Estate Planning for Unmarried Partners
Estate planning for unmarried partners is important because unmarried partners do not share the same protections and benefits offered to married partners. For example, in the event of incapacity, unmarried partners are not necessarily able to make decisions for each other. Moreover, in the event of death, unmarried partners do not necessarily inherit from one another. In this post, we discuss the most common and important estate planning for unmarried partners. There are various estate planning tools unmarried partners can use in order to protect their loved ones after death.
What is Typical Estate Planning for Unmarried Partners
If you do not have a Last Will and Testament, your assets will pass by intestacy. Under intestacy, New York state law governs how assets are disposed of. In the event that you do not have a Will and therefore default to New York state law, then, your assets will pass to your spouse, if any, or if none, then to your children, or if none than to your parents, or if none, then to your siblings, or, if none then to your aunts and uncles, and so forth. If you die without being married but with a significant other, then, in the absence of a valid written instrument, your significant other will not receive your assets. Indeed, If you are not married but have a partner or a significant other to whom you would like to pass some or all of your assets, then the only way to accomplish this goal would be with the creation of a Will or a Revocable Trust.
A Will may not be the Best Estate Planning tool for Unmarried Partners.
Even if you have a Will, your significant other will still have to go through a court process called probate. During the probate process, your Will is going to be submitted to the Court and become a public record. The Decedent’s next of kin will be given a chance to contest the Will. The next of kin will need to sign a Waiver of Process; Consent to Probate. If the next of kin does not want to sign the Waiver, then the Court will issue a Citation. This can become problematic with unmarried partners, especially in cases where family members do not respect the relationship or acknowledge the existence of the unmarried partner. In such an event, a Living Trust may be a better estate planning tool for unmarried partners. Alternatively, if you do not want your assets to be disposed of by Will but want to ensure that they are left to your partner, you may simply add a beneficiary designation or create a joint account for the asset. This will work to transfer the asset directly to the significant other because beneficiary designations override the terms of a Will.
Joint Ownership or Beneficiary Designations as Estate Planning for Unmarried Partners.
Assets owned jointly or those that have valid beneficiary designations do not pass by your Will. At death, these assets will go to the joint survivor or the designated beneficiary, regardless of what is written in your Will. Although adding a joint account holder or beneficiary may seem like an excellent and cost effective strategy, there are sometimes pitfalls. Certain common issues that can arise are:
- joint owner’s possible misuse of joint assets
- joint assets are exposed to joint owners creditors
- removing a joint owner can be difficult
- Joint assets or assets with designated beneficiaries do not provide asset protection
- Joint assets or assets with designated beneficiaries may incur taxes after death
One way to avoid the aforementioned issues is to create a Revocable Trust. Under a Revocable Trust, you continue to maintain control and full authority over the assets. Your unmarried partner or significant other can simply take over when you are either dead or incapacitated. Thus a trust is an excellent part of estate planning for unmarried partners.
How a Revocable Living Trust for Unmarried Partners Works
A better way to avoid the Court and maintain privacy over your assets is to fully fund a Revocable Living Trust.
A Revocable Living Trust is a legal document created during your lifetime which allows you to control your assets while you are alive and dictate who inherits these assets after your death. You can dictate the age when a beneficiary may inherit or even shield the assets from the beneficiary’s creditors. You may appoint yourself or another individual or trust company as Trustee to manage your assets.
With a Revocable Living Trust, you will not need to go through the Court to provide for your loved ones, and if you are separated from your partner, you can simply amend the Trust and avoid the tedious process of retitling assets. This gives you the most flexibility in estate planning, while giving the maximum protection for your unmarried partner. Indeed, a Revocable Living Trust gives you the maximum control over your assets, and gives your unmarried partner the maximum protection after your death. With a Revocable Living Trust, you can a
- avoid the time, cost, loss of privacy, and loss of control of probate
- avoid the pitfalls of Wills and joint ownership and beneficiary designations.
- avoid uncertainty and unintended consequences
- if you and your partner separate, you can simply change your trust without retitling or dividing assets
Ensure Your Wishes Are Met during Incapacity or Death
Unmarried partners do not share the same protections and benefits given to married partners, so proper estate planning is necessary to protect them after your death.
We can help you make these plans and guide your loved ones through them. Please feel free to contact us today so that we can start tailoring a plan that fits your needs.
Additional resources provided by the author
We are here to help you with your estate planning needs. We can prepare basic Wills to complex Trusts and we can take care of everything while you are home. For more information, please contact estate planning attorney Regina Kiperman:
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80 Maiden Lane
New York, NY 10038
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