It’s not hard to find free resources describing typical estate planning techniques and recommendations for singles or married couples. Unfortunately, it seems the same cannot be said for unmarried couples. Many people live with their significant other, but for a variety of reasons, they choose not to get married.
Because many of the protections in the law allowing spouses priority in making decisions for each other in the event one is incapacitated apply to married couples only, cohabitating couples face many unique challenges as the grow old together. Some of these challenges include the lack of statutory rights to inheritance, few techniques to minimize estate taxes and the lack of contractual rights to continued work related insurance or retirement benefits.
Absent proper planning, catastrophic and unanticipated events could occur. I recall one case in which a client in the midst of dealing with the death of their partner of over 8 years, was approached by the sister of her partner and told she needed to leave her home as it was not titled in her name and “did not belong to her”. Could the client do anything about it? Of course, her income was used to make mortgage payments, she contributed to the down payment and therefore she had an equitable interest. Could she have avoided the experience? Of course! This is just one example of the many unanticipated, negative events that could arise when couples fail to plan.
It is critical for couples that have chosen not to formally marry that they implement an Estate Plan to ensure that their loved ones inherit property consistent with their intentions and with the least amount of hassle and expense. More importantly, planning ensures partners are able to provide each other with the right and authority to make medical and end of life decisions. Unfortunately, unpleasant circumstances, financial and otherwise, await people who have planned their life together and made the decision not to formally marry, but failed to implement a professionally prepared estate plan.