Nadia and Kirsten have lived together for 22 years. They have never married and have never registered a civil partnership or domestic partnership of any kind. Nadia dies suddenly aged 58 without a will, leaving a house worth 900,000 dollars held in her sole name, a brokerage account of 1,200,000 dollars in her sole name, and a joint current account of 20,000 dollars held with Kirsten with rights of survivorship. Nadia is survived by Kirsten, by both parents and by one brother. Assume the state's intestacy statute passes property to a surviving spouse, then to children, then to parents and siblings, and that the state recognises neither cohabitants nor common law marriage. Which statement describes the position correctly?
- ANo marital deduction is available and Kirsten takes nothing under the intestacy statute, so the house and the brokerage account pass to Nadia's parents and brother while Kirsten receives only the joint current account by survivorship Correct
- BBecause the couple have lived together for 22 years the statute treats Kirsten as a surviving spouse, so she takes the spousal intestate share and the estate may claim the marital deduction on that share
- CThe marital deduction is unavailable to Kirsten, but the intestacy statute gives a cohabitant of long standing a share ranking ahead of Nadia's parents and brother, so Kirsten inherits the residue of the estate
- DKirsten may elect portability of Nadia's unused exclusion amount on a timely filed Form 706, which shelters the estate and produces the same outcome that a transfer between spouses would have produced
Why A is correct: Both the federal marital deduction and the intestate spousal share are reserved to a legal spouse, so the only asset that reaches Kirsten is the one whose form of ownership carries her name, which is the survivorship account.
Why B is wrong: Long cohabitation feels as though it ought to earn recognition, and a handful of states do recognise common law marriage, but the stem rules that out, and duration of cohabitation creates no spousal status and no marital deduction in a state that does not recognise it.
Why C is wrong: This gets the transfer tax half right, which makes it the most attractive distractor, but it invents a cohabitant's place in the order of intestate succession; the statutory ladder runs to blood relatives once there is no spouse and no issue.
Why D is wrong: Portability is a genuine election and Form 706 is the right return for it, so the mechanics sound convincing, but it may be claimed only by a surviving spouse and it moves exclusion rather than moving property to anybody.