I’m amazed at how often I speak to people who have lived with a significant other for many years and even have children together but haven’t tied the knot. Now, I’m not trying to make a religious or moral argument for marriage. In fact, I’m a bachelor myself. Rather, I think it’s important for these couples to understand the various financial implications of “living in sin.”
Being married can provide you with access to a whole range of benefits from your spouse’s employer. Even if your employer provides health insurance, your spouse’s plan may offer a better deal. If you decide not to get married, check to see if your significant other’s employer is one of the growing number that provides benefits to “domestic partners.” Contrary to popular belief, you don’t have to be same-sex to be considered domestic partners.
Speaking of popular belief, the idea of a “marriage penalty” has always been overblown. The fact is that there’s generally a tax benefit for being married, especially if one spouse earns much more than the other. Even before Congress repealed the penalty for most couples suffering from it, the majority of married taxpayers paid less in taxes than if they had remained single.
Social Security Benefits
This is one of the biggest. Being married can make you eligible for thousands of dollars in Social Security survivor benefits each month if something were to happen to your spouse while you have minor children. (You may have heard that Paul Ryan’s family received these benefits after his father passed away.) You can also get spousal benefits at your retirement age
Estate planning is a lot easier when you’re married. For one thing, most states have the spouse as the primary default heir if you don’t have a will, trust, or beneficiary designation. On the other hand, if you don’t get married, you or your significant other are likely to end up with absolutely nothing, which is what happened to the 32-year girlfriend of Stieg Larsson, author of The Girl With the Dragon Tattoo series. Of course, you can draft wills and other estate planning documents but they can be challenged in the court and other benefits, like hospital visitation rights, may slip through the cracks.
Child Support and Alimony
You may think of these as disadvantages of marriage and for many people, they are. But for others, particularly those who sacrifice their career for their family, these forms of support can be vital if things don’t work out. After all, if you think divorce with children is messy, wait until you see how messy a separation is without the structure of divorce law.
Of course, there’s more to life than money, especially when it comes to a decision like marriage. However, marriage is more than just a romantic or social relationship. It’s also a legal one with important financial ramifications.