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Unmarried couples who lack estate plans face challenges

by Legacy Plan
updated November 21, 2023

Failing to create an estate plan can be a risky proposition. Leaving your legacy to your state's intestacy laws creates a possibility that your assets will be distributed in ways that are different than you would have wanted. Leaving behind no plan also opens the door to risks like estate litigation from people claiming to be your legal heirs. With a complete plan that includes a last will and testament or a will and revocable living trust, you can make certain that your specific and personal objectives are made clear in valid legal documents.

Because they lack the automatic legal protections of marriage, unmarried couples must take proactive steps to secure legal rights, financial safeguards, health care wishes and a distribution of assets that matches their intentions.

What are the challenges of unmarried couples lacking legal recognition?

A fundamental issue unmarried couples encounter is the lack of default legal recognition afforded to marital relationships. Unmarried couples must establish all legal protections through documented agreements and estate planning measures. Otherwise, the law reverts to treating unmarried partners as legal strangers with no recognition of their relationship status. Proactive steps are essential to override this default absence of rights.

Without a marriage certificate, the law does not confer next-of-kin status or related rights. This affects:

  • Medical decision-making ability if a partner is incapacitated.

  • Inheritance and tax treatment without estate planning documentation.

  • Custodial claims over jointly raised non-biological children.

Can unmarried couples make medical decisions for each other?

One of the most poignant areas affected by this lack of recognition is medical decision-making. In situations where one partner becomes incapacitated, the ability to make health care decisions typically falls to the next of kin. For married couples, this right is automatically bestowed upon the spouse. However, for unmarried partners, the legal framework doesn’t automatically recognize this right. This can lead to heart-wrenching situations where a partner is sidelined in favor of legally recognized family members, despite having a more intimate understanding of the incapacitated person's wishes.

Do unmarried couples inherit from one another?

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Another significant challenge arises in the realm of inheritance and tax treatment. Without a legally recognized marital status, the surviving partner in an unmarried couple does not automatically inherit assets. In the absence of a will or estate plan, assets can be distributed according to the state's intestacy laws, often favoring blood relatives. Additionally, unmarried couples may face unfavorable tax treatments compared to their married counterparts. The lack of marital status can lead to the inability to take advantage of tax benefits available to married couples, such as unlimited marital deductions.

Do unmarried couples have custodial rights over non-biological children?

Custodial claims over jointly raised non-biological children represent another complex issue. In cases where one partner is not a biological parent, they may have no legal claim to custody or visitation rights in the event of a separation or the death of the biological parent. This can lead to emotionally charged legal battles and potential trauma for the children involved. Without adoption or legal guardianship documentation, the non-biological parent's relationship with the child is often not recognized, regardless of the depth of their emotional bond.

What are complications with unmarried couples owning joint property?

In an era where more couples are choosing to cohabit without getting married, the complexities of joint property ownership have become increasingly relevant. Unmarried couples, while enjoying many of the day-to-day benefits of a shared life, often find themselves entangled in legal and financial complications when it comes to owning property together.

For married couples, property ownership comes with a set of legal protections and a clear framework provided by matrimonial laws. These laws dictate everything from division of property in case of divorce to inheritance rights. However, for unmarried couples, no such default legal framework exists. This absence can lead to uncertainty, potential disputes and legal intervention, especially if the relationship ends or one partner passes away.

One of the first hurdles in joint property ownership is how the title to the property is held. Couples can choose between joint tenancy with right of survivorship, tenancy in common or sole ownership, each with different implications for ownership rights and inheritance. If one partner contributes more financially, the situation becomes further complicated, as financial investment does not always equate to legal ownership rights.

When purchasing property, unmarried couples often apply for a mortgage together. This joint financial commitment means both parties are liable for the mortgage payments, regardless of their individual contributions. If one partner fails to meet their financial obligations, it can adversely affect both parties' credit scores. Moreover, separating this joint financial responsibility in the event of a breakup can be a complex process.

