4 Legal Documents Every Newlywed Should Have
July 19, 2017Building Your Future
You’ve said your “I do’s,” enjoyed your honeymoon and written your thank-you notes. What’s next?
Having the proper legal instruments in place will help ensure your financial future is protected. Below is a list of legal documents, what they do and the risks of not having them in place. Understanding what each provides, as well as the risks, will help you make more informed decisions.
Protect your financial future by talking with your legal, tax and financial professionals when developing your legacy strategy. It’s never too late to do it.
Legal documents to consider
|Legal Document||What It Does||Potential Risks of Not Following Through|
|Will||Provides instructions for the transfer of your assets (anything of value) after your death. Does not include insurance contracts or retirement accounts, as they are disbursed based on their own beneficiary designations.
If you die and have children under age 18, a guardian would be named to care for them until they’re of legal age.
|No legal will:
If you die without a Will, you will be considered “intestate”. If this happens, the provincial government decides how to divide your assets – not you! This provincial formula is usually not reflective of your wishes for the distribution of your estate no matter how large or small it may be. Intestacy can also result in additional legal costs for your family to settle your estate.Not current:
Your estate will be distributed according to your will, if deemed valid.Your spouse, children, relatives, friends or favorite organizations may be excluded, if your situation has changed since the will was created.
|Beneficiaries||Payouts from your insurance contracts and retirement accounts are based on designated beneficiaries in place when you die.||If beneficiaries are not current, funds could be distributed in a manner you did not intend.|
|Power of Attorney (POA)||Authorizes another person or financial institution to handle all your financial affairs if you become seriously ill or incapacitated.
Includes paying debts and outstanding bills to investing and spending your assets.
|If property is listed in your name only, no one—not even your spouse—has legal authority to make financial decisions on your behalf (even if you are incapacitated) without a POA.|
|Advance medical directive (living will)||Provides instructions for medical decisions if you become incapacitated. A medical directive can reduce emotional stress for your family.
Be sure to work with your doctor and legal professional to consider all options.
|Without advance medical directives, your loved ones may have to go to court and pursue a guardianship so they have the authority to make medical decisions for you.
It can be emotionally stressful on your loved ones when no clear decision has been planned ahead of time and there is disagreement.
- Update your beneficiaries on your insurance contracts and retirement accounts. Work with the company you’re insured/invested with.
- Speak with your legal counsel to write a will that will be legally binding and removes any additional worry or stress from your partner or family.
- POA – discuss who would serve you best in that capacity.
- Advanced directive – maintain family harmony by having this in place and ensure your wishes are carried out.
Tending to your legal needs is not a quick process – there are many thoughtful considerations and decisions to be made. It will be well worth your time and effort to protect your family’s financial future from the unexpected. Connect with a FaithLife Financial Representative today to learn more about becoming a Member and our unique benefits.
Original article written by Thrivent Financial.