Umarried Couple Guide To Estate Planning

How To Plan Your Estate

Estate planning is essential if you have a life partner but are not in a relationship that can be legally categorized as a marriage, civil union, or certified domestic partnership. Without some kind of estate plan in place, neither of you will be able to inherit from the other, nor would you be able to influence how they are treated when they are near death or otherwise incapacitated.

State law will determine what happens to your solely held property after your death if you pass away without a valid will, and it won’t go to an unmarried partner. Instead, if you don’t have children, your parents and other close family members would inherit. And should you become incapacitated, only your spouse or someone you’ve named a legitimate power of attorney is permitted to make medical decisions on your behalf.

The good news is that this can be easily handled, and you can even draft the necessary legal paperwork yourself.

Composing Wills

If you own property, you should draw up a will that allows you to leave it to people of your choosing, such as your partner, close friends, or charity organizations. In the absence of a will and the absence of children, your state’s rules are likely to direct a large portion of your estate for your parents, siblings, or other relatives.

Wills are likewise essential if young children are in the picture and a guardian needs to be selected. If neither parent can raise the children, the guardian would. Without a will, a guardian would be chosen by the court. With a will, the guardian selected by the parents in the will would be decided by the court, barring any significant issue with that person.

Establishing guardianship shouldn’t be necessary unless both parents cannot care for the children. Should it be necessary, however, you might want to draft a letter informing the court of the significance of your partner serving as the children’s guardian. Remember, though, that should there be another surviving legal parent—such as from a previous relationship—that person would likely take over parenting responsibilities.

Living Trusts

As an alternative to a will, a living trust can be used to leave assets to each other. It serves the same purpose as a will while sparing the surviving partner the trouble and expense of probate. Most people wait until they are middle-aged or older before creating a living trust.

Dual Ownership of Assets

Owning big-ticket items, such as property, houses, and cars, with one another in joint tenancy with right of survivorship is another approach to ensure that neither of you is left without anything following the death of the other. If one of you passes away, the other will immediately get the entire property.

To accomplish this, you must include both of your names on the asset’s official title document, such as the deed to a home or the title for a car.

Designate Beneficiaries for Financial Accounts

For various reasons, you and your partner might not want to share ownership of all your assets, and shared retirement accounts are generally not allowed. You’ll likely need further measures to make sure any assets you own solely in your name pass to your partner upon your passing.

Some significant assets, such as bank, investment, and retirement accounts, might not go through your will. Instead, you can request a beneficiary designation form from the bank or account custodian and list the beneficiaries on it, so the money goes to the person of your choice.

The process is pretty straightforward; you can change your mind or name a different beneficiary by simply completing another form and mailing it in.

Durable Powers of Attorney and Living Wills

Should the need arise and someone needs to intervene on your behalf to make financial or medical decisions, you need to set up durable powers of attorney (DPOW) and, ideally, a living will to grant your partner authority over those matters.

Durable powers of attorney are mostly used to handle finances and delegate control of assets to one another. If one of you is suddenly hit by illness or accident, this can be a huge advantage. For example, you could require immediate access to your partner’s bank accounts to pay immediate expenses such as utilities and mortgage. Without a DPOA, you would have to go to court and establish your partner’s incapacity and your right to govern their assets.

You can also create a DPOA for healthcare so that if either of you is ever unable to make decisions for yourself, the other will have the authority to do so. In addition, you could also draw up a living will (medical directive) in which you express your preferences for end-of-life medical care in as much detail as you choose. Your doctors and other healthcare professionals must abide by them.

Smart Estate Planning

Nobody looks forward to having to prepare for the loss of a loved one. However, waiting too long can result in further troubles and suffering.

It is in your best interests to seek the counsel of knowledgeable estate attorneys with the experience and understanding to lead you through the process.

The experienced teams at Heban, Murphree & Lewandowski, LLC, are waiting to answer your questions and walk you through the process of planning for the future and the security of your loved ones.