Without the legal framework of marriage, dividing property upon the breakdown of a relationship can be fraught with difficulties for unmarried couples. Without a legal separation agreement, disputes may arise over who gets to keep the property or how much one partner should pay the other to buy out their share. This process often requires legal intervention, which can be both costly and emotionally draining.

In the event of the death of one partner, the surviving partner in an unmarried relationship does not automatically inherit the deceased’s share of the property unless stipulated in a will or if the property is owned as joint tenants. In contrast, married couples benefit from the right of survivorship, where the surviving spouse automatically inherits the property.

Can unmarried couples establish financial protections and security?

The traditional benefits associated with marriage, such as Social Security, pensions and veterans benefits, often remain exclusive to legally married couples. This exclusivity presents significant challenges for unmarried couples, highlighting the critical importance of comprehensive estate planning to establish financial protections and security.

One of the most significant disparities between married and unmarried couples lies in their access to government and employment-related benefits. Here are some examples:

  • Social Security benefits. For married couples, Social Security offers spousal and survivor benefits. These benefits allow a lower-earning spouse to receive up to 50% of the higher earner's retirement benefit, and a widow(er) can receive up to 100% of the deceased spouse's benefit. Unfortunately, these benefits do not extend to unmarried partners, regardless of the length or commitment level of their relationship.

  • Pensions and retirement accounts. Similarly, in the realm of pensions, especially those governed by federal law, the surviving spouse often has rights to a portion of the pension upon the death of their partner. For unmarried couples, automatic rights to a partner’s pension do not exist, which can leave a surviving partner vulnerable financially. Some private pensions may allow non-spouse beneficiaries, however.

  • Veterans’ benefits. Veterans’ benefits, including dependency and indemnity compensation and survivor benefits, are another area where unmarried partners are at a disadvantage. These benefits are typically reserved for legally recognized spouses and dependents.

Given these challenges, estate planning becomes not just beneficial but essential for unmarried couples. Estate planning involves creating legal documents and arrangements that ensure a person's wishes are honored and their loved ones are provided for after their death. For unmarried couples, there are several estate planning strategies to consider. They include:

  • Creating beneficiary designations. Unlike married couples, where the law often defaults to the spouse as the beneficiary, unmarried couples must explicitly name each other as beneficiaries in wills, retirement accounts, life insurance policies and other financial instruments.

  • Drafting wills and trusts. A well-crafted will or trust can ensure that assets are distributed according to the couple’s wishes, rather than being subject to state intestacy laws, which typically favor biological family members over unmarried partners.

  • Health care and financial powers of attorney. Estate planning allows couples to grant each other the authority through health care powers of attorneys and advance directives to make critical health care and financial decisions in the event one partner becomes incapacitated.

  • Cohabitation agreements. These agreements can outline financial arrangements and property rights during the relationship and provide a roadmap for asset division if the relationship ends.

Can unmarried couples make decisions about health care and end-of-life care?

In the realm of estate planning, different aspects hold varying levels of importance based on individual circumstances. For unmarried couples, however, one area stands out as particularly crucial: health care directives, such as a medical power of attorney and living will. For many unmarried couples, no aspect of estate planning is more important than ensuring the ability to make medical decisions on behalf of an incapacitated partner.

Unlike married couples, who are afforded a variety of legal protections and rights by default, unmarried couples face a significant legal gap, especially in health-related emergencies. The law typically recognizes family members as the default decision-makers in medical situations when an individual becomes incapacitated. This legal standard can leave a long-term, committed partner without any say in the care of their loved one, an often devastating and frustrating situation. Consider a few of the following ways that health care directives play a critical role:

  • Making treatment decisions. Without a health care directive or medical power of attorney, an unmarried partner has no legal standing to make treatment decisions. This means that if one partner becomes incapacitated, the other could be left entirely out of the decision-making process, regardless of their knowledge of the incapacitated partner's wishes.

  • Access to medical information. Privacy laws, such as the Health Insurance Portability and Accountability Act (HIPAA), often restrict access to an individual’s medical information. Without proper legal documentation, an unmarried partner may be denied access to crucial health information, impeding their ability to make informed decisions or even receive updates about their partner’s condition.

