Getting married? Living together? Together apart? (An established practice in The Netherlands where people are in committed relationships but don’t cohabitate.) Each of the choices we make in our relationships has personal, financial, and legal implications.
In these columns, we have focused primarily on the legal implications of the choices that are made. The question this month is what are the pros and cons of getting married. Since the Obergerfell ruling in 2015 that requires all states to issue marriage licenses to same-sex couples and recognize valid same-sex marriages from any jurisdiction, the question of whether or not to marry has taken on new importance for couples, as what had been mere symbolic ceremonies had no legal standing. Now they do. Any couple considering marriage should plan carefully—and do the hard work of looking at their individual situations before tying the knot. No, these aren’t always easy conversations, but we have seen time and time again (and with any contract to be honest), doing one’s best to anticipate what may lie ahead and addressing any potential issues generally results in a happier outcome for everyone. A few hours spent in what is decidedly an unromantic conversation, can free you up to experience romance more fully.
Certainly, there are all the social benefits of marriage, which can include emotional security, a public commitment to another person, the support of family and friends, a stable environment for children, and, in some cases, a political statement. Many of these can be established without a legal marriage, as well, but for many they are important reasons to get married.
From practical and legal perspectives, in addition to building a life together, couples can build wealth together. Connecticut is an “equitable distribution” state and an “all-property state,” which basically means that all property is marital property, unless there is a prenup (or postnup) agreement, which, in most cases will be honored by the courts. The advantage is that couples can make joint decisions regarding work, childcare, income, etc. with an added level of security. There are also tax advantages relating to marriage and how income is combined, which can contribute to your long-term financial planning. Always consult a tax advisor as you look into how these issues apply to you.
Marriage also makes it easier to deal with the death of a spouse. For example, property-transfer taxes—estate and gift taxes—don’t apply when transferring your property to your spouse, although they do come into play when property is transferred between unmarried couples. Plus, there are government benefits that apply to married couples, including Social Security, and unpaid leave to care for family members.
Because marriage has only been available on a widespread basis throughout the U.S. to same-sex couples for just over seven years, many couples who choose to marry have had established lives before saying “I do.” There may be previous marriages, children, and a host of other concerns or issues. (Some of these apply to later marriages for straight couples as well.) Particularly where there are blended families, you’ll want to speak to your accountant and lawyer about setting up trusts to ensure that assets are transferred consistent with the parties’ wishes when one spouse dies or becomes legally incapacitated. For instance, you may want to ensure your spouse is cared for throughout their life, but on their death, remaining assets should be distributed to your own family members. All of this is feasible; however, it takes time and attention to set it up.
From a legal perspective, the downside is that when you have combined two lives, a divorce, should that happen, makes things more difficult to unwind. As noted, Connecticut is an “equitable distribution” state, with a very broad division of what constitutes property. Also, as an “all property” state, all property may be divided, even if it is only in one spouse’s name, or if it was owned prior to the marriage. Some states, however, such as New York, recognize separate property claims. You’ll want to consult a lawyer who specializes in this field, but among the assets that will have to be divided are real estate, inheritances, businesses, pensions, and other investments.
One thing you will want to do is preserve all records prior to and throughout your marriage—whether it’s investments, who paid for what and so forth. Having a record of all of this will be very helpful, and perhaps determinative, if you are looking at dividing property.
Once you get all of this established, you can turn your attention to issues such as where are you going to spend Thanksgiving, or what kind of vacation do you want to take, or setting healthy boundaries around visiting with in-laws. All of that comes with marriage as well.
Finally, as we’ve said in other columns, because people change and grow over time, it’s important to revisit your agreements and adapt as situations change. Being responsible to your legal and financial well-being is as important as any other element of your marriage.
—Tedd S. Levine, Esq.