Why is it better to be married, financially?

[SussexRoyal]

A genuine question having read countless posts suggesting it is better to be married for financial reasons - out of interest, why?

My partner and I are very much in love, have 1 DC and another due next year, own a house together, have never had any arguments over financial matters and everything is split very fairly. However, we are not married. This mainly came from me as I’m not that bothered by marriage. What are the reasons (other than love) that we should get married?

Depends on your priorities. If you want to ensure your partner has the lowest possible claim on your assets if you split, yes. If your concern is inheritance tax, no. It's a personal call.

You don't have to be married.
Just equal.
Joint ownership and pension.

Again, depends on priorities. There are some things that no equal relationship will get you if it doesn't involve marriage or CP. The question therefore is whether you consider the juice to be worth the squeeze. Can't generalise.

I've been with DP over 30 years and never married.
We are financially equal.
Everything is legally watertight and the children had my surname.
It worked for us.

Well, where this generally becomes relevant is when the relationship ends, due to either death or separation. Marital status often doesn't mean much prior to that. An equal relationship and the kids surnames will do nothing at all about the IHT rules, for example. These things are completely different issues. So as I say, it's about whether the juice is worth the squeeze. It really depends.

This is interesting. I am pregnant. We are saving up to buy a house (renting at the mo). Neither of us will be a SAHP. I earn quite a bit more than my partner. I have loads more savings than him. I have a better pension. I love him with all my heart but I’m not in a rush to marry.

@SirMingeALot we both have life insurance and pensions and are named on each other's.
We both have wills and we are both named on anything relevant.
I don't need a state widow pension and it's the only thing we won't get.
The children are adults now so we also have no younger dependents.

@Aishah231 not talking about the State Pension here, but some Defined Benefit pensions will guarantee a widow/er's to a surviving spouse or civil partner, but no guarantee to someone who just lived with the deceased.

Anyway something I haven't seen mentioned - transfers of assets between spouse's or civil partners are free of tax. What does that matter, I hear you ask.

Well. Say you were lucky enough to have a bucketload of Company X shares, and suddenly you hear someone's buying them out. Your plan was to sell a few every year, but now someone's buying the whole lot, and CGT looms. But! You give half to DH. The buyout happens and you both make under the CGT limit. Then he gives YOU the money he was paid. All perfectly legal.

PS life insurances, pensions, wills and PoAs can all be revised in about the same time as it takes to say, "why were you having coffee with Catherine from Accounts?" so I wouldn't advise anyone to rely on that - someone could be the most wonderful person and then suffer injury or illness leading to a significant personality change...

I had a chat with a solicitor friend of mine - it was an informal chat of course, but i am unmarried with children with no plan at all to get married.
He said that not being married is actually for the best for most young couples these days and having been a solicitor and seen so many divorces over the years would heavily advise his children (boys and girls) to never marry. Interesting as it's different to what you see on mumsnet 😂

As a divorced person - who didn’t get married to be divorced; and had full plans of going back to work after kids, which got altered - here is my addition to the discussion.

The main point about needing to get married and protecting yourself applies to having kids. And to who will be shouldering the inevitable affect in the career:
Kids get ill; only go to school at 4yo; have long holidays and need to be picked up in the middle of work day. Then there are events, play dates, activities and mental load about organising their lives, etc.
Someone needs to cover this - and it inevitably affects careers in general; and career progression specifically.

If you have high net worth and all of the above are outsourced - then of course it doesn’t matter as much. (Let’s ignore the maternity leave for ease of arguments)

But in reality - it’s mostly women who most of it, and step back, or even take career breaks to raise the kids. And if the relationship breaks down - they end up in much worse place. It is very easy to change beneficiaries on all accounts - as those are used to cases of partner dying. In separation people tend not to willingly offer shares of their assets.

But of course - ‘marriage is a must’ is not an absolute dogma. If you have significant asset disparity - and not planning to be stepping back from career - then it’s a different story.
But as a reference - I wasn’t planning to be a SAHM - but life turned out that way.