For unmarried couples, appointing each other as medical power of attorney is a critical step. This legal tool allows one partner to make health care decisions for the other in the event of incapacitation. It ensures that the person you trust most, rather than an estranged family member or a court-appointed guardian, will have the authority to make decisions that align with your wishes.

While aspects such as asset distribution and financial planning are undoubtedly important, the immediacy and personal nature of health care decisions place them at the forefront. Financial and property matters can often be resolved over time, but medical emergencies require immediate and decisive action, often in life-or-death situations.

Do unmarried couples have custody rights for non-biological children?

In the complex fabric of modern families, an increasing number of unmarried couples are raising children together. These families often include a partner's biological child or children they have jointly adopted. However, without the legal framework that marriage provides, the non-biological parent in such arrangements may face significant legal hurdles in maintaining a relationship with the child if the couple separates or if the biological parent passes away.

In the eyes of the law, the non-biological parent in an unmarried couple does not automatically have custodial rights to a partner's child. This legal gap can have far-reaching implications.

Should the couple separate, the non-biological parent may have no legal standing to seek custody or visitation rights. If the biological parent dies without proper legal arrangements, the non-biological parent may lose all custody rights, potentially severing the relationship with the child.

Here’s how proper estate planning can help:

  • Legal guardianship. By legally naming the non-biological parent as a guardian in wills or estate documents, couples can ensure that the non-biological parent maintains custody and continues to play an active role in the child's life, regardless of unforeseen circumstances.

  • Providing for the child’s future. Estate planning also allows parents to make financial arrangements for their children's future, including setting up trusts or naming beneficiaries that include the non-biological parent, ensuring the child’s financial security.

  • Health care decisions. Including provisions in estate planning for health care decisions regarding the child can empower the non-biological parent to make medical decisions, a crucial aspect often overlooked.

What is the process to establish custodial rights for a non-biological parent?

The process of establishing custodial rights for a non-biological parent involves several steps, each critical in securing their role in the child's life.

By drafting a will, you can designate the non-biological parent as the child's guardian, and by establishing a trust, you can provide for the child’s financial needs and can include stipulations about the child’s upbringing and education.

It’s also important to utilize legal documents like a power of attorney or health care proxy that includes provisions for the child.

Indeed, wills and trusts form the foundation of an estate plan. But non-standard family structures create complications. Consulting an attorney helps customize plans and avoid pitfalls like unintended beneficiaries receiving assets or children being declared ineligible for inheritance due to technical trust language requirements. Estate goals should determine optimal structures versus just mimicking standard templates.

Conclusion

Estate planning is important for all individuals, but unmarried couples face a set of unique challenges that make thoughtful planning particularly critical. From health care decisions to property rights to financial protections, unmarried couples encounter legal gaps and vulnerabilities that married couples are shielded from.

While societal views continue to evolve, outdated laws still favor the rights of legal spouses and next of kin over unmarried partners. Proper estate planning can override these deficiencies by thoughtfully documenting intentions through wills, trusts, beneficiary designations and powers of attorney. With guidance from attorneys well-versed in serving diverse modern families, unmarried couples can craft estate plans tailored to their circumstances and priorities. While requiring some extra work, ensuring your wishes are legally secured provides invaluable peace of mind. With the right planning, unmarried couples can protect their legacy and provide for each other in the manner they intend.

How do I create an estate plan?

There are numerous options and scenarios to consider when developing an estate plan that protects your legacy and achieves your objectives, and important decisions should be made with the advice of qualified lawyers and financial experts. Membership with Legacy Assurance Plan provides members with valuable resources and guidance to develop comprehensive estate plans that take life's contingencies into consideration and leave a positive impact for generations to come. Legacy Assurance Plan members also receive peace of mind that a team of trusted, experienced professionals will assist them in developing legal, financial and tax strategies that will meet their needs today and for years to come through periodic reviews.

This article is published by Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at legacyassuranceplan.com.

Phone - 844.445.3422
Email - info@legacyassuranceplan.com
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