1. Property Rights
In a common-law relationship, each partner retains sole ownership of the assets they brought into the partnership. Unlike married couples who often share property ownership, common-law couples don’t automatically gain rights to each other’s possessions in the event of a breakup or death. This means that if there’s no written agreement, one partner may leave the relationship without any legal claim to the property acquired throughout the relationship.
It’s essential for common-law couples to protect their assets by drafting a cohabitation agreement or a domestic partnership agreement, specifying how assets will be divided if the relationship ends.
2. Inheritance Rights
In many jurisdictions, common-law partners do not have automatic rights to inherit from their deceased partner’s estate. If one partner dies without a will, the surviving partner may not be entitled to any portion of the estate. This situation can lead to significant financial hardship and emotional distress.
To avoid such complications, it is highly recommended for common-law couples to create wills and designate each other as beneficiaries. This ensures that the surviving partner will be legally entitled to inherit from the deceased partner’s estate.
3. Tax Benefits
Married couples often benefit from various tax advantages and incentives that are unavailable to common-law couples. These include joint tax returns, spousal deductions, and the ability to transfer assets between partners without triggering tax liabilities. As a result, common-law couples may face a higher tax burden compared to their married counterparts.
While tax laws vary by jurisdiction, common-law couples should consult a tax professional to understand the available tax benefits and strategies to minimize their tax obligations.
4. Health and Medical Benefits
In many countries, married couples have the right to access each other’s health and medical benefits. They can be added to an employer’s health insurance plan or make medical decisions on behalf of their partner if they become incapacitated. Unfortunately, common-law couples are often denied these rights as they are not recognized as legal spouses.
To mitigate this, it is advisable for common-law couples to explore alternative options for securing health and medical benefits. This might involve obtaining individual health insurance coverage or executing a power of attorney granting the partner legal authority to make medical decisions.
While common-law relationships provide couples with a flexible and non-traditional approach to partnership, it’s important to recognize the rights that may be lacking. Without the legal protections that come with marriage, common-law couples may face challenges in areas such as property division, inheritance, taxes, and health benefits. To safeguard their interests, common-law couples should consider legal agreements, wills, and consulting with professionals familiar with the legal rights and options available to them.
- Property Rights
- Inheritance Rights
- Tax Benefits
- Health and Medical Benefits