The number of Americans choosing to cohabitate in lieu of marriage is steadily increasing. While nontraditional approaches to relationships are becoming more common, the importance of traditional measures related to comprehensive estate planning remain just as important. In fact, for couples that cohabitate without entering a traditional marriage, comprehensive estate planning can be an integral part of ensuring your partner’s financial security and preserving assets the way you want. The National Law Review recently published an article highlighting the importance of estate planning for cohabitating couples and while the following important information is not an exhaustive list of considerations, it is a place for cohabitating couples to begin when approaching estate planning.
If the home you share with your partner is not in both of your names, you are likely to run into complications if they pass away. Without a traditional marriage, intestate succession will not work in your favor when it comes to property. Without a Will in place that specifically leaves that home to you, you would need to vacate the home after the title holder’s death or purchase the home for fair market value. Neither of these scenarios are ideal, and they are likely contrary to the plans you and your partner had for any property you own in the event of one of your deaths.
Distribution of Assets
Individuals that cohabitate typically share a variety of assets, from clothes to cars and everything in between. The same issue these couples can face when it comes to property also arises with these assets. Without a valid Will, all assets in your estate that are eligible for probate will pass through intestate succession. This means the court will distribute them based on your state’s intestate succession law, so even if you and your partner share these things they may end up going to someone else. It is also important to remember that non-probate assets, like life insurance and retirement accounts, often require the nomination of a beneficiary. Updating these assets to reflect the nature of your cohabitation is an extremely important part of estate planning.
Absent a valid power of attorney or similar directive, your partner may not be able to make important medical decisions on your behalf if you are unmarried. These estate planning tools help enable you to nominate an individual to make important decisions regarding your healthcare – and finances, too – in case you are no longer able to do so for yourself. Sadly, these situations arise more than you might think. Even healthy, young individuals can experience devastating accidents and medical problems that require important medical decisions be made, and leaving those decisions to your next of kin could contradict the plans you have discussed with your partner in the event of such occurrences. Important topics to consider include organ donation, burial arrangements, the use of life sustaining equipment (life support), and religious concerns.
Plan Sooner Rather Than Later
It is never too early to start engaging in comprehensive estate planning. For many couples that cohabitate outside of a traditional marriage, the conversation about estate planning starts at home. Not only is it important to explore these issues with your partner, but you also need to include your families in the discussion. Make sure your family members are aware of your wishes when it comes to important decisions, and consider adding a “no contest clause” in your Will should you feel any family members may wish to contest your estate plans. It is also important to work with an experienced estate planning attorney that understands the issues facing cohabitating couples that can help you navigate often-confusing and rapidly changing law related to estate planning. Attorneys that focus their practice on comprehensive estate planning can help you understand the many options that might be available to you in order to help you choose the right mechanisms to accomplish your estate planning goals.