When most of us think of reasons to get married, money is usually not top of mind. Other factors, such as being in love, attracted to our partners, compatible in ways of living, and having similar values and life goals are usually the factors that reign supreme when selecting a life partner. However, the financial benefits of marriage tend to appear much more often than most of us realize—at least not until the wedding day has passed and we’re thick in the throes of everyday married life.
“Marriage is a union on all levels—romantic, financial, taxes, legal, etc.—but people don’t factor in the financial part because it’s the furthest thing for their minds,” explains Abby Eisenkraft of Choice TaxSolutions Inc. in Melville, New York. “They have stars in their eyes, planning for the future and they don’t really think about financial planning until they are hit with a massive wedding bill that they are paying off for years to come.”
When two individuals come together in holy matrimony, it means they are now recognized by governments, law and society as a unit—and this covers many financial bases. In other words, marriage becomes so much more than a romantic union—it becomes two people who are together legally. “Once a ceremony is performed by a person who is authorized to solemnize marriages, the two parties are tied to one another for all intents and purposes, which means that there can be tax breaks, sharing of health insurance plans and other insurance policies, social security benefits, and entitlement to their portion of all property earned and/or acquired during the marriage,” explains Sabrina Shaheen Cronin, Family Law Attorney, and founder and managing partner of The Cronin Law Firm. “Although most couples do not consider the financial impact a marriage may have on them individually, finances should be a consideration when deciding whether to enter a marriage.”
Even if these spousal benefits might not be the most important reason why you’re getting married—nor should it be!—there are many ways couples can stand to profit financially from being married. Here’s a look at some of the top financial benefits of marriage, according to experts.
Shared Living Expenses
This benefit tends to go for any couple who’s living together (whether you’re homeowners or renting), which almost always includes a married couple. However, some more traditional couples wait until they say “I do” to consolidate homes (and bank accounts!) and start sharing in living expense coverage. “Getting married and consolidating into one home allows the couple to split the bills associated with their home instead of each paying their own utility and carrying charges associated with their respective homes,” says Lauren F. Riesenfeld, Esq., a New York Family Law attorney with Lauren F. Riesenfeld, Law, P.C., and owner of We Do, PLLC.
Whether you plan on filing jointly, head of household or separately, being able to benefit financially from filing taxes as a married couple is a substantial matter, notes Lee Wilson, relationship coach and online educator for TED on the science of relationships. “The ability to list someone as a dependent or two people filing jointly allows less of a couple’s combined income to be taxed since one income is supporting both people (or more if you have children),” he explains. “If one spouse is the earner and the other keeps the home, it’s a great foundation for a pleasant home environment because the upkeep of the house, food preparation, and career support can likely be provided to much greater levels than if both people worked or as single people.”
Legal Financial Assistance
Should either spouse be out of work for any extended period of time, they can generally depend upon their partner to assist in payment of any obligations they may have, explains Cronin. “Having the additional income to help support one another’s needs is definitely a plus, but another thing many couples may not consider is that, when they are married, it can also help if one of them needs a cosigner for a large purchase or any necessary loans.”
Reduced Insurance Rates
Married people also may receive reduced health, home, and car insurance rates, notes Cronin. “The particular reduction will depend upon the specific insurance company; however, if the insurance is provided through one person’s employer, generally once the couple is married, they will be able to add their spouse and children to their insurance policies and receive reduced rates on medical insurance,” she says.
What financial factors should you consider before marriage?
Before you say “I do,” here are some financial considerations you should make, according to experts.
Decide if you want a prenup.
If you’ve earned a substantial amount of money or have assets that were inherited or earned prior to knowing your partner, protecting them is a wise decision, according to Wilson. “If you worked 10 years to build up your savings, investments, and purchased houses or other assets, it doesn’t seem fair that someone else gets a large percentage of it if they were married to you for two years after you had already worked to earn it,” he says.
Talk about your family goals.
If you and your partner want children, your finances, not to mention your entire life, are going to look a bit different. That’s why it’s a good decision to have a discussion over family goals prior to getting hitched. “If one of you wants to stop earning income and keep the home, it’s best to discuss that prior to the marriage so that one person doesn’t feel that he or she is suddenly financially responsible for working to take care of everyone,” Wilson says. “At the same time, a lot of clients that I speak to, especially men, embrace being the breadwinner but need to have that conversation with their future spouse to ensure that both people are on the same page and have similar expectations for the future.”
Discuss your spending habits.
“Many people do not realize the impact debit and credit scores can have on their lives if their partner has an extraordinary amount of debt or a poor credit score,” warns Cronin. For this reason, she recommends that couples discuss what they are each bringing to the table in terms of outstanding expenses prior to getting married. “Although both names may not be on the debt, it can affect the couple’s ability to obtain financing for a home or car, and it can have a tremendous effect on monthly budgets if there are significant payments owed on loans or credit cards,” she adds.
Know each other’s premarital obligations.
If one partner was married previously and has prior support obligations, including spousal support payments and child support payments, and the other partner doesn’t know, it can cause a rift in the marriage. “Sometimes these prior obligations will terminate for the recipient upon his or her remarriage; however, remarriage will generally not affect a partner’s obligation to make said payments to their ex-spouse,” says Cronin. “Additionally, remarriage may or may not affect a party’s receipt or payment of child support payments depending on the court orders in effect.”
Discuss the future.
You and your partner hope to grow old together—so topics like retirement savings and estate planning shouldn’t be taboo. Coming up with a retirement plan and starting a retirement account should be important pieces of your personal finance puzzle. And while talking about death certainly isn’t fun dinner conversation, it’s smart to to think about wills to ensure that a surviving spouse is taken care of in an emergency.
At the end of the day, it’s important to remember that the financial benefits of marriage may only be one part, but they’re an important piece to the puzzle. “It is important to be realistic regarding your finances, and to have open lines of communication, regarding finances, prior to the marriage, to reduce possible arguments regarding this issue post-marriage,” Riesenfeld says. “It is also important to have a realistic outlook on your future life with your future spouse—i.e. if you want your children to attend private school and want a summer home, but do not work and are marrying someone who is unlikely to earn the financial means to acquire that lifestyle.”