Legal rights and responsibilities of marriage

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misemoi

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It comes up every now and again about various topics like inheritance tax, property ownership, and in money makeovers. Often the unromantic advise is that legal marriage would solve a problem. A lot of people don't understand the benefits of a legal marriage, or conflate it with weddings, or might be wary of the responsibilities without understanding what they are.

Could we have a thread pointing out both the benefits and the responsibilities of marriage, on a legal and fiscal basis only? I have noted a few points below that I think are important.

Benefits
Tax free transfer of assets between spouses, including on death
Ability to transfer tax credits and cut offs if one spouse is not using them - to a point
Are there pension benefits for spouses?
Employers often offer benefits to spouses eg healthcare
Is guardianship of children simpler if the parents are married to each other?
Family home protections? Does this apply if unmarried?

Responsibilities
Have a ceremony for EUR 200, must give 3 months notice and have 2 witnesses in Ireland - other options available elsewhere
In the event of a welfare claim, spouse income/assets taken into consideration (although you do not need to be married for this to be the case)
In the event of a dissolution of the relationship, separation and divorce requirements versus simply walking away (although this is not always the case if there are shared assets or dependencies involved)
 
misemoi said:
Is guardianship of children simpler if the parents are married to each other?
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Absolutely, where kids are involved, this is probably the most important one. We weren't married when our eldest was born and required urgent surgery while my now wife was still in the maternity hospital. As the father, I couldn't sign any paperwork or okay any treatment. The hospital had to arrange for another doctor in the maternity hospital to witness her signing the paperwork and then faxed it back. We were married shortly after, but a note persisted on my daughter's file, and not having my wife present in the hospital in the following years caused several delays while they went back to records to dig out our marriage cert!
 
misemoi said:
Family home protections? Does this apply if unmarried?
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The Family Home Protection Act only applies to married couples. Under that Act, if the family home is in the name of one spouse, that spouse cannot sell, mortgage, etc the family home without the consent of the other spouse.

The Family Home Protection Act does not give the spouses joint ownership of the family home. It still belongs to whichever spouse owns it, but that spouse's ability to deal with it is constrained by the need to obtain the consent of the other spouse.

The Family Home Protection Act applies from the moment a couple marry; it's not something that comes into play only if they separate or divorce.

Different legislation deals with separation and divorce. Under that legislation, the courts have wide powers to deal with the property of both members of the couple, whether jointly owned or owned by one or other partner. Those powers include a power to order the transfer of property, so the court could order that propety owned by one of them be transferred to the other, or that property owned jointly be transferred to one or other, or that property be sold and the proceeds divided, not necessarily in accordand with ownership. These powers don't apply only or especially in relation to the family home, but in practice they are often exercised in relation to the family home.

These powers apply on the breakdown both
  • of a marriage; and
  • of a non-marital relationship, if
    • the couple have cohabited for five years; or
    • they have cohabited for two years, and have a child together.
 
One pro of marriage is automatic inheritance rights if you didn’t make a will, and if you have a defined benefit pension, your spouse may be entitled to keep receiving a portion of that after your death. For example in the new public sector pension it’s 50% of pension payout. There’s also a death in service benefit. I believe another pro of marriage is when health crises occur you don’t need a POA to make decisions(?) and as a spouse you have a right to be informed whereas as a long-term unmarried partner the hospital may refuse to keep you in the loop (I’ve read horror stories).

One thing I’m still confused about is who “owns” assets once a couple gets married. Say they keep their accounts and finances separate except for a joint account. Does each spouse have any legal claim over the other spouse’s individual current and savings account during the marriage? Are they legally allowed to, say, draw down the other spouse’s savings (without their permission)? My common sense says no because these are not joint assets. However, if the couple divorces the assets will be redistributed to a more equal split right? So in effect, a couple while married does not have to share assets, and it’s only when they divorce that they have to??

On another note, I wonder if spouses are liable for the other’s debts?

(Sorry if my question is naive or misinformed, I have no experience with marriage or with the Irish legal system…)
 
From my IPASS, tax manuals and QFA models

May not be exactly what you're seeking but a handy list to have

Income Tax and Universal Social Charge

• Joint assessment is automatically applied for married couples and civil partners, unless separate or single assessment is elected

• Married or civil partner's tax credit provides double the single person tax credit amount

• Standard rate cut-off point can be increased for two-income couples by the lower of €35,000 or the lower-earning spouse's income (2025 tax year)

• Trading losses incurred by one spouse or civil partner may be offset against the other's income

• Home Carer tax credit available when one partner provides full-time care for a dependent person

• Double age tax credit available if either spouse or civil partner is over 65 years

• Tax relief available for medical or caring expenses when employing someone to care for an incapacitated spouse or civil partner

• USC rates and thresholds apply individually to each person; incomes are not combined for USC purposes

• Year of marriage or civil partnership may allow pro-rata refund if tax paid as two single people exceeds joint assessment amount

• Aggregation relief permits resident individuals to claim married or civil partner's tax credit and standard rate band when non-resident spouse or civil partner has no income

CGT..

