Cameron Miranda
Common-law marriages are only recognized in a handful of states in the US, and each state has its own requirements. Common-law spouses are eligible for several benefits, including Social Security, tax benefits, and employment perks. However, there are challenges associated with common-law marriages, such as the difficulty in proving the marriage exists, which can impact tax filings and inheritance claims. This article will explore the benefits and challenges of common-law marriages and provide insight into how these marriages are perceived by employers and the Social Security Administration.
| Characteristics | Values |
|---|---|
| Number of states recognizing common law marriages | 8 or 9, along with the District of Columbia |
| Social Security benefits | Spousal, survivor, and death benefits |
| Tax benefits | Exempt from gift tax for gifts to each other, unlimited marital exemptions for their estate, and can claim deductions for mortgage interest if they co-own a house or have children |
| Wills | Inheritance of a common-law spouse's property is allowed with a valid will |
| Medical Power of Attorney (POA) | Allowed |
| Property | Can be sold without the other's consent if one spouse buys property without putting the other spouse on the title |
| Employer benefits | Health, dental, and life insurance benefits, family leave, bereavement leave, access to retirement accounts or pension plans |
| Divorce | Common-law couples must go through a normal divorce in their state's courts to legally end the marriage |
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What You'll Learn
Common law marriage and Social Security benefits
In the United States, the Social Security Administration (SSA) recognises common-law marriages as valid marriages. As such, couples in common-law marriages are entitled to the same benefits as couples in traditional marriages, including spousal benefits, survivor benefits, and benefits from an ex-common law spouse.
To be eligible for benefits based on a common-law spouse's earnings, the marriage must be valid under state law. This generally requires that the couple intends to be married and presents themselves as such. However, the specific requirements vary across states, so it is important to understand the laws in your state.
If you move to another state after establishing a common-law marriage in a state that recognises such marriages, your new state of residence must also recognise your marriage. This means you may be eligible for Social Security benefits in any state, as long as your common-law marriage was created in a state that permitted it.
To apply for Social Security benefits based on a common-law marriage, you must provide evidence of your marriage to the SSA. This evidence typically includes statements from both spouses affirming the marriage, as well as statements from blood relatives of each spouse. If one spouse has died, the surviving spouse must provide a statement along with statements from two blood relatives of the deceased spouse.
It is important to note that spouses cannot receive their own Social Security Disability Insurance (SSDI) payment and the full spousal benefit simultaneously. Instead, they will receive a combination of the two benefits, resulting in the higher amount they are eligible for.
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Tax benefits
In the United States, common-law marriages are recognised for federal income tax purposes if they are recognised by the state in which the couple resides. If a couple with a common-law marriage recognised by their state moves to a state that does not recognise common-law marriages, they are still considered married for federal income tax purposes. However, if a couple begins and maintains their relationship in a state that does not recognise common-law marriages, they will not be considered married for federal income tax purposes.
In some states, common-law marriages are recognised if the couple holds themselves out to the public as married persons. This can be done by filing a joint tax return, which would fulfil the requirement of 'holding out'. However, it is important to note that most states do not recognise common-law marriages.
In Canada, common-law couples are not allowed to file joint tax returns. Instead, they must file individual returns and mark that they are in a partnership. While marital status does not affect tax rates in Canada, it can offer significant benefits for tax purposes. For example, under the Income Tax Act, an individual's marital status changes to common-law after living with their partner for 12 months or more, impacting their eligibility for credits and benefits such as the GST/HST credit, CCB, and CWB.
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Wills and inheritance
In the context of common-law marriage, spouses have similar inheritance rights as traditionally married spouses. If one partner passes away, the surviving common-law spouse is typically entitled to inherit their property and assets, even without a will. However, the specific laws and requirements vary based on location.
United Kingdom
In the UK, common-law marriage is a modern-day myth. No matter how long two people have been cohabiting, the law does not recognize them as a married couple. Therefore, if either partner passes away without a will, the surviving partner is not automatically entitled to any inheritance from the deceased's estate. In such cases, the estate is distributed according to intestate laws, which do not account for the survivor of a cohabiting couple.
Canada
In Ontario, Canada, common-law spouses do not have the same property division rights as legally married spouses. If a common-law spouse dies without a will, or does not provide adequately for their common-law spouse in their will, the surviving spouse is not automatically entitled to any inheritance. However, the surviving spouse can file a claim against the estate by filing a dependency claim or a claim for unjust enrichment.
