a home, raising a family, and preparing for retirement. Consider reviewing the assets you’ve accumulated before the marriage and how you want to manage future savings. A financial planner can guide you through these discussions and help you create a savings plan to achieve your shared objectives.
Update Your Will
Marriage automatically revokes any existing will unless it was made in anticipation of marriage. Therefore, it’s important to either create a new will or update your current one to reflect your new life together. If you already have significant assets, such as property or savings, it’s essential to ensure that your will clearly outlines how these should be distributed. A well-drafted will can also simplify the estate administration process and eliminate any uncertainty about your wishes.
Additionally, if you or your spouse have children from previous relationships, your will should reflect how assets will be shared between both families. In this case, working with a legal professional is key to ensuring that your estate is handled according to your wishes.
Don’t forget to review the beneficiary nominations on your life insurance and pension plans. These are separate from your will and should also be updated to ensure the right people benefit in the event of your passing.
Establish Powers of Attorney
A crucial yet often overlooked step in marriage planning is setting up Powers of Attorney (POA). A standard POA can be useful in temporary situations, such as when you’re traveling or recovering from an illness. However, a Lasting Power of Attorney (LPA) offers long-term protection. With an LPA, you appoint someone you trust, such as your spouse, to make decisions on your behalf if you lose mental capacity.
There are two types of LPA: one for property and financial affairs, and another for health and welfare. The latter allows your attorney to make decisions about your medical care and even life-sustaining treatment if you’re unable to do so yourself.
Setting up an LPA ensures that your spouse or another trusted individual can manage your affairs if you become temporarily or permanently incapacitated. Without an LPA, no one can legally act on your behalf unless authorized by a court.
Managing Money as a Married Couple
While the wedding day is an exciting occasion, your financial plans are what will help you build a stable future. Beyond the festivities and celebrations, make sure to allocate time and resources for professional advice to help you manage your finances and legal affairs effectively. Setting aside part of your wedding budget for financial and legal planning can have a lasting impact, ensuring that both of you are protected and well-prepared for whatever life may bring.
Key Takeaways
- Income protection is just as important as life insurance to safeguard against the loss of earnings due to illness or injury.
- Make or update your Will, as marriage revokes existing Wills unless written in anticipation of marriage.
- Set up Powers of Attorney so your spouse or a trusted person can manage your affairs if you lose capacity.
- Have open discussions about your financial goals and how you’ll manage money together.
- Include financial advice in your wedding budget to help secure your future as a couple.
Preparing for marriage is more than just choosing a venue and a dress—financial planning is an essential part of starting your new life together. By taking these steps, you can ensure that both your personal and financial future is secure.
