To be, or not to be married

When you think of domestic partnerships and those who are a part of one, you might conjure up thoughts of same-sex couples. Historically, you may have been right to make that connection. Up until 2015, when the Obergefell v. Hodges decision ruled that all 50 states were to recognize same-sex marriages, most same-sex, cohabitating life partners did live under the term ‘domestic partners’ socially, with certain states providing them with additional legal protections.

However, in a broader sense, the term references any two people who have chosen to build a life together but are not legally wed. This could be a couple living together but not yet engaged, a couple where one (or both) have been through a divorce and are not ready or wanting to jump the broom again, possibly two long-term partners who have chosen to live separately, or one of so many other forms of committed relationships that exist today.

Making the decision

The decision to get married is not simply a social or political issue. Making the decision to get married is very much a personal choice. From a planning perspective, however, there are over 1,100 legal differences your advisor is keeping in mind when thinking about unmarried couples versus married couples.

What your advisor should know

To provide our unmarried clients the same protections as our married clients, there are a few planning items your advisor is making sure of:

• Health care directives – who would you like to make medical and financial decisions on your behalf when you are incapacitated or receiving emergency medical care?
• Estate planning and dispute avoidance – when you pass away, do you want specific assets to go to your surviving partner and not be reduced by estate tax or contested by others?
• Tax planning – if you wish to make a gift of funds to your significant other during your lifetime, what is the most tax-efficient way?

Conclusion

It is essential for individuals in any committed relationships to carefully consider their legal and financial arrangements. Taking the time to safeguard and plan your future ensures the well-being of the partnership. As the landscape of domestic partnerships continues to evolve, with the right planning, couples of any status can navigate this journey with confidence and security. If you have any questions or would like to learn more about what legal and financial protections you and your partner are entitled to, contact your advisor or your tax professional. We’re always here to help.

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