When the topic of estate planning comes to mind, you may envision a married elderly couple with children. In actuality, many people do not fit this conventional mold, and therefore their estate plan needs to reflect this difference. Everyone should have estate planning documents in place regardless of age and socioeconomic status, but, regrettably, many people are without even the most basic documents. Take, for example, DMX, an American rapper who died earlier this year. Unfortunately, DMX died without a will, leaving his fiancé and children to fight over his assets. With five children over the age of 18, this legal matter has become increasingly complex. DMX isn’t the only celebrity to die intestate—he joins celebrities such as Bono, Jimmy Hendrix, Bob Marley, and Michael Jackson to name a few. What’s more, in the past two decades, the number of unmarried cohabitating couples has nearly tripled, making it that much more important to plan ahead as not doing anything leaves you and your cohabitating partner unprotected.
Single or married, when someone passes away without a will, the state determines who inherits your property. The purpose of estate planning is to determine who can make decisions for you if you are incapacitated and who will inherit your assets when you die. When it comes down to it, estate planning is arguably more important for unmarried couples who cohabitate than it is for married couples. Without it, unmarried couples won’t be able to make important decisions for, or inherit from, each other.
What exactly happens for unmarried couples without an estate plan?
The harsh reality is that if you are in an unmarried partnership and without a comprehensive estate plan, the law is not on your side. Unmarried partners are omitted from intestacy statutes, meaning that assets will be transferred to the deceased’s next of kin, i.e., spouses, children, parents, siblings, and so on. In cases of unmarried partners, the surviving partner is then left with nothing. There are some things partners can do without estate planning, such as naming their partner as a beneficiary in their life insurance plan, and as a beneficiary to retirement plans, but both of these options are only enforceable once one partner has passed away. These options are similar to a will, which names someone to inherit your assets after death. A drawback to having just a will is that it is subject to probate, which is a lengthy, tedious, and costly process. Marriage, to an extent, can be seen as a business proposition that allows married couples certain rights that unmarried couples are not granted. These include:
- Hospital visits
- The choice to cremate and be in charge of remains
- Deductions for estate tax purposes
- Social Security benefits
- Joint tax filing
- Immigration status
To make sure your partner has similar rights, you should have a conversation with your partner, and create a plan with an experienced estate planning attorney.
How to Ensure Your Wishes Are Carried Out the Way You Intended
Don’t assume that your assets will be transferred to your partner without the proper documents in place. As mentioned above, the law will likely favor your next of kin, so your estate planning documents must be both clear and up to date. Unmarried couples need to take the proper precautions when creating their estate plans, focusing on a few documents in particular. These documents are an advanced healthcare directive, a durable power of attorney, and a will. Furthermore, having a revocable trust can solidify your plan and help your loved ones avoid probate. Creating a revocable living trust while you’re alive allows your partner to be named as a beneficiary. A trust can be used in the event of incapacity, through either an accident or illness, allowing your partner to make legal and medical decisions on your behalf before the time of death, and giving yourself and your partner the most protection, as well as the ability to carry out your wishes the way you intended.
Why a Revocable Trust is the Safest Option
Having a revocable trust means that your partner will be able to avoid the probate process. Probate is the court supervised administration to settle your probate estate upon your death, a lengthy and costly process. Another reason a trust may be more beneficial than a will is that you can direct how your assets are managed and distributed on your behalf while you are alive, and on behalf of your trust beneficiaries after your death. In addition, these trusts may be structured to minimize estate tax exposure. This option gives you the most flexibility over your assets while you are alive and gives your partner the ability to manage your assets if you become incapacitated or die. As always, it is imperative for unmarried couples to review and update their estate planning documents every few years, or if they undergo any major life changes.
The best bet in ensuring your assets are distributed the way you intend, both during your life (upon incapacitation) and at your death, is to create estate planning documents sooner rather than later. At the end of the day, creating estate planning documents gives both you and your loved one’s peace of mind. To learn more about estate planning options for you and your partner, contact our offices today.