More and more people in the United States are unmarried. “A . . . Pew Research Center analysis of census data finds that in 2019, roughly four-in-ten adults ages 25 to 54 (38%) were unpartnered – that is, neither married nor living with a partner. This share is up sharply from 29% in 1990. Men are now more likely than women to be unpartnered, which wasn’t the case 30 years ago. [citations omitted]”[1] Some of this is due to people delaying or foregoing marriage, with more people choosing to cohabit without being married.[2]

According to the U.S. Centers for Disease Control, “adults in the United States are increasingly postponing marriage and young adults are projected to forego marriage altogether.”[3] The median age at which Americans first marry has been steadily rising.[4]

Although the divorce rate has been steadily falling in the United States, 2.3 per 1,000 Americans divorced in 2020.[5]

Chart 1: MS-2 Median age at first marriage: 1890 to present
November 2021

Source: U.S. Census Bureau, Decennial Censuses, 1890 to 1940, and Current Population Survey, Annual Social and Economic Supplements, 1947 to 2021.
Note: Starting in 2019, estimates for marriages now include same-sex married couples.
U.S. Department of Commerce, U.S. Census Bureau, https://www. census.gov/data/tables/time-series/demo/families/marital.html Figure MS-2

View accessible version of this chart.

Interestingly, many singles in the United States are not interested in even dating, with a majority of those who are divorced or widowed eschewing dating or looking for a relationship. The same is true for older singles, with “[h]alf of those ages 50 to 64 and three-quarters of those 65 and older . . . not looking for either a relationship or dates at the moment.”[6]

In fact, in the United States, the gap between the number of married persons and unmarried persons has dramatically declined from 1950 to today.

With so many single adults being content to remain on their own,[7] planning for unmarried individuals becomes very important, especially since the estate and gift tax advantages available to married citizens and residents of the United States are not available to single people. Therefore, failing to have basic planning documents can cause unintended results and unnecessary taxes. 

Chart 2: The Single Life
The Gap Between Married and Unmarried Americans Has Narrowed Since 1950
February 14, 2022

Source: 1950 and 1960 Decennial Censuses and the Current Population Survey Annual Social and Economic Supplement.
U.S. Department of Commerce, U.S. Census Bureau, https://www.census.gov/library/visualizations/2022/comm/the-single-life.html

View accessible version of this chart.

There are many unmarried people in the United States. They range from young adults in college or their first job, to divorced parents of minor children to widows and widowers. Of course, this list is not exhaustive. The thoughts offered here, by necessity, are of a general nature, as each specific life and lifestyle cannot be addressed. You should consult your attorney, tax, financial and other advisors to ensure that your planning fits your specific circumstances.

The Basics – Necessary Documents

As the old saying goes, hope for the best, but prepare for the worst.[8] Indeed, but what if the worst does happen? For the unmarried person living alone, who would handle your affairs if you were unable to do so? Alternatively, for the unmarried person cohabiting with another, if you desired that your cohabitant handle your affairs, would your cohabitant be allowed to do so without formal documentation? Most states have laws that force an answer to those (and other such) questions. To avoid having the default rule created by your state legislature apply to your circumstances, having the right documents in place can ensure that you get to choose the person who will have authority to handle your affairs if you cannot.

Health Care

Who will communicate with your health care providers if you are unable to? States have enacted laws that allow you to create a document in which you can name one or more agents to communicate with your health care providers. These documents have various names, such as “healthcare power of attorney”, “healthcare proxy” and “healthcare declaration” (for ease of reference, such documents are referred to as healthcare documents). Whatever its name, a health care document allows you to indicate your preferences and to name a person (an agent) to communicate with others regarding your health care.

Failing to name such a person in your health care document can cause chaos, or at least confusion. Your health care providers may turn to your “next of kin” for advice, perhaps a parent or a child. What if you had multiple children who disagreed as to your medical treatment? If your family disagreed about your treatment, the disagreement could result in a fight in court to appoint a guardian of your person. Not only is this expensive, but it can also be time consuming. To put it bluntly, you could die waiting for a resolution of the disagreement. You can avoid this possibility by naming an agent in a heath care document.

If you are cohabiting but unmarried, your cohabitant is not legally part of your family. As your cohabitant is not among your next of kin, your cohabitant may be excluded from discussions about your healthcare. In fact, if you are being cared for in hospital areas restricted to family members, your unmarried cohabitant may be prevented from visiting you. If you want your cohabitant to be your voice for healthcare, you must appoint that person as agent in your healthcare document.

For the single person first out on their own, perhaps away at college[9] or a first job, a health care document can help in a different way. Federal law ensures that your healthcare information is private. If you became ill at college, medical privacy laws would prevent your healthcare providers from discussing your condition and treatment with your parents. Naming your parents as your agents in your healthcare document would allow your health care providers to discuss your medical needs with them.

