Major life events often bring new responsibilities, priorities and financial decisions. Marriage, welcoming a child, divorce or the loss of a loved one can affect more than your personal life. These changes may also influence your taxes, investments, insurance coverage, retirement strategy and estate plan. Here are several important financial considerations to review when life changes.

Getting Married

Marriage can affect your tax filing status, withholding and eligibility for certain tax benefits. Newly married couples may also need to combine financial accounts, establish shared goals and decide how they will manage income, expenses and debt.

After getting married, consider:

• Reviewing your tax withholding and updating Form W-4 if needed
• Updating your name and address with the appropriate organizations
• Reviewing beneficiaries on retirement accounts and insurance policies
• Discussing your individual and shared financial goals
• Creating or updating your will and estate plan
• Coordinating investment and retirement strategies

Welcoming or Adopting a Child

A new child brings both joy and new financial responsibilities. Parents may become eligible for certain tax benefits, including the Child Tax Credit, Adoption Credit or Child and Dependent Care Credit, depending on their circumstances.

This is also a good time to:

• Add your child to your health insurance
• Review life and disability insurance coverage
• Update your will, beneficiaries and guardianship instructions
• Adjust your household budget and emergency savings
• Begin planning for future education expenses
• Obtain a Social Security number for the child

Divorce or Legal Separation

Divorce can significantly affect your income, assets, taxes and long-term financial goals. Your filing status, withholding, dependents and eligibility for certain credits and deductions may change.

Important steps may include:

• Reviewing your tax filing status and withholding
• Updating beneficiaries on eligible accounts and policies
• Revisiting your retirement and investment strategy
• Reviewing jointly owned property, accounts and debts
• Updating your estate-planning documents
• Creating a new budget based on your current income and expenses

Some beneficiary designations or account changes may be governed by divorce agreements, court orders or federal and state law. Work with your attorney, tax professional and financial advisor before making changes.

Losing a Spouse or Loved One

Managing financial matters while grieving can feel overwhelming. The deceased person’s final income tax return generally reports income received through the date of death, along with eligible credits and deductions.

Surviving family members may also need to:

• Locate estate-planning and financial documents
• Notify financial institutions, insurers and government agencies
• Review account ownership and beneficiary designations
• Understand pension, retirement, and Social Security benefits
• Evaluate changes to income, expenses and investment needs
• Review or create an updated financial and estate plan

There is rarely a need to make every long-term financial decision immediately. Begin with time-sensitive responsibilities and seek guidance before making significant changes.

Make a Financial Review Part of Every Major Transition

Following any major life event, review your:

• Tax withholding
• Monthly budget
• Emergency savings
• Insurance coverage
• Investment and retirement accounts
• Beneficiary designations
• Will and estate documents
• Short- and long-term financial goals

The IRS also recommends reviewing your withholding after a major personal or financial change to help avoid an unexpected tax bill. Its online Tax Withholding Estimator can help you determine whether an adjustment may be appropriate.

We’re Here to Help

Life can change quickly, but you do not have to navigate every financial decision alone. The Minster Bank Private Wealth Management team can help you understand how a major transition may affect your financial plan and identify the next steps that support your goal.

Contact us to schedule a conversation about your financial future.

This article is for general informational purposes only and should not be considered tax, legal or investment advice. Please consult the appropriate qualified professional regarding your individual circumstances. Tax information was adapted from current IRS guidance on major life events.