Marriage alternatives abound, but can they replace the marriage contract altogether? The short answer is no, which is why the push for full, equal same-sex marriage is picking up steam.
Without a broader definition of marriage, same or opposite sex domestic partners cannot: - automatically inherit a share of your partner's estate - receive spouse disability benefits - receive military benefits for spouses for education, medical care, or loans - receive Social Security or retirement plan benefits for a deceased spouse - make medical decisions for an incapacitated partner or sometimes even visit - receive an equitable or equal division of property if you split up - consent to autopsy or make final arrangements - file joint tax returns - claim a marital communications privilege when testifying in court - receive numerous private discounts spouses may receive in health clubs, insurance policies, tuition rates, and more The list is daunting.
An LLC may not replace the marriage contract, but it can serve to replace a pre-nuptial agreement in most situations.
What can an LLC do for any couple who someday wishes to marry? 1.
Encourages a couple to sit down and discuss their finances.
Who is going to contribute what to the relationship? Are you going to buy a house together? Who is contributing property or cash to the relationship, and how will the assets be divided if the couple splits up.
Instead of a judge or state statute determining how property will be divided in the event of a split, your LLC Operating Agreement will make that call.
You have written your "divorce" or end strategy if things don't go well - and over 50% will not.
In my opinion, an LLC can be a superior vehicle for establishing responsibilities in a relationship than a prenuptial agreement.
It's easier to enforce, unlikely to be modified or thrown out by a judge, and can survive the breakup of the underlying relationship if it's in the best interest of the parties.
2.
Tax advantages.
Most couple LLCs are taxed as a partnership where any income passes through to the members and is claimed on individual tax returns.
With an LLC, business profits are not considered to be earned income to the members, and are not subject to self-employment tax.
Your LLC is a business, even if defining your relationship was the primary reason for forming an LLC.
Do business together and you may qualify for any number of business tax deductions.
Work with your accountant or financial advisor to claim all legal tax deductions.
3.
Limited liability.
Don't ignore the original purpose of a limited liability company.
Unlike a married couple who could have their joint assets attacked when one becomes involved in a lawsuit, judgments against one member can only go against that member's interest in the LLC, not the whole business.
In short, an LLC can only serve as an alternative to marriage in a few important areas.
It can eliminate the need for a prenuptial agreement and solidify and define your relationship.
Until same-sex marriage is a right recognized by the federal government and all 50 states, an LLC can level the playing field and provide some benefits not available with mere cohabitation.