It’s a great institution….

It’s a great institution….

By Randy Ratliff

A few years ago, I sat down with a couple to discuss their estate planning needs. As we got to know one another, I learned they had been married for 52 years. So, I asked: “How have you managed to stay happily married for 52 years?” Without missing a beat, the wife gave me this deadpan stare and said: “What makes you think it’s been happy?” Ask a dumb question.

Marriage is what you make of it, as my grandmother used to say.

Fewer people are making anything of it. According to the U.S. Census Bureau, divorce rates for most age groups have been dropping since 1996. One chief reason the divorce rate is dropping is that large numbers of millennials remain unmarried through age 40. In fact, each generational group since the Baby Boomers marries less than the one before.

Being married provides a ton of perks and privileges — from Social Security to income taxes, married couples benefit economically. I have seen estimates that there are over 1000 legal benefits that married folks get that nonmarried couples do not. The overall implications of the decline in marriage are beyond the scope of this column (and we would need someone smarter than me to tell us what they are), but there are very significant differences between married and nonmarried couples regarding legal rights in decision-making for incapacitated partners, parenting, property ownership, and post death disposition of assets.

So, if you and your partner are firmly set against marriage, then you especially need to consider how you will own assets, who will manage your affairs if you become incapacitated, and how your property passes after you die. Today, everyone turns to Google for solutions and I am aware that a few states and some localities around the country recognize and publish formal declarations of domestic partnership agreements. After reviewing several, I recommend against a DIY internet solution. In fact, I strongly suggest that you sit down with a qualified estate planning attorney to help you navigate what could ultimately be a minefield. Domestic partnership agreements or shared ownership agreements can be great solutions, but they need to be valid under state law.

None of this is to say that you cannot accomplish your goals without getting married. You and your partner just need to sit down and think things through and formalize an estate plan. The reality is that you have a number of options. Understanding these simply requires care, consideration, and expertise.  For example, Grantor Retained Income Trusts (GRITs) can be very effective, especially when one partner has significantly more assets than the other. Likewise, a Qualified Personal Residence Trust (QPRT) allows transfer of the residence to the partner.

Other techniques include joint ownership of property with a right of survivorship; a will or trust designating your partner as beneficiary; naming your partner as the beneficiary with payment on death forms for bank accounts and annuities; signed and currently effective durable powers of attorney providing that you have granted your partner the power to handle your affairs; designating your partner as an authorized recipient on health and education releases, and designating your partner as beneficiary of your life insurance policy and retirement plan.

A final word about retirement accounts. In 2014, a unanimous United States Supreme Court ruled that inherited IRAs are not exempt from the creditors of the recipient. In other words, if you leave your IRA to your partner and he or she gets sued, your hard-earned IRA will be subject to being levied to pay for any judgment. The lone exception is for spouses. One way to avoid this and maintain creditor protection is to establish a Stand-Alone Retirement Trust and name the trust as the beneficiary of your IRA. Your partner can be the trust beneficiary, receive the funds in the most tax-efficient manner available, and the funds can be protected in the event your partner’s worm farm operation goes bust.

Of course, you can always just get married, because as Groucho Marx said, “Marriage is a great institution, if you don’t mind living in an institution.”

Randy Ratliff is a Brentwood attorney practicing estate and elder law. He can be reached at or

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