Even without estate planning, there are laws in place for married couples to distribute property and assets to either the other spouse, children, or parents. However, there are few laws for unmarried couples, even if they have lived together for a lengthy period of time. That is why estate planning is imperative for elderly, unmarried couples. Without it, no one in the relationship would be able inherit from one another should someone pass away, nor would they be able to make any end-of-life decisions.
Estate planning is important for two distinct reasons: it will determine who will receive your assets when you die, and who could make decisions for you should you become incapacitated and unable to make decisions for yourself. That goes for married and unmarried couples. But that is why it is especially important for unmarried couples; neither of you could inherit from one another or make life decisions for each other. State law will dictate where your assets go if there is no estate plan, and that is usually never the unmarried partner.
Marriage rates have fallen across the country, yet cohabiting relationships have been climbing, particularly Americans over the age of 50. This specific age group accounts for almost a quarter of all cohabiting adults.
Combined with the rising divorce rates and remarriages, many couples over the age of 50 are simply choosing not to get married but will live together. This likely means that many couples may be living together for years, purchasing homes together and larger assets, making estate planning even more important to unmarried couples.
Here are some estate planning tips for unmarried couples to protect your best interest and those of your partner:
- Write a will: Writing a will is important because it can state who will inherit your property and assets after your death. You could use your will to then name your partner the way you see fit, or whomever else you choose. Under state law, your possessions will likely go to your siblings or parents if you do not have a will or children. Perhaps more importantly, a will is used to name a guardian for your children should you pass away. If your partner is not the legal parent of your child, then you would want someone you trust to raise them. The guardian would raise a couple’s child if both parents were not able to.
- Joint ownership: A good way to avoid probate and ensure your assets go to your partner is to own your assets together, namely larger items such as a car or a house. With right of survivorship, ownership of an asset simply goes to the unmarried partner in its entirety upon death. In most cases, right of survivorship can take place of a will.
- Beneficiaries: However, you cannot do a joint ownership on all your assets, such as a retirement or a bank account. That is where naming a beneficiary comes in and can be done simply by just filling out a form at your bank. Some assets, like a bank account, cannot pass through a will and only through a named beneficiary. Furthermore, if you change your mind on the beneficiary, you could simply just fill out another beneficiary designation form.
- Power of attorney: You could use durable powers of attorney (DPOA) for both your finances and medical decisions should either of you become incapacitated or injured where you can not make decisions on your own. A DPOA for finances gives a person authority over your finances, such as needing to use your checking account to pay bills. A DPOA for healthcare gives a person the ability to make medical decisions for you, and, when combined with a living will, can abide to your end-of-life healthcare wishes as you choose. Without a DPOA for finances, the only way to get any authority over your party’s finances is through the court.
- Letter of instruction: Consider writing a letter of instruction to your partner which would detail how to manage your estate after you pass. The letter of instruction should include details such as if you have a safety deposit box, what bills are due, or who should be notified upon your death; generally, answers to the many questions that will likely be asked after you are gone. These instructions will make it easier for your partner.
Legal Guidelines for Unmarried Couples
Laws for married couples who divorce generally does not apply to unmarried couples who are no longer together but may apply to unmarried couples whose state recognizes common law marriage as a legal marriage. However, most states do not.
With an unmarried couple, your assets are presumed your own unless you deliberately combined them, either through a joint account or other means. However, this could be overruled by a written agreement, as most states would legally recognize that. Furthermore, any jointly owned assets are considered to be split evenly, unless otherwise noted in an agreement.
Neither unmarried person in a breakup is entitled to receive any alimony support unless there is a written agreement. For married couples, if one person makes more than the other, the court could make the one that earns more support the other. However, that is not the case with unmarried couples.
If you both have children together and break up, then child support is handled just as it would if you are married. Normally, however, you should be able to handle this without court intervention by working out a joint agreement. If only one of you is the legal parent, the parent that is not legal would not have any right or custody or visitation of the child but will not have to support the child either.
Unmarried couples should prepare a written living together agreement, which details who possesses property, accounts, and other assets. This could minimize the need to go to court in the event of a breakup.
The New Jersey Wills, Trusts, and Estate Lawyers at Herold Law, P.A. Help Unmarried Couples with Estate Planning
If you are in an unmarried, cohabitating relationship, it is extremely important you plan your estate to protect your wishes and your partner’s. Call the New Jersey wills, trusts, and estate lawyers at Herold Law, P.A. today. Our established and knowledgeable team has years of experience with estate planning and can help you get started right away. Call us today at 908-647-1022 or fill out our online form for an initial consultation. With our offices located in Warren, New Jersey, we proudly represent all communities of Warren and Plainfield.