Couple discusses estate plan

Part 1: Understanding the Importance of Estate Planning for Unmarried Couples

I receive a lot of calls from unmarried couples seeking advice on how to protect their family if something happens to one of them. Nontraditional family structures are the fastest-growing segment of our population. So, it is important you know how to protect your partner and kids if the unexpected occurs.

Unmarried couples face unique challenges when it comes to estate planning, as they lack the legal protections and benefits afforded to married couples. Estate planning is especially important for unmarried couples because it ensures that their assets and property are distributed according to their wishes. Married couples can take advantage of state laws providing protection for spouses. Unmarried couples do not have such protection.

Estate planning provides a framework for decision-making in the event of incapacity or death. Here are some reasons why estate planning is essential for unmarried couples.

Protecting Assets: A properly drafted estate plan can help protect the assets of an unmarried couple in the event of death or incapacity. Without a will or trust in place, the laws of intestacy will determine how property is distributed, which may not align with the couple’s wishes. Intestacy assumes a legal relationship and unmarried couples are deemed legal strangers. So, unmarried couples do not have any rights under the laws of intestacy.  I have seen long-term (20+ years) partners kicked out of the family home because the person on the title died without an estate plan.

Deciding on Health Care: Estate planning can help ensure that the wishes of an unmarried partner are respected in the event of a medical emergency. Through a health care directive, one partner can make decisions on behalf of the other in the event of incapacity. You would rather your partner make your medical decisions than your sibling, right?

Avoiding Probate: Probate is a time-consuming and expensive legal process that transfers a person’s assets to their beneficiaries after death. Estate planning can help unmarried couples avoid probate by using a revocable living trust, which transfers assets directly to the named beneficiaries.

Planning for Incapacity: Estate planning can help ensure that an unmarried partner is provided for in the event of incapacity. A durable power of attorney can grant authority to make financial decisions, while a living will can specify end-of-life wishes.

Maintaining Privacy: Estate planning can help maintain privacy for an unmarried couple. The probate process is a matter of public record, but a trust can provide for the transfer of assets outside of the court system, maintaining privacy.