With the average American newlywed now averaging age 31 for men and 29 for women, many couples start out married life with property and assets that each owned individually beforehand. In “Couples & Money: Ours? His? Hers?,” CBS Boston takes a look at what should be owned individually or jointly and presents good tips for couples to consider.
If you go ahead and sell one home and move into the other, you need to decide ownership issues. Will you add your new spouse to the deed and add him or her to the mortgage as a responsible party? Are you working with an estate planning attorney? You might consider talking to him or her about the benefits of putting your home in a trust.
Another thing to consider is that marriage doesn’t automatically combine your credit reports. If one spouse has a poor credit report and is getting out of debt, you may want to keep things separate. If you do want to purchase a house in the future, you’ll have one good credit report and one good credit score. If you bring credit card debt or school loans into your marriage, you’re responsible for paying that off yourself.
As far as banking, think about a joint checking account for household expenses and savings. However, you should consider what would happen after one of you passes. As soon as there’s only one name on an account, it becomes a probate asset at the death of the owner, forcing any heirs to go to court to access the account. That’s just one of the reasons many people prefer to title their accounts in the name of a trust.
Keep your own credit card, but know that you’re responsible for the payments. You may want to have a joint card for the household purchases.
Any assets you bring into the marriage—like stocks, bonds, mutual funds, and savings—should be kept in your individual accounts. You can talk about using joint accounts for your future goals and tapping into your individual accounts to help you achieve those goals. However, make sure to update any beneficiary designation. You should make sure the proceeds of these accounts would pass the way you would want, should anything happen to you.
Make certain that you’re both taking advantage of retirement plans when available from your employer. Contribute the maximum you can afford and make sure your beneficiary designations are the way you want them here, too. You should also check other accounts such as pensions, life insurance policies and any other financial accounts that have a designated beneficiary.
Take a careful look at each of your health insurance policies to see who has the better plan and make sure to discuss a health care power of attorney and HIPPA release. That way, you know how your spouse would want to be cared for in the event of a crisis and you have the authorization to speak with doctors to follow their wishes.
If you have an estate plan in place, meet with your estate planning attorney to update your wills and other estate planning documents. If you don’t have an estate plan, make sure to take care of this sooner rather than later. Think of it as a wedding gift you give to each other.
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Reference: CBS Boston (June 8, 2016) “Couples & Money: Ours? His? Hers?”