A little pre-nup financial advice
Young couples getting ready to tie the knot this summer typically have a lot to talk about – guest lists, invitations, venues, honeymoon, and all the details that go into planning a wedding. Money often isn’t part of the conversation. But it should be. After you’re married, you take up life as an economic unit, and a number of important things will change. Here’s a list of what couples should talk about before they exchange vows.
- Goals
It’s important to talk about your longer-term goals. For example, whether you intend to have children, basic childcare options, where you will live, how spending and income patterns will be affected.
- Assets
Once you have a broad idea of goals and planning, you’ll want to lay out what each of you is bringing to the marriage. What does each of you own, and perhaps more importantly, what does each of you owe? Are there assets with specified individual ownership and beneficiaries, such as RRSPs or trusts? Once you’re married, assets and liabilities are shared. Make sure everything is on the table now to avoid surprises after you’ve tied the knot.
- Investing styles
You may both be active investors with aggressive styles. Often one partner will be aggressive and the other more conservative. Work with a financial planner to come up with a plan that encompasses all your combined assets and satisfies both of your investing styles. Yes, it can be done, and I can discuss how.
- Insurance
Newlyweds without life insurance should consider some form of term life insurance, because it’s the most economical and provides a good level of protection. Ten-year term life insurance is the most common, and may be made even more economical for a couple with joint first-to-die policy. Couples with existing insurance coverage will probably want to change the beneficiary of their respective life insurance policies to each other. Couples may also want to raise coverage. They should also look at existing extended health insurance and disability to see if one or the other’s policy offers spousal coverage. That could add up to big savings on premiums.
- Consult a financial planner
A good financial planner will help couples identify and deal with these and many other financial matters before marriage, so they don’t become problematic afterwards. They’ll work closely with you to set up a plan and build an investment portfolio to meet both your short-term and longer-term financial goals.
© 2017 by Robyn K. Thompson. All rights reserved. Reproduction without permission is prohibited. This article is for information only and is not intended as personal investment or financial advice. Securities mentioned are not guaranteed and carry risk of loss.