Having completed a healthcare document, be sure your health care providers each have a copy. Also, be sure a copy is also attached to your chart in the local hospital where your doctors have admitting privileges.

While everyone should have a healthcare document, there are practical things you should also do, particularly if you live alone. For example, if you were ill and unable to call for assistance, would someone check on you? Perhaps it makes sense to have a network of contacts, friends and relatives, for whom an interrupted routine would result in someone coming by. See your healthcare providers regularly and as necessary. Know the symptoms of serious illness, like heart attack and stroke. Don’t ignore warning signs. If you have a chronic condition, wear a medical alert bracelet or necklace. The old adage is certainly correct, “an ounce of prevention is worth a pound of cure.”[10]

End-of-Life Decisions

As with healthcare decision making, failing to clearly state and to designate someone to communicate your end-of-life decisions can lead not only to chaos and confusion, but also to heartbreak.

States have enacted laws that allow you to create a document in which you can state your decisions regarding end-of-life and can name one or more agents to communicate those decisions to your healthcare providers and others. Although these documents have many names, for ease of reference, they are referred to as a living will.

There have been famous cases where families have spent years in court litigating over an incapacitated person’s decision to withhold life sustaining care at the end-of-life. These fights are tragic, particularly when the person involved is young. However, without clear direction stated in your living will, your family members may fight to impose their own judgments on your care. Recall the famous case of Terri Schiavo, in which a young woman who had spent ten years in a permanent vegetative state was the subject of a seven-year court battle between her husband (who was legal guardian) and her parents over the removal of life-sustaining treatment.

Without a living will, non-family members, such as a long-term cohabitant, could be excluded from decision-making, potentially excluding from the process the person who, perhaps, best understands your wishes.

Finally, without a clear statement of your intent, it is possible that your family may be divided over decisions regarding your care, causing an irreparable rift over what is inevitably a very difficult and often heart-wrenching decision. Imagine if two of three children agreed to end life support while one child vehemently opposed it. That majority decision could tear the family apart.

There are always practical things to consider with respect to end-of-life decisions. Having completed a living will, be sure your health care providers each have a copy. Be sure a copy is also attached to your chart in the local hospital where your doctors have admitting privileges. Also, if you do not desire lifesaving CPR treatment, in some circumstances, some states allow your doctor to place a “do not resuscitate” (DNR) order in your records and for you to carry a DNR card or wear a medical alert bracelet or necklace. That way, if you are found in cardiac arrest, the rescue squad will not bring you back, only to have you placed on life support which may later be removed pursuant to your living will.

Lastly, remember that your living will takes effect in very specific circumstances. For example, under Pennsylvania law, a living will provides instructions when you have been determined to be incompetent and have an end-stage medical condition or are permanently unconscious. The terms “incompetent”, “end stage medical condition” and “permanently unconscious” are all defined by the Pennsylvania statute.[11] Unless the conditions of the statute are met, your living will won’t take effect.

Durable Power of Attorney (Financial)

Imagine what would happen if you were in an accident or experienced a health event following which you were unable to manage your financial affairs. If you do not have a durable power of attorney, then your family may need to seek a court-appointed guardian to manage your assets. Going to court takes time and resources. A better strategy could be to execute a durable power of attorney that appoints agents and successor agents to act on your behalf.

If you ever are incapacitated or simply unavailable, even for a brief period of time, your agent can manage your financial affairs while you are unable to do so. A durable power of attorney can be useful to allow your bills to be paid with your available resources during a challenging time.

As with any position of trust, the person you choose will depend upon your circumstances. Choose your agent carefully, as that person can do with your assets just about anything you could do with them. In fact, a broadly written power of attorney could allow your agent to give your property away. Do not automatically assume a family member, such as a child, is the best choice. It has happened where a child uses a power of attorney to steal funds from a parent. Your agent could be a cohabitant, a trusted family member, a friend or even your attorney or accountant. Although it may be cumbersome, you can name two or more agents to serve together. Your power of attorney could require majority or unanimous agreement among your named agents before they can act. Note, however, that in an emergency, such a requirement would likely preclude quick action.

Revocable Trust

Another way to have consistent management of your investible (and other) assets would be to fund a revocable trust during your lifetime. As the name implies, this is a trust that you can revoke or amend during your lifetime. You would be the beneficiary of the trust. Typically, you would also be the trustee. Your investment assets would be held in the trust (the trust could hold other assets too).[12] If you became incapacitated or died, your successor trustee would immediately become the trustee and would continue to manage the property in the trust without interruption. As described below, the trust would also dispose of your assets following your death.

