I was visiting with close friends recently about their daughter’s upcoming wedding, and they referred to an article they’d read describing 2022 as “the year of the wedding.” Due to so many postponed weddings during COVID, the 2022 calendar is jam-packed with weddings. Question: What do weddings have to do with estate planning and family legacy planning? Answer: A lot!
When I was studying tax law and estate planning at UT Law School over 40 years ago, I never imagined I’d one day be advising families on so many issues pertaining to marriage. I’ve written on the topic, I give speeches on the topic, and I regularly advise clients on the topic.
The ties between marriage and estate planning are numerous. The most obvious has to do with trust and pre-nuptial (“pre-nup”) planning to preserve and protect family assets. But as a follow-on to last week’s email about protecting all 5 “capitals” (not just financial capital), my focus today is on the impact of marriages on human capital. As I elaborated last week, author Jay Hughes distinguishes between quantitative estate planning (to protect financial capital) and qualitative estate planning (to protect human, intellectual, social, and spiritual capital). Family “wealth” is comprised of all five capitals.
Hughes defines human capital as the individuals who make up the family, including each one’s physical and emotional well-being. It’s easy to imagine how a stressful wedding scenario would disrupt family relationships and the emotional well-being of family members. Yet even in the most harmonious situations, wedding planning puts stress on family relationships. Healthy relationships are the glue in maintaining a family’s stability and sustaining a family’s wealth long-term. The estate planner can be an objective voice of reason when challenges emerge.
Consider the impact these hot-button issues could have on family ties:
- Cost of the wedding—Establish a budget (and then if you’re realistic, you should secretly double it in your head). The movie Father of the Bride warns how tempting it is to bust the budget. Caution against the wedding becoming bigger than the marriage. When our daughter Lizzy married, we asked her to identify her top three priorities. She chose music, photography, and a fairy tale Manhattan venue. We kept all other costs under control.
- Determine who pays for what—Bride’s family, groom’s family, or the marrying couple. A wedding is a major financial endeavor akin to two strangers entering into a business partnership. Some Orthodox Jews adhere to the FLOP rule: the groom’s side pays for Flowers, Liquor, Orchestra, and Photography. Clarify upfront what costs each will cover.
- Who calls the shots? Though some are tempted to follow the other “Golden Rule,” a wedding isn’t necessarily a situation where “he who has the gold rules.” With the stability of a family hanging in the balance, the stakes are much higher.
- Invitation list—Do the math. A 400-person wedding doesn’t mean the bride’s parents can invite 400 guests. That’s 200 couples, perhaps 100 for the bride and 100 for the groom. After inviting family members, the bride’s friends, and the groom’s friends, parents will likely be left with a small number of invitations for their friends.
- Pre-nup planning—As hot topics go, this may be the hottest. The Blum Firm has substantial expertise in this area. Be on the lookout for information in upcoming emails about pre-nups as well as “pre-nup alternatives.”
Above all, remember that “post-wedding” matters more than “pre-wedding.” Set aside any hard feelings and support the new couple. They will be parenting the next generation of your family. Embrace your new in-law and welcome him or her to the family. In coming weeks, we’ll give tips on onboarding in-laws.
Stay tuned for more wedding wisdom in this “year of the wedding.”
Marvin E. Blum
Weddings are an important part of a family’s legacy. Marvin Blum’s daughter Lizzy observes as her husband Ira preserves the Jewish tradition of breaking a glass, reminding us of the fragility of life and the care it takes to protect relationships.