Is Being Married Always a Financial Advantage?

You would think so if you watched Suze Orman’s show last week where she discussed gay marriage and the four financial advantages of being married. On her show, she mentioned that married people have all kinds of advantages in terms of health insurance, pensions, social security, and estate taxes. She says that you can leave your spouse 100% of your assets tax-free, get higher social security benefits if your spouse dies, and pension plans at corporations often let you leave money to your spouse. Employers often insure a spouse and not a life partner. Okay, fair enough but maybe that just says more about how our tax structure and employee benefits are set than about marriage. For example, your kids get screwed if you leave them your money too as part of your estate by high estate taxes. Why not change the estate law to make this more fair? But this post is about the other side that Orman did not touch on: What are the financial disadvantages of being married?

There are many. First, what about the marriage penalty? Two high earners who are married pay more than if they were single. Is this fair? Not in my book. Another disadvantage of being married is that spouses are often responsible for the other’s debt. If your spouse racks up a great deal of debt and bails on it, that can become your problem, depending on the state you live in. According to Nolo.com:

In community property states, most debts incurred by either spouse during the marriage are owed by the “community” (the couple), even if only one spouse signed the paperwork for a debt. The key here is during the marriage.

And what if you don’t want to leave your retirement account to your spouse? According to Nolo.com “your spouse–or former spouse–may have a legal claim to your retirement account, so proceed with caution.”

Finally, if you get divorced, you may end up giving most of your assets away, even if you earned them. And then, of course, there are the non-financial restrictions on you when married, especially if male. You often need your wife’s permission to get a vasectomy. Even your own body is no longer your own once you become wedded to a woman.

Can you name some more financial disadvantages of marriage that I missed?