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You Can Still Use Common Law Marriage to Reduce or Eliminate PA Inheritance Tax

June 29th, 2016
By Nicholas Orloff

Using-Common-Law-Marriage-to-Reduce-or-Eliminate-PA-Inheritance-TaxesUnder Pennsylvania Estate Law, anything that you inherit from your non-spouse, significant other after his or her death will be taxed at a rate of 15% by the Pennsylvania Department of Revenue. However, if you can prove that you were the common-law spouse of the deceased, anything that you inherit will be taxed at a rate of 0%. This can translate into significant savings. For example, if you inherit $1,000,000 from your significant other, you will save $150,000 in PA inheritance taxes if you can prove the existence of a common-law marriage.

Cohabitation alone does not equal a common-law marriage

Common-law marriage was abolished in Pennsylvania as of January 1, 2005, but if you can prove that your common-law marriage was established prior to January 1, 2005, the court will accept it. Contrary to popular belief, simply living with someone for a specific amount of years does not establish a common-law marriage under Pennsylvania law. The amount of years that that you live with your significant other is only one factor that the Court will consider in its common-law marriage analysis.

How to prove a common-law marriage under Pennsylvania law

There are two ways to prove the existence of a common-law marriage in Pennsylvania.

The first method is by offering evidence that you and your alleged spouse made an express agreement to be married (i.e., you exchanged wedding vows but never obtained a marriage certificate).

The second and more common method of proving the existence of a common law marriage is by submitting evidence of constant cohabitation and a reputation of marriage in the community. Reputation evidence may be established by way of affidavits and testimony from relatives, neighbors and co-workers.

If you are successful in proving constant cohabitation and a reputation for marriage in the community, the court will presume that you have met your burden to prove the common-law marriage. The party challenging the common-law marriage, which is typically the Pennsylvania Department of Revenue, is then given the opportunity to rebut the presumption of common-law marriage by offering evidence to the contrary.

Typical questions the court asks to determine if a common-law marriage existed

Some of the typical questions that the court will ask in determining whether to grant a request for the recognition of a common-law marriage include the following:

  • How long did the parties live together?
  • Did the parties have and/or raise children together?
  • Did the parties wear wedding rings?
  • Did the parties file their income tax returns as single or married individuals?
  • Did the parties maintain individual or joint bank accounts?
  • Did the parties own real estate together?
  • Did the parties refer to each other as spouses on all documents, including their Last Wills and Testaments?
  • Were the parties on the same insurance policies (health, auto, etc.)?

If you have or are about to inherit from your non-spouse, significant other, it is important to speak with an experienced estate attorney to determine whether you may qualify as a common-law spouse under Pennsylvania law.

About the author: Nicholas Orloff, Esq. practices Estate and Elder law at Raffaele Puppio and has litigated several common law marriage disputes in Pennsylvania.