Financial and Legal Records for Newlyweds

(BNN) Every couple’s approach to handling finances is unique. Through the years, spouses develop their own systems for managing financial and legal tasks. Sometimes it is one partner’s responsibility to manage finances, sometimes the other’s. Often, it is a combination. Whatever the chosen solution, important financial and legal information should be shared for convenient reference.

Couples should establish records for ready access to the following:

Retirement plans: Take time to fully acquaint each other with employer retirement benefits. Both partners should have current knowledge of pension plans, 401(k) accounts and IRAs. For a complete view of expected retirement benefits, become familiar with one another’s Social Security benefits, as well. Understanding retirement benefit information will bring clarity to other plans and assist retirement decisions.
Credit card documents: This one can be scary. Some may prefer to not know how much credit card debt their spouse has accumulated. But it’s wise to know where to find account numbers in case one loses a card and needs help to cancel the card and obtain a replacement. Mutual awareness of credit card debt balances will also help with developing a family’s overall financial plan.
Power of attorney: It is generally a good idea to have power of attorney to cover any individually owned assets, just in case a spouse becomes ill or is otherwise unavailable. Power of attorney can be limited to specific functions for a certain period, such as selling stocks or withdrawing money during scheduled travel. A broader document that authorizes each partner to handle almost any situation in the other’s absence is also a consideration. A power of attorney can be legally recorded, too, so that locating a “piece of paper” is not necessary in an emergency situation.
Wills, trusts and life insurance: It’s important to share information about wills, trusts and life insurance, especially if either spouse has been married before. There could be restrictions on how some assets may be used. Beneficiaries may have been left unchanged by mistake. Most important, make sure each partner knows where to find wills, and is able to easily access the document itself if something were to happen.
Health insurance policies: Most insurance companies will cover care administered in the first 24 to 48 hours of a medical emergency, even if the coverage details have not been specified. But the situation isn’t as clear with hospital visits that are less urgent. If each partner is covered by a different insurance plan, both should be familiar with required “hoops” they may have to jump through in order to claim benefits, have them recognized by a physician or hospital, and receive reimbursements for medical expenses paid. If one spouse is stricken with a sudden illness, does the other know which doctor to call first to get an okay for treatment? If not, there could be big bills from an out-of-network doctor.
Business loans: If one spouse owns a business or is a partner in a professional firm, both should know about any personally guaranteed loans. It is critical to be aware of such “outside” liabilities, since household assets can be pursued if the business can’t repay the loan.
Records of other financial obligations, such as mortgages, auto loans and leases, and recurring expenses for asset maintenance and services, are also helpful to have at hand.

While many couples don’t need or want to know every detail of one another’s finances, maintaining a mutual knowledge of these important topics –– and access to vital documents –– can help you maintain balanced control over your family’s finances, be prepared for any sudden personal unavailability, and to plan together for a sound financial future.

This article was contributed by Matthew D. Gensler, a financial advisor at Raymond James Financial Services, Inc., New York. (212) 557-5005 Matthew.Gensler@RaymondJames.com.