What are the Estate Planning Recommendations for Unmarried Cohabitating Couples
Estate planning prepares couples who cohabitate without getting legally married for the vicissitudes of life. Failing to do estate planning properly can lead to long-term life partners being unable to participate in major medical decisions for their loved ones, risk being evicted from their homes and, in extreme cases, being impoverished. Estate planning for unmarried couples is an act of love and kindness.
Property Ownership for Unmarried Couples
The duration of a relationship has no bearing on ownership or accessibility to a residence. If a couple has been living in the same home for decades but only one person is listed on the deed, only the person on the deed owns the home. Even a well-meaning provision in a Last Will and Testament giving a partner the right to live in the home will not change the ownership status.
If heirs wish to sell the home and evict the partner, they have the law on their side. Even if both partner’s names are on the mortgage, unless both names are on the deed, only the one whose name is on the deed is the legal owner of the property. Changing the title of ownership to both partners can protect the surviving partner’s right to remain in the home.
Being Involved in Medical Decisions
Unmarried couples have no legal rights regarding each other’s healthcare, from making treatment decisions to talking with healthcare professionals to navigating insurance matters. With the right estate planning documents, however, anyone can give another person the power to care for them in case of illness, injury, or incapacity.
Documents vary by state, but they generally include Power of Attorney, Healthcare Proxy, Advanced Care Directives, HIPAA Release forms and Living Wills. Be certain to have these documents properly prepared, executed and readily available in case of an emergency.
Personal Property and Asset Distribution for Cohabitating Couples
Having a Last Will and Testament is critical for nonmarried couples who wish to leave assets to each other. If there is no Last Will, each state has laws of intestacy, usually based on biological kinship. A person who is estranged from their family and has no will may have all their worldly goods inherited by a parent or a sibling. Regardless of the decedent’s wishes, their unmarried partner will have no legal recourse.
Estate Planning for Partners and Minor Children
Parents use a Last Will and Testament to name a guardian for their child in case they become incapacitated or die when the child is a minor. This is especially important for the child of a couple who has not married. Suppose the biological or adoptive parent does not have a Last Will and Testament. In that case, the court will determine which family member may take custody of the child or may place the child in foster care until the guardianship matter is worked out.
Estate Planning to Protect Unmarried Partners
Finally, unmarried partners need to address tax planning in their estate plan. When the first spouse in a married couple dies, the surviving spouse may inherit assets with little or no tax implications. The unmarried couple does not enjoy the same benefit. Trusts or other estate planning strategies should be discussed and executed long before they are needed.
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