One might think that when it comes to finances, marriage is the better choice. A domestic partnership also has its advantages. The financial differences between marriage and domestic partnership are numerous. Which form is right for you depends on your preferences, circumstances, and legal status.
Domestic partnerships are legal relationships between two people who are entitled to some of the same rights as married couples, such as time off to care for a partner, family leave for bereavement and childcare, eligibility for health benefits, and visitation in hospitals, prisons, and other institutions operating in New York (for those registered in New York). Such a domestic partnership must be legally registered in accordance with the applicable municipal law under Executive Order 123 (dated August 7, 1989).
In New York, individuals wishing to enter into a legal domestic partnership must also meet specific eligibility criteria to legally register the partnership.
A couple can register a domestic partnership if:
- The partners have a close and committed personal relationship and live together permanently.
- Both partners are residents of New York City or at least one person is employed by the city on the date of registration.
- The partners must sign a domestic partnership statement at the clerk’s office to take an oath confirming their residency.
- Both individuals are 18 years of age or older.
- Neither partner is currently married.
- Neither person is currently in a domestic partnership or has been in any other such relationship within the last six months.
- The partners are not related in a way that would prohibit marriage in New York State.
Although domestic partnerships legally provide partners with a number of benefits resulting from a legally recognized relationship, unfortunately, there are also many benefits that the law does not provide for this type of relationship, no matter how happy the couple may be.
The benefits of marriage, however, are so widely understood that we often don’t think about them, but they are significant. There are over 1138 federal benefits resulting from marriage, such as the right to:
- Inheritance
- Financial support – spousal maintenance.
- Division of marital property after divorce;
- Sponsor a spouse for immigration;
- Adopt the spouse’s surname;
- Receive Social Security, pension, etc. benefits.
Marriage brings many financial benefits
One of the most important benefits of marriage is automatic inheritance. If you are married and your spouse dies without a will, you are in a much better position than if you were in a domestic partnership. Domestic partners may not qualify for death benefits, pension, or survivor’s annuity if your partner died and did not legally regulate inheritance in a timely manner by preparing appropriate legal documents (will or trust). There are many ways to secure a domestic partner and transfer your assets to them using appropriate legal documents so that no immediate family member can challenge the deceased’s last will.
Domestic partnerships, which were originally created to provide legal benefits to same-sex couples, also apply to cohabiting couples or couples aged 62 and older who cohabit, depending on the state. Domestic partnerships can apply to both same-sex and heterosexual relationships. Although some employers (about 25% in the US) offer health benefits to domestic partners, this is by no means standard. Therefore, this is an important factor to consider, as purchasing your own health insurance can be costly.
Regardless of whether you are married or in a domestic partnership, important decisions must be made regarding financial management. A decision must be made whether to have joint or separate accounts. For both relationships, marriage and domestic partnership, key documents such as a “Power of Attorney” as well as a “Health Care Proxy” – medical power of attorney – should be remembered.
“Power of Attorney” – power of attorney for legal and financial actions. This is a power of attorney to make all day-to-day decisions in case of incompetence, illness, or inability to act on one’s own behalf. For example, to conduct banking transactions, to sell real estate, to apply for various benefits. Such a document can be revoked by the person granting the authorization (principal) provided that they are fully aware of their actions.
A “Health Care Proxy” is an authorization in which we designate a person to make medical decisions when we are no longer able to express our wishes in a hospital or at the doctor’s. The “Cruzan” case from 1990 shows the choices and decisions Nancy Cruzan’s loved ones faced when she fell into a coma at the age of 25 after a terrible car accident. Her parents wanted to disconnect her from machines, but the lack of this document meant they had to wait for a court ruling, which took as long as 7 years.
Summarizing the above facts about marriage and domestic partnership, it should be remembered that every relationship will find its supporter. From a legal standpoint, however, it should be remembered that marriage gives us many benefits that a domestic partnership will not provide. It is very important to establish an appropriate family and financial plan so that each party, both in marriage and in a domestic partnership, is adequately financially secured.
