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May 18, 2024

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Marriage: Make The Right Financial Moves

Marriage affects how you build wealth, pay taxes and plan your estate. It’s important to make the right moves, especially at the beginning.

When you and your spouse plan your finances, your focus is likely to span careers, lifestyle issues, family, wealth management and virtually every element of your life as a couple. Sophisticated planning can enhance your progress in these and other areas from the start.

Protect Your Assets

As a first step, understand your options for protecting assets that each of you brings to the marriage.

  • Decide whether a prenuptial agreement is appropriate. If one or both of you have an interest in a business, an inheritance or other substantial assets, there may be compelling reasons for maintaining those assets separately. This is especially true in community property states, where property may be divided evenly in the event of a divorce, regardless of how it came into the marriage.
  • Review the beneficiary designations on your insurance policies, banking and investment accounts and retirement plans. A beneficiary designation is important because it can override the terms of a will. With an employer-sponsored retirement plan, you may be required to name your spouse as beneficiary unless your spouse waives this right in writing.

Create a Budget

Agreeing on short-term cash management can go a long way toward assuring that mutual goals are met.

  • Build a budget. Even if you did not have a formal budget prior to marriage, creating one now will help you and your partner get a clear picture of where you stand financially.
  • Determine how you will pay debt incurred before you got married. Generally speaking, debt incurred prior to marriage remains the legal obligation of the person who took out the loan. But if the loan is secured by jointly held assets, such as a car, it can get more complicated.
  • Envision your desired lifestyle five or ten years into the future. If a larger home, a family or your own business is in the picture, start budgeting now to make these goals happen.

Review Your Investments

Adequate diversification could help you build wealth and manage the short-term volatility of the financial markets, even though it may not assure success.

  • Review your joint financial assets, both retirement and nonretirement. Also consider real estate if either of you owns a primary residence or a vacation home.
  • You may not be adequately diversified if your assets mirror one another. Consider the diversification available through mutual funds and professionally managed accounts, and think beyond traditional asset classes such as stocks and bonds.

Plan for the Future

Retirement saving, life insurance and estate planning are important, even if these areas are not your immediate focus.

  • If both of you are employed and have access to employer-sponsored defined contribution retirement plans, you each can contribute a maximum of $17,500 for 2013.
  • There are several types of trusts that an estate planning attorney can review with you. A living trust allows the grantor (the owner of the assets) to remain both a trustee and beneficiary of the trust while he or she is alive.1 Upon the grantor’s death, a successor trustee manages or distributes the remaining assets. When philanthropy is part of the picture, consider a charitable lead trust or a charitable remainder trust.

You and your spouse are at a critical juncture in your joint financial life. I can help you make the most of it.

Courtesy of: Irene F. Stolarz
Branch Name: Morgan Stanley, Little Falls, NJ
Phone Number: 973-890-3020
Web Address: www.morganstanleyfa.com/stolarz

1Some states do not permit a person to be sole grantor, sole trustee, and sole current beneficiary.
If you’d like to learn more, please contact Irene F. Stolarz.
Diversification does not assure a profit or protect against loss in declining financial markets.
Tax laws are complex and subject to change. Morgan Stanley Smith Barney LLC (“Morgan Stanley”), its affiliates and its Financial Advisors do not provide tax or legal advice, are not “fiduciaries” (under ERISA, the Internal Revenue Code or otherwise) with respect to the services or activities described herein, and this material was not intended nor written to be used, and it cannot be used, for the purpose of avoiding tax penalties that may be imposed on the taxpayer. Individuals are urged to consult their tax or legal advisors before establishing a retirement plan or to understand the tax, ERISA and related consequences of any investments made under such plan and to understand the tax and legal consequences of any actions, including implementation of any estate planning strategies, or investments described herein.
Article by Wealth Management Systems, Inc. and provided courtesy of Morgan Stanley Financial Advisor.
The author(s) are not employees of Morgan Stanley Smith Barney LLC . The opinions expressed by the authors are solely their own and do not necessarily reflect those of Morgan Stanley. The information and data in the article or publication has been obtained from sources outside of Morgan Stanley and Morgan Stanley makes no representations or guarantees as to the accuracy or completeness of information or data from sources outside of Morgan Stanley. Neither the information provided nor any opinion expressed constitutes a solicitation by Morgan Stanley with respect to the purchase or sale of any security, investment, strategy or product that may be mentioned.
Morgan Stanley Financial Advisor(s) engaged The Post Eagle to feature this article.
Ms. Stolarz may only transact business in states where she is registered or excluded or exempted from registration See http://www.morganstanleyfa.com/stolarz/groupdetail.htm Transacting business, follow-up and individualized responses involving either effecting or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, will not be made to persons in states where Ms. Stolarz is not registered or excluded or exempt from registration.
© 2013 Morgan Stanley Smith Barney LLC. Member SIPC.
CRC 692419 [09/13]