There’s a very logical reason why I want to get legally married to my husband: I want to protect my family. Those of you not familiar with the legal rights granted by that $50 marriage certificate might be thinking I’m being dramatic — but I’m not.
Despite Benjamin and I having Wills, there’s absolutely nothing to prevent one of our families from contesting them should one of us die. Given the behavior of my family over the last year this is not a passive concern. In a worst-case scenario I die and our joint assets are frozen during probate and Benjamin is kicked out of our home if my family “wins”. We’ve taken as many steps as possible to prevent that including the aforementioned Wills and life insurance policies with Benjamin as the primary beneficiary (life insurance policies are contractual documents that bypass Wills unless the insurance beneficiary falls through to the estate). If a spouse of a legally married couple dies the person’s assets transfer seamlessly to the surviving spouse.
Enough about death, lets talk about life. It’s a good thing I like wading through the tax morass ’cause as a non-legally married couple it is an amazingly hard slog. Lets say I want to further hedge my bets against a worst-case “Casey dies” scenario by transferring some of my assets over to Benjamin while I’m alive. Because he and I aren’t legally married I can only transfer ~$13k/year to him tax-free — anything over that amount he would need to pay a gift tax. Married couples can throw however much money they want at each other and not suffer the tax hit.
Lets talk about retirement. When Benjamin was working at the bank, prior to becoming a full-time student, we were actively contributing to his Roth IRA. When he became a full-time student he wasn’t eligible to contribute to his IRA because he wasn’t earning any income. If we were legally married I could have contributed to his IRA (via the “spousal IRA“) for the past three years. This is unfortunate as we missed some pretty good growth opportunities due to how low the market was during that time. A friend had mentioned that I could have hired him for some position and paid him enough money to max out his yearly IRA contributions. The two downsides to that are 1) he would have had to pay taxes on the amount and 2) it could have decreased or removed his ability to obtain grants, scholarships, and/or loans.
Those are the three big financial reasons that jumped immediately to mind this morning – I’m sure there are other financial reasons that I’m not thinking of at the moment.
4 thoughts on “Why I want to get legally married – part 1”
Re: taxes, you would probably also see a significant drop in taxes if you were married. Each tax bracket goes higher for a married couple, and since your combined income sounds like it would basically be your income, you would wind up with more of your income taxed at a lower rate.
In the history of English and American marriage law there are many examples of these practical concerns trumping religious conviction, and I hope we will have another one.
The “marriage penalty” was introduced in 1969 and was ended in 2003. There’s no reason to think we won’t switch back from a single penalty to a marriage penalty again.
Actually, in the specific situation Casey and Benjamin are in – with one person earning the majority of the money – it wouldn’t have applied ever to my knowledge. The penalty came up in situations where both spouses earn about the same amount of money. And yes, it could come back. Wouldn’t it be nice if Casey and Benjamin could be legally married before it does? :-)
You should be able to put a lot of joint assets into an account with right of survivorship. Those assets are not frozen during probate. M’s and my checking/savings accounts and non-IRA mutual funds are all joint accounts with right of survivorship.
Also, anyone’s will anywhere, even the default will the state rights, can be contested.
But yes, your relationship should have the same legal status as mine.