Posted on March 05, 2005 at 17:44:14:
Unmarried couples do not qualify for all the financial benefits of married people. They cannot file taxes jointly or inherit unlimited funds from their partners, and they may not be eligible for spousal employee benefits. But there are savings to be had.
One partner can claim the other as a dependent, as long as they have lived together for the entire year, one partner has furnished more than 50 percent of the support of the other and the dependent partner has not earned more than $3,100 during the year (not all income is counted). A plus—the dependent’s medical expenses can be deducted, even if he or she doesn’t meet income limits. One rule: that the relationship not violate state law.
Other possibilities: name the partner beneficiary of a pension plan. Or transfer money free of gift tax—up to $11,000 a year, or up to $1.5 million in an estate. Or, using trusts, transfer considerable assets to a partner at reduced transfer-tax rates.