Estate Planning Helps Unmarried Couples
What do millennial and aging couples have in common? Trends are showing that more older couples are choosing to stay unmarried, despite being in long-term committed relationships. Most married couples understand the importance of estate planning to transfer assets and take care of living costs for the surviving spouse. However, estate planning is arguably even more necessary for couples that depend on each other but are not married. Without an estate plan unmarried couples won’t be able to make end-of-life decisions or inherit income and assets from each other.
Why Should Unmarried Couples See an Estate Planning Attorney?
There are laws in place to protect married couples that have not planned their estate by governing the distribution of property in the event of death. If you do not have a will, when you're married the property will pass to your spouse and children, or to parents if you die without a spouse or children. However, there are no laws to protect unmarried partners. Without a solid estate plan, your partner will not be a decision maker and will inherit nothing that wasn't specifically designated through the use of beneficiary and estate planning documents.
Estate planning serves two main functions:
- Estate planning can determine who makes decisions for you if you become incapacitated and
- Estate planning will also determine who gets your assets when you die.
The following are the essential estate planning steps that can help unmarried couples:
One way to make sure property passes to an unmarried partner is to own the property jointly, with right of survivorship. If one joint tenant dies, his or her interest immediately ceases to exist and the remaining joint tenants own the entire property. This is also a good way to avoid probate.
Make sure to review the beneficiary designations on bank accounts, retirement funds, and life insurance to make sure your partner is named as the beneficiary (if that is what you want). Your partner will not have access to any of those accounts without a specific beneficiary designation.
Durable Power of Attorney.
Durable power of attorney appoints one or more people to act for you on financial and legal matters in the event of your incapacity. Without it, if you become disabled or even unable to manage your affairs for a period of time, your finances could become disordered and your bills not paid, and this would place a greater burden on your partner. Your partner might have to go to court to seek the appointment of a conservator, which takes time and money, all of which can be avoided through a simple document.
Health Care Power of Attorney.
Similar to a durable power of attorney, a health care power of attorney appoints an agent to make health care decisions for you when you can't do so for yourself, whether permanently or temporarily. Again, without this document in place, your partner might be shut out by other family members or forced to go to court to be appointed guardian. If it is important for all of your family members to be able to communicate with health care providers, a broad HIPAA release -- named for the Health Insurance Portability and Accountability Act (HIPAA) of 1996 -- will permit medical personnel to share information with anyone and everyone you name, not limiting this function to your health care agent.
Your will says who will get your property after your death. However, it's increasingly irrelevant for this purpose as most property passes outside of probate through joint ownership, beneficiary designations, and trusts. Yet your will is still important for two other reasons. First, if you have minor children, it permits you to name their guardians in the event you are not there to continue your parental role. Second, it allows you to pick your personal representative (also called an executor or executrix) to take care of everything having to do with your estate, including distributing your possessions, paying your final bills, filing your final tax return, and closing out your accounts. It's best that you choose who serves in this role.
A revocable trust can be especially important for unmarried couples. It permits the person or people you name to manage your financial affairs for you as well as to avoid probate. You can name one or more people to serve as co-trustee with you so that you can work together on your finances. This allows them to seamlessly take over in the event of your incapacity.
Estate Planning Attorney in Avon Lake
At Joseph L. Motta, elder law and estate planning firm in Avon Lake, OH, we specialize in putting our expertise to work to provide you with the best advice. Call 440-930-2826 to schedule a free consultation .