It has been reported by the National Marriage Project at the University of Virginia that marriage has been strengthened by the recession. In part it may be that people’s commitment to marriage has deepened and it also may be that the financial strain of the recession has meant that couples have stayed together.
This study seems to deal with divorce statistics rather than the rise of new marriages. Marriage has been encouraged by the state by providing more favourable terms for married couples. So what are the benefits of marriage apart from the old fashioned romantics?
Well married couples are treated more favourably from a tax perspective. They are entitled to a married couples allowance, provided one spouse was born before 6th of April 1935, and can transfer assets between each other with no Capital Gains Tax. Family businesses can allocate income to the lower earning party to reduce rates of tax. A spouse is often entitled to a pension from her deceased spouse. We all encourage clients to make a will but if they fail to do so their assets will pass automatically to their spouse. And of course if all fails a spouse has a right to be supported on divorce.
So how does that compare with people who choose not to marry? They have no automatic rights on the break-up of a relationship and their position will be entirely governed by their actual ownership and their contributions or express agreements. They will have no rights to pensions or assets unless expressly provided for by the other party. Property does not pass automatically if there is no Will, it will go to the deceased’s nearest blood relative. There is no right to be maintained on the break-up although the children can be provided for and a home may be provided if there is sufficient money to do so. There are of course no tax incentives for unmarried couples.
So whatever you decide is right for you, think about having a prenuptial agreement if you are to marry and have assets. If marriage is not for you, ensure that you have agreements setting out precisely what ought to happen if you break up. And do not forget to make a will!