What do you think of when you hear the word “marriage”? Happy couples, cake, rings, wedding bells and day to celebrate? Young couples today are beginning to think beyond the wedding day, considering the financial implications of combining taxes and sharing debt obligations. There are many alternatives to getting legally married. The easiest one is co-habitation, but this carries with it some disadvantages when you want to be tied legally to your partner. What are the pros and cons of marriage?
Wedding Bills : The average US wedding costs about $35,000. If a new couple invested that money in IRA with an annual rate of 9%, they would have 1.26 million dollars by the time they reached 65.
Marriage Tax Penalty: When married couples both earn income, this places them in a higher tax bracket. They can end up paying more taxes, often negating the income of one working parent especially if the cost of childcare is considered. Avoiding marriage if both persons are earning income lets you file taxes separately and potentially keep more of your income. If however, one partner will not be earning income, claiming two deductions (claiming the non working person as a dependent) benefits a married couple on their tax filings. Monetary gifts between legally married couples are also exempt from tax.
Emotional Stress: Most couples go through emotional stresses as they plan their weddings, straining their relationship as they bring in extended family to help fund or make decisions regarding the wedding day. Consider a cruise vacation where you spend less than on a traditional wedding. You can simply enjoy your partner while on a stress free vacation.
Home Buying: Married couples who file jointly can keep up to $500,000 on the sale of a home without paying capital gains tax, whereas an individual homeowner can keep only $250,000.
Illness: Non married couples may have difficulty receiving visitation rights when one of them is hospitalized. This can be solved by having a lawyer draw up a visitation rights agreement between you and your partner. Power of attorney gives full rights to your partner to make decisions on your behalf.
Healthcare: Being on the same healthcare plan can be convenient and sometimes cheaper, however if one family member on the plan develops a serious illness, everyone else on the plan can be negatively effected by cost or the inability to get a low rate on a new plan. Keep in mind that if you are considering having children, it is best for both parents to get on their own healthcare plan prior to conceiving a child, as most insurance policies have a clause that excludes them from paying for labor and delivery costs if a baby is born prior to 12 or 18 months of the plan’s initiation. Fathers may also find it difficult to get a good rate on healthcare if they have fathered a child prior to applying for individual healthcare. When you have children, also consider which parent’s healthcare plan the new baby will be added to or if the baby will be on it’s own healthcare plan.
Loans and Bankruptcy: By getting legally married, couples are automatically joining their credit ratings and debt responsibilities. By keeping your credit ratings and monetary lending legally separate, you will not compromise your partner’s ability to operate financially. This is especially beneficial if either person owns a business as you can keep your assets in one person’s name and the business in the other’s name. Should the business run into trouble, your assets can be kept safe if each person is not legally attached through marriage.
Social Security: Legally married couples are able to receive each other’s social security benefits after death. Social Security benefits are so nominal that neither of you should plan on relying on it as income in either case. If you both reach the age of retirement, you may wish to get legally married at that point to receive each other’s SS upon death. It is also likely that SS will not be worth anything or phased out by the times you retire. Use the tools of legal partnership and legal marriage when and how they suit you and your partner best.
So how can you “get hitched” without all the downsides? Think of legal marriage as a package deal, granted by the government to recognize two individuals as one unit. This effects everything a married couple does, sometimes positively, sometimes negatively. Assess what tools of legal marriage you and your partner would like to benefit from and hire a lawyer to set up a legal agreement between the two of you that will take advantage of only the positives. These may include:
- Legal visitation rights in a medical emergency
- Granting your partner the power of attorney
- Setting up a will for each of you
- Agreeing on what will happen should you decide to separate: children, assets, etc.
- Agreeing on who legally owns any assets or businesses that may currently be owned by both of you.
- Legally changing of last names and deciding what sur name your children will take.
- Setting up life insurance policies and ensuring that the surviving partner is the benefactor of such policies.
Hiring a good lawyer may cost between $1000-$2000, but this pales compared to the financial benefits down the road when setting up your tailor made partnership agreement. You may also find that websites like legalzoom.com with DIY legal documents may suit your needs for general items like name change, wills, etc.
Marriage isn’t what it used to be. The tradition of the dolled up bride in white, who’s parents throw an expensive party is borrowed from the days of kings and queens. The “princess” was the star of the day and no expense was too great to make her wedding day as lavish as possible. Today this medieval tradition can be too costly and unnecessary. Focusing on your future as a couple both financially and emotionally should be more important than putting on a show and party for your friends and family. Consider tailoring your legal partnership to best suit your needs, then take a long romantic vacation to celebrate each other. You’ll save money and enjoy yourselves much better than putting on a show.
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Resources: Financial Advantages and Disadvantages of Marriage
from our home. The result is a cheaper, healthier way of cleaning. We also do not buy PFC coated furniture, carpet, etc and we avoid clothing made from anything but cotton or bamboo. From ScienceDaily.com:
speak sound so cute and their mispronunciations often make us giggle. Between the ages of 3 and 6 when language is being tested and solidified by a child is the most vulnerable period of language aquisition.
during pregnancy directly correlate with behavioral issues in their child at ages 4-9 years.
women’s hormones make her more likely to choose a mate who exhibits more masculine traits and to also choose a mate who is genetically less like herself through the body’s response to pheromones of the opposite sex.
Obviously she and her family decided to abort the babies considering her age and the danger of childbirth at such a young age, (and the circumstance of rape). Because of this decision, the Catholic church responded by excommunicating the child, her mother and the doctors who conducted the procedure.
This book deals in just parenting. What we teach our children should be taught by example. Threats, sheltering and fear are insincere ways of guiding a child into adulthood. If what you teach your children is honest and real, it should be capable of weathering all that the world has to throw at it without tactics, threats or sheltering. If knowledge and reason can knock down what one teaches a child, then a re-evaluation of what is being taught must be conducted. Once a child grows up and has free access to the information he seeks, the parents will have forfeited the child’s trust and confidence in them.
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