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Rowling & Associates Blog

Considering Marriage

by Tara Weisinger

With the demise of DOMA (the Defense of Marriage Act), now all couples can ask “Should we get married?” If you are considering marriage, your main consideration should obviously be whether or not you want to get married! Assuming the answer is yes, you will need to weigh the importance of the financial impacts vs. your personal preferences.

A cartoon of a man's marriage proposal to a woman at a fancy dinner

What rights and responsibilities come with marriage?

There are over one thousand rights and responsibilities as a married person. These can include rights of community property, hospital visitation and parental status, and benefits. Responsibilities can also play a part, such as joint liability on debts, support obligations and the requirement for divorce if the relationship is to be severed.

Will being married change my estate taxes?

The Supreme Court case overturning DOMA involved the US’s assessment of estate taxes on the surviving spouse of a same-sex marriage. For most people, this will not be an issue whether married or unmarried since the estate exemption is now almost $5.5 million per person. For couples with a net worth in excess of that, marriage could substantially lower estate taxes by means of tax-free marital transfers and “portability” (allowing one spouse to claim the unused exemption of the other pre-deceased spouse).

I am considering marriage; how will this change my income taxes?

Depending on relative income levels and “head of household” status implications, marriage might have a positive or negative impact on income taxes. Since situations change (both for taxpayers and tax laws), a marriage “penalty” in one year could be a marriage benefit in the next year. Working with your CPA can help quantify how marriage will affect income taxes.

What types of income-based benefits should I think about when considering marriage?

Income-based benefits could be impacted by marriage, i.e., food stamps, scholarships, insurance exchange costs, etc. The dollar change caused by marriage should be evaluated for materiality.

Can being married change my retirement benefits?

Yes, your social security income and pension income can be impacted by getting married. A spouse with a history of little or no earnings is entitled to Social Security based on 50 percent of the higher-earning spouse. This benefit of up to $1,500 per month (or more) is so substantial, it could make marriage look pretty attractive! In addition to that, many pension plans offer the option of a “joint and survivor” annuity benefitting the spouse. This option is typically not available to unmarried couples.

In the end, after weighing the pros and cons, it all comes down to personal wishes.

For couples who decide not to get married, tax and estate planning is a must! Meeting with your CPA and Financial advisor is always a good idea when making major life changes and marriage is no exception to this rule.