Marriage - Council Rock School District

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Council Rock School District
Business Law Class
Chapter 31
Marriage Law
Legal Rights &
Business
Why is this a financial issue?
Couples and Money
• 31% of all
people in a
relationship
had lied to
their partner or
spouse about
money*
Impact on Finances
• 58% of them hid cash
• 54% of them hid a purchase
• 34% of them lied about
finances, debt, money earned
• 30% of them hid a statement
or bill
• 15% of them hid a bank
account
*NEFE Personal Finance Survey, May 2015
Major Impact on Finances
Couples and Money
• 68% of people say a current or past relationship was
affected by financial deceptions
• 67% of them say it caused an argument
• 42% of them say it caused less trust in relationship
• 19% of them say it led to separation of combined
finances
• 16% of them say it led to divorce
• 15% of them say it caused them to become closer/grow
together
• 9% of them say it causes less privacy in relationship
Bell Ringer
• Does anyone know the origin of
using a ring as an engagement
token?
• What are some other things you
know about marriage customs
and laws?
The Marriage Contract
• Agreement containing consideration between
two parties who have the capacity to contract, by
mutual consent for a legal purpose
– (promise to give up legal right to remain single)
• Discuss changing laws
– (DOMA): Defense of Marriage Act- Federal law
• Signed into law by President Clinton
• Barred recognition of same-sex partners as “spouses”
• Section 3 of the "Defense of Marriage Act" has been declared
unconstitutional by the US Supreme Court. Committed samesex couples who are legally married in their own states can
now receive federal protections - like Social Security,
veterans' benefits, health insurance and retirement savings.
The Marriage Contract is
Business Related
Marriage involves many decisions and
responsibilities
• Name Changes
• Spousal Support
• Privileged communication
– The law considers certain relationships private and
confidential like Doctor/Patient, Lawyer/Client
• Inheritance
– Automatically entitled to a share of the deceased’s
estate
• Tax Breaks from Government
– File Joint Tax returns
The Marriage Contract
• It is a Civil Contract that comes
into existence when you become
engaged
– (a promise to give up the legal right to be
single)
• Under common law you could sue
if one party breaks off the
engagement
Question: Who gets the ring?
Rights and Duties
• Marriage Contracts change your
legal status by agreement
– Gives both Husband and Wife new
rights and duties
– Intended to provide protection for
both parties
• Living together doesn’t give you
this special protection
Rights and Duties
•
Right to support by your spouse when
necessary
Right to inheritance from deceased spouse
•
–
–
•
•
•
Statutory 1/3 Rule Share v. “Last Will” Share
One day or 100 years… Doesn’t matter
Right to property if the marriage ends
Right to compensation to continue your
standard of living if the marriage ends
Right to file a joint income tax return
Rights and Duties
• Many employers also give certain rights to
their employee’s spouse
– Insurance coverage, death benefits, other rights
etc…
– This duty cannot be relinquished, even by agreement
• Martial DUTY (explained)
– Such as the duty of each spouse to care for, support and
protect the other
• Although these terms may seem vague, they have been clarified by courts in
written precedents over the years
– In addition, each has a right to the company, cooperation,
society, sexual relations, conjugal affection, love, comfort,
and solace of the other.
• This bundle of rights is often called the “right of
consortium.”
Premarital or Prenuptial
Agreement
• Before marrying:
– People can enter into contracts
concerning the real and personal
property
• This set forth how their property will
be handled if marriage ends by death
or divorce
Why don’t more people
enter into a pre-nuptial?
Premarital or Prenuptial
Agreement
• Must be in writing and signed
by both parties
– Usually Video Recorded
– Must make honest statements and
disclose all assets to each other
• What are some advantages and
disadvantages of prenuptial
agreements?
Premarital or Prenuptial
Agreement can cover…
• Rights and Obligations of each party
regarding any property
• Rights to buy, sell, manage, or
control real or personal property
• Disposition of real and personal
property upon separation, death, or
divorce
• Change or elimination of support
Planning a Marriage vs.
Problems-ahead?
