Estate planning is important for everyone, though it is far more significant for unmarried couples. In contrast to married couples, where many rights and protections occur automatically under the law, an unmarried partner has to take conscious action in order to make sure their wishes are observed and that the other partner is protected. Unless appropriately planned for, state laws will generally not recognize an unmarried partner as a beneficiary or decision-maker regardless of the length or depth of the relationship. Key aspects of estate planning include the following, which address the special needs of unmarried couples:
1. Establishing Beneficiary Designations
In a case where the couples are unmarried, one of the simplest but most important things they can do is name each other as beneficiaries on financial accounts, in retirement plans, and in life insurance policies. The designation supersedes a will, ensuring that the property goes directly to your partner. Without these, your assets may revert to your lawful heirs, for example, parents or siblings, leaving your partner unprotected.
2. Creating a Will
A will is the foundation of any estate plan, especially for unmarried couples. You can name your partner as the main beneficiary of your estate in your will. You are also free to state the way you would want assets, sentimental items, and real estate distributed. Without a will, your partner may not have any legal claim to your property since the intestacy laws favor the blood relatives.
3. Setting Up a Trust
Trusts provides wider protection than a will can. For unmarried couples, a revocable living trust allows for you to give your property to your partner without probate. By doing that, not only will you make sure of privacy, but your partner actually receives these assets without having to wait too long. Trusts can also be employed to manage and distribute assets whereby mutual goals and values can be taken into account.
4. Granting Power of Attorney
Give your partner durable power of attorney to take care of financial and legal matters for you in the event you are unable. The durable power of attorney is the legal document allowing your partner to pay the bills for you, deal with investments on your behalf, and sell your property.
5. Establishing Healthcare Directives
Healthcare decisions can be particularly challenging for unmarried couples. Without proper documentation, your partner may not have the authority to make medical decisions or access your medical records. A healthcare proxy or medical power of attorney allows your partner to act as your healthcare decision-maker. Additionally, a living will can outline your preferences for medical treatment, ensuring your wishes are followed.
6. Addressing Real Estate Ownership
If you and your partner own property together, the form of ownership matters. Joint tenancy with rights of survivorship ensures that the property passes directly to the surviving partner upon death. Alternatively, a trust can provide similar protections while offering additional flexibility.
7. Planning for Estate Taxes
Unlike married couples, unmarried partners do not benefit from the unlimited marital deduction for estate and gift taxes. Strategic planning, such as setting up trusts or utilizing lifetime gift exemptions, can help minimize potential tax burdens.
Conclusion
Estate planning can provide an unmarried couple with the protection they need for one another and ensure that mutual desires are carried out. You can create a tailored plan regarding beneficiary designations, wills, trusts, and healthcare directives that suit your relationship. It’s important to get advice from a qualified estate planning attorney who can walk you through the complexities to attain peace of mind for you and your partner.
Remember, this information serves as educational and informational content only and is not a substitute for legal advice. Before making any changes to your estate plan, consult with a lawyer you trust to ensure your decisions align with your individual needs and circumstances. Click the link below to set up a meeting with O’Brien Estate Law, LLC, where we can discuss your specific situation and guide you towards a comprehensive estate plan.