Navigating Love and Real Estate: A Guide for Newlyweds

My wife and I recently attended a beautiful wedding that reminded me about how exciting it is when newlyweds embark on sharing their lives together. It can also be complicated and sometimes stressful when the happy couple brings with them real estate assets, or when the couple decides to buy a home together. I have found, from both personal experience and through the experiences of our clients, that many struggle with how to best combine and protect their assets. If you are recently married, or soon to be married, and want to avoid the “Just Married Angst,” please take the time to read through this blog which highlights real estate-related tips for newlywed couples.  

Don’t Rush In

First off, I want to start by stressing that you shouldn't feel the need to rush into anything right away. Take a deep breath and enjoy being married for a minute. When ready, I highly recommend using this blog post as a checklist to get your financial ducks in a row. The biggest thing is to prioritize these items in small chunks to get your momentum going. Don't get overwhelmed by trying to tackle all of these at once and end up paralyzed and doing nothing. Consider tackling these items over the next three to 12 months.  

Create a Team of Trusted Advisors 

I recommend that you assemble a team of trusted advisors to help you with the various issues you will face as you combine assets and figure out your financial future. In my opinion, you should be considering the following people for your team: 

• Trust Attorney
• CPA or Enrolled Agent
• Insurance Agent
• Lender
• Financial Advisor
• Real Estate Professional

If you don't have a person for a particular category, please reach out and let me know. I can give you a few referrals for you to call and interview. Please call or text me at 775-525-0309 or email me for help with referrals. It is good practice to interview several people and make sure you have people on your team that you get along with and are looking after your best interests. Once you have your trusted advisors in place consider tackling the items below. 

Create a Trust

I highly recommend that the first step you take is to find a Trust Attorney and set up a Trust with your new spouse. Why you ask? A trust is a legal arrangement where the assets of an individual are transferred to a trustee, who manages them on behalf of the beneficiaries. The trust can be created during the lifetime of the individual, and they can also serve as the trustee. In such cases, the individual retains control over their assets and can amend or revoke the trust at any time. In the event of the individual's death or incapacity, the successor trustee takes over the management of the trust, and the assets are distributed according to the provisions of the trust. If there is just one thing that you do from this blog, please consider getting a trust done. 

I have seen too many times where something happens to one of the spouses and the surviving spouse is left devasted because they didn't have a trust in place.  Below is a podcast on what a trust is and how to set one up. I recommend interviewing several Trust Attorneys to see who best fits both of your personalities because it is a very personal process/topic.     

Podcast on Trusts: https://youtu.be/ZxbCd1iuBd0?si=IGlyyFy4uOTebX0_

Blog post on The Differences Between a Trust and a Will: https://blog.livinginsouthreno.com/the-differences-between-a-will-and-a-trust

Review Real Estate Insurance Coverage

It is important to look over all of your real estate holdings and make sure they are properly insured and protected. You want to make sure the replacement value of all your properties is the amount you have your properties insured for just in case a loss occurs. Additionally, you might want to consider additional policies now that you are married such as an umbrella policy for $1 million for liability, earthquake insurance, flood insurance, a term life insurance policy, and/or homesteading your primary residence. If you have multiple policies with different insurance companies, you might want to consider combining your insurance coverage with one company to save money and simplify things.

Below is a recent podcast with an insurance agent discussing all these issues: https://youtu.be/ZxbCd1iuBd0?si=IGlyyFy4uOTebX0_

Your Real Estate Portfolio – Existing and New Purchases

You may have already started thinking about purchasing a home that is both of yours together – rather than living in one of your existing homes if one or both of you already own a home. Some couples, like myself when I got married, already own homes that they purchased before the marriage. Some couples will move into one home and sell the other while others choose to rent out their home, and then some will choose to sell all together and buy something new as a couple. Each circumstance is different for every couple and it’s important to look at all of the options, costs, and long-term implications of every possibility.  

If you are considering a joint property, you are going to want to carefully analyze all of your real estate holdings and make sure you are looking at all options (selling or making it a rental property) before making a final decision. I believe that the worst thing you can do right now is sell a property with a sub-four-percent mortgage rate to get a 7.25-percent mortgage rate for a new property. You need to sit down with your lender, your real estate professional, and your CPA and really analyze each property and see if it makes sense to make them a rental or sell them. I urge you to not make a property a rental unless it makes financial sense and all of your trusted advisors have reviewed the implications based on tax and personal liabilities. If you are considering the rental route, make sure you speak with your attorney about setting up an LLC to set up a firewall between your rental property and other personal assets. 

Here is a recent podcast we did about how to set up an LLC for rental properties:  https://youtu.be/I4dhtoRY8lQ?si=sA-GBlUoVU1jghJt

Finally, I recommend being very patient and thoroughly investigating all options before making a decision about purchasing a joint house in this market. In my opinion, this market has a lot of room to go down with how things are going right now. If you want to proceed with purchasing a joint home, just make sure you can easily afford the monthly payment and do not end up being “house-poor.” 

Cheers to the Happy Couple

The journey of marriage is an exhilarating adventure filled with joy, love, and shared dreams. However, it's essential to approach this new chapter with careful planning, especially when it comes to your real estate assets and financial future. Rushing into decisions can lead to unnecessary stress and complications.

By following the steps in this blog and taking the time to plan wisely, you can set a strong foundation for a harmonious and prosperous life together. Remember, building your future together is a journey, and with careful planning, you can navigate it successfully and create a strong and lasting union.

If you would like to discuss any of these items in more detail, I am available at your convenience. Please call or text me at 775-525-0309 or email me. 

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