Estate Planning for Unmarried Partners
Estate planning is important for married couples, but it is absolutely vital for couples who choose not to get married. Unmarried partners do not have the same privileges and protections as a legally married spouse – without proper planning, they will be unable to participate in your end-of-life care and medical decision making and they will be unable to inherit from you. Thus, a proper estate plan is essential to ensure your partner is protected in the event of your death or incapacity.
If a person fails to make an estate plan, New York state provides a statutory default for who will inherit their property at their death. This default inheritance scheme generally provides that your estate will be distributed to your spouse and children (if any) or, if none, to your parents, or, if none, to your siblings and so on and so forth. Nowhere on this list does the unmarried partner appear. This means that failing to provide for your unmarried partner in a will or a trust or naming them as a joint owner or beneficiary on an account or asset, provides them with no right to inherit from your estate.
Unmarried partners should be sure to execute a power of attorney and a health care proxy so that their partner is able to make financial and medical decisions for them in the event of their incapacity. Further, unmarried partners have several options when choosing how to plan for the distribution of their estate at their death.
Last Will and Testament
Most of us are familiar with the last will and testament. This is a document in which you outline your wishes for the distribution of your estate at your death. It is entirely possible to leave either a portion or the entirety of your estate to your partner in your last will and testament. You may designate an Executor to handle your estate who will offer your will to court to be probated at your death. Probate is a formal process in which the court chooses to accept your will as valid and empowers your executor to carry out your wishes. When a will is admitted to probate, each of the decedent’s next of kin is entitled to notice and an opportunity to object. If any of the decedent’s family members refuse to accept the will, they may object to any inheritance provisions the decedent may have made for them in their will and for this reason, a last will and testament may not be the best estate planning tool for unmarried partners.
Joint Ownership and Beneficiary Designations
It is possible to transfer certain assets at your death by designating someone as your beneficiary or by naming them as joint owners. This transfer of ownership will occur automatically at your death regardless of the contents of your last will and testament. While this is certainly an option, there are possible downsides of this estate planning technique. These downsides potentially include: the misuse of assets by the joint owner, lack of creditor protection, lack of tax planning benefits, and a lack of flexibility if you change your mind or end your relationship.
Revocable Living Trusts
One of the best estate planning tools available to unmarried couples is the revocable living trust. This is a trust created during your lifetime that you can amend or revoke at any time. The revocable living trust gives the creator the ability to control their assets while they are alive and dictate who inherits from them (and under what conditions) at their death. The ability to amend the trust also provides the creator with the flexibility to change who inherits their property if their circumstances or relationships ever change. Further, a revocable living trust is a private document that is not required to be admitted for probate and thus your family members are not invited to give or withhold their consent for your decisions.
This article is for educational purposes only - to provide you general information, not to provide specific legal advice. Use of this post does not create an attorney-client relationship and information contained herein should not be used as a substitute for competent legal advice from a licensed attorney in your state.
