![]() So become an open book about your finances, and encourage him or her to do the same! Outside of our life partners and maybe our parents, we’re not used to being candid about things like our salaries and how we spend our cash. The more comfortable you are talking about something as personal as money with your partner, the easier it’ll be to make important decisions about combining finances after marriage when the time comes. Some pointers: Start the Conversation Early So do yourselves a favor and hash out your plan for combining finances after marriage-you’ll be glad you did. And sure, you can spurn the convo and wing it, keeping your finances separate and continue doing your own thing, but as your relationship evolves and becomes more and more mature, it’ll be come harder and harder to keep money things separate. Sure, the conversation about combining finances after marriage isn’t as romantic as honeymoon talk, but it’s way more important, and rightfully deserves a top spot on your wedding planning checklist. ![]() The merging of two hearts, two souls, two lives, two… bank accounts. In addition to honoring your estate objectives, a QTIP qualifies for a spousal exemption from the federal gift tax.Ahh, marriage. One possible solution? A qualified terminable interest property, or “QTIP” trust.Ī QTIP trust is an irrevocable trust that allows your surviving spouse to receive income from your estate while reserving the principal for another beneficiary upon your spouse’s death. It’s important to note, though, that a marital trust is not as restrictive as a family trust. A marital trust, which can take advantage of the unlimited marital deduction for estate value that exceeds the available federal exemption amount, for the immediate benefit of your surviving spouse and ultimate benefit of your children.A family trust to take advantage of unused federal exemption amounts for the ultimate benefit of your children, but that may also provide income for your surviving spouse.When you pass away, your trust can fund two separate entities: With a revocable trust, you put your assets into the trust, and the trust becomes the initial beneficiary of your estate. When combining finances, a trust can help you protect both your new spouse and any children from a previous marriage. “An oversight like that can have huge, and obviously unintended, consequences.”Ĭonsider a trust to protect spouse and children “We’ve seen situations where someone remarries, but they still have their previous spouse as the designated beneficiary,” she adds. But your won’t supersede outdated beneficiary information, so it’s important to get these documents updated right away. “People sometimes put updating these documents off or, for example, forget they have a 401(k) from a previous employer that they never rolled over,” Baustian says. It’s also important if you intend to pass assets to charity or to a family member other than your spouse. Updating the designated beneficiaries for your retirement accounts, bank accounts and life insurance policies can help ensure your spouse is covered in case of the unexpected. Simply leaving your estate to your spouse could lead to your children’s disinheritance if your spouse remarries and doesn’t put your children in their estate plan.īut until that time, you need to protect your new spouse. As natural as that desire may seem, it doesn’t happen without careful planning. When step-siblings grow up together, it can make sense to divide assets equally among them, but some people prefer that wealth pass through their biological children. Money can be an emotional topic in any marriage, but a blended family makes combining finances after marriage even more difficult. “This reframes your thinking and conversation, so you don’t take an overly protective mine-versus-yours stance.” “Begin with a certain mindset and presumption, which is that you really love each other and want to do the right thing and treat each other fairly,” says Shannon Baustian, vice president and Private Wealth Advisor at U.S. Still, it’s important to keep the conversation positive and remind your spouse that you want to talk about these things for your mutual benefit. It may be uncomfortable, but full financial disclosure gives you the chance to bring up important questions or concerns before you say “I do.”įor instance, alimony owed to a previous spouse, substantial wealth or debt, a large inheritance or money tied up in a risky venture can all trigger concerns about what will be shared or kept separate in the marriage. Sitting down with your partner to discuss merging your finances before the big day is an important first step, especially if your net worth is unequal. Find a financial advisor or wealth specialist.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |