We frequently discuss how estate planning matters pertain to married individuals and couples. Of course all individuals, regardless of marital status, would be wise to take steps to set up an estate plan and plan for end of life matters. For couples who choose not to marry, extra steps must often be taken to ensure a partner has certain rights and inherits intended assets and property.
Currently, a total of 17 states legally allow same sex couples to marry, including New York. Marriage, however, is not for everyone and there are a growing number of both same-sex and heterosexual couples who are choosing to co-habitat rather than marry. For these couples, estate planning laws intended to pass assets directly to a spouse upon one’s death do not apply and extra attention must therefore be paid to accomplish these goals.
For unmarried couples who wish to leave assets to a partner, it’s important to ensure beneficiary designations are up to date. Most financial, investment and retirement accounts require an individual to name a primary beneficiary. For accounts established prior to the start of a relationship, updates should be made to reflect intended changes especially if children later become a factor.
In addition to ensuring assets pass directly to a living partner or heir, taking steps to set up an estate plan can benefit unmarried couples in many other ways. For example, married couples are allowed to pass a large amount of assets to a spouse upon death without being subject to federal taxes. Unmarried couples, however, are not afforded this same privilege, but can achieve this same goal with proper estate planning.
In addition to inheritance and estate tax avoidance matters, unmarried couples would also be wise to plan for end of life matters. Estate planning instruments such as a living will, health care proxy and hospital visitation authorization can provide a partner with visitation and health care decision rights while also ensuring an individual’s wishes are followed.
For any individual or couple, estate planning can be confusing and complex. For unmarried couples, however, goals related to inheritance, end of life decisions and estate taxes can be particularly challenging to accomplish. For these reasons, it’s wise to consult with an estate planning attorney who can answer questions and assist in helping unmarried couples accomplish their estate planning goals.
Source: Ahwatukee Foothills News, “Estate planning for domestic partners,” Kim DeVoss, Jan. 3, 2014