Wedding vows mean different things to different people, but the legal and financial outcomes are the same. Inheritance of property, ability to make medical decisions, retirement plans, taxes, credit, and more are all affected by your marital status. The following are a few of the areas that are worth examining once you are back from your honeymoon.
If both you and your spouse are employed, having two salaries allows you to accumulate more wealth over the long-term. Combined earnings may make a mortgage easier to afford, as well as having more funds to put into emergency savings. If both spouses have employer-sponsored retirement plans, they have the potential to save $36,000 per year, versus the $18,000 allowed for an individual in 2015 under the age of 50. Dual incomes have a great potential for saving for retirement and also saving on taxes, as filing jointly may result in lower tax payments than filing separately. Taking advantage of retirement savings can also help lower your tax bill.
Some pensions may provide benefits to a surviving spouse. Generally, married workers are required to name their spouse as the plan beneficiary unless the spouse waives this in writing. Speaking of beneficiaries, periodically reviewing your beneficiary designations for retirement accounts is a good idea, especially after a marriage, to make sure that these designations reflect your wishes.
Qualifying widows or widowers may also be eligible to collect Social Security benefits up to a maximum of 50% of the benefit earned by the deceased spouse.
Updating your Name
Speaking of Social Security, if you are planning on changing your name, apply for a new Social Security card. It will be the same number, just with your new name. The SSA requires an original marriage certificate to make this change, so be sure you have that in hand first before mailing in the application or making an appointment at your local Social Security office.
Once you have a new Social Security card, make an appointment at the DMV to get a new license with your new last name. Be sure to bring your current license, certified marriage certificate, and your new Social Security card.
Other changes are fairly easy once you’ve updated Social Security and the DMV; some places to update are bank accounts, employers, post office, utilities in your name, credit card companies, landlord/mortgage company, insurance company(ies), passport, school/alumni associations, and doctor’s offices, to name a few.
Consider drafting a complete estate plan, if you haven’t already done so. This includes Wills, Trust, Powers of Attorney, and Advanced Healthcare Directives. The Powers of Attorney and Healthcare Directives would give your spouse the authority to make financial or medical decisions should you become incapacitated, which would avoid delay in medical care or expensive court intervention if these documents aren’t in place.
Debt and Credit
Before getting married, check each other’s credit scores at www.annualcreditreport.com and if needed, take the steps to improve your scores as soon as possible. In the future, when you apply for joint credit, your credit scores will be combined to determine your average. Getting started on improving your scores early means any problems can be addressed sooner.
Since marriage is a qualifying event, you are able to change your health plan within 30 days of getting married. Compare the costs and each coverage’s benefits to see what your options are; the best option may be to have one of you added to the other’s group health plan. Check with human resources to see how much employee + spouse coverage is, as well as if the plan fits both of your needs.
For health savings and flexible spending accounts, the limit will still be $2,500 for each person; however, you cannot submit for reimbursement for the same expenses.
For a Dependent Care Account, the household limit is $5,000, so make sure to coordinate with your spouse on who (or how much each of you) will elect for these expenses.
If you currently have life insurance policies, either through your employer or a private individual policy, check the beneficiary designations to be sure that they reflect your wishes and update them if necessary.
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