• Transfers of assets between spouses or civil partners occur at a no-gain, no-loss basis, provided the receiving spouse or civil partner is resident in the State

• Receiving spouse or civil partner is deemed to have acquired the asset at original cost and acquisition date; ownership period treated as continuous

• Married couples and civil partners living together may only have one principal private residence for CGT relief purposes

• Unused capital losses may be transferred between spouses or civil partners in the year of separation

CAT

• All gifts and inheritances between spouses or civil partners are completely exempt from CAT, regardless of value

• Pension lump sum death benefits and dependent's pension benefits received by a spouse or civil partner are exempt from CAT

• Approved Retirement Fund or vested Personal Retirement Savings Account transfers to surviving spouse or civil partner are exempt from both Income Tax and Inheritance Tax upon death

• Proceeds from Section 72 policies are exempt from Inheritance Tax up to the amount of any ARF tax arising from the deceased policyholder's death

Pensions and Employment Benefits

• Employer contributions to Revenue-approved pension schemes are not treated as benefits-in-kind for income tax purposes

• Proprietary director's spouse or family member, if genuinely employed, may accumulate retirement capital under separate Standard Fund Threshold, allowing separate tax-free lump sum benefits up to €200,000

• Preferential loan benefit-in-kind is calculated on the full amount of joint loans provided to an employee and their spouse or civil partner

Legal and Property Protections

• Family Home Protection Act requires consent of non-owning spouse or civil partner for any conveyance, sale, gift, or security interest in primary dwelling

• Transfers of assets between spouses or civil partners are exempt from stamp duty, including transfer of shared home into joint names

• Surviving spouse or civil partner has automatic legal right share of deceased's estate: one-half if no children, one-third if children exist

• Will made when single is automatically revoked upon marriage

• Credit union funds may be paid directly to spouse upon member's death

Financial Dissolution and Separation

• Pension Adjustment Orders may be issued by courts upon legal separation or divorce, allocating pension benefits from the marriage period to non-member spouse or civil partner

• Divorce decree may include orders for property partition, financial compensation, property sale (except family home where remarried spouse resides), maintenance pending relief, or provision from estate

• Succession rights are automatically extinguished upon decree of divorce

Social Welfare and Insurance

• PRSI refund available for legally enforceable maintenance payments made to spouse or civil partner

• Joint life policies available for life assurance and serious illness cover

• State Widow's Contributory Pension included in income gain calculations following death of working spouse

• Protection policies recommended to safeguard surviving spouse and children from financial loss

• Joint life policies on first survival basis pay out upon first death

• Insurability options allow spouse to increase life cover without proof of good health upon birth of child

• Life assurance unit-linked investment bonds provide ease of fund transfer to spouse upon death

Investment and Loan Structure

• Shares in innovative enterprises may be subscribed for jointly by spouses or civil partners

• Connected persons rules for tax-advantaged investments encompass spouses, affecting thresholds and relief qualification

• Marital status routinely required during fact-finding process for financial and loan applications

• Some lenders permit borrowing against additional capital paid off through accelerated mortgage repayments

Housing and Government Supports

• Marital status affects eligibility for Local Authority Home Loan, with "Fresh Start" provisions for divorced or separated individuals with no interest in family home
 
qwerty-2023 said:
Does each spouse have any legal claim over the other spouse’s individual current and savings account during the marriage?
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In a judicial separation or divorce situation all marital assets are considered (via the respective spouses' affidavits of means/welfare) but it's impossible to say in the general care how they may be split. There's a common misconception that it's necessarily 50:50 or that this is the starting point for negotiations when it may not be so.
 
qwerty-2023 said:
On another note, I wonder if spouses are liable for the other’s debts?
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If they are jointly and severally liable, yes, otherwise each individual is responsible for their own. In the case of death the deceased's estate will be liable for any outstanding debts.
 
qwerty-2023 said:
One thing I’m still confused about is who “owns” assets once a couple gets married. Say they keep their accounts and finances separate except for a joint account. Does each spouse have any legal claim over the other spouse’s individual current and savings account during the marriage? Are they legally allowed to, say, draw down the other spouse’s savings (without their permission)? My common sense says no because these are not joint assets. However, if the couple divorces the assets will be redistributed to a more equal split right? So in effect, a couple while married does not have to share assets, and it’s only when they divorce that they have to??
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During the marrriage, the couple have no direct claim on one another's assets, and e.g. wife cannot draw funds out of husband's bank account (unless husband instructs the bank to allow this, of course).

They do have mutual obligations of maintenance and support, but these don't translate into direct claims on assets; to enforce them you'd have to go to court and get an order against your spouse, and nowadays this very rarely happens except in the context of wider separation/divorce proceedings.

(In the past this did happen — e.g. if a husband deserted his wife she could get an order directing him to pay a specified amount of maintenance to her for so long as he remained in desertion. If he returned to her the order lapsed.)

