Getting married: what are the financial and legal benefits?

Why get married? Of course, because you love each other - but what some cohabiting couples don't consider is the legal and financial benefits of being married.

Besides the food, flowers, favours and gifts, you’re also entering a major contract. Marriage and civil partnerships bring with them a number of responsibilities, but also several perks.

The cost of marriage

Big weddings are notoriously expensive – the average cost in the UK is now over £20,000. But if that’s all that puts you off getting married, think again.

The legal benefits and safeguards of being in a married couple are worthwhile, and a low-key ceremony needn’t break the bank.

It’s just as romantic to use your hard-earned joint savings as a deposit on your first home together.

If you do dream of a lavish white wedding, then you may need to start saving or investing for it even before you meet your future spouse.

What are the financial perks of marriage?

Marriage may leave couples significantly better off over time after the wedding has been paid for.

One big tax advantage is that spouses can transfer money and assets between them tax-free, which can reduce your overall tax bill. In contrast, capital gains tax (CGT) is potentially payable when an unmarried couple gifts assets to each other.

Married couples can also gift assets to their spouse when they die without paying inheritance tax. In contrast, unmarried couples may have to pay inheritance tax - even if they pass their share of the family home to their partner.

Marriage also gives more financial protection if a married couple separates. This is particularly important for the lower-earning partner, who may have fewer assets in their name.

If an unmarried couple split up, each partner keeps what is legally theirs, which can be tough on a low-earning partner. But if a married couple divorces, assets can be shared more fairly. Assets owned by both spouses are usually considered as part of any divorce settlement.

There is also a marriage allowance, which can save you income tax.

The lower-earning spouse can transfer up to £1,260 of their personal allowance to the higher-earner, reducing their annual tax bill by up to £252.

Find out more about shared finances for married couples.

Are married parents better for children?

Whether you’re married or not, as biological or adoptive parents, you both have a parental responsibility to support your children financially.

However, if the parents aren’t married, only the biological mother automatically has parental responsibility for the child. Since December 2003, the father has parental responsibility if the birth is jointly registered.

Parental responsibility is the legal right to make decisions about a child’s life, such as their name, education, home, health, and religious upbringing. But it also carries responsibilities like providing a home and looking after any assets they own  and money set aside for them.

Anyone married to the mother at the time of the birth has parental responsibility – even if they are unrelated to the child.

There are other ways that you can get parental responsibility without getting married. It's worth asking a family law specialist about this.

Does getting married affect my will?

When you get married, your previous will is invalid, so you need to write a new one.

If you don’t, then intestacy rules will apply to your entire estate. If your estate is worth £322,000 or less, then everything will automatically be left to your spouse, which can mean that your children, including any from previous relationships, don’t receive any inheritance.

If your estate is worth more than £322,000 and you have children, the first £322,000 will be left to your spouse, and any assets over that amount will be divided between your spouse and children.

On the other hand, if you’re not married, your partner won’t get anything if you die, unless your will specifies that they should.

And if you’ve got a mortgage together, they will be fully responsible for it if you die.

Even worse, if there are other claims on your share of it, such as from your children, your partner may lose the home. A solicitor can help you draw up a will.

There are more savings when it comes to inheritance tax.

When one of you dies, any money or assets passed on to your spouse are free from inheritance tax if you’re married. However, if you are unmarried, then there may be inheritance tax to pay if you leave assets or money to your partner.

What about marriage and pensions?

When you’re married, you may be entitled to your spouse’s state pension after they die, if they were entitled to an additional state pension.

Note that marriage doesn’t automatically entitle you to any of your spouse’s workplace pension, or death-in-service benefits.

For that, each spouse must name the other as the nominated beneficiary of the pension.

Take particular care if you remarry, as old pension pots may still have your ex-spouse named as a beneficiary.

What happens if we separate?

If you separate and you’re not married, you’re not entitled to anything you don’t jointly own.

Furthermore, it can be difficult to prove joint ownership, and this will probably require legal advice.

When you’re married, things are very different. When you divorce, all the assets owned by both spouses are usually treated as marital assets, so you have a better chance of a fair settlement.

Some couples choose to sign a prenuptial agreement before they get married or a postnuptial one after the wedding to outline what will happen if they decide to split.

It can offer you protection if you want to make sure your spouse can’t claim against some of your family’s assets if you divorce.

You can get a solicitor to help you draw these agreements up.

Is this all the same for civil partnerships?

As a civil partnership is almost legally identical to marriage, all of the above still stands.

Get expert financial advice

If you need help with your finances, getting financial advice is a good idea.

Unbiased can quickly connect you to a financial adviser that is regulated by the Financial Conduct Authority.