Disposing of Property at Death

Everyone dies. Following your death, your estate must be administered. That is, someone must gather your assets, pay your outstanding debts, pay your final income taxes and the taxes associated with transferring your assets, and finally distribute your remaining property to your beneficiaries. Many books have been written about planning for the disposition of property and the taxes thereon at death. Here we provide reminders about some pitfalls. As each individual’s situation is unique, you should consult with an attorney who specializes in estate planning and administration with respect to your circumstances.

A will, or a will in combination with a revocable trust,[13] would dispose of your property following your death. Such document or documents would also appoint one or more people or entities to carry out your directions, including the allocation of taxes among your beneficiaries. When considering the disposition of your property at death, remember:

  • If you fail to make a will, state law will dispose of your property. You may not desire the default rules set by your state legislature to determine who receives your property. If you are living with an unmarried cohabitant, that person would not receive property under state intestacy laws.
  • If you fail to make a will, state law will also determine who has the first right to administer your estate. If you are living with an unmarried cohabitant, that person would likely not be eligible to administer your estate unless that person was also your creditor or your family agreed to allow your cohabitant to administer the estate.[14]
  • If you are unmarried and have no children, your next of kin might be your parents, who would receive your assets under state intestacy law. If your parents have sufficient wealth to be subject to federal estate and/or state inheritance taxes, passing your assets to them would increase their potential future tax liability. Further, if your parents do not effectively disclaim their inheritance and later desire to give what they inherited from you to your siblings, they might have to plan to avoid a gift tax (or the use of their lifetime exclusions).[15]
  • Not all property passes by will. Some assets, such as retirement plans, IRAs and life insurance pass pursuant to beneficiary designation. Be sure your beneficiary designations are aligned with your estate plan. Also, don’t forget to complete the beneficiary designations for benefits provided by your employer. Many companies provide their employees with qualified retirement plans and group term life insurance. Be sure that those assets are transferred to the desired recipients by completing beneficiary designations.

Owning Property

Living with an unmarried cohabitant is becoming more common, particularly among Americans ages 18 through 24. In fact, in that age group, unmarried cohabitation is more common than living with a spouse.[16] For unmarried individuals, owning property together can be challenging. Failing to plan for that property can have dire consequences.

Taking Title to Property

How you own your property makes a difference. If unmarried people own property as joint tenants with right of survivorship, generally, under state law, upon the death of one of the owners, the surviving owner would automatically own the entire property. However, if the property were instead owned as a tenancy-in-common, the deceased owner’s half would, generally, pass through the deceased owner’s estate, allowing the deceased owner to transfer the deceased owner’s share of the property to someone other than the surviving owner should that be the deceased owner’s intent. Without further planning, such as making a will leaving the property to the surviving owner, the deceased owner’s one-half could pass to next of kin, such as parents or children or siblings. The surviving owner might be forced to buy the other half of the property or sell the property and move.

Unmarried cohabitants do not have the same rights as married people. For example, if only one of the cohabitants owns the property in which the cohabitants live, the non-owner could be evicted by the owner. 

It is possible that tenant’s rights laws could give the non-owner some protection with respect to the living arrangement; however, as a non-owner, a falling out with your cohabitant could leave you homeless. Before cohabitants live together, they should create rules for their living arrangement and the division of property in the event of separation. Those rules should be documented in a written cohabitation agreement. As this agreement is a contract (like any other business arrangement), when preparing the agreement, each cohabitant should be represented by a separate attorney. The agreement should state, among other things, who will pay for what expenses, the rules regarding living arrangements, and the rules for dividing property acquired together in the event of a breakup. It is far easier to create these rules when the cohabitants are friendly than to divide assets without guidance following a breakup. Defining property rights in advance of a problem or disagreement will prevent conflict and the cost of resolving a dispute should the worst occur.

Some Tax Consequences of Property Ownership

For tax purposes, married individuals can be treated very differently than unmarried individuals. Of course, with respect to the federal income tax and many state income tax laws, married individuals may file a joint income tax return. There are also special rules for married people when it comes to transferring property by gift or at death. For federal gift and estate tax purposes, a married individual may transfer any amount of property to a spouse without a gift tax (during life) or estate tax (at death) by virtue of the marital deduction.[17] Although it may be obvious, transfers to anyone other than a legally married spouse, even if the donor and donee are living together, do not qualify for the marital deduction.

