Planning for the Future as an Unmarried Couple

For married couples, estate planning may be relatively straightforward. With many assets, the deceased's spouse is typically the beneficiary. For unmarried couples, however, estate planning might take a few additional measures to ensure the surviving partner can assume ownership of assets without having to fight the matter in court or face an unexpected tax liability. If you are an unmarried couple looking to create an estate plan, here are some helpful tips to get you started.

The Difference Between Married and Unmarried Protections

Unmarried partners are not afforded the same legal benefits and protections as married spouses. An unmarried partner may not be eligible to receive corporate pensions or Social Security survivor's benefits, making safeguarding other benefits all the more important. Similarly, unmarried partners may not be able to make certain decisions if their partner becomes incapacitated. The good news is you can address all these concerns with a solid estate plan.

Trusts

Trusts are useful for unmarried couples hoping to eliminate the potential for family members to challenge a will. An individual can place his or her assets in the trust during their lifetime or name the trust as a beneficiary and provide instructions for what will happen if that person dies. Naming the partner as a successor trustee of the trust will allow that person to be in control of managing the trust, and trusts can typically withstand the rigors of the probate court in case a family member challenges the trust terms.

Retirement Accounts and Life Insurance Policies

It will take careful planning to ensure your retirement account goes to your partner without burdening him or her with unnecessary taxes. Make sure you name your partner as a formal beneficiary on any retirement accounts or life insurance policies. Your beneficiary will take precedence over your will, so it's a viable form of protection. If you fail to do this, the account could end up in the wrong hands.

Unfortunately, some company plans do not allow surviving unmarried partners to roll over 401(k) accounts into IRAs. Instead, some may force the surviving partner to take the funds in one lump sum, generally making it subject to taxes. If you have an IRA, however, you can name your partner as a beneficiary, so he or she does not have to take the funds as a lump sum and pay taxes on it. Also, check with your account manager to learn about your options.

Wills

Trusts are a more secure estate planning tool if you want to pass on significant assets to your partner, but they do cost some money upfront to establish. If you prefer to simply create a will, know that wills are frequently challenged in court. And, your unmarried partner will lack some of the built-in benefits married spouses enjoy. This makes leaving only a will risky if you want your wishes to be respected. Don't rely solely on a will, but do consider the things a will can do for you, such as set forth detailed instructions on how you want your personal belongings to be handled and funerary preferences.

Estate Planning for Unmarried Couples

Estate planning is important for all couples, married or unmarried. For some, it's a difficult task to undertake, although the potential benefits can be enormous. If you die without an estate plan in place, your estate could end up in probate court. In the end, your partner may not benefit from your estate the way you would have wanted them to. For peace of mind, speak with a California estate planning attorney to get started on your estate plan. An experienced estate planning attorney can help you devise a plan that will provide your partner the same benefits and protections as a married spouse by using a variety of estate planning tools and ensuring all paperwork is properly filled out to make your afterlife wishes clear and enforceable.

Are you ready to start your estate planning? Fresno area estate planning attorney Christopher Martens can help you carefully plan your estate to preserve wealth and protect your loved ones' interests. Attorney Christopher Martens has the skills and knowledge needed to help you ensure your wishes are carried out properly. Serving the Visalia and Fresno areas, The Law Offices of Christopher Martens can provide strategic estate planning guidance. Call our office at 559-967-7386 or email us at [email protected] for a free consultation.