If you are in a committed relationship but are not married to your partner, estate planning is essential. Unless you each draft a Will, and/or Trust, and designate the other person as a beneficiary, your assets will pass to other family members and your partner will receive nothing when you die. Further, without proper planning you won’t be able to make end-of-life decisions for each other.
In addition to a Will, here are some tools available to unmarried partners:
Joint ownership: Under joint tenancy, ownership is shared equally with a right of survivorship. That means when one owner dies, the other automatically takes over the deceased person’s share. Establishing joint ownership is usually as easy as putting both names on a document, such as a vehicle title or the deed to a house.
Beneficiary designations: Certain assets can be transferred via beneficiary designations, outside of your Will. You can leave bank accounts, insurance, retirement accounts, and certain government securities to someone by naming that person as the “payable-on-death” beneficiary. These forms are available directly from the bank/account administrator and can be updated at any time.
Living will and power of attorney: If you want your partner to handle financial and medical decisions if you become incapacitated, a health care power of attorney and a living will can make sure that happens. Likewise, a financial power of attorney gives your partner control over your assets.
Revocable trust: A living trust places your assets in trust for your benefit during your lifetime and designates where these assets will go when you die. A revocable trust is one you can change at any time. They can be set up to benefit unmarried partners, in the same way they can be set up for children or other heirs.
By placing assets in a trust, you can avoid the probate process, eliminating delays and fees. Your property can pass immediately and directly to the named beneficiaries. Some people also choose trusts to protect their privacy. While wills are public documents, a living trust is private and typically more difficult to challenge.
These are big questions, and you may not have all the answers right away. But don’t let that be a reason to put off creating or updating your estate plans. Talk with your estate planning attorney to talk through your options and wishes.