Some New Jersey couples opt for domestic partnerships instead of marriage. The financial aspects of both options differ. Many people favor marriage over domestic partnerships due to the financial benefits they may reap, but if you’re considering one option versus the other with your relationship, you will want to know how your finances might fare.
Health and retirement benefits
In a domestic partnership, you may or may not be able to share retirement benefits. However, if you can share them, you might have higher taxes. In terms of health insurance, you may not be covered by your partner’s insurance. If you are able to be covered, it can be written off on taxes.
Married couples can access one another’s retirement benefits and have more options compared with domestic partners. A person can also get covered by their spouse’s health insurance.
Tax benefits
Married couples always benefit from sharing taxes. They can receive a double deduction as a married couple and can transfer unlimited assets between one another except when estate or gift taxes apply.
With a domestic partnership, there is no tax benefit like married couples enjoy. Each person is required to pay during tax season.
Survivor benefits
Married couples have access to their spouse’s assets in the event that the spouse passes away without a will. New Jersey, just like all other states, recognizes the surviving spouse’s right to inherit assets from their spouse. By contrast, with a domestic partnership, if one person dies, the other partner may not receive any survivor benefits.
Asset protection
Couples who are married are always better protected financially if they end up getting a divorce. They are entitled to spousal support and division of property and assets. Domestic partners may or may not be able to recover the same type of support if they end their partnership.
Whether you and your significant other get married or enter a domestic partnership is a very personal decision. You might want to weigh out the financial pros and cons to decide which is right for you.