Estate planning is for everyone. Unmarried couples should consider creating an estate plan, like married couples. Estate planning is not limited to marital status; it is about ensuring that your assets and wishes are protected and followed in the event of your death or incapacity. Here are some key reasons why unmarried couples should have an estate plan.
You’ll Want to Protect Each other
You want to protect your partner. It is important to have a plan in place to ensure property, assets, and children (if any), are taken care of. A Will is a legal document that sets forth your wishes regarding the distribution of your property and the guardianship of any minor children. If you pass without a Will, those wishes may not be carried out. Further, your loved ones may end up spending additional time, money, and emotional energy to settle your affairs after you’re gone. Without a legally recognized relationship like marriage, unmarried couples may not have the same default legal protections, such as inheritance rights, that married couples have. Additionally, an estate plan can specify how you want your assets to be distributed to your partner in the event you become incapacitated.
When it Comes to Decision-Making
Estate planning documents such as a healthcare proxy and durable power of attorney can grant your partner the authority to make medical and financial decisions on your behalf if you become incapacitated. A power of attorney refers to a legal authorization that allows you (the “principal”) to give a designated person (your “agent”) the power to act on your behalf. The agent will be given full or limited authority to make decisions about the person’s property, finances, investment, or medical care. A medical power of attorney is often referred to as a “Health Care Proxy”. Your healthcare proxy will have access to your medical. They may also authorize tests and treatment, decide where you will receive care, which physicians will provide care, and whether to accept, withdraw, or decline treatment. A durable power of attorney (sometimes referred to as a DPOA or financial power of attorney) remains in effect even if you were to become incapacitated. Because durable powers of attorney extend beyond a principal’s incapacity, they are very helpful for estate planning purposes, because they allow others to act on your behalf even after incapacitation.
Avoiding Probate
Proper estate planning can help avoid or minimize the probate process, which can be time-consuming and costly. By designating beneficiaries and creating a living trust, you can streamline the transfer of assets to your partner. A living trust is a legal arrangement established by an individual (the grantor) during their lifetime, to protect their assets and direct their distribution after the grantor’s death. There are two primary types of trusts, a revocable living trust, and an irrevocable living trust. At the creation of the revocable living trust, you (the grantor) can designate yourself as the trustee. Then you have the power to change and amend trust rules at any time. You will be free to change beneficiaries, change trustees, remove assets, or terminate the trust at any given time.
Your Special Wishes
Estate planning allows you to specify your wishes for end-of-life circumstances. These tips can help you and your partner make decisions that align with each other’s desires. To create an effective estate plan for an unmarried couple, it is important to work with an experienced estate planning attorney. They can help you navigate the legal requirements and tailor the plan to your specific needs and wishes. Keep in mind that estate planning should be an ongoing process and should be reviewed and updated periodically to reflect any changes in your relationship or financial situation.
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