There have been some distinct changes in the American cultural and sociological landscape in recent decades. Among them is the increasing number of unmarried couples living together as lifetime partners. This trend has created estate planning challenges for the individuals involved. Here are a few of the more common estate planning issues that may affect unmarried couples:
In general, the rules governing the ultimate disposition of assets are not as favorable for individuals who are not legally married as they are for those who are married. If an individual dies without a will (intestate), state intestacy law will determine the disposition of the decedent’s assets. Although these rules vary from state to state, they typically dispose of assets through bloodlines or marriage. So, in the case of unmarried lifetime partners, assets may not be distributed according to the decedent’s wishes.
A last will and testament is designed to protect against the undesirable effects of intestacy by allowing an individual to specify who is to receive probate assets upon death. However, a will may not be immune to challenges made by the decedent’s family members who may have benefited from intestacy law if a will was not accepted by the local probate court. Therefore, it is essential that a will be drafted and executed when an individual is fully competent.
Although a will can express a lifetime partner’s wishes for the disposition of assets upon death, it does not provide any contingency arrangement for the management of assets or medical decisions if the individual becomes incapacitated due to an accident or illness. But, a general durable power of attorney and a health care proxy can allow an individual to determine who will make such decisions.
Furthermore, the addition of a revocable trust can further solidify an estate plan and help protect individuals from some of the planning problems related to wills and powers of attorney. Privacy and the ability to transfer assets associated with revocable trusts can be attractive estate planning components for lifetime partners. While trusts and estate planning can become extremely complicated and need to be specified for each unique situation, it is important to talk to a professional regarding your legacy plan.
Simonet Financial Group, LLC
Phone: (512) 296-8962