More and more couples are choosing not to marry, instead registering as a domestic partnership or even living together with no formal registration at all. This choice carries financial and legal implications different from marriage that are worth understanding in order to plan properly.
The income tax difference: no joint filing for domestic partnerships
As explained in the article on joint versus individual taxation, that option is generally reserved for married couples (and single-parent households under the terms set by law), and isn't available to unmarried domestic partners, regardless of whether they're registered as such in a regional registry. Each member of a domestic partnership must always file individually.
The key difference in inheritance without a will
In the absence of a will, the legal inheritance regime automatically recognizes certain rights for the surviving spouse in a marriage, whereas a domestic partner generally does not automatically have those same inheritance rights simply through cohabitation, unless there's an explicit will in their favor or specific regional regulations recognizing concrete rights for registered domestic partners (which vary considerably between autonomous communities).
Why a will matters far more for a domestic partnership
Precisely because of this difference, making a will is considerably more important for a domestic partnership than for a marriage, if the goal is to ensure the surviving partner receives a share of the estate in the event of death, since without an explicit will, the estate could go to other relatives of the deceased instead of the surviving partner.
Taxation of gifts and inheritance can also differ
For certain taxes related to inheritance and gifts, some autonomous communities treat registered domestic partners the same as spouses for purposes of certain tax breaks, while others don't, or require additional registration and cohabitation-duration requirements to apply that equal treatment, leading to considerable variation by region.
Widow's/widower's pension: stricter requirements
As explained in the article on the surviving spouse's pension, domestic partners face considerably stricter requirements than married couples to access this benefit (prior formal registration with a minimum lead time, proof of cohabitation for a set period), so it's worth formalizing registration as a domestic partnership well in advance if you want to preserve this right.
What's worth formalizing if you're a domestic partnership
Beyond formal registration as a domestic partnership (where applicable in your autonomous community), it's worth considering making a will, reviewing ownership of joint assets and accounts, and checking the specific requirements for the surviving spouse's pension, all with legal advice tailored to your specific autonomous community.
Plan your joint savings
Regardless of the legal framework you choose, our compound interest calculator can help you plan long-term joint savings goals.