Finances For Same-Sex Couples: Things To Consider Before Saying ‘I Do’
June is the month that we nationally celebrate Pride and the LGBTQ+ community. The LGBTQ+ community has come a long way with getting respect and rights that heterosexual couples are afforded. The right to same-sex marriage is now legally available in each of the 50 states in the United States, although some states have laws that may vary. None the less, each state must confirm to the United States Supreme Court’s rulings acknowledging marriage as a basic freedom guaranteed Constitution.
Now that same-sex marriage is legal it brings to the forefront questions about how the laws are applied, especially in regard to finances within marriage. Considering that legal changes in some countries are fairly recent, some LGBTQ families may not be informed in financial, tax, and estate planning matters.
Questions such as should we merge our finances? Should we file taxes together? Should we join health insurances?
The good news is that most of the same rules that apply to heterosexual marriages are vastly applied to same-sex marriages. Financial planning should still be a priority for any relationship. Here a few things to consider before saying “I do” to your significant other.
- Taxes: Just like other married couples, same-sex couples will have to consider how marriage will affect their taxes. There are two options available to married couples: filing jointly together or filing separately. Both ways their have pros and cons depending on a couples income levels.
- Family Planning: If your planning to have a child, financial planning is a huge consideration. Same-sex marriages also face the same possibilities of having to pay child support for children if they later decide to get a divorce and can’t create an amicable plan to provide for your children without the courts.
- Social Security Benefits: Access to each other’s social security benefits is one of the important federal legal rights gained upon marriage. This right had previously been reduced by the “place of residence rule,” which meant that a legally married same-sex couple living in a state that did not recognize same-sex marriage would not have been recognized as a married couple for the purposes of social security benefits.
- Health Insurance: Many insurance plans restrict spousal coverage exactly as the name says: you are protected only if you are the lawful spouse of the participant. With the legal capacity to marry, same-sex couples can now benefit from their partners health insurance policies and to choose which employer offers the best value to their families.
- Retirement: Retirement programs are another consideration before marriage. Most private pension plans and national government retirement programs have now changed their requirements to accept same-sex marriages due to earlier legislation and rulings. If you are unsure if your retirement plan has done the same, reach out to them to make sure your spouse is included.
If you or your significant other is looking for guidance on how to prepare financially before tying the knot, please contact us to learn where to start today.