Many people have questions about the legal needs of unmarried couples. There are many steps unmarried couples can take to achieve legal protections similar to or equal to those of married couples. However, there are some legal benefits to being married that cannot be duplicated. How close can unmarried couples come to having the same legal protections as married couples?
Real Property Ownership: Many couples want to own real property together with a right of survivorship, so that when one passes away, the other one owns the property outright automatically. For married couples, having both spouses’ names on the deed does this. Unmarried couples can add “joint with right of survivorship” to their deed. However, married couples also have the advantage that a creditor can take the property only if both spouses owe the creditor money. If only one spouse owes the creditor money, the creditor cannot force the sale of the land.
Health Care Decisions: A spouse does not have an automatic right to make medical decisions for the other. Spouses and unmarried partners need Health Care Powers of Attorney appointing the other person to make those decisions.
Hospital Visitation: Believe it or not, hospital policy governs this, not a law. Hospital policies may vary. Unmarried partners can sign hospital visitation forms instructing that the other partner be allowed to visit. Most hospitals will respect these forms, but they are not required to.
Financial Authority: A spouse does not automatically have the right to take financial actions on behalf of the other. Spouses and unmarried partners need durable financial Powers of Attorney to have that authority.
Inheritance: A spouse has a statutory right to inherit some part of the other spouse’s estate when there is no will. However, it is not a complete right. When one spouse dies, and is survived by children or by a parent, they will share in the estate along with the spouse. For that reason, it is important that both married and unmarried couples have wills if they want their entire estate to go to their partner. It is even more important for unmarried couples because without a will, they will not share in each other’s estate at all.
Statutory Benefits: Some state and federal laws give benefits only to spouses or to surviving spouses. These statutes do not allow those benefits to go to unmarried partners or to anyone other than a spouse. At the state level, surviving spouses of disabled veterans can keep the county property tax exemption used by the veteran. Under a federal law called ERISA, a spouse must consent before an employee withdraws money from a company retirement account. Social Security law allows a spouse to have retirement benefits calculated based on one’s own earnings history or on a spouse’s earnings history if it is higher. Benefits available by law to spouses or surviving spouses usually cannot be duplicated or transferred to unmarried partners.
Property Division After Separation by Constructive Trust Rules: You probably know that a “trust” is when one person (a “trustee”) owns legal title to an asset, but they are responsible for managing the asset for the benefit of another person (the “beneficiary”). Most commonly, someone sets up a formal, written trust by a trust agreement or in his will. A “constructive trust” is when there isn’t a formal, written trust, but the court acts like there is because that seems like what the parties intended.
Constructive trusts have been used for a long time in business partnership cases. For example, assume two friends go into a partnership together and contribute equal amounts of money to buy a piece of land for investment, but for convenience they title the land in just one partner’s name. If the partnership fails and the one who has title to the land claims it belongs only to him, the Court will say, “No.” The Court will rule that this is a “constructive trust,” where the one with legal title is treated like a trustee for the benefit of the other party. The one who contributed money and trusted his partner will be treated fairly and equitably.
North Carolina Courts have applied this same model to unmarried couples. If two unmarried people go in together to buy a residence, but for some reason title it in just one person’s name, the one who isn’t on the deed will still be protected. In a lawsuit, the Judge will recognize an ownership interest in the one whose name is not on the deed. The same is true for any sales proceeds if the one whose name is on the deed has sold the property before suit is filed. It appears likely that the Court will apply the same rule to other assets – vehicles and bank accounts, for example – to achieve a just and fair result.
This article cannot cover all of the legal issues facing unmarried couples. It is intended to highlight some common ones.
Kim K. Steffan is an attorney with Steffan & Associates, P.C. in Hillsborough, NC. She can be reached at 919-732-7300 or firstname.lastname@example.org.
This article was last updated in January 2020.