Beloved retired Tri-Cities four-star general Jim Mattis married for the first time. Huzah!
His wife, Christina Lomasney, is an entrepreneur and executive at Pacific Northwest National Laboratory.
These newlyweds, whom I do not know personally, no doubt have complex personal and financial lives and will likely still have many financial issues to deal with.
They are no different from many other couples who are getting married.
If I were their fiduciary financial advisor, here are some of the first steps I’d suggest for them — and most newlyweds — to focus on money after saying “yes.”
What is important to you?
It’s such an exciting time, the first few days after the wedding.
As a new couple, I encourage you to have ongoing conversations and dream a little about where your new life together might take you. Do not hold back. If money weren’t an issue, what would you do with your time and energy as a couple? What people, causes and activities are important to you?
Finances combined or separate?
Do you plan to combine your finances, separate them, or a combination of both?
How involved do you envision being in each other’s financial lives?
Often there is a financially dominant partner in a relationship.
Will you have a family meeting to discuss money matters together, if so, how often? How will important decisions be made?
Establishing healthy communication early in a relationship can help put you both at ease. When each person feels comfortable expressing their needs, feels listened to and respected, resentment is much less likely to build up.
Do either of you have a successful business, a large inheritance, or debts that you would like to keep separate? If so, consider a prenuptial agreement, which can always be done after you say “yes.”
It is also important to consider the laws of your state. Washington is one of nine communal property states, which means that property acquired during marriage is owned equally. This counts in a death or divorce. For people with complex lives who might have out-of-state assets, the law can get complicated, so seek advice.
Couples have a choice in terms of taxes, the married couple filing jointly (MFJ) or separately (MFS).
Generally, MFJ offers more deductions than MFS and results in lower tax liability in most cases.
The MFS may make sense in certain situations, such as business owners trying to qualify for a qualifying business income (QBI) deduction or a student loan situation.
You’ll want to check whether your new filing status and adjusted gross income will affect your ability to contribute to tax-advantaged accounts.
It’s always good to talk to a tax professional – after all, what normal person really understands taxes?
Get a tax projection for this year, and you might be pleasantly surprised at the additional tax benefits marriage brings.
Like many couples, age differences can lead to some planning challenges regarding health care, your outlook on retirement, and income planning.
It can be difficult to plan a mutual retirement journey in terms of time and activities, as well as coordinating when to start income streams like pensions or social security.
Chances are the young spouse will outlive the other, another important planning opportunity.
An age gap can also have advantages. If your spouse is still working, that clearly means there is an additional income stream, which reduces reliance on your investments. It could also mean maintaining company-sponsored health insurance, access to a portable long-term care program, and other employer benefits.
And if the spouse is at least 10 years younger and is the sole beneficiary of your IRA, the required distributions at age 72 are reduced.
Sooner or later you will have to talk about death and agony. It’s a tough conversation to have any day of the year, but you have to do it. It all goes back to the beginning, what is important to you? Talk about your wishes for your money, your family. What do you want your money to mean to your children or to others? When do you want this to happen?
Have a frank and open conversation about your end-of-life wishes and share them with other important family members.
To make your wishes come true, you need to finalize – yes, sign – documents with your estate planning attorney.
It’s also a good time to review your beneficiary designations, life insurance policies, and benefits, as you may want to add your new spouse.
Finally, if you or your spouse are considering changing your name, set a deadline and try to do it all at once, starting with your driver’s license and Social Security card. There are many handy checklists online as a guide.
The best days are ahead
There will be an adjustment period as you settle into your new life together.
Love can be fresh, shiny and new, and there’s nothing better!
We wish a long and happy marriage to those taking the plunge, including the general and his new wife.
Angie Furubotten-LaRosee is a certified financial planner, speaker, podcaster, and founder of Avea Financial Planning LLC, a Richland company offering fiduciary financial advice and investment management for a lump sum, specializing in retirees, particularly in the Pacific Northwest National Laboratory.