Estate Planning Tips for Unmarried Couples

Welcome to the Kazi Law Firm! We are a boutique law firm steeped in Texas tradition personifying the warmth and congeniality consistent with southern hospitality. We believe in preserving integrity and professionalism with true Texan charm, staying true to our roots, while providing essential, affordable legal services to all. Located just north of Dallas, Texas in the rapidly growing suburb of Frisco; the Kazi Law Firm concentrates on contracts drafting and review, wills & estate planning, real estate law, landlord, tenant, mediation, and general business law needs.

As marriage rates have declined, the share of adults who have ever lived with an unmarried partner has risen. Amid these changes, most Americans find it acceptable for unmarried couples to live together, even for those who don’t plan to get married, according to a new Pew Research Center survey. This trend often leads clients to inquire as to if and why unmarried couples need an estate plan at all? Shockingly, the short answer is “Yes, absolutely, an estate plan is beneficial to all couples, regardless of a marriage license.”

Why Do Unmarried Couples Need an Estate Plan?

Ironically, an estate plan for unmarried couples in many ways is so more important than for a married couple. It’s imperative to keep in mind that there are two sides to estate planning: The first side deals with what happens to your personal belongings and property when you die and the second involves who will take care of you if you become incapacitated.

Those key objectives do not deviate when you get married. Therefore, an estate plan for an unmarried couple usually looks quite similar to an estate plan for a married couple. In order to comprehend why it is so critical for unmarried couples to have an estate plan, think of all the benefits our legal system affords married spouses:

  • Social Security benefits
  • Spousal privilege in court
  • Immigration status
  • Inheritance
  • Joint tax filing
  • Homestead rights
  • Hospital visits

While marriage recognizes and provides certain legal rights to individuals, unmarried couples may not have those same rights. For example, imagine if you were lying unconscious in the hospital and your partner was desperate for an update? Without a power of attorney or HIPAA waiver, they will likely have a difficult time getting the information they need. Additionally, they will not have the legal authority to make medical decisions on your behalf. Can you imagine the sheer anguish at that moment?

Taking the matter one step forward, imagine a situation where you unexpectedly pass away. Your partner will not be entitled to any Social Security or other benefits, any notice of probate proceedings, or any homestead rights typically granted to legally married spouses. Without a well-crafted estate plan, your partner will have no right to you or your belongings. Why not spare your loved one this agonizing experience?

Needless to say, the law favors married couples. So if you want to provide for your partner after your death and enable them to take care of you if you become incapacitated (and vice versa), you need an estate plan that gives them a legal basis to enforce those rights.

What Kind of Estate Plan Do We Need?

Keep in mind that no two estate plans are the same, just as no two people are the same. However, here are a few estate planning tips for all unmarried couples:

Protect your Home from Probate

Remember that without the appropriate legal documents providing for the transfer of title outside of probate, rigid Texas intestacy laws may control who receives your assets. If you and your partner are not married, intestacy could mean that they have no right to your house after your death. Let’s talk about the various ways to circumvent probate when it comes to real estate.

  • Transfer your home into a living trust: First, you can transfer your house into a living trust that you create yourself or to a joint trust created by you and your partner. It is essential to note that a living trust is not the same instrument as a last will and testament. Depending on the terms of the trust, after your death, your partner could either inherit your house OR have the right to live in it for as long as he or she wants. Either way, it avoids probate.
  • Create a joint tenancy: Second, you can name your partner as a joint tenant of your house. Joint tenancy is a type of ownership by which two or more people own property together. Upon the death of a joint tenant, his or her interest automatically passes to the surviving joint tenant(s). While there are potential problems with naming a joint tenant as opposed to using a Living Trust, it can still be used to avoid probate. Please keep in mind, however, that this may not be an option if you have a mortgage on the house.

Name Your Partner as “POD” Beneficiary

  • Insurance policies, retirement plans, and even bank accounts allow you to name one or more individuals (e.g., your partner) as a “pay-on-death beneficiary.” For example, let’s say your partner designates you as the pay-on-death beneficiary of his savings account. After his death, you can take a copy of his death certificate to the bank, along with your own identification, and the bank will transfer the funds or re-title the account into your name.
  • These designations also take precedence over a will or trust, so review your pay-on-death beneficiaries regularly to ensure they accurately reflect how you want your estate distributed upon your passing.

Appoint Your Partner as Attorney-in-Fact

  • A Durable Power of Attorney (POA) is one of the most critical estate planning documents you can (and should) have. Whereas other documents generally only affect others after your death, a power of attorney affects you during your lifetime.
  • By naming your partner as Attorney-in-Fact through a power of attorney, you can ensure that he or she has the ability to act for you in financial situations in the event you cannot act for yourself.
  • It’s also prudent to enable your partner to make end-of-life decisions for you by naming them as your health care proxy in a Medical Directive. This document spells out your wishes regarding life-sustaining treatment and artificially administered nutrition and hydration.

Draft an Instructional Letter To Your Partner

  • A letter of instruction is designed to tell your partner or other representatives everything they need to know to manage your estate properly. Where do you have bank accounts? What services need to be canceled? What bills need to be paid? Where do you keep the key to your safe deposit box? Where do you keep your assets? What family or friends should they notify of your death? Where do you keep your estate plan?
  • Giving these instructions can make it easier for your partner to manage your estate after your death, particularly if he or she does not know much about your family finances, business dealings, etc.

Create a Digital Estate Plan

  • Technology has changed everything including estate planning. With the popularity of Facebook, Instagram, Twitter, e-mail, and cryptocurrencies, it is vital that you include digital assets in your estate plan to enable your partner to access or dispose of your online accounts after your death.

Regardless of why you’ve decided to cohabitate rather than marry, failing to include your significant other in your estate plan can cause unintended consequences for them and for you. It is imperative to have an experienced probate attorney draft your estate plan to ensure that your last wishes are carried out to your satisfaction. Why wait? Contact us today to include your partner in your estate plan and give yourselves that peace of mind.

I built my law practice on the premise of being a life raft in a sea of sharks. I want to be an advocate for those that have been wronged and are too intimidated to seek help. My firm is here to explore your options, guide you through your legal journey, and give you that safe space to ask questions! There’s no such thing as a stupid question…Only the ones you don’t ask. So, my question to my clients is not “do you have any questions?” But rather “what questions do you have?”

As always, the Kazi Law Firm is standing by to help you in your time of need. Don’t hesitate to contact us today. We specialize in real estate law, landlord-tenant disputes, immigration, and wills & estate planning. Family is at the core of our practice. Just as we treat our family with respect and understanding, we treat yours. Come join the Kazi Law Firm family today!

Why swim alone in shark-infested waters when you don’t need to?