Planning a Marriage Problem
Prohibited Marriages
• Marriage between relatives (Many states)
– Consanguinity (blood)
– Affinity (marriage)
Consanguinity (Blood)
Mother/Father
Grandmother/Grandfather
Daughter/Son
Granddaughter/Grandson
Aunt/Uncle
Sister/Brother
Niece/Nephew
Affinity (Marriage)
Mother/Father
Stepmother/Stepfather
Step-grandson/Step-granddaughter
Stepdaughter/Stepson
Step-grandmother/Step-grandfather
Mother-in-law/Father-in-law
Daughter-in-law/Son-in-law
Granddaughter-in-law/Grandson-in-law
Marriage can be voided and Child would be illegitimate
Prohibited Marriages
• Bigamy and Polygamy
– Bigamy – 2 spouses at the same time
– Polygamy – more than 2 spouses at
once
• Must be practiced in life for protections
of religion
• Many states consider such marriages as
illegal and a crime
If someone gets married without the
knowledge of the previous marriage
than on the death of the first spouse
the second marriage becomes legal
The Requirements of Marriage
• Each state has its own laws regarding
marriage
• Age – 18 without parents consent
– Younger with parents’ consent,
– Court permission, if emancipated
• What age do you think should be the
minimum age for a person to marry
with and without parental consent?
– Should this age be the same for males and
females?
Common-Law Marriage
•
STATES THAT RECOGNIZE COMMON LAW MARRIAGE:
Only a few states recognize common law marriages:
• Alabama
Colorado
Georgia (if created before 1/1/97)
Idaho (if created before 1/1/96)
Iowa
Kansas
Montana
New Hampshire (for inheritance purposes only)
Ohio (if created before 10/10/91)
Oklahoma (possibly only if created before 11/1/98)
Pennsylvania (if created before 1/1/05)
Rhode Island
South Carolina
Texas
Utah
Washington, D.C.
The Requirements of Marriage
• Common-Law Marriage
•
IF YOU LIVE IN A STATE THAT DOES RECOGNIZE COMMON
LAW MARRIAGE:
– You must: "hold yourself out to be
married" (by telling the community you
are married, calling each other husband
and wife, using the same last name,
filing joint income tax returns, etc.)
• This can create a common law marriage
– Common law marriage makes you a legally
married couple in every way, even though
you never obtained a marriage license.
The Requirements of Marriage
• Common-Law Marriage
•
IF YOU LIVE IN A STATE THAT DOES RECOGNIZE COMMON LAW MARRIAGE:
– If you choose to end your relationship, you
must get a divorce, even though you never
had a wedding.
– Legally, common law married couples must
play by all the same rules as "regular"
married couples.
– If you live in one of the common law states
and don't want your relationship to become a
common law marriage, you must be clear
that it is your intention not to marry.
The Requirements of Marriage
• Common-Law Marriage
• Pennsylvania: A common-law marriage
was established if, before 1/1/2005, a
man and woman exchanged words that
indicated that they intended to be married
at the present time and they also held
themselves out to the community as
married (introducing each other as
husband and wife, filing joint taxes, etc.).
The Requirements of Marriage
(continued)
• Ceremonial Marriage – To be
formal…must be declared as
husband and wife in the
presence of someone
authorized by state law to
perform marriages
• Covenant Marriage –
Counseling before and during
marriage to resolve conflicts
The Requirements of Marriage
(continued)
• Marriage License – a certificate that
gives two people permission to marry
– Waiting Period – Pennsylvania = 3 days
– Blood Tests/Physical Exams. – tests for
communicable diseases (AIDS, syphilis)
• Proxy Marriage
– Use of various names
– Provided NO fraud is committed
Community Property States
Community Property
Defined: Most property acquired during the marriage (except
for gifts or inheritances)—is owned jointly by both spouses
and is divided equally upon divorce, annulment, or death.
– Division of community property may take place by item,
by splitting all items or by values. In some jurisdictions,
such as California, a 50/50 division of community
property is strictly mandated by statute
– Arizona
– Idaho
– Nevada
– Texas
– Wisconsin
California
Louisiana
New Mexico
Washington
Impact on Business
• If you start a business before marriage, keep it
going and the value increases during marriage
and then get divorced, your spouse may be
able to claim part of the increase in the value
as community property.
• Most lawyers advise spouses to keep their
business property and accounts separate.
– If they commingle it with community property, it
can become community property should they get
divorced.
Impact on Business
• Bank accounts or brokerage accounts
before marriage, if they are separate
– KEEP all reinvest interest, dividends &
capital gains put back into that account
• Don't put your paycheck into it or use
it to pay rent
– Gifts or inheritance, keep in a separate
account in your name
– Own a rental property, don't use
community income to pay taxes or make
repairs
Impact on Business
• Premarriage debt
– Community-property states, any debt a
spouse takes on before marriage remains
that spouse's sole debt after marriage.
• Getting married does not your spouse responsible
• Even if they help repay it, as long as they don’t cosign the loan.
– But You could be affected in this way: If your spouse
defaults on loan, the creditor would first look at separate
property… if that wasn't enough, the creditor could try to
get their half of any community property
– Any debts taken on after marriage are generally
community debts, and each spouse is responsible for
the entire amount.
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