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Every married person who has argued with a spouse about money has longed to be single again and in total financial control.
That wish usually subsides -- how quickly depends in part on the dollar amount in dispute. But that fleeting thought raises an interesting question.
Is there a time when being single is more financially desirable?
Sure, marriage has many economic advantages, such as pooled income, shared health-insurance coverage, although more companies now also offer this benefit to unmarried couples, and Social Security survivor benefits. Even the marriage tax penalty has been eased in recent years.
But in some instances, it's more practical to remain unhitched.
"One thing to keep in mind is that it's always a mix of financial and emotional decisions," says Scott Farber, a wealth management adviser based in Natick, Mass. "It's difficult to look at a relationship from a strictly financial standpoint."
"However, there are some general instances when it might be better not to be married."
That's how Sheryl Garrett, a certified financial planner with Garrett Planning Network in Shawnee Mission, Kan., sees it, too.
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While there's no "typical couple" that should consider living together without official legal status, there are some typical issues. Basically, says Garrett, staying legally unattached could be financially beneficial for one or both partners when these five issues come into play:
- Liability
- Credit and debt concerns
- Survivor's benefits
- Taxes
- Children
Liability for married and unmarried
One of the great things about marriage is you get to share everything. That's also one of the worst things about marriage, especially when it comes to liability issues. You could be financially responsible for judgments against your spouse, such as personal lawsuits or Internal Revenue Service liens and all types of legal actions in between.Janice K. Hobbs, owner of Jan Hobbs Financial Group in Orange, Calif., says this is a concern of many of her clients who primarily are high-income individuals.
"We have a lot of doctors as clients, both partners are physicians, which is a high-liability profession," says Hobbs. If one of the doctors is sued, the other person's assets are just as liable -- if they are married. By staying single, Hobbs says, only the one physician's income and assets would be at risk.
The liability issue doesn't worry only still-working people who are making a good living.
Garrett says a book buyer raised similar concerns at a signing for her book, "Money without Matrimony," that she co-wrote with Debra Neiman.
The woman, in her late 50s, had a new man in her life and they were considering another go at marriage. She was in a good financial position, but a combination of previous marital and business problems had left him dealing with the aftermath of a divorce, bankruptcy and some lingering financial issues.
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"Her question was, 'If we did get married, would that be a bad idea?' My answer was that if they keep things separately, depending on the state (of residence), his debts in his name and her assets in her name, you're fine. But if he gets sued. ...
"She said, 'Stop. I think we're going to wait.'"
Commingled credit and debt
That cautious woman's remarriage query also raised the issue of shared credit, which Garrett says can go hand in hand with liability worries.The credit-reporting business has evolved so now each person has an individual credit score. So unless you borrow money together, getting married doesn't automatically hurt you from a credit standpoint, says Garrett.
Continued: Securing survivor's benefits
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