I'm Getting Married. How Could Marriage Potentially Affect My Finances?
Marriage affects your finances in many ways, including your
ability to build wealth, plan for retirement, plan your estate, and
capitalize on tax and insurance-related benefits. There are,
however, two important caveats. First, same-sex marriages are not
legal in most states and are not recognized by the federal
government. Second, a prenuptial agreement, a legal document,
permits a couple to keep their finances separate, protect each
other from debts, and take other actions that could limit the
rights of either partner.
If both you and your spouse are employed, two salaries can be a
considerable benefit in building long-term wealth. For example, if
both of you have access to employer-sponsored retirement plans and
each contributes $17,500 a year, as a couple you are contributing
$35,000, far in excess of the maximum annual contribution for an
individual ($17,500 for 2013). Similarly, a working couple may be
able to pay a mortgage more easily than a single person can, which
may make it possible for a couple to apply a portion of their
combined paychecks for family savings or investments.
Some (but not all) pensions provide benefits to widows or
widowers following a pensioner's death. When participating in an
employer-sponsored retirement plan, married workers are required to
name their spouse as beneficiary unless the spouse waives this
right in writing. Qualifying widows or widowers may collect Social
Security benefits up to a maximum of 50% of the benefit earned by a
Married couples may transfer real estate and personal property
to a surviving spouse with no federal gift or estate tax
consequences until the survivor dies. But surviving spouses do not
automatically inherit all assets. Couples who desire to structure
their estates in such a way that each spouse is the sole
beneficiary of the other need to create wills or other estate
planning documents to ensure that their wishes are realized. In the
absence of a will, state laws governing disposition of an estate
take effect. Also, certain types of trusts, such as QTIP trusts and
marital deduction trusts, are restricted to married couples.
When filing federal income taxes, filing jointly typically
results in lower tax payments when compared with filing
In certain circumstances, creditors may be able to attach
marital or community property to satisfy the debts of one spouse.
Couples wishing to guard against this practice may do so with a
Marriage may enhance a partner's ability to collect financial
support, such as alimony, should the relationship dissolve.
Although single people do adopt, many adoption agencies show
preference for households that include a marital relationship.
The opportunity to go through life with a loving partner may be
the greatest benefit of a successful marriage. That said, there are
financial and legal benefits that you may want to explore with your
beloved before tying the knot.