| When
it pays to stay single | | |
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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.
Debt is a slightly different matter. That's because in some
states, when you marry you also marry your spouse's debt, especially if post-marriage
payments come out of a joint account. "If you have a
situation where one partner is heavily in debt, especially if the one in debt
has fewer assets, marriage could potentially expose the nondebtor's assets,"
says Farber.
Where you live also could affect your debt status.
In community-property jurisdictions -- Alaska, Arizona, California,
Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin
or Puerto Rico -- community property includes the earnings of both
partners while married, as well as everything purchased with that
money. If separate property is commingled with community property
during a marriage, it could be viewed as community property. Similarly,
all debts incurred during marriage, unless specifically noted as
separate, become community-property debts.
It's easier to avoid responsibility for a spendthrift
partner's debts when you simply live together. Just be sure you don't inadvertently
invalidate this unmarried advantage. Don't take on joint transactions, such as
helping your financially struggling partner pay an overdue loan, or it could show
up on your record, too. Securing survivor's
benefits
When it comes to federal retirement benefits, marriage is advantageous
for many couples. A surviving spouse gets to choose between his or her own benefits
or those of the deceased spouse, whichever is greater. (This usually happens more
often with women, says Garrett, though some men receive such benefits.) There's
no comparable survivorship payment for partners who just live together. But this
benefit could interfere with the decision of a widow or widower who wants to remarry. "Say
there's a woman who's a widow and involved with another man," says Garrett.
"She has her deceased husband's benefits and the man has his own. Together
they have enough to live on comfortably.
"But if they get married, her Social Security
goes away and she would qualify for half of her new husband's benefits.
That could be several hundred dollars less a month, and that amount
could make a big difference."
Hobbs agrees. "If your new spouse doesn't have
the same work history as your old spouse, you may have traded off
a good benefit," she says.
Contact
your local Social Security Administration office and have them run some numbers
for your personal situation. The calculations could help you decide whether you
want to walk down the aisle.
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