‘For richer and for poorer, in sickness and in health, ‘till death do us part.’... The phrasing will vary in the presence of a Priest, a Rabbi, or a Registrar. Personal choice may also determine the delivery, but whether it’s authentic medieval text or a full blown rap (the video is out there!), your vows have always meant more than mere words in the eyes of the law.
As the honeymoon tan fades, it’s easy to slip into life’s routine without really taking stock of the impact marriage can have on your financial status. To help provide some guidance for those wishing to plan a secure financial future for their new family, Weddingsite.co.uk have invited along financial experts Will, Trust and Protect to give us their Top Five Financial Protection Jargon Busters for Newlyweds:
1) Protection: Now you that you have said ‘I do’ it is time to start thinking about your financial responsibilities. You can protect your new family’s future by setting up life insurance policies that provide a pay out in the event of one partners death, or if one of you becomes extremely ill and unable to work. You can even purchase health insurance that will help speed up treatments by paying for private medical care. The cost of effective protection does not have to be high, and will vary depending on your requirements. With some specialist policies available such as serious illness cover, premiums can even be reduced over time as your fitness and general health improves.
2) Mortgage: Probably the most significant financial commitment taking on by most new couples is the purchase of your own home. If you don’t have enough savings to buy a property outright, a bank will lend you money, which you then pay back to them monthly, with interest added on top – this is a mortgage. There are many lenders, with different interest rates and conditions so the right advice is essential. You can also protect against redundancy, long term illness or death, with insurance that covers monthly repayments, or the full balance of your mortgage.
3) Will: This tells everyone what you wish to happen to your assets when you die. Although assets can be property or money, a will can even determine who takes care of your children. Your will can override the wishes of surviving family members so is a very powerful document, but a well drafted will through experts such as Will, Trust and Protect can help avoid disputes, and ease the process of distributing your estate to loved ones. Leaving assets without a will can mean costly legal fees, and higher inheritance tax liabilities, and your assets may not be distributed as you intended. Marriage will render any existing will you may have legally null and void.
4) Inheritance Tax: The Government takes a percentage of the value of all your assets that are left to another person in the event of your death. Currently, this does not apply to legally married couples but other named persons in a will, such as children or siblings may have certain tax liabilities depending on the value of what they receive. It is important you have sound advice when planning your estate to keep these liabilities to a minimum.
5) Trust: This is a legally recognised way of sharing assets with loved ones such as property, or money whilst you are still alive, or ensuring that assets left behind benefit those in the way you intended. Trustees are appointed to administer the Trust in the interests of those who benefit from it. A Trust is commonly used when including children as beneficiaries of any will, or for protecting assets against future bankruptcy of a beneficiary. Will, Trust and Protect can also help you set up a trust for a new will, or an existing one, as a legal way of minimising inheritance tax liabilities.
Financial planning is all about peace of mind, and you can’t put a price on that. Unfortunately most people suffer the stress of bad planning when they least need it, but there are certain life events that offer up opportunities to address these important issues in a positive way, none more so than getting married.
In the coming months Will, Trust and Protect will be sharing key elements of well thought financial protection for your family’s future, but if you have any immediate need for advice or support you can visit their website by clicking any of the links above. You can also get help by calling 0845 257 9827 and making a telephone appointment for a chat with an advisor.