Ever more couples are eschewing marriage. According to research from Thriving Center of Psychology, two in five Millennials and Gen Zers think marriage is an outdated tradition and 85% say it’s not necessary to get married to have a fulfilled and committed relationship. It’s important for those who decide not to tie the knot to learn about estate planning for unmarried couples.
Planning for Multiple Scenarios
Married spouses have certain rights under state law. If one spouse dies without a will, the other spouse is likely entitled to some or all of the assets under state intestate succession laws. Spouses also typically have rights when it comes to overseeing medical care for an incapacitated spouse.
Unmarried couples may not have these rights. It’s therefore necessary to consider multiple scenarios and create an estate plan that addresses each of them. What will happen if:
- One partner dies before the other? Who do you want to inherit the estate: the unmarried partner, children, other relatives, or a combination?
- Both partners die at the same time? For example, if both partners die in a car crash, what should happen to the estate?
- One partner is incapacitated? Who will be responsible for decisions regarding medical care?
A Lack of Planning May Lead to Heartbreaking Scenarios
To see why estate planning is so important for unmarried couples, consider the following scenarios:
- Brad and Jane live together and are committed to each other but have decided not to get married. Jane owns the house they live in, but both Brad and Jane contribute to it financially and think of it as theirs, not hers. Then, Jane dies unexpectedly and her sister inherits the house. She kicks Brad out to be able to rent out the property, leaving Brad homeless.
- John and Michelle have been together for 20 years, but they’ve never married. They have spoken about their views regarding end-of-life decisions and know that neither would want to stay on life support if there was no hope for recovery, but they have never drawn up official documents regarding this. Then, John is injured in a car crash. He is in a coma with severe brain damage and has no chance of recovery. However, his parents refuse to let him go. Michelle has no legal say in the matter, even though she knows what John would have wanted better than anyone.
Putting Together Estate Plans for Unmarried Couples
An estate plan may consist of many different elements. Some key aspects of estate planning for unmarried couples include:
- Wills. As unmarried couples may lack the protections provided by state intestate succession laws, wills have an even greater level of importance than for married couples. Lay out exactly what you want to happen to your assets, including things like heirlooms and jewelry as well as money and real estate.
- Guardianship. For unmarried couples with children from previous relationships, guardianship is often a complicated issue.
- Titles and Deeds. For houses and cars, titles or deeds play an important role in estate planning. In Oregon, for example, you can add a joint owner and survivorship to the vehicle title. Doing this makes it easier to transfer the title after the owner’s death.
- Life insurance. If you have life insurance, it’s important to make sure the beneficiary designations reflect your current wishes. It may be necessary to update these designations if your situation changes.
- Retirement accounts. As with life insurance, you’ll need to make sure your retirement accounts include beneficiary designations that reflect your current wishes.
- Digital accounts. With ever more aspects of our lives taking place in the digital space, estate planning for digital accounts is requiring more attention. You may have more digital accounts than you realize, including cryptocurrency, NFTs, online photos, social media accounts, bank accounts, and retirement accounts. Think about both ownership and access: who do you want to own digital assets such as cryptocurrency and how will the designated person access your accounts?
- Medical power of attorney. If one partner becomes incapacitated, will the other partner be able to make decisions regarding medical care? Since unmarried partners may not have the same rights as married couples, it’s important to establish these rights through an advanced directive and a medical power of attorney.
Estate planning requires a practical mindset. Although couples may not want to think about death or hospitalization, it’s important to plan for these scenarios. Doing so will prevent difficult – and sometimes heartbreaking – situations.
An estate planning attorney can guide you through the process of estate planning for unmarried couples. Contact Skinner Law.