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*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” Social Security, veterans' benefits, health insurance and retirement savings.Section 3 of the "Defense of Marriage Act" has been declared unconstitutional by the US Supreme Court. Committed same- sex 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 Civil ContractIt 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 new rights and duties –Gives both Husband and Wife new rights and duties protection for both parties –Intended to provide protection for both parties Living together doesn’t give you this special protection

Rights and Duties Right to supportRight to support by your spouse when necessary Right to inheritanceRight to inheritance from deceased spouse –Statutory 1/3 Rule Share v. “Last Will” Share –One day or 100 years… Doesn’t matter Right to propertyRight to property if the marriage ends Right to compensationRight to compensation to continue your standard of living if the marriage ends Right to file a jointRight 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)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 consentAge – 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: Pennsylvania (if created before 1/1/05)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 MarriageCommon-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 marriageThis 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 MarriageCommon-Law Marriage IF YOU LIVE IN A STATE THAT DOES RECOGNIZE COMMON LAW MARRIAGE: you must get a divorce –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. you must be clear that it is your intention not to marry. –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 MarriageCommon-Law Marriage Pennsylvania: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 –ArizonaCalifornia –IdahoLouisiana –NevadaNew Mexico –TexasWashington –Wisconsin

Impact on Business value increases during marriage then get divorcedyour spouse may be able to claim part of the increase in the value as community property.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. business property and accounts separate.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 rentDon'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 debtPremarriage 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 co- sign 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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