Transfers can be direct or indirect. When one person pays the obligation of another person, that is a gift. For spouses, the unlimited marital deduction prevents such a transfer from being subject to the gift tax. However, a person who satisfies the obligation of a non-spouse and exceeds the annual exclusion from the gift tax would consume lifetime gift tax exclusion to the extent that the amount paid exceeds the annual exclusion.[18] Once a person’s lifetime gift tax exclusion is fully consumed, additional gifts over each year’s annual exclusion amount would cause a gift tax. For example, assume two individuals living together purchase a residence for $1,000,000 and take title as joint tenants. Assume further that one individual paid the entire purchase price for the property. Upon receiving title, the individual who paid would have made a $500,000 gift to the other individual. If the purchase occurred in 2022, $16,000 of the gift would be offset by the annual exclusion and $484,000 of the gift would consume lifetime gift tax exclusion. Further, if the individual who paid for the home continued to pay all of the carrying costs of the property, one-half of those costs would be treated in the same manner, as a gift to the other owner. Making gifts beyond the annual exclusion amount would require the donor to file a federal gift tax return, even if no tax is due.

Also, taxes paid upon the transfer of property to a non-relative may be more costly than those paid for a transfer to a spouse, child or sibling. The inability to apply a marital deduction for federal estate tax purposes has been noted above. State death taxes may also be more expensive for property passing to a non-relative. For example, in Pennsylvania, property passing to an unrelated individual is subject to an inheritance tax of 15% of its value, compared to 0% for property passing to a spouse (or charity), 4.5% for property passing to a lineal descendant and 12% for property passing to a sibling.[19]

Other Family Matters

Often, unmarried people living with one another are also living with children. While the intent of this article is not to address all the issues involved in child rearing (truly an understatement), there are a few things to consider when children are involved.

Stand-by Guardianship

If you are a single parent living with a minor child, many states allow you to name a stand-by guardian for your child should something happen that makes you unable to care for your child.[20] Although the child’s other parent could be guardian, sometimes the other parent is not able to assume that role; for example, because that parent has died or has had parental rights terminated by a court. Think of all the things that might prevent you from being available to your child, from incapacity to a long hospital stay. A stand-by guardianship could ensure that a capable adult is always available to care for your child.

Child Support

Even if you are unmarried, should you and another individual have a child, you will be expected to support the child financially. Most states have mandatory child support guidelines for determining the amount to be paid to the custodial parent as child support.[21] In some cases, it may be a criminal offense to fail to pay court-ordered child support.[22]

Child Visitation

Be aware of your rights with respect to your cohabitant’s children. You may consider yourself (and the children may consider you) a parent; however, should you and your cohabitant separate, if you are not the child’s biological parent and do not have court-ordered visitation rights, you may be denied the ability to see the children or your ability to see them may be limited.[23]

Support

Not all states allow an unmarried cohabitant to seek financial support from the other cohabitant after a breakup.[24] Before cohabiting with another person, you may wish to consider defining your rights in a cohabitation agreement, particularly if the relationship will hinder your earning capacity or cause you to make financial sacrifices. Of course, the laws of the various states can differ greatly. Before beginning a cohabitation with an individual who is not a spouse, seek the advice of an attorney experienced in family law who can explain and protect your rights.

Understand Your Relationship and Its Consequences

Unmarried individuals should plan for life just like anyone else. Without a spouse to be your default “next of kin,” special planning may be necessary to define your rights in whatever relationships you have. 

It is important to be aware of your state’s default rules with respect to health care, property ownership and division and distribution of property upon death. You should consult with legal, tax and financial advisors who can help you navigate life’s many relationships. 

A PNC Private Bank Wealth Strategist can be an integral part of your advisory team. Should you wish to know more, contact any member of your PNC Private BankSM team.

 

TEXT VERSION OF CHARTS

Chart 1: MS-2
Median age at first marriage: 1890 to presentChart 2: The Single Life (view image)

Year Men's age at first marriage[1] Women's age at first marriage[1]
2021 30.4 28.6
2010 28.2 26.1
2000 26.8 25.1
1990 26.1 23.9
1980 24.7 22.0
1970 23.2 20.8
1960 22.8 20.3
1950 22.8 20.3
1940 24.3 21.5
1930 24.3 21.3
1920 24.6 21.2
1910 25.1 21.6
1900 25.9 21.9
1890 26.1 22.0


Chart 2: The Gap Between Married and Unmarried Americans Has Narrowed Since 1950 (view image)

The chart includes two lines: an orange line representing married Americans and a yellow line representing unmarried Americans. The bottom axis displays years in 10-year increments from 1950 to 2021. The left axis displays the number of Americans in millions.

Starting in 1950, there were 74.4 million married Americans and 37.3 million unmarried American. A smaller bar graph shows that the unmarried number breaks down as 69% never married, 7% divorced, and 24% widowed.

The numbers trend up, but the gap between the two lines narrows as time goes on. By 2021, the graph shows there are 135.9 million married Americans and 130.3 million unmarried Americans. A smaller bar graph breaks down the unmarried number as 68.4% never married, 19.9% divorced, and 11.7% widowed.