Berge & Berge, LLP Blog

Tuesday, May 10, 2016

Estate Planning for Unmarried Couples

Do I need an estate plan if I am not married to my partner?

Today, more and more Californians are deciding not to marry and choosing, instead, to live together. Whether divorced individuals or widowers who have decided not to get married again, young couples not ready to tie the knot, or even same-sex couples who can now legally marry, but choose not to do so, it is essential for unmarried couples to establish an estate plan.

While married couples have certain built-in legal protections with respect to property rights, the same is not true for unmarried couples. For example, legally married couples can leave their entire estate to the surviving spouse free of estate tax. Legally married couples also enjoy other benefits such as Social Security, surviving spouse benefits, hospital visits, and statutory inheritance rights, among others.

In California, the Probate Court does not recognize a cohabitating couple's relationship as a legal one since there is no common law marriage in the state. For this reason, it is essential for unmarried couples to engage in advanced planning. If one person dies or becomes incapacitated and there is no estate plan in place, the surviving partner is not entitled to any benefits and does not have legal rights to make decisions about healthcare.

In order to plan for the unexpected and protect their rights, there are some essential estate planning documents unmarried couples should put in place.

Revocable Living Trust

First, while many individuals think of estate planning as preparing a will, another option is to establish a revocable living trust, particularly for those who own property or have assets greater than $150,000. This type of trust will allow your estate to avoid probate after your death. Because a trust is a personal, private document that is not recorded in the Probate Court, it will also help to avoid a will contest.

In addition. a revocable living trust allows you distribute your assets to your partner, or anyone else you choose. By utilizing such a trust, you can also more readily designate the individual to manage your assets in the event you become incapacitated or die. For those with less than $150,000 in assets, putting a will in place can also ensure that your partner is protected and that your assets are distributed according to your wishes.

Powers of Attorney

In the event that you or your partner becomes incapacitated, it is essential to choose someone to manage your financial affairs by executing a power of attorney. It is also crucial to nominate someone to make health care decisions for you in the event you are unable to do so by executing a power of attorney for healthcare, also referred to as an advanced healthcare directive.

In the end, non-traditional families should seek the guidance attorney with expertise in trusts and estate law and who understands the unique needs of unmarried couples

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