There is an old saying that nobody gets married with the intention of getting divorced. This holds true for your client who just got engaged.
While luggage, a Cuisinart, trivets, and other registry items are on your client's mind, the best gift you can offer is actually something PLANNED.
In other words, before you toast the new couple (assuming you made the cut on the invitation list), sit down and help your client understand the legal and financial implications of this most holy union.
This week's column will discuss a couple topics you will want, at a minimum, to discuss with your client as they embark on their life changing journey.
Encourage your client to discuss finances
Marriage is a wonderful thing but that doesn't mean it is effortless. In fact, happily married couples universally agree that marriage takes work and communication. One avenue where you can help is by encouraging your client to have a financial conversation with his or her fiancé.
Financial disagreements are a top cause of marital strife, but remember, courtroom tactics aren't a useful preventative measure here. Instead, you can help your client learn more about their partner's financial expectations by understanding their desires rather than subpoenaing their balance sheets. Empower your client to talk to their fiancé about their goals for their lifestyle, starting a family, and planning for the future.
Once the groundwork has been laid, encourage your clients to discuss "joint activities," such as whether they will combine accounts and how they will plan to save and invest.
In sickness and in health
Your client will soon make a promise to care for his or her new spouse in sickness and in health. Help them abide by that honorable and loving covenant.
A newly married couple is energized by their hopes and dreams. These goals depend on one thing: the couples' ability to earn an income. We don't think twice about earning an income when we are healthy, but what about when we are sick? Help your clients protect their hopes and dreams by talking to them about the importance of having an estate plan and other financial planning tools including life and disability insurance.
For some newlyweds estate planning may be premature. Until they are ready, they can take simpler steps to protect their spouse in case of emergency, such as changing their beneficiary designations on retirement accounts and group insurance, and selecting transfer on death designations on their bank accounts if they don't intend to join them.
Consider a prenup
An ounce of prevention is worth a pound of cure and this is definitely the case when bringing assets into a marriage. The ounce of prevention in this case is a prenuptial agreement, or prenup for short. Hence, a prenuptial agreement may be worthwhile if your client (1) owns a business or property, (2) anticipates a substantial inheritance, or (3) has prior children. It could also prevent future costs if the couple is substantially unequal in preexisting wealth or income.
Always add value
When the newlyweds open their gifts, they are impressed by their guests' generosity. Your gift is to be their most trusted advisor, offering them proactive insight into matters for smooth financial sailing. Regardless of your practice area, your guidance and insight will be the gift that keeps on giving.
Want to talk to Kyle about student loans or other topics featured in The Economic Blueprint? Email him at kzwiren@financialarch.com or call him at 248-482-3622.
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Kyle Zwiren, JD, works with Financial Architects Inc., an independently-owned company located in Farmington Hills. Kyle and his team serve attorneys and other professionals to help them design financial plans in line with their goals and based on optimal efficiency. Kyle practiced law prior to becoming a Financial Architect. To talk to Zwiren, email him at kzwiren@financialarch.com or call him at 248-482-3622.
Published: Fri, Apr 26, 2019
