There’s no obligation to merge your finances with your spouse. In fact, in the twenty-first century, separate bank accounts, credit cards, and investments are common, especially with the average marriage age rising, meaning many people already have these things in place long before they get married.
You don’t have to file taxes jointly either, and whether or not you should depends on your circumstances. In practice, however, most couples end up at least partially merging their finances because it’s just the most practical way to deal with joint expenses, commitments, and financial goals.
Whether or not you fully merge your financial life with that of your spouse, there are a few things that you should probably share with each other.
What’s in your will?
It may seem ironic, but generally, getting married is a time when you should also contemplate your potential demise. Depending on where you live, getting married might actually invalidate your previous will if you have one. In addition, getting married may well mean you need to change the details of any previous will to include your spouse.
However, things can be more complicated than that, especially if one or both of you are bringing children from previous relationships into the marriage. Providing for children in blended families can be complex and is one of many reasons families can end up in court after an untimely death. Inheritance law differs from state to state and making a will really is the only way to ensure your assets get passed on in the way you would want them to be.
Even if your will is very straightforward, making one can still make life easier for your loved ones and frequently decreases probate expenses. Spouses should make separate wills, but making them at the same time, using the same lawyer and/or notary, will tend to simplify the process. At the very least, your spouse should know what’s in your will so they don’t get any (more) nasty surprises in the event of your death. It will also help them to plan for their own future.
Life insurance details
Yes, we’re continuing with the morbid, just for a moment. Whether you have life insurance and the details of it are definitely something your spouse should know. Many people feel they don’t really need life insurance unless they have kids, but that’s not necessarily the case. Your spouse may need your life insurance to pay off a joint mortgage or other debts you leave behind that could potentially be passed on to them.
Much like knowing the contents of a will, knowing the details of your spouse’s life insurance policy is partly about allowing you to plan for the worst, even though you’re obviously not expecting it to happen. Being aware of what happens in the event of your spouse’s death can help you plan for your own future should the worst happen.
How your tax situation might impact them
People often talk about the tax advantages of getting married, but in fact, there are potentially both pros and cons to marriage from a tax perspective, depending on your circumstances. For this reason, it’s a good idea to sit down together with a tax advisor, discuss your tax situation, and work out whether you’ll be better off, overall, filing taxes as a married couple or as two individuals.
Any debt that might impact them
If you keep your finances separate, your debt should not generally impact your spouse’s credit report or credit score. As we’ve discussed before, your credit score is not ‘merged’ with your spouse’s, and their credit history can’t change or erase your own credit history or automatically change your score.
However, as soon as you even partially merge your finances, your debt could start to have an impact on your partner. If you and your spouse open a joint bank account, for example, even if it’s just for joint expenses and you both keep your other separate accounts, it can mean both partners’ information appears on any future credit reports. And if you apply for a mortgage together or other joint financing, the lender will check both your scores, so one bad score will tend to mean you don’t get offered the best financing deals.
There is also that issue that in some circumstances, and in community property states, in particular, any debt you have can get passed on when you die. This is also usually the case if you hold joint or co-signed debt, so a spouse will be responsible, for example for any debt on a credit card in both your names even if you ran it up without their consent or knowledge.
It’s a reflection of modern life that many couples keep their finances separate, but if there’s any way your financial situation can impact your partner, it’s only fair to share it.
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Frequently Asked Questions
Are you responsible for your spouse’s debt?
Generally, you are not personally responsible for debt that is only in your spouse’s name, but you are fully responsible for any joint or co-signed debt, even if your spouse ran up the balance. The rules differ in community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin), where debt taken on during the marriage may be treated as shared. Because laws vary by state, an attorney can explain how they apply to you.
Does getting married combine your credit reports?
No. Each spouse keeps a separate credit report and credit score after marriage, and a partner’s history does not transfer to yours. Your finances become linked only through joint accounts, co-signed loans or being added as an authorized user, and lenders look at both scores when you apply for credit together, such as a joint mortgage.
Does getting married cancel an existing will?
It depends on where you live. In England and Wales, for example, marriage generally revokes a will made beforehand, while most U.S. states do not automatically revoke it but have rules that can give an omitted spouse a share of the estate. Either way, updating your will after marriage is the simplest way to make sure it reflects your wishes.
Should married couples file taxes jointly or separately?
Most married couples owe less tax filing jointly, because the married filing separately status loses access to or limits several credits and deductions. Filing separately can still make sense in some situations, such as keeping liability for a spouse’s tax return separate or when one spouse is on an income-driven student loan repayment plan. Running the numbers both ways, or asking a tax professional, is the best way to decide.
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About the author
Contributing Writer, Wealthtender
Karen Banes is a freelance writer specializing in entrepreneurship, parenting and lifestyle. She writes articles, website content, ebooks and the occasional award winning short story. Her work has appeared in a range of publications both online and off, including The Washington Post, Life Info Magazine, Transitions Abroad, Brave New Traveler, Natural Parenting Group, and Copia Magazine.
Karen provides copy editing and proofreading services, as well as content creation services, at her website KarenBanes.com.