“The Disadvantages of Not Being Married”

The title is taken from an article I’m reading today by Robert B Larson and Stephen J. Larson, PhD, CFP, in the Journal of Financial Service Professionals. I may be doing a presentation on some of these topics at a conference on estate planning for “non-traditional” families and thought a summary of the article was relevant here.

  1. Family Medical Leave: The Family Medical Leave Act of 1993 allows employees to receive up to 12 weeks/year of unpaid medical leave for specific reasons. These reasons include the birth of a child (both mother an father are entitled to family leave), placement of a foster child (again both mom and dad are similarly entitled), caring for a sick spouse, child or family of the employee.
  2. Health Care Decision Making: If one’s partner becomes disabled, state law will determine who has the right to make decisions for him/her (absent an appropriately drafted durable power of attorney). State laws typically follow the order of intestate succession – the spouse has the first right, followed by any children, parents, siblings, etc.
  3. Loss of Consortium and Wrongful Death: Loss of Consortium is a civil claim where one can sue an alleged wrongdoer for causing them the loss of companionship, comfort, protection and sexual relations. Though this is a state-by-state issue, many states do not allow loss of consortium claims between partners unless they were married at the time of the loss.Wrongful death is also a civil claim where one spouse sues over the loss of the other and can thereby obtain an economic relief to cover the economic support lost when the other spouse died.
  4. Crime Victim Recovery: Similar to the above except this is a criminal remedy awarded to the surviving spouse.
  5. Martial Privilege: There are two parts to the privilege. The first prevents a husband or wife from being compelled to testify against the other spouse. Should a spouse choose to testify then he or she is not permitted to disclose confidential marital communications – this is the second part of the privilege. This is anything said between spouses that was intended to be confidential (and where no third party was present).
  6. Problems with Insurance (including COBRA and Workers’ Compensation and Employer Health Care Benefits): Spouses and children are often automatically covered under an employee’s homeowner’s policy. The same is true for group health care coverage.
  7. Federal Income Taxes: Unmarried persons can obviously not file joint returns.
  8. Residential Real Property Capital Gains: Married persons who file jointly can exclude up to $500,000 of gain when they sell their home but those who file individually can only exclude $250,000. The current capital gains rate on real estate held for more than one year is 15%
  9. Social Security: The spouse of an employee who has been paying into the system is entitled to receive benefits when the working spouse becomes disabled, retires or dies.
  10. Retirement Plan Survivorship Benefits: Sometimes the benefits of certain plans are only available to spouses – you’ll have to read your plan to find out.
  11. Intestacy Laws: Non-married persons cannot inherit under the laws of intestacy in any state. A robust estate plan is required to pass property.
  12. Estate Taxes and The Marital Deduction: Spouses enjoy an unlimited deduction on property gifted between them both during their joint lives and after the death of one of them.
  13. Gift Taxes and The Marital Deduction: Kind of the same as above. Non-married individuals can also not enjoy the benefits of gift-splitting to reduce the sizes of their estate to further avoid the federal estate tax.

There are 1,138 recognized legal rights and privileges associated with marriage. These are just some of the ones that I deal with everyday when planning for families both “non-traditional” and otherwise.

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