financial benefits of marriage vs. long term relationship

[Eighty_nine]

So, my boyfriend and I are pretty serious, very happy, and talking about trying for a baby in 6 months to a year from now, assuming all is still great between us and we're in an OK spot to afford one, etc.

 

But I really can't decide whether I'd ever like to get married. He basically says he'll do what I want to do. He would love to be married to me but if I'd rather not, that's OK with him too. We see a long future together regardless.

 

Of course some would say there are emotional benefits to being married, and I agree, that may be true.

 

But financially- i.e. taxes, owning property, etc... are there are a lot of disadvantages to not being legally married? Also my partner has school debt, whereas I am debt free. How might his debt affect me, in the future, if we were married?

 

Thanks!

[DivorcedDad123]

His student loan (or any other pre marital debt) won't affect you legally,but it's going to mean that he has less disposable income than he might otherwise.

Property,if you're married,you have a legal interest in,even if your name isn't on the loan. Unless that property was acquired prior to marriage. Even then, if marital funds were ever used to pay for the property,you have an interest.

Taxes are different. The two of you together are going to be in a higher tax bracket,but you can file married/seperately. A child brings other tax deductions,but those pale in comparison to the cost of raising one. Mortgage deduction is the biggie. You get to deduct the interest on your loan,so being amortized, you start off paying all interest,and as the loan progresses,the interest becomes smaller and the principle you pay is larger.

[Els]

The answer will vary hugely depending on where you live (AFAIK even in the US different states have different laws on that).

[nescafe1982]

The answer will vary hugely depending on where you live (AFAIK even in the US different states have different laws on that).

 

+1 on this. See an attorney for advice on this as it pertains to your specific situation.

 

I will say, though, that at the Federal level you get better tax breaks for both shared property and children if you are legally married.

[Mr. Lucky]

But I really can't decide whether I'd ever like to get married. He basically says he'll do what I want to do. He would love to be married to me but if I'd rather not, that's OK with him too. We see a long future together regardless.!

 

I'm always confused by this when kids are involved. Obviously, there's some aspect of marriage you find threatening, off-putting or unnecessary.

 

But what bond or obligation does marriage bring that having a child together does not:confused: ???

 

Mr. Lucky

[CarrieT]

If you decide against marriage for any reason, at least get general Powers of Attorney; otherwise you have no legal rights if something catastrophic happens. Either of your families could swoop in and make decisions that you or your partner should be making, but would have no legal right to do do otherwise.

Edited September 11, 2015 by CarrieT

[oohlala]

His student loan (or any other pre marital debt) won't affect you legally,but it's going to mean that he has less disposable income than he might otherwise.

Property,if you're married,you have a legal interest in,even if your name isn't on the loan. Unless that property was acquired prior to marriage. Even then, if marital funds were ever used to pay for the property,you have an interest.

Taxes are different. The two of you together are going to be in a higher tax bracket,but you can file married/seperately. A child brings other tax deductions,but those pale in comparison to the cost of raising one. Mortgage deduction is the biggie. You get to deduct the interest on your loan,so being amortized, you start off paying all interest,and as the loan progresses,the interest becomes smaller and the principle you pay is larger.

 

^This.

 

Also, there's a few logistics that come along with marriage that are still doable without it but take a little more effort. Like working out health insurance, life insurance, etc. - and essentially making sure you've got everything else taken care of legally and have a living will. Domestic partnership also helps with some of that.

 

Personally though, I wouldn't marry for any reason financial.

 

I was very on the fence myself my entire life and we're still not sure if we want kids, but we're very very ready to be married. He's younger than I am, I'm 35. So I've had a while to think about this.

 

I have the more established career, disposable income, etc. so I'm essentially the breadwinner. This is absolutely fine with me because he does about 99.9% of our domestic duties. I trust him with the money we share right now and I will trust him with our money when we're married, but I know that it's going to be a bigger financially responsibility for me than I'd enjoyed in years before. And I don't care. Totally worth it.

[oohlala]

If you decide against marriage for any reason, at least get general Powers of Attorney; otherwise you have no legal rights if something catastrophic happens. Either of your families could swoop in and make decisions that you or your partner should be making, but would have no legal right to do do otherwise.

 

^That too.

 

When people try and argue to me that marriage is just a piece of paper, my first thought is to revisit Terry Shiavo. You need to definitely work out the Powers of Attorney and map out what your desires are in a catastrophic situation.

[OldRover]

OP,

 

There's LOTS you can do to protect each if you remain single, but you need to know state law.

 

You can do a ton of things with trusts, power of attorney and basic agreements.

 

Some states have a "domestic partnership" which offers some rights to each and some benefits, but is very easy to get out of, and is not obligating like marriage.

 

You can learn all about the above, if you take the time to do it. You can have just about everything married or not with the above stuff, and knowing the state law.

 

The federal law may have some tax effects on you married or not, you need to explore where you stand there.

[SolG]

The answer will vary hugely depending on where you live (AFAIK even in the US different states have different laws on that).

 

Where I am (not in the US) there's really no difference once you've lived together for two years. I know lots of long term couples who chose not to bother with marriage per se, but are just as committed both legally and relationship-wise. It would pay for you to get legal advice regarding how things work in your jurisdiction.

[Els]

Where I am (not in the US) there's really no difference once you've lived together for two years. I know lots of long term couples who chose not to bother with marriage per se, but are just as committed both legally and relationship-wise. It would pay for you to get legal advice regarding how things work in your jurisdiction.

 

Yeah, same here, although the minimum cohabitation period varies for different rights/obligations. Also, notably, even without considering separation laws, being in a legally-recognized relationship isn't always to one's financial benefit - sometimes spouses or de facto partners aren't entitled to certain allowances or social payments that they would otherwise have received if single, due to their other half's income.

 

I agree with you and nescafe - OP needs to either talk to an attorney or do a LOT of research on local laws. LS really can't help with this as people won't know which laws are applicable to the OP's country/state.

Edited September 12, 2015 by Elswyth

[central]

Short term, marriage can be a financial burden. If you have children, there are tax breaks, but those tax breaks are MORE valuable when applied against a single tax return. Married filing separately usually INCREASES your total taxes - except if one person has very high deductible expenses subject to a gross income threshold (e.g., medical deductibles) - that threshold is higher when you combine incomes. Also, if you have children and are not married, the parent can claim 'Head of Household' status which provides additional exemptions (if you are separated eventually, you can negotiate who gets to claim head of household status so that you minimize taxes and maximize money available for child support, say).

 

Long term, marriage MAY provide financial benefits or burdens, depending on the scenario. At retirement, if you've been married 10 years or more and one of you has had a considerably higher lifetime income, the LOWER earning spouse can get Social Security Retirement Income at half the amount the higher earning spouse would get, rather than on their own earnings record. This can provide tens of thousands of dollars a year in additional SS income. (This remains true if you divorce after at least 10 years, but not if you remarry later.)

 

On the other hand, if you are married and one goes into a nursing home (not covered my Medicare), almost ALL of your assets and their SSRI can be taken to pay for care, and given how high those costs are, it can almost impoverish the healthy spouse if the stay is long term. (There are strategies to avoid this, such as a so-called Medicaid divorce with unequal asset distribution in settlement favoring the well spouse. Few people know this or are willing to divorce to preserve their assets.) Another problem - if you buy health insurance on the exchanges - is that one person alone as unmarried may receive subsidies, but married income levels could result in no subsidy.

Edited September 12, 2015 by central