Preparing for richer or poorer

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Wedding bells ring almost every weekend this time of year. If you're newly married, planning the big day most likely occupied all of your time and energy. But after the champagne is drunk and thank-you notes are sent, it's time to tackle another to-do list: organizing your financial life as a married couple.

Of course, that includes tackling long-term issues, such as where you want to live, if you want to start a family and how much to save for retirement.

In the meantime, there are some immediate financial decisions to make. They're not as weighty--and may seem more like a nuisance--but they're important.

"When people get married, many don't want to just rush into changing things immediately until they have a better sense of how each manages money," said Deborah Wilburn, author of "For Richer, Not Poorer: The Newlyweds' Financial Survival Guide" (Perigee, $14.95). "But you have to at least start thinking about it."

-- Review insurance policies

As a married couple, you may get a break on insurance premiums.

If both you and your spouse have health insurance at work, check whether you'd save by joining one or the other's plan.

Typically, you have a limited time period after you marry, often 30 days, to make the switch. Otherwise, you'll have to wait for the annual open-enrollment period.

For auto insurance, be sure to let your agent know you've tied the knot. Depending on your provider's policy, if you're young--typically under the age of 30--you could receive a cut in premium for being married.

For example, at State Farm Insurance, the premium for a 28-year-old, newly married male could drop by about 15 percent. For a 20-year-old female, the premium could be cut in half.

Even if you're older, you may save by insuring both your car and your spouse's car with the same provider. At State Farm, this so-called multicar discount would knock roughly 5 percent to 20 percent off each person's policy.

Also make sure you have sufficient life and disability insurance, especially if you and your spouse have taken on significant debt together, such as a mortgage, said Jason Print, a certified financial planner in Schaumburg.

"You don't want to leave your spouse on the hook for significant mortgage payments," Print said. "Remember, what happens to you will now have a big impact on your partner."

-- Name beneficiaries

Not to drag out gloomy thoughts, but you also should name or re-name the beneficiary on your investments, including your 401(k), individual retirement accounts and other mutual funds or stocks.

"It's not difficult to do," Print said. "It's usually a matter of filling out a form where the securities are held. But you'll be ensuring that the assets go to your spouse if you meet your demise."

Similarly, if either you or your spouse already owned a home before marrying, you'll want to add your spouse's name to the title, making it a joint tenancy with right of survivorship or tenancy by the entirety.

That way, if something should happen, the property would automatically pass to your spouse without the hassle of probate court, which settles estates, and often is time-consuming and expensive.

-- Change your tax filing status

One area where you don't have much choice is taxes, and as a married couple filing jointly, you may be able to take advantage of lower tax rates. So be sure to submit a new W-4 to your employer, updating your status.

-- Manage your credit

Finally, you have to decide how you'll handle debt.

Even though you're married, you and your spouse still have individual credit histories and credit scores, said Barry Paperno, manager of consumer operations for Fair Isaac Corp., which calculates FICO credit scores.

But any time you take on debt together, such as opening a joint credit card, your credit history is equally affected by what your spouse does. Thus, if you miss a payment one month, it dings both of your credit scores.

Not that you should be paranoid about the person you wake up to every morning. In fact, you'll probably rest easier knowing what's at stake financially.

E-mail Carolyn Bigda at yourmoney@tribune.com.

Copyright © 2014, Los Angeles Times
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