According to the Pew Research Center, the number of never married Americans is at an all-time high. In 2012, almost twenty percent of all adults over the age of 25 had never been married, compared to only nine percent in the same age bracket back in 1960. The research center cites shifting public attitudes towards marriage as one of the top reasons why Americans are putting off marriage or never marrying at all. Half of all never married adults do not wish to ever walk down the aisle and are perfectly comfortable just remaining in a committed relationship.
But for a committed couple, there are estate planning benefits that come with marriage that you do not receive with a domestic partnership. Here are some of the few financial and legal benefits that come with a marriage certificate:
Qualifying for an estate tax marital deduction
When one spouse dies, the estate is passed to the surviving spouse tax free. For domestic partners the deduction does not apply, and although the federal level of exemption is high at $5.34 million, the state estate tax exemption levels can be very low.
Qualifying for a gift tax marital deduction
As long as your spouse is an American citizen, you can make gifts of any amount tax free. Unmarried couples are subject to a gift tax if they financial support the other spouse, and the maximum tax free gift an unmarried person can make each year is only $14,000.
Rolling over deceased spouse’s IRA into surviving spouse’s IRA
If your partner dies with an IRA and names you as the beneficiary you must start taking distributions immediately, regardless of your age. If you are married, the surviving spouse has the option of rolling the IRA into their own, allowing the surviving spouse to delay making distributions until age 70 ½.
Contributing to a spousal IRA
If you are domestic partners and one does not work, that partner cannot contribute to an IRA for retirement savings because there is no earned income. However, if you are married and one spouse is not working, the non-working spouse can use the working spouse’s income to qualify for IRA contributions.
Receiving survivor’s benefits from a pension plan
If your spouse has a pension and elected for survivor’s benefits you will continue to receive pension benefits after the other spouse dies. However, that does not apply for domestic partnerships.
Receiving Social Security benefits
Married couples can file for spousal benefits that allow the surviving spouse to collect up to fifty percent of the deceased spouse’s social security amount. There is also the possibility for a larger benefit upon the death of a spouse. In a domestic partnership there is no option.
Saving on health insurance
Even if it is an employer sponsored plan, most health insurance plans are cheaper for one plus a spouse, as opposed to two single plans. This is particularly helpful if one partner does not have access to insurance through an employer, like if one partner is self-employed.
Legal advantages in case of spouse’s incapacitation
If one partner is incapacitated in the hospital, it can be incredibly difficult to see them if you are not a blood relative or a spouse. You must go to a judge in order to be named as a healthcare proxy, and that takes time and money. If there is any family discord you could be battling family members over everything.