What Changes When You Say “I Do”?

There’s a difference between wanting a wedding and wanting a marriage. (Similarly, there’s a difference between wanting to have kids and wanting to be a parent.) Getting married has some major impacts when it comes to your money, and that’s not including the cost of saying “I do.” 

Marriage creates new rights and responsibilities, both legally and financially. Financially, you could unlock benefits like potential tax savings by filing jointly. You may also face joint responsibility for debt and assets. Likewise, legally, marriage changes your status. Inheritances and making medical decisions can be different when you’re single. In this guide, you’ll learn about what changes, benefits, and risks you can expect. 

Financial Benefits of Getting Married

Increased Savings and Wealth

Marriage makes a lot of financial sense. You don’t need to understand complicated math or investing topics to know that two incomes combined can lead to increased savings and wealth. Research from The American Enterprise Institute supports this, as married Americans have been found to have twice the average assets of divorced or never-married Americans. Surprisingly, researchers controlled for gender, age, education, race, and ethnicity and still found the same results.

Partners who combine finances often see faster progress because there is less duplication, clearer goals, and more accountability, according to Ed Coambs, a certified financial planner and licensed couples counselor and financial therapist. 

One reason this is likely is that married couples can allocate more of their income to saving, investing, and building wealth, as they share the costs of housing, food, and utilities. Meanwhile, single folks spend significantly more than married couples on the same things. 

Another benefit isn’t directly monetary, according to Coambs. “What many couples miss is that they each enter marriage with an internal rulebook for money, often absorbed unconsciously from family or past experiences,” he said. “The early task is to bring those rules into the open and co-create explicit, external agreements.”  

Building these agreements involves having conversations around the following topics to build financial intimacy and trust, as well as to heal money wounds.

Tax Advantages 

One way to think about the changes that occur legally and financially after marriage is that, in a sense, the couple becomes the entity instead of the individuals, explained Andreea Olteanu, a trusts and estates attorney with 20 years of experience.

“From an income tax perspective, for example, the spouses’ incomes are typically combined on a jointly filed return,” she said. “[Filing jointly] generally results in an overall tax savings, but it may also result in a higher tax bracket for the lesser-earning spouse,” Olteanu said.

Another tax benefit of getting married and filing jointly is what some call the “marriage bonus.” When couples have a significant income difference, filing jointly may result in the higher earner being taxed in a lower bracket than if they were single. Additionally, the income thresholds for each tax bracket are wider for individuals filing jointly, allowing those with significant income disparities to pay lower tax rates on a portion of their income.

Insurance

Various types of insurance, including health, home, and auto, could result in lower costs when combining policies with a partner.

For health insurance, for example, one partner’s plan may have a lower deductible, making it more affordable if both are on it together. In some cases, employers may cover more of their employees’ premiums than those of their spouses, making separate plans more financially smart. If you each have plans, compare the network, benefits, deductibles, and out-of-pocket costs before deciding to merge plans. 

Married couples are perceived as less risky, so providers often offer lower premiums for items such as homeowners and car insurance. In fact, statistics show that married couples have better driving records than singles. Still, if either partner has a poor driving record with lots of accidents or violations, hold off on merging your car insurance, as having these on your record can increase premiums for both of you.

Joint Accounts

Getting married can impact your eligibility and rates for loans and joint accounts because, when you apply for credit together, it’s your combined financial history that will be evaluated. Of course, that can either be a good thing or a bad thing, depending on your history. 

As for joint accounts, combining finances can help couples meet higher minimum balance requirements, which may reduce fees and simplify bill paying. Some research has actually found that joint bank accounts are associated with a happier marriage compared to those who didn’t merge finances and kept strictly separate accounts.

Additional Benefits

Social Security offers spousal benefits, meaning that a worker’s spouse might be eligible for extra spousal benefits. There are a few rules and stipulations, including age requirements, but the benefit could be as much as half of the worker’s full retirement benefit.

Financial and legal protections for married couples often come down to each individual state, especially when it comes to asset distribution after a spouse dies. 

Legal Changes After Marriage

Name Change 

Changing your name after marriage is a choice, and it isn’t legally required. If you decide to do so, you’ll need to notify a number of government agencies and have a certified copy of your marriage certificate available. You’ll need a new Social Security card, driver’s license, state ID, passport, and update your bank accounts. 

Health and Medical Rights 

Marriage does provide a presumptive right to make medical decisions, but it’s not exclusive or absolute. Without legal documentation to the contrary, parents, siblings, and adult children may have an equal say in treatment decisions. 

However, most states have statutes that establish a default hierarchy for medical decision-makers. A spouse is typically at the top of the list, but it doesn’t mean other family members can’t challenge them. The term “next of kin” refers to a person’s nearest living relatives and is often used in the context of inheritance and surrogate decision-making.

Estate Planning and Inheritance Rights 

Getting married does not automatically update your will or estate planning documents. You’ll need to revise your documents and potentially create a new will to reflect your new marital status. Doing so helps protect your spouse’s inheritance and prevents legal disputes by keeping your beneficiary designations up to date. You’ll also need to consider updating your estate planning documents to align with your current wishes in the event of your death.

In many states, spouses enjoy inheritance rights, according to Olteanu. In those states, “a surviving spouse has a ‘right of election’ against the deceased spouse’s estate, which grants the survivor one-third of the deceased spouse’s overall estate regardless of what the deceased spouse left him or her in a will or trust Agreement,” she said. “For example, if the husband dies with an estate worth $10 million and he leaves his wife a bequest of $2 million, the wife can exercise her right of election asserting her right to $3.33 million.” 

Spouses can waive their respective right of election during their lifetime, which is typically done in a prenuptial or postnuptial agreement, according to Olteanu, who said prenuptial agreements are key to protecting assets and are one type of financial planning that could save a marriage. “If one spouse has significantly more assets or debts than the other spouse, it is crucial to consider and outline what happens if the marriage ends,” she said. Getting this on paper now can prevent future disputes. 

The Bottom Line

Marriage is more than a ceremony; it is a financial and legal partnership that can profoundly impact your life. While it offers significant benefits, including tax savings, increased wealth, legal protections, and spousal benefits, it also comes with shared responsibilities. By starting with open conversations, creating a shared financial plan, and aligning on long-term goals, you and your partner can build a resilient foundation to face any of life’s surprises together.