Domestic Partners & Unmarried Couples Resources

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Domestic partners share a long-term, committed relationship without entering into a traditional marriage, common-law marriage, or a civil union. Some jurisdictions offer domestic partnership agreements in order to permit domestic partners to form contractual arrangements concerning common property, monetary support of the other partner, and other domestic considerations. Certain states, such as California allow domestic partners to register with the state in order to obtain legal rights and benefits.

For instance, California passed the Domestic Partnership Rights and Responsibilities Act of 2003, which declares that registered domestic partners in California "shall have the same rights, protections, and benefits, and shall be subject to the same responsibilities, obligations and duties under law...as are granted and imposed upon spouses." Thus, the rights and responsibilities involved with the care of children is the same for registered domestic partners as it is with married couples. This statutes was reviewed and upheld by a California appellate court in Knight v. Superior Court (128 Cal. App. 4th 2005).

Benefits

Some employers provide domestic partner benefits to their employees. Domestic partner benefits are employment benefits provided to an employee's non-marital partner and usually involve health insurance, dental care, or relocation expenses. An increasing number of companies offer domestic partner benefits to their employees. For example, in 1998 only 69 Fortune 500 companies provided domestic partner benefits to its employees. However, in 2003, the number jumped to 200 companies. The Human Rights Campaign has developed a step-by-step guide for employees who wish to obtain domestic partner benefits in their workplace.

Besides health care benefits for employees, other companies have also developed unique products for domestic partners. For instance, certain insurance companies will compose policies which provide health benefits to domestic partners. Also, health clubs, car rental agencies, and other companies provide special rates and discounts for domestic partners and unmarried couples.

Taxes

Because the Internal Revenue Service does not consider domestic partners to be spouses for tax purposes, the federal government taxes domestic partner benefits as income. Thus, employers must report the fair market value of any domestic partner benefits given to its employees, and the employees must pay the appropriate income tax for these benefits.

Furthermore, unlike married couples, domestic partners cannot file a joint tax return. Instead, domestic partners must file their taxes as single people. Accordingly, they must develop different tax planning strategies than married people who may file their taxes jointly.

Sometimes, the tax laws benefit domestic partners, such as when domestic partners fall within different tax brackets. While income from a married couple are taxed at a unifed tax bracket, income from domestic partners are taxed accordingly to each individual's tax bracket. Thus, if one partner has a significantly higher income than the other partner, the partner with the higher income should be the one that makes charitable contributions on behalf of the couple because tax deductions for charitable contributions are more valuable to individuals in a higher tax bracket. In addition, the partner with the higher income may wish to shift assets to the partner with a lower income to minimize capital gains taxes.

Inheritance Rights

Traditional inheritance laws provide widows and widowers with a portion of the deceased's estate in the absence of a will. However, common law does not consider a surviving domestic partner to be widow or widower since the domestic parters were not legally married. However, some states, such as California, Vermont, and Hawaii have passed statutes which bestow inheritance rights on domestic partners. Since inheritance rights vary from state to state, if an unmarried couple lives in a state which has not passed domestic partner inheritance statutes, the couple may wish to provide for the surviving partner through other means. For instance, each person may draft a will and/or a trust which provides the surviving partner with a portion of the deceased's estate. An unmarried couple may also wish to utilize the adoption laws in their jurisdiction, if permitted. If one partner legally adopts the other, this automatically provides each partner with an intestate share of the other partner's estate.