Dec 22 2008
Estate Planning for the Unmarried Couple–Same Sex or Otherwise!
It’s hard enough for me to get married couples to do their estate planning, never mind unmarried couples. Many couples, both married and unmarried, don’t even contemplate any form of estate planning until there are children in the mix. This, even when there are substantial assets or complicated familial issues to consider. As you continue to read, bear in mind that every state is different and also, that the ensuing discussion is by no means exhaustive. Before even delving into where assets go upon death, unmarried couples should plan around the division of shared assets for the time in which they are living together as a couple. They should also memorialize how these same assets will be disbursed should the relationship end. This can be done by some form of domestic partnership agreement which of course, should be drafted by an attorney. Just like a married couple, unmarried couples should have Wills whereby they specifically choose the beneficiaries of their estate. If a person passes away without a Will, the courts determine the ultimate beneficiaries by utilizing the rules of intestacy. The rules of intestacy generally pass assets to biological relatives. In the case of an unmarried couple (and in the absence of a Will or Trust), the assets will pass to a more remote relative before passing to a significant other. In the case of an unmarried couple with a hefty amount of assets, there are important tax implications to ponder as an unmarried couple loses the benefit of the unlimited marital deduction. The marital deduction allows unlimited, tax-free transfers between spouses. Therefore, attorneys need to draft more sophisticated types of documents for wealthier couples in this type of situation.Unmarried couples also need to be astute about who’ve they designated as beneficiaries of 401ks, life insurance policies and the like. (see my prior post about this very topic!) Unmarried couples also need to be certain they have named someone to take care of their finances in the event of incapacity. Perhaps even more importantly, they need to name an individual to make health care decisions on their behalf in the event of incapacity. Finally, there should be agreements in place with respect to any children. Often times, one parent is the legal parent and the other partner has no legal rights with respect to a child at the end of the relationship or upon death.
