As society evolves, unmarried but committed relationships are becoming increasingly common. While these partnerships offer flexibility, they also come with specific financial and estate planning challenges. Without the inherent legal protections of marriage, it’s important to proactively ensure that your wishes are clearly documented. Here’s how to adeptly manage estate planning for unmarried couples.
1. Open Dialogue is Essential: Starting the conversation about estate planning early and maintaining clear communication is vital. Ensure both parties are aligned and fully understand the decisions being made, especially given the implications these choices can have on future financial and medical situations.
2. Draft a Will: In the absence of a will, state laws might determine asset distribution, often favoring biological family members over unmarried partners. Draft a precise will to ensure your partner isn’t left in the lurch.
3. Power of Attorney: A power of attorney allows you to designate someone to manage your legal and financial matters if you become incapacitated. While this document is important for everyone, it’s even more important for unmarried couples, as uncertainty and conflict may be more likely if your relationship is not legally recognized.
4. Health Care Proxy: In the absence of a healthcare proxy, your next of kin – not your partner – is the one authorized to make life or death decisions for you.
5. Co-Ownership of Assets: Investigate how you title shared property. Joint ownership means the surviving partner inherits the property without the interference of probate courts.
6. Beneficiary Designations: Regularly revisit and revise beneficiaries on significant accounts like life insurances or IRAs. For unmarried couples, this is non-negotiable, as partners aren’t automatically recognized as heirs.
7. Create a Living Together Agreement: Consider this the unmarried couple’s answer to a prenup. This binding document can define ownership, expense allocation, and provisions if the relationship concludes.
8. If You Have Minor Children: If you have minor children with your partner, it’s even more important to have an estate plan in place. In the absence of a will, your assets will all go to your children – not your partner – and they will be tied up in court until your kids turn 18. Your partner would need to get permission from the court to use the money for your kids. Your partner would have to submit detailed records of how the money is used, which information becomes public record. This not only creates costly legal bills and headaches for your partner, but exposes sensitive financial information about your children.
Unmarried, But Not Unprotected
Choosing not to marry shouldn’t equate to leaving your partner defenseless. By addressing these crucial estate planning areas, you cement that both partners’ wishes are honored. Partner with an adept estate planning attorney to cover every base and instate every essential protection.