Estate Planning for Unmarried Couples

"The cornerstone of every estate plan is a will." You've heard that before, but it is especially important for unmarried couples to have a complete estate plan, not just a will. Property and estate laws automatically provide legally married couples with a measure of protection that you must carefully plan to duplicate.

When someone dies without a will, the court appoints an administrator who distributes property to various family members according to state law. Even without a will, the surviving spouse is entitled to a specified share of the estate, usually about one-third depending on state law and other circumstances. While that may be far less than the spouse intended, there is no such assurance for your life partner.

Your will serves other important functions besides making sure the wrong person doesn't inherit your life savings. It allows you to name the person who will be in charge of administering the distribution of your property and ensuring that your last wishes are respected. Your will is also the place where you can specify those wishes. Even if you think those who love you know your thoughts on funeral and burial rites, put it in writing so there will be no doubt.

As a couple, you must discuss your thoughts on property distribution, consider any family concerns this may raise and carefully examine the various forms of property you hold separately and jointly. If you intend that household belongings and certain personal items should be left to your significant other, state this in your will. This may include many things that you already think of as belonging to both of you, such as your furniture.

Property that has a legal title can be owned as a couple and left directly to the surviving person. This includes assets such as bank accounts, automobiles, brokerage accounts and real estate. Check on these types of property now and make title changes as necessary. Not only must the property be titled in your names jointly, you must specify that it be held with rights of survivorship. While you are considering all your assets, don't forget to check who is listed as your beneficiary on all life insurance policies and retirement accounts.

An interesting option for transferring real estate is called a life estate. You can leave the property to someone else, but specify that your loved one has the right to live in and use the property for his or her lifetime. Life estates work well if you want to leave the property to your favorite charitable organizations.

One further thing to complete your estate plan, especially for unmarried couples, is the issue of living wills and powers of attorney. The two of you should discuss your intentions regarding life-prolonging medical intervention, consent to medical procedures and the administration of medication. Make an estate plan now so that you know each of you will be cared for as you intended and there will be no unnecessary confusion or unexpected consequences.

Please contact Mary Ludwig, Development Director at 712-732-5127, for more information.

The information on this site is not intended as legal, tax or investment advice. For such advice, please consult an attorney, tax professional or investment professional.

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