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What are the major differences in legal treatment between married and unmarried couples?

There are several differences in legal treatment. Specifically, unmarried couples do not:

  • Automatically inherit each otherís property. Married couples who do not have a will have the state intestacy laws to back them up; the surviving spouse will inherit at least a fraction of the deceased spouseís property under the law.

  • Have the right to speak for each other in a medical crisis. If your life partner loses consciousness or capacity, someone will have to make the decision whether to go ahead with a medical procedure. That person should be you. But unless you have taken care of some legal paperwork, you may not have the right to do so.

  • Have the right to manage each otherís finances in a crisis. A husband and wife who have jointly owned assets will generally be affected less by this problem than an unmarried couple.

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What estate and financial planning steps are particularly important for unmarried couples?

The following steps are particularly important for unmarried couples:

  • Prepare wills. If both partners make out wills, the chances are that the intentions expressed in the wills will be followed after one partner dies. If there are no wills, the unmarried surviving partner will probably be left high and dry.

  • Consider owning property jointly. Owning property jointly with right of survivorship is a way of ensuring that property will pass to the other joint owner on one joint ownerís death. Real property and personal property can be put into this form of ownership.

  • Prepare a durable power of attorney. Should you become incapacitated, the durable power of attorney will allow your partner to sign papers and checks for you and take care of other financial matters on his or her behalf.

  • Prepare a health care proxy. The health care proxy (sometimes called a "medical power of attorney") allows your partner to speak on your behalf when it comes to making decisions about medical care, should you become incapacitated.

  • Prepare a living will. The living will tells the medical community what your wishes are regarding artificial feeding and other life-prolonging measures.

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Do married couples need more insurance?

The purpose of life insurance is to provide a source of income for your children, dependents, or whoever you choose as a beneficiary, in case of your death. Therefore married couples typically need more life insurance than their single counterparts.

Whether you need to buy life insurance depends on whether anyone is depending on your income. If you have a spouse, child, parent, or some other individual who depends on your income, you probably need life insurance. Here are some typical families that need life insurance:
  • Families or single parents with young children or other dependents. The younger your children, the more insurance you need. If both spouses earn income, then both spouses should be insured, with insurance amounts proportionate to salary amounts. If the family cannot afford to insure both wage earners, the primary wage earner should be insured first, and the secondary wage earner should be insured later on. A less expensive term policy might be used to fill an insurance gap. If one spouse does not work outside the home, insurance should be purchased to cover the absence of the services being provided by that spouse (child care, housekeeping, bookkeeping). However, if funds are limited, insurance on the non-wage earner should be secondary to insurance on the life of the wage earner.

  • Adults with no children or other dependents. If your spouse could live comfortably without your income, then you will need less insurance than the people in situation (1). However, you will still need some life insurance. At a minimum, you will want to provide for burial expenses, for paying off whatever debts you have incurred, and for providing an orderly transition for the surviving spouse. If your spouse would undergo financial hardship without your income, or if you do not have adequate savings, you may need to purchase more insurance. The amount will depend on your salary level and that of your spouse, on the amount of savings you have, and on the amount of debt you both have.

  • Single adults with no dependents. You will need only enough insurance to cover burial expenses and debts, unless you want to use insurance for estate planning purposes.

  • Children. Children generally need only enough life insurance to pay burial expenses and medical debts. In some cases, a life insurance policy might be used as a long-term savings vehicle.

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If one spouse changes their name after marriage, who should be notified?

You should notify all organizations with which you previously corresponded with your maiden name. The following is good list to start with:

  • The Social Security Administration

  • Driverís license bureau

  • Auto license bureau

  • Passport office

  • Employer

  • Voterís registration office

  • School alumni offices

  • Investment and bank accounts

  • Insurance agents

  • Retirement accounts

  • Credit cards and loans

  • Subscriptions

  • Club memberships

  • Post Office

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Do I need to update my will when I get married?

Absolutely. Your will should be updated often, especially when such a significant life event occurs. Otherwise you spouse and other intended beneficiaries may not get what you intended upon your death.

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What are the tax implications of marriage?

Once you are married you are entitled to file a joint income tax return. While this simplifies the filing process, you may find your tax bill either higher or lower than if each of you had remained single. Where itís higher itís because when you file jointly more of your income is taxed in the higher tax brackets. This is frequently referred to as the "marriage tax penalty." Tax law changes intended to reduce the marriage penalty became effective in 2003, but don't eliminate the penalty for taxpayers in the higher brackets.

You can not avoid the marriage penalty by filing separate returns after youíre married. In fact filing as "married filing separately" can actually increase your taxes. You should consult your tax advisor as to the optimal filing status for your situation.

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How can married couples hold property?

There are several ways of owning property after marriage. These vary from state to state.

  • Sole tenancy ñ Ownership by one individual. At death the property passes according to your will.

  • Joint Tenancy, with right of survivorship - Equal ownership by two or more people. At death property passes to the joint owner's. This is an effective way of avoiding probate.

  • Tenancy in Common ñ Joint ownership of property without the right of survivorship. At death your share of the property passes according to your will.

  • Tenancy by the Entirety ñ Similar to Joint Tenancy, with right of survivorship. This is only available for spouses and prevents one spouse from disposing of the property without the others permission.
Community property ñ Equal ownership of property acquired during a marriage. Community property states are AZ, CA, ID, PA, NV, NM, TX, WA, and WI.

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