The institution of marriage has seen a steady decline in the past decades. Between weakening social pressure, declining religious practice, and greater societal acceptance of alternative lifestyles, a romantic couple today finds far fewer reasons for registering their romantic partnership with the State. The hassle of a potential divorce at the end of the relationship further weighs against formalizing a relationship in the modern era.
There are, however, good reasons for getting married. While marriage as a social institution finds itself less valued over time, marriage continues to receive a privileged position in the legal world. This article will provide a non-exhaustive list of some of those benefits. The purpose is to help educate unmarried couples as to the potential benefits of getting married and, absent marriage, explain how those same benefits could be enjoyed.
When a person finds themselves incapable of making their own decisions due to incapacity, someone else must make decisions for them. Every state has a statute which outlines who has the ability to do this based on their relationship to the person. Critically, unmarried romantic partners generally are not given the power to make these decisions. Absent a spouse, a close family member is often the one empowered to act on behalf of the incapacitated person, no matter how long the unmarried couple has been together.
This issue can be avoided by proper planning. Absent a marriage, a durable medical power of attorney can be executed to allow the unmarried romantic partner to make decisions he or she would not otherwise be authorized to make. Naturally, this needs to be done before the person is unable to make decisions for themselves.
Inheritance & the Marital Estate
When a person passes away, their property is distributed. Most people are aware that a last will & testament can allow a person to give away whatever he or she wishes to whomever they wish when they pass away. We have all read stories about surprise gifts, family members being “cut out” of a will, and so on.
What most people do not know is that every state has an intestacy statute which provides for how property is distributed when a person passes away without a will. These vary considerably but often spouses and children are prioritized. Absent a spouse or children, parents, brothers, grandparents, and the like generally inherit property.
No state in the country allows an unmarried romantic partner to inherit property through intestacy. This is a critical issue because an unmarried romantic partner could assist in building wealth together with their partner without any legal right to compensation for the effort provided during the partnership.
In contrast, any income earned by either partner during a marriage is considered to be part of the “martial estate” to which a spouse will have some right to if their spouse passes away. Law varies considerably from state-to-state on the amount he or she has a claim to, but every state acknowledges that a widow or widower is entitled to part of the marital estate in recognition of their formalized partnership.
The easiest way to remedy this situation without getting married to is execute an effective last will & testament naming the unmarried romantic partner as the beneficiary of the estate.
Insurance & Non-Probate Transfers
While most people know that property can be passed through a last will & testament, many are unaware that several kinds of property pass at death without ever having to go through a will. These are referred to as non-probate transfers because they do not require a probate court to order their transfer to the intended beneficiaries. The most common assets that pass outside probate are life insurance proceeds, bank accounts, and brokerage accounts.
Each of these — and most other assets that pass outside probate — allow for someone to choose a beneficiary. The person can choose anyone or even an organization such as a church or non-profit. Issues arise if, however, they do not choose anyone. Often each asset will have a list of people who are “default” beneficiaries. The top of most lists is one’s spouse, followed by children, family members, and ending with the probate estate if no one else can inherit the asset.
The easiest way for an unmarried romantic couple to avoid any issue is to review their beneficiary election for any account or asset to ensure the proper person is selected. Often, these elections are initially solicited when someone starts a new job, buys a new insurance policy, or opens a new bank account. You may not have your intended beneficiary’s required personal information and forgot to follow up. If there is any doubt, it is best to verify they are set up properly before something occurs making it impossible to change.
Marriage & the Standard Deduction
Under the federal Internal Revenue Code, a deduction reduces the amount of income considered when calculating a taxpayer’s tax. For example, a person with $20,000 in income and $10,000 in deductions would only be taxed on the post-deduction $10,000. If that same person had only earned $10,000, he or she would owe no tax for that year.
Individual taxpayers are allowed to either choose to itemize their deductions on their tax returns or they can elect for the standard deduction which is often greater than what he or she could deduct through itemization. For the 2022 tax year, the individual standard deduction is $12,950. This amount if tied to inflation and thus will increase over time.
Critically, married couples who file their federal tax return jointly can claim double the individual standard deduction. For the 2022 tax year, this is $25,900. This is important because it applies even if only one part of the couple did not work or did not work enough to enjoy the full $12,950 deduction. By pooling the deductions through filing jointly, a married couple can maximize their standard deductions and often pay less tax as a result. Additionally, a widow or widower is allowed to claim the joint deduction amount for the two years after his or her spouse passed away.
Unfortunately, there is no way to enjoy these benefits without getting married. Federal law does not allow unmarried couples to file their taxes jointly like a married couple.
Are you part of an unmarried romantic couple and want to ensure you are not missing out on rights and privileges married couples obtain by default? Feel free to call me at 903-221-9180, fill out the Contact Us form, or email directly at email@example.com to set up a consultation.
Note: This article was not written with any particular state law in mind. It is generalized information intended to be used exclusively for educational purposes. This is not legal advice, and no attorney-client relationship has been formed between the reader and the Law Office of Matthew C. Lewis.