United States
In the US, common-law marriage offers several advantages similar to traditional marriages, including inheritance rights. In some states, a surviving spouse can claim a portion of the estate if they were left less than what they would have received under state law. Additionally, in Texas, a common-law spouse has the same rights as a formally married spouse, including community property rights, homestead rights, and exempt property rights. To establish a common-law marriage in Texas, the couple must agree to be married, live together as husband and wife, and present themselves as married to others. Evidence of this may include joint tax returns, insurance policies listing each other as spouses, and employer records claiming each other as spouses.
Creating a Will
To ensure that your wishes are carried out and to avoid potential litigation, it is recommended to create a comprehensive estate plan or will. This is especially important for unmarried couples or those in common-law marriages, as they do not have the same inheritance tax benefits as married couples. By creating a will, you can choose who will deal with your assets, who will act as guardians for any minor children, and who will benefit from your estate.
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Health, dental and life insurance benefits
In the United States, common-law marriages are recognised by insurers, who are subject to state regulations and must adhere to the definition of "spouse" established by the state. This means that common-law spouses can be enrolled in health and welfare plans, depending on the state in which the marriage was established. However, a self-insured plan may choose to exclude parties in a common-law marriage from its definition of a spouse.
Once divorced, former common-law spouses have certain rights to continue their health coverage under ERISA plans and non-federal government health plans, subject to the Public Health Service Act. This is outlined in the Consolidated Omnibus Budget Reconciliation Act (COBRA), which allows employees and their dependents to continue health coverage after specific events, including divorce.
In terms of dental insurance, it seems that common-law spouses can be added to dental plans, as they can be added to existing health insurance plans. However, it is not explicitly stated whether this includes dental insurance as part of a health plan or as a separate entity.
Regarding life insurance, there is limited information on whether common-law spouses are eligible for benefits. However, it appears that life insurance policies are considered alongside pension plans when discussing employer benefits.
It is important to note that the specific benefits available to common-law spouses may vary depending on the state and the specific insurance provider. It is always best to refer to the relevant state laws and insurance policies for detailed information.
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Employment perks
In Canada, common-law spouses are lawful spouses and are afforded the same rights and responsibilities as married couples. This means that if an employer's plan includes spousal benefits, common-law spouses would also be eligible.
In British Columbia, common-law partners do not automatically qualify for their partner's employer-provided benefits like married couples. While some employer benefit plans in BC offer coverage to common-law partners, eligibility can vary depending on the specific plan design. Common-law partners must meet the criteria established by their partner's employer, which can differ significantly between plans. Some plans offer coverage after a relatively short cohabitation period, such as six months, while others require a longer duration, like one to five years of living together.
In Canada, an employment benefit plan that denies coverage to common-law or same-sex couples may be considered discriminatory on the basis of sexual orientation and therefore unconstitutional under the federal Canadian Human Rights Act. Every province in Canada has its own human rights laws prohibiting discrimination on the basis of marital status and sexual orientation.
In the United States, common-law marriage can qualify for employment benefits, but the requirements vary by state. Eight states and Washington, DC, let couples establish common-law marriages. Common-law marriages are recognized beyond the borders of the state in which the marriage occurs. Once a couple is common-law married, the marriage can only be dissolved via a divorce.
Under the Health Insurance Portability and Accountability Act (HIPAA), an employee has the right to enroll a new spouse and new dependent children for health coverage. These rights extend equally to common-law spouses.
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Frequently asked questions
A common-law marriage is a legal marriage for all state and federal purposes, without an official license and solemnization. It is created by a couple's mutual agreement and public behaviour.
Common-law spouses qualify for similar benefits as legally married spouses, including Social Security benefits, tax benefits, inheritance, and employment perks such as health, dental, and life insurance benefits, family leave, and bereavement leave.
The requirements for a common-law marriage vary by state, but generally include presenting as a married couple to their social circle and community, sharing the same last name, and celebrating anniversaries together.
Proving a common-law marriage can be challenging as there is no marriage certificate. Evidence may include testimonies from friends and family, shared financial records, and other relevant documents that show a commitment to each other.
The number of states recognizing common-law marriage varies between 15 and nine, including the District of Columbia. States that allow common-law marriage include South Carolina and New Jersey.
