Unmarried? No Excuse to Neglect Estate Planning
Just because you haven’t tied the proverbial knot doesn’t mean you and your significant other should neglect properly planning your estate. Getting your estate organized is not exclusive to elderly folk or married couples. Everyone, including unmarried couples, should take the time to get a plan together. Here are some important tips for couples who have yet to say “I do.”
First, if you and your significant other are living together, but aren’t yet married, make sure your assets will pass to the other if you suddenly die. You can accomplish this by naming each other as beneficiaries on all pensions, retirement accounts and insurance policies. You should also draft up wills and make sure to name your significant other as the beneficiary. If you fail to have a will, your assets can pass, by default under the laws of intestacy, to a parent, sibling or other family member – not your partner.
If you want extra asset protection and a plan in case of disability consider creating a “revocable living trust” which can leave more instructions and ensure your assets are properly managed, as opposed to a will. Additionally, in some states, unmarried couples can also create a “revocable transfer-on-death deed” (also known as an “enhanced life estate deed”), which designates a beneficiary to receive property.
If you and your significant other contribute equally to purchasing a home, make sure that home is titled properly. You should make sure it is titled as a “joint tenancy with right of survivorship.” This will ensure the property is kept out of the probate process if one of you dies.
Another important scenario to be prepared for is if you or your significant other becomes ill and needs care. For this scenario, you need two documents – (1) a durable power of attorney to designate your partner to manage your financial affairs and (2) an advance care medical directive so your significant other can manage your health care decisions. Once again, without these documents in place, your health care decisions could be made by a family member as opposed to your partner.
Furthermore, without these documents, your partner could even be denied the right to see you.
If you’re living with someone, but you’re not quite sure if they’re “the one” and don’t want to have them inherit your assets, you can still take steps to plan your estate. For example, you could draw up a “living-together agreement” which simply states who is responsible for what and who gets what in the event of a breakup. These agreements are legally enforceable in all states.
To get these documents drafted properly, consider reaching out to an experienced estate planning attorney in your area.