Legal

Why unmarried partners should care about estate planning

More and more people are entering long-term committed relationships without getting married. Unfortunately, state and federal laws do not protect unmarried couples as they do married couples when it comes to inheritance, taxes, and decision-making powers. Therefore, it is important that unmarried couples engage in comprehensive financial and estate planning because without proper planning, your partner could end up with nothing should you pass away. The Law Is Not on Your Side. If you do no estate planning, your state’s intestacy statute will determine who will receive your money and property and the amount each legal heir will receive. While laws vary by state, generally speaking, your money and property will go first to your surviving spouse (if you are married), then to your children or grandchildren, your parents, your siblings, and your siblings’ children, in that order, depending on who survives you. Additionally, if you have a life insurance policy and fail to complete the beneficiary designation form, the proceeds from the policy may be paid to your estate, necessitating the costly and time-consuming probate process. Similarly, if your retirement account does not have a named beneficiary, that may also end up going through probate and cause unintended income tax consequences. “Blended Family” Concerns. With blended families (someone who remarries and has children from a previous relationship), the planning objective is to make sure that the children from the previous relationship are not completely disinherited. In many instances, the new spouse’s claim to the deceased’s money and property has priority. However, if you have children from a previous relationship but are not married to your partner, the concern becomes protecting your partner who, under the law, would not be entitled to anything because your children would more than likely receive everything. Actions to Take Now

If protecting your partner is important to you, you may wish to consider the following steps:

• Review your beneficiary designations. They must be filled out correctly and properly submitted to be effective.

• Review how your accounts and property are owned. Living together in your house does not mean you both own it, nor does simply helping with mortgage payments. It is important to know who has access to the account used for household expenses so the healthy partner can continue paying the bills if one of you becomes incapacitated or passes away.

• \If you do own a home or other real estate together, consider a joint ownership agreement to protect both of you should there ever be a disagreement over how to handle things. A comprehensive estate plan should address who will receive your money and property at your death, who will make financial and medical decisions for you if you cannot, and outline your end-of-life wishes.

— By Gregory Herman-Giddens, Esq. Gregory Herman-Giddens is Chair of Henderson, Franklin, Starnes & Holt, P.A.’s Wills, Trusts & Estates Department. He may be reached at gregory.herman-giddens@henlaw.com or by phone at 239-344-1240. Virtual appointments are available.