Whether you just proposed or were proposed to, congratulations on your recent engagement. The next few months will be a whirlwind as you plan your wedding and future lives together.
However, you should not just focus on planning your wedding in the next few months. Your whole lives will change, including your finances. To ensure you make a smooth transition from engagement to marriage, do not forget about these important items.
Pull and Share Your Credit Reports
Pulling your credit reports and sharing them with your partner is the first thing you should do after the engagement rush calms down. This step is not sexy, but pulling your credit reports will prevent you from being shocked by your partner's financial past, right before the wedding.
Discovering your future partner owes $75,000 in credit card debt could give anyone cold feet. By pulling credit reports early in the engagement, you can discuss any major shocks before you put down payments on wedding items that you will lose should the wedding be called off.
We hope that you will not have any surprises, but if you do, at least you can deal with them early on in the engagement.
Plan Future Financial Arrangements
Now that you know everything about your partner's credit, you should begin planning your financial future. Will you combine your bank accounts or keep separate accounts? Who will pay for the monthly bills? How much should you spend without consulting your partner first?
Establishing how you want your future financial life to work early on will help prevent the most common marriage battles, the fights about money.
Update Important Documents and Accounts
You will not want to make any major changes prior to tying the knot, but you will want to make sure you know which documents to update after you officially get married.
First, you will want to update any benefits that require you to name a beneficiary. Once you marry the love of your life, you probably will want them to receive your benefits should anything awful happen to you. If you forget to change your beneficiary, your benefits will go to whomever you had named prior to your marriage, which could even be your ex-spouse.
Next, update other important documents like your will, living will, power of attorney and insurances to reflect your new spouse's name.
Finally, consider adding your spouse to certain accounts you would like them to have access to should an emergency arise. These could include bank accounts, investment accounts or even utility accounts.
Consider Changing Benefits
A small window opens to update your benefits at work whenever a qualifying life event occurs. Marriage counts as one of these events. In general, you will have thirty days to update your benefit elections, which include health insurance, dental insurance, vision insurance and life insurance just to name a few.
Take advantage of this time to optimize your insurance options. For instance, if your future spouse has amazing low-cost health insurance, make sure to switch your health insurance off and join your spouse's workplace policy within the thirty-day window after you get married.
Change Your Tax Withholding
Finding out you owe more in taxes after filing your first joint tax return feels awful, so preempt this problem by correcting your tax withholding. Once you become a married couple, your tax situation could change significantly.
If you both have a fairly simple tax return, you could simply fill out new W-4 forms at your job and adjust your withholding to the recommended amounts based on your new married status. However, if you have had extremely complicated tax returns the last few years, you will probably want to talk with your accountant or CPA in order to determine how your marriage will affect your tax situation.
Getting these money to-dos out of the way early in an engagement will allow you to feel much more confident about your future marriage. Get started today so that you can focus on other things when you reach the honeymoon phase.