Sure. Again, none of this refutes what I said about how there are some things you can only get through marriage/CP and an equal relationship will do nothing to change that. So the question isn't whether your equal relationship will allow you to be treated in the same way as a married/CP couple for IHT purposes, for example, because it won't. It's whether that matters to you.

It's not all one way either. Some people actively prefer having more testamentary freedom, for example. This is what I mean about it being a personal call. But your claim 'you don't have to be married' doesn't really get to the point of the matter which is that you might have to be married/CP or indeed unmarried to get what you want. The key is for people to be aware.

Totally agree with PP it is really about children. Because of unforeseen possibilities it is usually a better bet for women to marry before they have children.

Would love to know what he bases that on. Especially as women still generally take a massive financial hit to have children.

The terminology there is interesting too. Young couples. Not couples per se, or young couples once they aren't young any more.

I can’t think of any
as a will can cover most issues

it really only comes into play when people split ….

I didn’t marry and was the earner
kids

boy I’m glad I didn’t marry that’s all I can say
way way easier logistically to split
cost me £450 to draft a shared parenting plan

A will doesn't help with IHT or bereavement benefits.

It comes into play when the relationship ends through either death or separation, which all of them do eventually. Because married/CP and unmarried couples are treated differently at these points, that's the test really.

As for wills, they will not cover IHT, nor give you the same access to the full range of bereavement benefits. There is nothing that can make a couple treated like they are married/CP for IHT purposes other than marriage or CP. It isn't a matter of opinion that wills and equality do not do this, so the question is only whether you want that. A will can also be unilaterally revoked without a beneficiary knowing, and it will be harder for an unmarried cohabitant who wasn't being provided for to challenge than it would be for a spouse. There are people who deliberately choose cohabitation for this reason.

So basically, the issue isn't whether an equal partnership and always working will give you access to the same provisions in law as marriage/CP. They won't. The question is whether you regard that as a bad thing or not: that's where personal opinion kicks in. It's important to understand this.

He was referring to the "younger generation", as opposed to the advice that was given to previous generations

Mmm, I just wonder how he squares that with the knowledge that the younger generation will get older, that inheritance tax and bereavement benefits exist and will affect more and more people proportionately with age. Perhaps he has in mind that these assessments can look quite different at 80 than 30.

I don't know any women who've had a 'financial hit' to have kids though? Any 'hit' on finances has affected both couples (childcare is a shared expense) and most of the women I know earn the same, if not usually significantly more, than their partners, and certainly more than they did pre-kids. They also plan better as they know how expensive childcare is, as an example, and most, if not all when i think about it, have gone self-employed or freelance after having children so childcare can be more flexible and thus less expensive.
Myself and my partner are worth the same amount of money so getting married wouldn't benefit either of us should it end in divorce. And anyone I know who's married someone with more money/assets (or they themselves have more money/assest) has insisted on a legally binding pre-nup which is legally taken into consideration in the event of divorce.

Read this thread this is a good example of problems when not married

Long Term Relationship - Mortgage Issues www.mumsnet.com/Talk/relationships/4680924-long-term-relationship-mortgage-issues

You need to think of the What Ifs...
What If we have a disabled child and one of us needs to give up work... how can we financially protect them (male or female)
What If one of you can no longer work
What If you get a brilliant work opportunity abroad
What if one of you wins the lottery, or gets a massive inheritance

I don't thinkbtgeres one right answer. It is definitely financially advantageous for DH and I to be married due to his job. But it might be safer for other people to be unmarried.

Like the earlier poster said. Marriage protects the financially weaker party. In my case that's my husband. I outearn him, am not feckless with money so have more savings and a larger pension and do the majority of
childrearing. Luckily i quite like having him around. I couldn't afford to divorce him and maintain anything like the life
that i currently pay for.

I recommend that women keep a job when they have children and don't leave themselves financially fucked. Now we are in our 40's some
Of my friends who had really good careers a decade or so ago are really regretting their life choices.