On separation or divorce the assets can be redistributed. There's a preference for doing this on a basis agreed between the spouses, but if they don't agree the court does have powers to impose a split. The goal isn't "a more equal split"; it's making proper provision for both spouses and for any children, taking into account the assets available and the earning or earning capacity of each spouse, and all other relevant circumstances. The emphasis is not on finding out what assets the parties have and dividing them "fairly" or "equally"; it's on identifying the parties' reasonable needs need and then working out how the available assets can best be used to meet those needs. Often that does result in a transfer of assets or income from a wealthier/higher earning spouse to a poorer/lower earning spouse, but that's not a given.

The court's powers to redistribute assets on separation/divorce are also available on the separation of an unmarried cohabiting couple, provided they have cohabited for 5 years (or 2 years, if they have a child). So, in a "differences between gitting hitched and shacking up" assessment, this isn't really a difference.
 
Thanks very much for your replies - that’s really informative! It’s strange to me how marriage is one of the biggest and most important contract we can make in our lives, yet it’s so difficult to find out all of the legal and financial implications. I feel there should be a hefty government booklet or something laying out all the implications! I keep finding out new aspects, for example, I just learned on another thread that if you’re married your pension funding limit increases (handy!).

I’m getting married here to my Irish partner next year and as a foreigner, legal marriage in Ireland is a good bit different than in my home country, hence me trying to find out what exactly we are signing up for :-)

I suppose the reason that this booklet that I’m wishing for doesn’t exist is because the decision to marry wouldn’t typically be made based on a list of legal and financial pros and cons, I think people mostly either want to get married or they don’t, regardless of the fine print of pension funding limits or tax credits ;-)
 
qwerty-2023 said:
I suppose the reason that this booklet that I’m wishing for doesn’t exist is because the decision to marry wouldn’t typically be made based on a list of legal and financial pros and cons, I think people mostly either want to get married or they don’t, regardless of the fine print of pension funding limits or tax credits ;-)
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Your question is a very sensible one. And experience has taught me that making an informed decision generally works out far better than making an ill-informed one!

Before one is licensed to drive, one must pass a driving test which requires a knowledge of the rules of the road; perhaps, before being allowed to marry, aspiring couples should be required to undertake a marriage test (a written one would probably be best, as a practical test could get messy!) which would seek to establish that they know the benefits and disadvantages of changing their matrimonial status before taking the plunge.

The partner who achieves the highest mark in the test would officially be designated the head of household!
 
Unfortunately for some young couples death can happen at an early stage in a relationship and being married makes the whole process much simpler in practical terms. There may be no will, previous children, or complicated assets but being the legal spouse of the deal person places the living spouse in a strong legal position in organising and carrying out funeral arrangement's, inheriting property, money or businesses. Being the legal “representative' of the dead spouse when dealing with sudden and unexpected death, or with a medical death places the surviving partner in the relationship as the only official point of contact for a myriad of issues.

I have unfortunately seen it first hand in a relationship of very short duration but being the pregnant wife of the deceased husband who had (prior to the marriage) obtained property, businesses and 2 children from a previous relationship placed her in a strong position to deal with everything from a legal name for their unborn child to an undisputed right to inherit the house etc. Otherwise as a live in girlfriend his family may have asked her to leave and she would have probably needed to prove the partner was the father of her child when born months later so the child could inherit a legal share of the assets.
 
The point about marriage, basically, is that it's the social, legal, administrative etc recognition and acceptance of the fact that a couple are in a committed, mutually interdpendent, conjugal relationship. It's a bunch of rights, entitlements, expectations and obligations that, as a society, we have come to regard as appropriate to the circumstances of a couple in such a relationship. The idea is that it should work for them, and that it should also work for the rest of us in relation to them. It should produce outcomes which are appropriate to the reality of the situation.

So, e.g., if you're married, and you die without a will, your spouse gets your stuff. If you weren't married, it would go to your nearest family members — say, your parents. So, when you marry, your spouse is advantaged and your parents are correspondingly disadvantaged, but everyone — including your parents — is generally happy about this, because we see these inheritance rules as being appropriate to your situation.

Etc, etc. There's a whole host of specific rules that work differently when your married. But you probably don't need to know about them in detail in order to make a decision about whether to marry, because even if you don't know you can generally predict, with a fair degree of reliability, what the rule would be by asking yourself the question "in relation to a couple in a committed, mutually interdpendent, conjugal relationship, what would I expect the rule about this to be?"

The controversial thing is the development we've seen in the last generation, in which couples who aren't married, and who have presumably thought about it and chosen not to marry, are nevertheless treated for legal, administrative, etc. purposes like married couples. But you can explain this by saying that we are looking past the question of form, whether the couple have had a wedding ceremony, and instead looking at the questoin of substance, the reality of their relationship.
 
Purple said:
If I ever make an informed decision I'll let you know how it works out. Until then...
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So presumably your decision to respond to my observation was ill-informed? In which case I feel emboldened to remind you of the maxim that fools rush in where angels fear to tread!
 
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