On behalf of Richard A. Lewis posted in Estate Planning on Tuesday, May 24, 2016.
Many couples in committed relationships, both opposite sex and same sex, nowadays choose not to marry, for many reasons. Of course, the law gives married people certain benefits such as automatic inheritance rights if one of them should die without a will. Many of the legal advantages of marriage, however, can be attained through careful estate planning.
One of the easiest ways to get started is for the couple to look at how their property is legally titled. A second name can be added to a bank account, for example. Real estate owned as joint tenants, rather than in the name of only one of them, automatically goes to the other joint tenant should one of them pass away, without the need to go to court. An attorney can perform the legal work involved in changing the title status of property.
Wills and trusts
Depending on the nature of their individual and joint property, the partners should consider whether the use of wills would further advance their estate planning goals. Generally, unless a will directs otherwise, property not jointly owned at death passes to the person’s closest relatives under state intestacy laws. If a partner in an unmarried relationship wants his or her property to go to the other partner instead of to family members, this can be accomplished in a will.
For people in committed, unmarried relationships with significant wealth, an attorney can advise him or her about other potential estate planning options such as the revocable living trust.
Powers of attorney
An important legal document to consider is the power of attorney, in which a person can appoint someone to act for him or her in financial matters in case of incapacity. For example, should one partner become medically unable to act, the other could access the incapacitated partner’s bank account to pay the rent if a power of attorney is in place giving him or her the power to do so.
Another matter that should be carefully considered is whether to designate the other partner as the beneficiary on retirement accounts like 401ks and IRAs as well as on life insurance policies.
Should the couple wish to have reciprocal rights to make health care decisions for the other in case of serious illness or injury, they can execute reciprocal health care directives to accomplish this. Otherwise, they could be excluded from seeing one another in the hospital or medical decision making could fall to the injured or sick partner’s closest family instead of to the partner.
Another option to discuss with legal counsel is whether to become registered domestic partners. This is a legal relationship under California law that grants many of the benefits of marriage, but it is only available to same-sex partners and to opposite-sex partners if one of them is over 62 years old. An attorney can discuss the pros and cons of becoming domestic partners.
Seek legal counsel
Anyone in a committed, unmarried relationship should seek legal advice to understand what steps can be taken to protect the money, property and decision-making powers of the partners in case of incapacity or death.