Stable marriages involve many different factors. Love, companionship, loyalty, children, growing together, and intimacy are just some of the many reasons people stay together.
Finances are another important factor, and they can make – or break – a marriage. Today, we want to look at why unstable finances can keep unhappy couples together, and why sometimes they’re the impetus for a divorce.
What are some of the financial reasons spouses stay married?
There are many financial reasons spouses may stay married – even though, emotionally, the marriage is over. Often, these couples end up living parallel lives within their homes, since it just doesn’t make sense financially to split up.
Financial burdens of homeownership, bills, and other costs of living
The benefit of staying in the same home is that you and your spouse only have one set of house payments. If one of you stays in the home, then you’ll both have to pay for the house payments and the cost of a new apartment or home. Many couples choose to stay together simply because they cannot afford to move out. One household may mean the ability to continue pooling resources for:
- Car loans
- Joint credit cards
- Utility bills
- Education expenses
- Childcare expenses
It is worth noting that spouses generally have more protection from creditors. If property is jointly owned, then if a creditor obtains a judgment against just one spouse, the creditor can’t seize any property owned by both spouses – as long as the other spouse isn’t liable, too.
Social Security benefits
One spouse is normally entitled to more Social Security than the other spouse based on their earnings history. The Social Security Administration helps spouses in long-term marriages by giving the spouse with lower benefits the right to claim her/his spouse’s higher benefit payment, provided certain conditions are met:
- The spouses must have been married for 10 years or more.
- The spouse entitled to a lower Social Security payments waits until she/he is 62 to claim benefits
- The spouse entitled to the lower Social Security payment can claim 50% (1/2) of her/his spouse’s retirement benefit amount.
Spouses who have been married for less than 10 years may agree to stay married until the 10-year period has been met, so the spouse entitled to the lower amount can claim half of the other spouse’s higher amount. Another consideration is that Social Security payments increase for people between 62 and 70.
Health insurance benefits
Many spouses who have insurance through their employer can include their spouse on the employment insurance policy. When spouses divorce, the employer is generally not required to cover the former spouse, with the exception of the spouse’s right to claim additional coverage through COBRA for a limited time (and provided the premiums are current). Spouses need to check to make sure the employer will cover a spouse who is separated from the spouse who works for the employer.
There may be federal tax benefits to staying married. There are IRS laws and other laws that govern tax deductions and tax credits for children and for the payment of alimony. There may be other tax advantages such as saving on federal estate taxes.
Staying together may make more sense if you and your spouse run a business together. It may be easier to stay married than to decide who will own the business, who will run the business, and other business considerations. This may be especially important if there are shareholders, or if the company’s stocks could be affected by a divorce.
What are some of the financial reasons spouses divorce?
Financial conflicts are a primary reason spouses divorce. Spouses may consider a divorce if:
- One spouse isn’t earning his/her fair share. If a spouse doesn’t want to work and isn’t contributing to the marriage in other ways, then it may be necessary to consider a divorce. If one spouse is lying about money, then that’s an even bigger red flag.
- A spouse is getting into debt. Some debts like medical bills are understandable. If your spouse is getting into doubt because of a substance abuse problem, gambling, or just spending beyond his/her means, then a divorce may be necessary to save your assets from creditors.
- A spouse isn’t willing to share his/her income. Most spouses share the house and personal expenses. Many spouses have joint bank accounts. If a spouse is trying to use his/her ability to earn a living to control you, then a divorce may be necessary.
Another financial matter that can affect the stability of a marriage is if a spouse spends a lot to support an extended family. We believe that family should help one another whenever they can, but if your spouse is repeatedly “loaning” money – or just giving it away – to family members, with or without your knowledge or consent, it could be a sign of something else.
At the Law Offices of Adrian H. Altshuler & Associates, our Franklin family lawyer has been helping clients for 30 years. We explain your rights if you separate and if you divorce. One of the primary aims of any divorce is to protect you financially as much as possible given your marital property, incomes, and other factors. To discuss how divorce impacts your finances and what protections are available, call our office at 615-977-9370 or fill out our contact form to schedule an appointment at one of our offices in Franklin, Columbia, or Brentwood.