Not every happy, committed couple chooses to get married. For their own reasons, some couples choose to cohabitate. They may file for a domestic partnership or a civil union. In some states, however, there is no alternative legally recognized relationship. But any unmarried couple can create a cohabitation agreement on their own. This is essentially just a contract between two parties.
A cohabitation agreement clarifies the rights and responsibilities of each person in the relationship. It documents how finances, assets, and debts will be handled during the relationship. And depending on what the couple wishes to include in the document, it can do more.
What Is a Domestic Partnership?
A domestic partnership is a legally recognized form of a committed relationship. Not all states recognize domestic partnerships within a legal context. The details of domestic partnerships may differ by state and municipality.
According to the National Conferences of State Legislatures, these states recognize domestic partnerships:
- District of Columbia
- Hawaii (allows for reciprocal beneficiaries)
Some municipalities recognize domestic partnerships even though their state does not. Individual businesses may recognize domestic partnerships for purposes of employee benefits, even if the states in which they operate does not.
Domestic partnerships became particularly significant during the push for same-sex marriage rights. Many states and cities offered domestic partnerships when same-sex marriages weren't yet legal. To make it official, partners need to file a Domestic Partnership Agreement. They usually must pay a filing fee to the local government.
What Is a Civil Union?
Civil unions extended some of the legal rights of marriage to same-sex couples. Since the legalization of gay marriage by the Supreme Court in 2015, civil unions have waned in popularity. Only Colorado, Hawaii, Illinois, New Jersey, and Vermont still recognize civil unions. The federal government does not consider civil unions to be the legal equivalent of marriage.
Why Domestic Partnership Instead of Marriage?
Why would a couple choose a domestic partnership instead of just getting married? Most likely, there are personal reasons for avoiding marriage. They may feel there are too many societal or family obligations that come with marriage. They may have been part of a nasty divorce and are now shy of repeating a past mistake. Domestic partnerships are easier to end.
There can also be financial benefits to avoiding marriage. Couples where both partners are high earners can avoid the “marriage penalty" when it comes to taxes. A cohabiting partner receiving alimony may continue to receive alimony. This varies by state, however, and is an evolving area of law.
The Benefits of Domestic Partnerships
A domestic partnership provides the two parties with some of the legal benefits of marriage. But just as recognition of domestic partnerships varies by state, so do the benefits. One of the main reasons to enter a domestic partnership is to access domestic partnership benefits. This could include health and life insurance benefits, death benefits, and rights to family leave when a partner is ill.
Domestic partners may be eligible for these benefits:
- Coverage by a partner's work-provided healthcare or insurance benefits plan
- Eligibility for family sick leave and bereavement leave if one's partner gets sick or dies
- Tax benefits from filing taxes as a single filer, which typically has a lower tax bracket
- Rights to the inheritance of a domestic partner, which some states recognize but others do not (see the Social Security website for information on non-marital legal relationships)
- The allowance of domestic partners' hospital and jail visitation rights, as recognized by some states
- The allowance of domestic partners to make financial and medical decisions on a partner's behalf, as recognized by some states
Read more about the benefits and legal protections of domestic partnerships at the links below.
The Downside of Domestic Partnership
There are some significant downsides to domestic partnership status compared to traditional marriage. Domestic partnerships are not uniformly recognized by the federal government or its agencies (like Social Security or the IRS). They are also not recognized by insurance companies in the same way or by all foreign governments. Additionally:
- You cannot file your taxes jointly.
- Your partner cannot receive your Social Security benefits after you die.
- You may not automatically inherit from your partner. If you are named in a will and inherit, you may pay inheritance tax.
- If an employer extends health insurance benefits to a non-employee partner, the value of that benefit is taxable income. There may also be different limits on coverage.
- A domestic partner may not have the same rights of access, information, and medical decision-making that a spouse would have.
To understand the financial and tax implications of a domestic partnership, talk to a tax attorney.
The Process of Establishing and Ending a Domestic Partnership
The process for making a domestic partnership official is fairly simple. It involves filing an application at a courthouse or a designated government office. Your state may have eligibility restrictions. See the link below for State Laws on Domestic Partnerships, which will take you to the domestic partnership registration process for your state.
If you have registered your partnership with your city, that does not mean you are registered domestic partners according to your state. You may need to do that separately.
Termination of domestic partnerships is similarly easy. One partner typically files a form with the Secretary of State or the county or city clerk. Assets in the marriage do not become community property. They remain individual assets. If both parties paid for an asset, they may work through an attorney or mediator on property division.
If there are children from the relationship, a child custody and parenting time agreement need to be negotiated. You will also need to get a child custody court order approved by a family court judge. The court might also order child support.
Hiring a Family Law Attorney
Understanding the legal and financial issues surrounding domestic partnerships can be challenging. An experienced family law attorney can provide information about domestic partnership laws in your state. They can also draft a cohabitation agreement or assist with property division and child custody. Attorneys can provide you with valuable legal advice.
Contact a family law attorney today.