Financial Responsibilities of Marriage

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Financial Responsibilities of Marriage

Getting married confers many financial benefits that make it attractive as a cultural institution. These benefits are made possible in part by the various financial responsibilities that married people must agree to when they join in legal union.

Examples of responsibilities

Financial responsibilities vary from state to state. Generally, spouses can share in the property that is acquired during the marriage, and they can share in the income as well (depending on the state they live in). Spousal income and assets are counted when determining need for government assistance, such as education loans, veteran’s medical benefits, housing loans for veterans, and housing assistance.

Common responsibilities include providing financial support for any children produced by the marriage. Spouses are liable for many other family expenses, too.

If divorcing …

In the event of divorce, you may be financially responsible for your spouse. You are entitled to equitable division of property acquired during the marriage. An exception to this is if you draw up a legal agreement beforehand that specifies otherwise.

Should you remarry after a divorce, it is important to remember that you may be ineligible to receive survivor benefits.

Changing beneficiaries on certain accounts requires written consent of your spouse.

What about your debts?

It is important to know how your spouse handles money (it is best to learn that before you tie the knot, actually). If you live in a "community property" state, most debts incurred by your spouse during the marriage are owed by you as well as your spouse—unless the creditor has agreed to treat the debts as your and your spouse’s own. In non-community property states, your debts are yours and yours alone. But there is an exception to this—if the debts benefit the marriage as a whole (such as for child care or shelter).

As a general rule, if a creditor is going after one spouse to pay a delinquent debt, the other spouse is co-liable only if the debt was incurred for joint purchases or family-necessary purchases. There are gray areas in this rule, of course, and many states have subtle variations in them.

Time to update

Once the honeymoon is over and it’s time to face life again, there are many things you may need to do, depending on your and your spouse’s wishes. You might add your spouse to your health insurance plan or vice versa. You might make your spouse a beneficiary of any accounts that involve beneficiaries. These include your retirement plans, your investments, life insurance policies, and savings and checking accounts.

Alternatively, you might open up joint accounts. Some couples prefer them for efficiency’s sake, while others like to keep their money separated. Some couples open joint accounts for some uses while keeping separate accounts for other uses, like personal spending.

Do you have a will? You may need to update it to include your spouse. You may also need to update a living will, any trusts, and/or powers of attorney so that your spouse and you are both included.