What are the financial implications of a civil union?
Civil unions, despite their similarities to marriage, have some financial implications that couples should be aware of before entering into a civil union. Since a civil union is not legally recognized in the state of Texas, individuals in a civil union do not receive the same financial benefits as those who are married. For example, social security benefits are not automatically shared when two people enter a civil union. Additionally, in some states, if either partner has a medical emergency, the other partner cannot make medical decisions without a healthcare proxy. Furthermore, civil unions are not recognized by the Internal Revenue Service (IRS) which means that couples cannot file joint tax returns or receive tax deductions. Without a joint tax return, couples in a civil union are not eligible to receive other benefits such as the Earned Income Tax Credit or the Child Tax Credit. Also, since spousal health insurance benefits do not extend to civil unions, each partner must purchase their own health insurance or rely on state-funded insurance. Additionally, one partner in a civil union may be unable to include the other partner in an employer-sponsored retirement plan, such as a 401(k). This means that the partner who does not have access to the plan may be unable to contribute or save for retirement. Ultimately, couples must consider all the financial implications before entering into a civil union to make sure that all necessary arrangements have been made for a secure financial future.
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