MSU Extension Office: Common Law Marriage Estate Planning

This is one of a series of articles focusing on estate and legacy planning. The authors are Kaleena Miller, Madison-Jefferson County Extension Agent, kaleena.miller1@montana.edu, and Marsha Goetting, MSU Extension Family Economics Specialist, goetting@montana.edu

John and Mary, an unmarried couple, lived together for 15 years prior to John’s death. They never obtained a marriage license or had a wedding. John had two children from a previous marriage while Mary had no children. They did not have any children together. All property was in John’s name only when he died without a written will. Does the property valued at $2 million pass to John’s two children or to Mary? Well, it depends.... says Marsha Goetting MSU Extension Family Economics Specialist.

Mary could file in district court as a surviving spouse because she believes she and John had a common-law marriage. If Mary “wins,” she inherits $1,075,000 while John’s children from his previous marriage only inherit $925,000.

“Why the difference in amounts?” asks Kaleena Miller, Madison-Jefferson County Extension Agent.

“Under Montana law, the estate of a person who dies without a will is divided between his spouse and children from a prior marriage. If Mary is not a “wife,” all of John’s estate passes to his children.” said Goetting.

But, states Miller, “John’s two children could assert in district court that a common law marriage between their dad and Mary did not exist. If they “win,” they inherit their father’s estate – all $2 million and nothing passes to Mary.

After the death of one party, there may be confrontations like the above between the “surviving spouse” of a perceived common-law marriage and the deceased person’s other heirs – children, grandchildren, parents and/or siblings. An estate plan could help prevent these conflicts. Also, court costs and attorney fees could be avoided from a contentious court case to determine the existence of a common law marriage.

A common law marriage is one formed without a license and solemnization by a minister, a priest, a judge of a court of record, or by a public official whose powers include solemnization of marriages (mayor, city judge, or justice of the peace).

The State of Montana recognizes both formal marriages which comply with the marriage statutes and common law marriages which do not comply with the marriage statutes, but nonetheless meet the requirements set out in Montana case law. Montana is one of nine states that allow common-law marriages. If you are considering a move to a state that does not recognize common-law marriages contact an attorney to learn what your alternatives are.

“The Montana Supreme Court has established three elements for creating a common law marriage,” said Goetting. The party asserting the existence of a common law marriage must prove the following three elements to the district court. First, the parties were competent to enter into a marriage. Second, the parties assumed a marital relationship by mutual consent and agreement. Third, the parties confirmed their marriage by cohabitation and public repute.

The surviving spouse of a common law marriage has the same rights of inheritance under the Montana Uniform Probate Code (UPC) as any other surviving beneficiaries, stated Miller, However, the amount passing to a surviving spouse depends upon whether the decedent (person who died) has surviving parents or lineal descendants (children, grandchildren, or great-grandchildren).

The distribution of the estate also depends upon two additional factors. How the property is titled. In other words, whose name appears on the real property, checking and savings accounts, stocks, bonds, and mutual funds? Is the property solely owned? Is the property titled as joint tenancy with the right of survivorship or as tenants in common? If the property is held in joint tenants with the right of survivorship between the couple, the property passes automatically to the survivor. Proof of common law marriage is not necessary.

For further information see the Montguide, Property Ownership: Estate Planning (MT198907HR): https://store.msuextension.org/publications/FamilyFinancialManagement/MT198907HR.pdf

Was there a beneficiary designation on the property? In other words, did the deceased owner designate who was to receive the asset upon their death with a transfer on death deed on their real property, payable on death designation (POD) on bank and credit union accounts, transfer on death registration (TOD) on stocks, bonds, and mutual funds, and/or beneficiary designations on life insurance and retirement accounts? For further information, see the Montguide, Designating Beneficiaries Through Contractual Arrangements (MT199901HR): https://store.msuextension.org/publications/FamilyFinancialManagement/MT199901HR.pdf

Different family situations for common law marriages are described in an MSU Extension MontGuide: https://store.msuextension.org/publications/FamilyFinancialManagement/mt201408HR.pdf For those who do not have computer access, copies of all MontGuide mentioned in this article are available from the Madison-Jefferson County Extension office at 287-3282.