Weddings, marriage and all things financial….5 things to consider!

My best wishes to Prince William and Catherine Middleton on their big day at the end of this month and for their futures together. Wedding fever is likely to build as we approach the end of April 2011 and the Royal couple will not be alone in their preparations, with many marriages planned for the coming spring and summer months in 2011 and beyond.

Obviously, with a wedding or civil partnership, there is much to prepare, from flowers to outfits, wedding breakfasts and cars to speeches and making sure that all the invites have been safely delivered and the various responses gathered in. The frenzy of activity will build until the big day arrives and all hopefully runs smoothly.

With all this focussed effort occurring, it is sometimes easy to forget some of the financial planning that should also be considered, and this is understandable. To help, I have listed below some of my financial tips on what to look at as any happy couple approach their union and future together.

1. Financial gifts on marriage (Inheritance tax)

Parents, and other relatives, may well be pleased to provide the marrying couple with a wedding gift of money on their marriage. For parents, they can give £5,000 to their child with the gift falling outside their estate for inheritance tax purposes at the time of the gift. Grandparents can also undertake a similar gift, limited to a level of £2,500.

This is over and above the normal annual gift allowance of £3,000 in a year.

2. Pension nominations on death before retirement

If you have collected a pension or two in your working life, or are a member/owner of a pension now, you may have made a nomination on the plan in the event of death before you retire. If your plan was started when you were young and before you met your soon to be spouse, this may be nominated to someone else, such as your parents, siblings or someone from a previous relationship. You can normally update this nomination easily and at no cost by writing to the provider or to the HR department of the employer. Some provide a form to do this.

3. Review your life & protection cover

With the marriage complete, the married couple have a new found responsibility to one another, both emotional and financial. Protecting your spouse in the event of your death may become important, especially if you are going through other life changes, such as children, mortgages and other progressions.

It would be prudent to review your life covers and other protection arrangements, such as ill health protection to ensure that you are both comfortable that each of you will be protected if something unfortunate was to happen to either of you.

If you have cover from your employer, such as death in service benefit, you may want to contact your HR department to update their records and record your new marital status.

4. Make a will

A cornerstone of any financial planning is having a will in place. Wills become void on marriage and therefore you should address this as soon as possible after the marriage or, you can have a will prepared in contemplation of marriage. A will could also protect children and mitigate the effects of inheritance tax.

Speak to your legal adviser/solicitor about this to ensure that your spouse/family is protected.

5. Take financial planning advice

Once the honeymoon is over and you start to settle into your stride of married life, think about your long term futures together and what you want to achieve both now and at the life cycles that you may encounter, (as examples) from merging two households into one, children, employment changes, wealth management and retirement. You may well have already discussed together what you hope for, however, it is well worth while getting good quality financial advice about how this can be achieved financially.

As a married couple, it may also be prudent to look at your individual income tax positions and how this can be used effectively to reduce any liability to income tax in future tax years.

Speak to an independent financial adviser (IFA) about your mutual objectives and what can be achieved, based on your individual circumstances.

Summary

If you are or a member of your family is getting married, then I wish you every success for the big day and the future.

There is a lot involved in wedding planning and, as noted, financial planning may come as a low priority when looking at what needs to be prepared, but has significant consequences if you get it incorrect. We would be pleased to expand further on the points in this blog when you enquire and please note that this is not an exhaustive list.

We are all different and the needs of a marrying couple will vary, dependent on their individual situations before the marriage and their futures together. Therefore, this article should not be seen or used as individual advice.

Seek Independent Financial Advice (IFA) for your circumstances. Churchouse Financial Planning Limited can be contacted in Guildford, Surrey on (01483) 578800.

Keith Churchouse

Director of Churchouse Financial Planning Limited

Churchouse Financial Planning Limited is authorised and regulated by the Financial Services Authority. The Financial Services Authority does not regulate taxation advice.