To Wed or Not Wed - Financial Planning Impact

Living Together or Getting Married Impacts Couples Financial Planning wed or not wedNaturally, the decision to wed or not to wed is highly personal.  For many, it is an emotional minefield.  For others, it involves dearly held values.  No matter how strongly emotions and values rule, legal and financial considerations flow from choosing whether or not to marry.

Legal Rights.

Marriage conveys certain legal rights.  For instance, a wedded spouse is allowed to visit their beloved in a hospital or even a prison.

Additionally, a spouse is legally the next of kin.  When it comes to personal misfortune and tragedy.  That status confers meaningful rights.  In an emergency, the marriage partner may make medical decisions.

Cohabitation does not confer the same next of kin status nor the same legal standing. A domestic partner may be barred from the hospital or emergency room. Many hospitals rank blood relatives higher on the list of who gets in. Naturally, everyone benefits from having a will and the appropriate medical care legal documents in place.  For non-married couples these documents are absolutely critical long before a partner becomes incapacitated.

Medical Insurance.

A husband or a wife has the option to enjoy the benefit of insurance coverage under the plan offered by the spouse's employer.  Given the high cost of private medical insurance, that can make a huge financial difference. Should either partner suffers a job layoff or any other time out of the workforce, the other partner's insurance benefits can offer coverage.

The picture is not so clear for non-married partners. Generally, most employer based insurance excludes domestic partners. That leaves the expensive marketplace as the next stop.

Credit Ratings.

Another point of difference involves credit ratings. Each member of a cohabiting couple stands alone in the eyes of the big 3 credit bureaus.  That is simply not the case for a married couple. For couples, a dialogue about credit ratings is certainly something to consider. Interest rates are pegged to credit ratings. Therefore, the real cost of every major purchase hangs in the balance.

Property Rights.

When the time comes to inherit property, the law presumes certain spousal rights to inheritance.  For a cohabiting couple, nothing is presumed.  Such rights must be lined out in each partner's last will and testament.  Additionally, cohabiting couples need to exercise extra care in how the title to any property is held.

Standing to Sue.

In the worst case event of an untimely death, a bereaved spouse has legal standing to hire an attorney and, if appropriate, file a wrongful death claim. For a domestic partner, it depends upon whether the state of residence even permits a non-married partner to file such a lawsuit.

No matter the emotions, values or sheer trepidation involved, either choice has profound consequences. Sometimes the consequences lie in the timing of the decision. Navigating financial planning for couples--married or cohabiting--is complicated.