Estate Planning for Unmarried Couples
With marriage rates declining, an ever-increasing number of couples choose to stay in a committed relationship with their significant other without tying the knot. According to the Pew Research Center, nearly 60% of American adults aged 18 to 44 have lived with a partner outside of marriage at some point in their lives.
However, couples who live without a legally recognized marital status don’t have the same legal rights and protections when it comes to inheritance and decision-making authority as married couples. This might seem unfair, but that’s the unfortunate reality. As bizarre as it may sound, but without the formal institution of marriage, unmarried couples are essentially “strangers” to each other in the eyes of the law.
But that doesn’t mean you should start planning your wedding date to fix that. There are ways unmarried couples can achieve the same legal rights and protections as those enjoyed by couples who got married. And the estate planning attorneys at The Elder & Disability Law Firm, APC, can explain how.
Estate Planning for Couples
Whether you and your partner are married or not, you will benefit from having an estate plan in place to protect assets, minimize taxes, and avoid probate. Estate planning documents also allow you to name people who would make decisions on your behalf in the event of your incapacity. Some of the estate planning documents that couples should consider include:
A last will and testament (will)
Without an estate plan in place, the fate of your estate—and even your own fate, in the event of incapacity—falls into the hands of state laws. And, in many cases, this may lead to some undesirable outcomes, especially for unmarried couples whose members aren’t entitled to each other’s inheritance in the eyes of the law.
The Challenges Faced by Unmarried Couples
When it comes to estate planning and arranging what will happen when you die or lose your mental capacity, unmarried couples face more challenges than married ones. Why? Because marriage provides spouses with certain fundamental legal rights and protections. While unmarried couples don’t enjoy the same legal rights and protections, it’s possible to replicate them to a certain extent with estate planning.
Some of the most prominent challenges faced by unmarried couples when it comes to inheritance and decision-making authority include:
Partners who never got married have no right to each other’s assets in the event of death;
A partner may be shut out of the decision-making process when making healthcare and end-of-life decisions (instead, these decisions will be made by next of kin); and
A partner may not inherit their deceased partner’s benefits from retirement accounts like 401(k)s and IRAs or life insurance.
However, you don’t necessarily have to get married to overcome these challenges. With the right estate plan in place, you and your partner can be protected the same way married spouses are.
Estate Planning Considerations for Unmarried Couples
No one should ever tell you how to live your life. It’s totally up to you to marry or stay in a committed relationship outside of marriage. However, without the inherent legal protections typically afforded by marriage, you will need to take extra steps in order to replicate the estate planning benefits of marriage.
When you’ve found “the one” and wedding isn’t part of your plans, consider creating an estate plan that consists of the following tools:
Will: When partners are not married, each of them should have a will in place. If they don’t, their assets will pass to their heirs according to the state’s intestate succession laws after their death. As you may have guessed, those laws don’t generally recognize a non-spouse partner as an heir. As a result, the surviving partner could end up receiving nothing. Each non-spouse partner needs a will that mentions each other’s name in the document to bypass intestate succession laws.
Power of attorney: If you and your significant other aren’t married and you want them to have decision-making authority in the event of your incapacity, you need to designate them as your “agent” in a power of attorney so they can manage your healthcare, financial, and legal matters. Without this document in place, the court will designate your next of kin to handle your matters should you lose your capacity.
Living trust: With a living trust, you can maintain control over your property while you’re alive and dictate what should happen to that property after your passing. If you choose your partner as a beneficiary, they will receive the property while avoiding the costly and lengthy probate process.
In addition to these estate planning tools, unmarried couples should also review beneficiary designations for accounts like life insurances or IRAs. Please note that the estate plan you create depends on various factors, including whether or not you and your partner share children, how your assets are titled, and many others. That’s why it might make sense to contact an estate planning attorney and get personalized guidance.
Don’t Want to Get Married But Want the Same Legal Protections Enjoyed by Married Couples?
Without the legal protections typically afforded to those who tie the knot, unmarried couples face unique challenges when it comes to estate planning. But before you rush to the nearest jewelry store to buy an engagement ring and propose to your partner, know this: there is a way to replicate the estate planning benefits of marriage. If you and your significant other don’t intend to legally marry, you will need to make special arrangements to protect both yourself and your partner.
The attorneys at The Elder & Disability Law Firm, APC, can help you make those arrangements to ensure your financial futures are secure and your wishes are honored even without the need to get married. The law firm has an office in Redlands but serves clients throughout Southern California. Get in touch today to schedule your consultation.