Weddings are nothing if not romantic. Two people, joining together as a unit throughout life and until death parts them. But the reality is that when a couple gets married, it’s a legal document and combination of the good, the bad and the ugly in the eyes of the government. It’s not romantic, no, but if you aren’t prepared for those important day-to-day necessities outside of the location details, tablescapes and specialty cocktail choices you might be looking at a bit of a rough patch after the honeymoon is over.
We reached out to Certified Public Accountant and financial expert (you may have caught her “Kemcents” spots on the WDSU news) Kemberley Washington to ask financial questions couples need to think about before signing their names on the wedding certificate.
What should couples know when combining their finances — either after they get married or even before?
I believe couples should discuss their finances before getting married. It is critical for the couple to decide how they want to move forward financially during this time. In some cases, this may involve keeping some assets separate or combining them all. As part of this process, they may also need to develop a financial system, such as maintaining separate accounts, a joint bank account or a combination of both.
I don’t think there is a right or wrong way to go about this, but more importantly coming up with an agreement that works best for you and your future spouse.
If they’re paying for their own wedding, is there any advice you’d give a couple to ensure no hiccups occur financially along the way?
Good one! Make a budget for how much you and your future spouse want to spend on your wedding ceremony before you begin planning. Stick to your budget after you decide how much you will spend. It can be difficult, but don’t let your emotions get in the way. Along the way, review your budget and continue to look for vendors that fit your budget.
Taxes — you pay them every year, but what should couples be aware of when filing for the first time as legally married?
Generally, married couples can file either married filing jointly or married filing separately (MFS). When filing separately, certain tax deductions and credits may be limited or eliminated.
The MFS problem becomes more complicated if you reside in a community property state, such as Louisiana. In community property states, certain income must be reported equally on both tax returns despite only one spouse earning the income.
It is also a good idea to speak with a tax professional about your tax situation before your tax due date (typically before year-end). At this meeting, discuss whether you should update your W-9 forms, pay additional estimated taxes (if needed), and run a tax scenario filing both jointly and separately to see what works best for you.
Are there any other things they have to do after they’re legally a unit? (I’m thinking any filings with state or government or some type of entity that would need to know about a legal marriage.)
If you plan to marry soon or recently tied the knot, you should consider reviewing your financial situation and making changes to important documents. For example, you may need to change your last name, update your passport and driver’s license. You should also consider having a discussion with your future spouse concerning insurance policies to determine if any changes are needed at this time.
(LTEC editor Melanie here: If you are changing your name on your passport, you will need to bring the original, official marriage license to your passport office appointment. Photocopies and decorative copies are not valid.)
When thinking about the future, what would you suggest couples start on before they get married or soon after to set themselves up for success? (In the sense of preparing for children, home owning, owning a business, and so forth.)
I expect planning is key.
It is important to discuss financial goals not only at the beginning of the relationship, but also throughout the marriage. I admire my mentor for adopting a business concept that has allowed her marriage to thrive both financially and personally. Once a month, she and her husband review their finances and devise financial strategies for their business and rental properties. With this simple concept, they have consistently set themselves up for success and have been able to accumulate wealth and increase their assets over the years.