A Non Traditional Family is an all encompassing term that is used to describe many different types of familial relationships. These may include, but are certainly not limited to: common law marriages, same sex partnerships, blended families, and domestic partnerships. The number of non-traditional families in United States has doubled since 1970, and Census figures estimate that 5.5 unmarried, cohabitating couples live in the United States alone. Laws that govern the naming of an executor of an estate, and other estate planning procedures, are slightly more complex when they involve a non traditional family situation, and this article will attempt to familiarize you with some of the laws governing estate planning and the non traditional family.
Tax Advantages For Married Couples
Unlimited marital deduction for transfers upon death, exclusion from taxable income of employer provided health insurance for a spouse, Deferral of income for qualified plans and IRAs through rollovers, Transfer of qualified plan interest on termination of a relationship, and many other benefits as determined by state and local ordinances.
Tax Advantages For Unmarried (union not recognized by law) Couples
Ability to use planning techniques for unmarried persons under Chapter 24, no “marriage penalty in income tax rates or earned income tax credit, possibility of deducting further capital losses depending on asset ownership, non-recognition of gain on the sale of a home up to $250,000 per person, possible lower average tax rate, potential added protection for social security benefits due to income threshold differences, and other benefits as deemed by law and type of union.
Common Law Marriages
In the past, common law marriages were recognized by the state, provided that a man and woman had lived together for a certain amount of time and considered themselves to be husband and wife. Nowadays, only a handful of states still recognize common law marriages, and in the ones that still do, living together for a certain amount of time is not enough to constitute marriages. The couple must have the capacity to marry, consider themselves as husband and wife, live together, and represent themselves as husband and wife. In these states, common law marriages provide the partners with the same rights as those of ceremonial marriages. Problems can occur when a couple marry in a state that recognizes common law marriages, and then move to one that does not, particularly when it comes to estate planning.