The Supreme Court’s recent landmark marriage equality decision means same-sex couples can head down the aisle whenever, wherever they choose. But gaining the freedom to marry doesn’t mean that doing so makes financial sense for every couple.
And the math deciding whether marriage adds up only gets more complicated for same-sex couples over 50, says Michael Adams, executive director of the nonprofit Services and Advocacy for GLBT Elders (SAGE). “Marriage can be a hindrance as much as a help,” Adams says. “We recognize this tremendous enthusiasm for the new marriage equality — and we join it — but we want to make sure people have information they need to make smart decisions for themselves.”
Towards that end, SAGE has launched its “Talk Before You Walk” public awareness campaign to get elder and “near elder” singles and couples to weigh the financial costs before they put a ring on it.
6 Financial Reasons Marriage Might Be Unwise
Here are six financial reasons gay and lesbian couples might not want to get married:
1. Why co-mingle separate financial lives now? If you and your long-term partner have kept separate checkbooks and investments or determined how assets will be shared through a partnership agreement, you should ask yourself whether you really need to be married, says attorney Nancy Chemtob of the New York City-based firm Chemtob Moss & Forman. “What other benefits will you gain, if you have already documented everything financially?”
Some same-sex couples who wed could now face the federal “marriage penalty” that some heterosexual married couples have.
2. You may incur a tax penalty. Some same-sex couples who wed could now face the “marriage penalty” that some heterosexuals have. The marriage penalty happens when a married couple filing a joint tax return owes more in taxes than if they were single and filed separate returns since their combined incomes pushes them into a higher tax bracket. Typically, the more a couple’s incomes differ, they more they gain filing jointly.
“It depends on your income level, and is something an accountant can help you figure out,” Adams says.
3. Your estate planning can go awry. Marriage can complicate the settling of an estate. A married spouse, for example, can receive an automatic percentage of an estate even if he or she is not listed as the assets’ beneficiary. “You can have a will that says your children get everything, but your spouse could still have a claim for a share,” Chemtob says.
4. Your benefits could be cut. People who receive public benefits — including Social Security, Veteran’s, Medicare and Medicaid — could see them diminished, or their eligibility impacted, if they marry, according to Adams. “Many LGBT older adults are living close to the edge financially. Small decreases in benefits can make a big difference,” Adams says.
5. You may ultimately be required to divvy things up 50-50. Barring a prenuptial agreement, a marriage that ends in divorce will be subject to state community property or equitable distribution laws that could result in the assets being shared, whether or not that was your intention, according to Chemtob, who handled the first same-sex divorce in New York in 2008.
If you’re established financially and you meet someone you want to marry, you should take very seriously “the co-mingling” of your assets, Chemtob says.
6. Divorce for some long-term partners could become very costly. Couples who’ve lived together for many years, marry for a short time and then seek a divorce could be on the hook for a much bigger settlement based on their total time together compared with straight married counterparts in the same situation.
“The court could say: We can’t look at this as a one-year marriage, because the reason you didn’t get married before is because it wasn’t legal,” Chemtob says.
For LGBT romantics who still want to say “I do,” Chemtob offers one final piece of advice: Get a prenup.
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