What are the financial implications of marriage (and of divorce and re-marriage)? Those who have recently changed their marital status or who are planning such a change may have important financial and legal decisions to make. These decisions might deal with property ownership, providing for children’s welfare, post-mortem planning, and day-to-day finances.
This Financial Guide discusses financial considerations related to a change in marital status. And, because divorce is sometimes the flip side of a marriage–and often the bridge between marriage and remarriage–it is covered here as well.
Note: Under a joint IRS and U.S. Department of the Treasury ruling issued in 2013, same-sex couples, legally married in jurisdictions that recognize their marriages, are treated as married for federal tax purposes, including income and gift and estate taxes. The ruling applies regardless of whether the couple lives in a jurisdiction that recognizes same-sex marriage or a jurisdiction that does not recognize same-sex marriage.
In addition, the ruling applies to all federal tax provisions where marriage is a factor, including filing status, claiming personal and dependency exemptions, taking the standard deduction, employee benefits, contributing to an IRA and claiming the earned income tax credit or child tax credit.
Any same-sex marriage legally entered into in one of the 50 states, the District of Columbia, a U.S. territory or a foreign country is covered by the ruling. However, the ruling does not apply to registered domestic partnerships, civil unions or similar formal relationships recognized under state law.
This guide will also briefly touch on legal issues involved; however, variations in state law make it nearly impossible to discuss in any detail the legal ramifications that a change in marital status presents.
Related Guide: For a discussion of the impact of the death of a spouse, please see the Financial Guide: DEATH OF A SPOUSE: Financial Steps You Should Take