5 Estate Planning Tips for Unmarried Couples & Details!
While estate planning is necessary for every individual irrespective of the assets they own, it is a must for the unmarried couple too. For various reasons, the number of couples staying together without marriage is increasing day by day and while marriage brings several legal rights such as joint tax filing, social security, inheritance, immigration status, etc., committed (unmarried) couples don’t have these rights. If you are an unmarried couple who are sharing your property with each other, you still don’t have any legal right on the property and the person as well. For such couples, estate planning is must as without it you will neither be able to inherit from each other nor be able to take decisions on each other’s behalf, in case anyone gets incapacitated.
Estate planning for married couples can seem pretty straightforward because it relies on long-standing, proven legal and tax strategies while for unmarried couples it requires individual approach. In such cases if you die without a will, then the state court will decide who will inherit your assets among your family or relatives and your domestic partner will not get anything. You can’t rely on state court laws as they will not favour the surviving domestic partner and hence, an estate plan is essential to protect the person to whom you are committed. While the state laws favours marriage, we have summarized top 5 tips of estate planning for an unmarried couple:
5 Estate Planning Tips for Unmarried Couples-
1. Protecting your real estate:
A good estate plan is the one which avoids probate and ensures that your assets go to the people as desired by you as without it, the intestacy law will decide who will inherit your assets through probate. There are some methods to avoid probate. The first is you can place your assets in a ‘Living Trust’ or in a joint trust along with your partner. The trust ensures the transfer of the assets to the partner outside probate after your demise or incapacity as your partner would be the successor trustee to manage the estate after you.
Another way is joint tenancy i.e. you can name your partner as joint tenant of the property and you both, together will be the owner of the property. In such case, if one partner dies then the other gets the full ownership of the property with the right of survivorship.
2. Designating your medical and financial power of attorney:
Apart from death, estate planning is also for your lifetime planning and one such instance is planning for your incapacity. A durable power of attorney and a health care directive are such documents that affects you during your lifetime.
By naming your partner in a durable medical and financial power of attorney you can ensure that your partner will take care of your financial and medical affairs on your behalf during your inability. Similarly, by an advance health care directive you can name your partner as your health care proxy to make end-of-life and life sustaining treatment decisions for you. Thus document comprises your wishes regarding the treatment you want and end-of-life decisions during dire medical situations.
3. Beneficiary designations:
In case of insurance policies, bank accounts and retirement plans, you are allowed to name individual(s) as a pay-on-death beneficiary. By naming your partner as beneficiary in aforementioned documents, you can ensure that after your death your wealth will be with your partner. As these designations hold priority over a will or a trust, it is advised to review and update them regularly to ensure the distribution of the assets according to your wish.
4. Digital estate plan:
With the changing technology, the world is changing and so is changing the estate planning. With the more involvement and reliability on social media platforms, it is essential to involve them in your estate plan. It is advised to list out the digital assets along with login details of the social media platforms to enable your partner to access and dispose your online accounts after your death. Digital estate planning ensures that both individuals’ wishes are respected and maintained.
5. Funeral authorization:
Without a marriage, your partner can be excluded from your funeral proceedings in many states. With an estate plan, you can prevent any conflict regarding the claim over funeral proceedings. You can include your partner name in the funeral authorization and cremation/burial instructions in your will or trust.
Many couples decide to stay together without marrying due to several reasons but failing to plan your estate and include your domestic partner in that can cause several consequences, stress and burden for your partner and yourself too. Hence, it is advised to stop thinking that as you are not married and sharing each other’s property means you don’t need any estate planning as it can lead to some serious consequences. Thus, we advise you to seek advice from an estate planning lawyer and start planning your estate now.