5 Things to Consider Before Getting Married.
Finding love is a beautiful thing; what is even more beautiful is showing your commitment to your partner by marriage.
However, marriage can significantly impact your finances in a number of ways. In this article, we discuss five areas that you need to carefully consider before deciding to get married.
1. Tax Implications
Depending on the state in which you live, getting married can have significant implications on how much you pay in taxes.
In most cases, combining your assets with your partner’s may push you up into a higher revenue bracket, which can increase your collective tax burden.
You could also disqualify from certain government benefits because of your increased combined revenue. An accountant will be able to advise you on how to optimize your taxes depending on your situation.
2. Pre-marital Debt
Getting married when a person has significant debt, can affect the other person’s financial situation if the debt obligation is transferred to the partner.
States have different laws regarding how premarital debt is handled in a marriage but some states hold both spouses accountable for the debt each person had incurred before getting married.
It is also important to consider how your increased income through joint finances might affect your debt repayment.
If you are repaying based on your income, then your repayment obligations would likely increase.
In some cases, you may be eligible to have a portion of your debt forgiven based on your income, but marrying and receiving an increased income might eliminate this option entirely.
Make sure you discuss any existing debt with your partner and be sure that you understand how your state’s laws handle pre-marital debt.
3. Loss of Alimony or Survivor Benefits
If you (or your partner) have been previously married, then remarrying could mean that you lose alimony or survivor benefits from the pension of your previous spouse.
If your alimony or survivor benefits are a significant portion of your income, then marriage might mean that you would lose that income.
4.Medical Bills and Medicaid Eligibility
When you get married after age 65, your spouse’s assets will be considered when deciding whether you’re eligible to receive Medicaid (U.S).
If you make less than your partner and are receiving Medicaid, getting married might mean that you are no longer eligible for the program.
You can learn more about Medicaid eligibility here. If you end up being no longer eligible for Medicaid, then the costs of any long-term care would fall upon your spouse.
When you consider that this could cost tens of thousands – or even hundreds of thousands – over several years, it becomes even more important to understand the financial implications of getting married after 65.
When it comes to health insurance, marriage doesn’t usually have a restrictive effect.
Even if you don’t marry, if one partner is working, the other partner may be added to their insurance plan – the specific details depend on the employer’s policy.
If you marry and sign up for your spouse’s health insurance, and then your spouse passes away, most insurance companies will allow you to continue your health insurance coverage.
If you do end up in a situation where a spouse is paying for most of your medical care, then it is important to consider what would happen if your spouse passed away.
Life insurance policies are one way to ensure that the widowed spouse has financial resources to support themselves, and depending on your financial situation, life insurance may be a wise investment.
5. Speak with a Financial Planner
If you are considering getting married, I advise you speak with a financial planner to understand all of the ways that marriage may affect your finances.
Getting married seems like the logical step when you have been in a long-term relationship, but you will also want to be realistic about some of the financial implications that marriage can bring.
Whether you and your partner choose to marry or decide that it makes more financial sense to simply live together, you need to make the choice that is right for you.
That’s all on the 5 Things to Consider Before Getting Married.