Estate Planning Tips for Unmarried Couples
According to the latest available US census data, the number of adults cohabiting has risen by almost 30% over the last five years. It is more important than ever for young and old unmarried couples to invest in estate planning.
There are two sides to estate planning: (a) what happens to your things in the event you die, and (b) who takes care of you if you ever become incapacitated. Estate plans for unmarried couples look similar to those of married ones since these goals don’t change with marriage.
Here are five useful tips you need to keep in mind in terms of estate planning:
You need to ensure that your house and other assets avoid probate. A good estate plan will ensure that your things actually go to the people you intend to have them. Rigid intestacy laws may control who acquires your assets without any legal documents to provide for the transfer of title outside of probate. This means that your partner may not have a right to your property after your death if you are not married.
These are two ways you can avoid probate for property:
- Living Trust: You may want to transfer the house to a living trust or a joint trust with your partner. You should note that living trust is not the same as last will and testament. The terms of the trust can be used to dictate whether you want your partner to inherit the house or live in it for as long as they want.
- Joint Tenancy: A second way of avoiding probate is listing your partner as the joint tenant of the house. Two or more people can own property through the rules of joint tenancy. The interest of a joint tenant automatically passes to the surviving tenant in the event of death.
Make Your Partner Attorney-in-Fact
You should have a durable Power of Attorney. This is one of the most critical documents in estate planning. Power of attorney comes into force during your lifetime while other documents usually affect after death. You can ensure that your partner has the ability to act in medical and financial situations on your behalf in the event you cannot act for yourself by naming them the Attorney-in-Fact.
You should consider naming your partner as your health care proxy through an Advance Directive for Health Care. This will give them the ability to make end-of-life decisions on your behalf if you cannot. The document would spell out your needs regarding artificially administered hydration and nutrition and life-sustaining treatment.
Make Your Partner Your Pay-On-Death Beneficiary
Retirement plans, insurance policies, and bank accounts may allow you to name individuals, such as your partner as the pay-on-death beneficiary. For instance, if you list your partner as the pay-on-death beneficiary, they would be able to retitle the account or transfer funds to their account by showing a copy of your death certificate and their own identification.
There are always drawbacks to naming live-in partners as pay-on-death beneficiaries. However, it is better than doing nothing. Your partner may not be able to stop the asset from falling under probate laws. Also, they may not be able to control the timing of the distribution. These designations have precedence over trust or will. This makes it important that you review pay-on-death beneficiaries on a regular basis to ensure they reflect how you want the estate to be distributed.
Consider Having a Digital Estate Plan
Technology has changed estate planning to a major extent. It is crucial that you don’t forget to include digital assets while estate planning. This will enable your partner and other representatives to access all your online accounts after your demise. Online accounts may include cryptocurrencies, websites, social media accounts, emails, and other online properties.
Write an Instruction Letter for Your Partner
Letter of instruction helps your partner and other representatives understand everything they need to know about managing your estate. You can include key information about your assets, services/subscriptions that need to be canceled, the location of safe deposit boxes, and other important things.
Your representatives will find it easier to manage your estate properly following your death with these instructions. This is particularly important if your partner doesn’t know much about business dealings and family finances among other things.
Speak with an Estate Planning Attorney in Kentucky Today
There are several reasons that may dissuade a couple from legally marrying. However, you may cause unintended consequences for them and yourself if you fail to include your partner in your estate plan. The dedicated attorneys at John H. Ruby & Associates are here to help you and your significant other understand the various options before you.
Get in touch with us today to learn more about including your partner in your estate plan. You can schedule a complimentary consultation today by calling 502-895-2626 or completing this online form.