Money is one of the leading causes of stress in a relationship, and it only becomes more complicated when you get married. Before you take that big step in New Jersey, it’s essential to understand both the positive and negative financial implications of marriage.
New Jersey’s equitable distribution system
For starters, you need to understand that New Jersey is an equitable distribution state. This means you will divide all assets and debts acquired during the marriage fairly as opposed to a 50-50 split. The court considers many factors when deciding how to divide property, including the duration of the marriage; the income of each party; any issues related to child custody or support payments; and, perhaps, a prenuptial agreement (only valid and fair agreements stand in court). You should note that, depending on your unique circumstances, the judge might deem that a 50-50 split is what’s fair.
Financial implications of marriage
First, you may become liable for your partner’s debt if he or she incurred it during the marriage. Hence, if your spouse took out a loan or opened a credit card in his or her name, you could end up paying for it. You can also lose the rights to your inheritance or gifts, especially if your spouse did anything to preserve or raise its value or if you used your salary (which becomes marital property after your marriage) to improve that asset.
On the positive side, you and your partner can benefit from filing your taxes jointly. You can combine your income and deductions, which can often result in a tax break for a couple. Additionally, if either of you has medical insurance through an employer, the other may be able to get coverage under the policy as well.
Ultimately, marriage is an important decision and one that you should not take lightly. While it comes with numerous financial implications, understanding them ahead of time can help you make an informed decision about whether tying the knot is right for both of you.
