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The last time you want to think about finances is when you're in the middle of a major life event.
Whether it's marriage, having a child, divorce or death, that is when you are totally caught up in the overwhelming detail of the situation. Yet, that is also the time when you need to think about the financial consequences.
Whether you manage your own finances or have a financial professional to assist you, certain major life events call for a re-examination of your financial strategy. Here are some of those events.
Marriage
When you marry, especially if you and your husband already have your own careers, you have to make some decisions about your financial futures. Many working spouses keep separate checking accounts for day-to-day expenses, sharing the major costs (like mortgage payments) on an equitable basis. But most married couples invest for the future together. Saving for children's college education, retirement, a second home, or other long-term goals requires planning and agreement on the best investment tactics. You and your spouse should determine how much you need to save, what your investment options are, and how best to reach your goals, with the help of a financial professional, if necessary.
Having Children
When children enter your lifeùwhether through birth, adoption or step-parenthoodùmany of your priorities will change. Having children means setting new prioritiesùfor example, how much to save for your child's education vs. how much to save for your own retirement.
A financial professional can be particularly helpful at this time. She or he can help you by making sure you have adequate life insurance to support your children until they are able to support themselves; suggest methods of addressing your children's college education expenses; work with your attorney and/or tax advisor to help you establish and fund an estate plan that minimizes taxes and makes sure your property is distributed in the way you desireùfor example, if you wish to have your estate go to your children by a first marriage rather than to your spouse.
Divorce
Divorce is an emotionally chaotic time, but it shouldn't leave you with financial regrets. You or your financial professional will want to consider these and other issues:
• payment of bills for joint assets (car, mortgage payments, etc.)
• tax implications of dividing marital property
• protecting yourself from any possible bankruptcy of your spouse
• protecting your assets from your former partnerÆs liabilities, including business or tax liabilities
• college funding for your children
• equitable division of retirement plans and reinvestment of proceeds to avoid tax liabilities
• renaming beneficiaries of your and your former partnerÆs life insurance policies and revisiting your estate plan
Death of a spouse
One of the most important functions of a financial strategy is preparing for the event of one partner's death. Insurance, estate planning and many other issues should be discussed and understood by both parties so that either is prepared to carry on alone. Still, the death of a spouse, no matter how prepared you may be, is overwhelming. Your financial professional can help you in many ways, including:
• making sure you receive all the life insurance benefits you are entitled to
• assisting you on transferring ownership of investment accounts
• re-examining your investment portfolio in light of your new situation
• helping you determine how best to withdraw funds from your spouse's retirement plans
• funding a new estate plan
If you are currently in the middle of one of these major life changes, you should think about your financial strategy now. But donÆt wait until change occursùmake sure you are prepared for your financial future.
This material is not intended as tax or legal advice. You should consult with your personal financial, tax or legal advisor regarding your specific situation before implementing any estate or business strategy.
Robin Davey offers securities through AXA Advisors, LLC
(member NASD, SIPC) 5 Maxwell Dr. Clifton Park, NY 12065, and offers
annuity and insurance products through an insurance brokerage affiliate, AXA
Network, LLC and its subsidiaries.
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