I recently saw the movie "Bohemian Rhapsody", which tells the story of the rock band Queen and its lead singer, Freddie Mercury. Having come of age in the ‘70s, I found it interesting enough to look up some of the background.
One of the more interesting stories told in the movie, and with fair accuracy, is Freddie’s relationship with Mary Austin. For many years, Mercury referred to Mary as his “common-law wife”. Even after they broke up, he referred to her as his “only true friend”. He even bought a house for her, after they separated, next to his own.
When Freddie Mercury died, he had his estate planning firmly in place. He left about half of his estate (the total of which was estimated at $75 million) to Mary. It is fortunate for her that he had his affairs in order, because if he had not, she likely would have been entitled to nothing.
Learning about that relationship reminded me of a myth that I have periodically heard about Alaska law. Let me make this clear: Alaska is not, repeat NOT, a common-law marriage state. For some reason, perhaps because there are so many cohabiting couples up here, many people assume that it is.
Common-law marriage is an arrangement in which, even though a couple did not go through a formal process to marry (getting a license and having a ceremony and such) they hold themselves out, to the rest of the world, as husband and wife. In a handful of U.S. states, and in some other countries, if you do that the law may recognize you as a legally married couple, after some required period of time. But not in Alaska.
Being legally married, as opposed to just being a cohabiting couple, has a lot of legal consequences. In Alaska, a legal spouse is entitled to certain statutory allowances, adding up to $55,000, from any probate estate. If there is no will, a surviving spouse receives the first $100,000 of the probate estate, and anywhere from half, to the whole, of the rest of the estate. If the deceased spouse attempts to disinherit the surviving spouse, there is a spousal elective share law which allows the survivor to claim up to one-third of the assets. If the deceased spouse didn’t try to disinherit, but just didn’t get around to updating the will after the wedding, the surviving spouse may be entitled to all or most of the estate. On top of all that, household goods of a married couple are presumed to be joint property, to which the surviving spouse is automatically entitled.
And spouses have rights in other areas of law, such as guardianship proceedings and, of course, in divorce.
What rights, on the other hand, does the survivor in a cohabiting couple have? Pretty much none. Even the presumption that the household goods are jointly held does not apply to a surviving boyfriend or girlfriend.
This is why it is absolutely critical for a cohabiting couple to have their affairs in order. If it is the intent of the couple that if one dies, the other inherits, they need to have certain things in place. To begin with, there should be beneficiary designations (also called transfer on death provisions) on all accounts, retirements and life insurance.
Real estate should have transfer-on-death deeds recorded against it, so that the interest of the deceased partner automatically transfers to the other partner on death. Remember, in Alaska joint ownership of real estate, with right of survivorship, only works for married couples. If an unmarried couple own a piece of real estate together, and one dies, the interest of the deceased partner has to go through probate. And if there is not a will leaving everything to the surviving partner, the deceased partner’s relatives may force sale of the property.
In addition to beneficiary designations on financial assets, and transfer-on-death deeds on real estate, there should always be a will in place, and in some cases a living trust may be needed.
I have seen a number of ugly cases in which lack of competent planning caused real issues when a boyfriend or girlfriend died. Several involved real estate, with the surviving boyfriend or girlfriend wanting to continue living in the house, of which they still owned half, but the family of the deceased partner insisting it be sold.
I even saw one case in which the father of the deceased boyfriend came into the home uninvited, while the surviving girlfriend was at work, and started taking things which he claimed belonged to his son. Although that was illegal, regardless.
Estate planning cannot completely resolve all of the issues which can come up with a cohabiting couple. For example, there is typically not any way to leave a traditional pension to a surviving partner if you are not married. There are a lot of things, nonetheless, which can be done for a cohabiting couple so that there is not a huge mess if one of them dies.
Freddie Mercury had his affairs well in order, so that his long-time beloved would be taken care of. Shouldn’t you be at least as responsible as the guy who sang “Somebody to Love”?
Kenneth Kirk is an Anchorage estate planning lawyer. Nothing in this article should be taken as legal advice for a specific situation; for specific advice you should consult a professional who can take all the facts into account. A real professional, not a common-law professional.
