Statistics show there are an increasing number of older individuals who are divorcing later on in life. There is also an increasing number of individuals who are discovering that living together as an unmarried couple has its advantages.
According to the United States Census Bureau, the number of unmarried individuals who are older than 50 even increased by 75% between 2007 and 2016.
Unfortunately, however, living together as an unmarried couple creates a number of unique estate planning challenges. This article reviews some of these hurdles.
Addressing Problems involving Imbalances in Money
In a number of relationships involving unmarried couples who live together, one spouse makes substantially more than another. Unfortunately, this often means that if an older individual becomes incapacitated or passes away without the adequate estate planning documents, the individual who makes less can suddenly end up facing challenges.
Difficulties with finances, however, is not the only challenge that can arise. In these situations, courts frequently rely on blood relatives to make medical and financial decisions if a person becomes incapaciated.
The Role of HIPAA Releases
Unmarried couples must make sure that HIPAA releases are signed by both individuals. HIPAA is a federal privacy law that prohibits medical facilities from disclosing details about a person’s condition.
Unmarried couples who live together should make sure that they have signed copies of HIPAA release forms and that they are up to date. Additional documents like healthcare power of attorney and financial power of attorney are also worth considering. This way if one of the partners becomes incapacitated, the other partner will be able to make important decisions about the care the incapaciated individual receives and how their assets are handled.
The Importance of Creating a WIll
If an unmarried couple lives together, does not create wills, and one of the individuals dies, the state of New York will distribute assets in accordance to pre-established state intestacy laws. As a result, an individual will not be entitled to inherit any of these assets. Instead, assets will be distributed to the deceased person’s relatives. In contrast, if a married individual dies without a will, the surviving spouse is entitled to a certain amount of assets under the terms of intestacy law.
Resolving Issues with the Couple’s Home
It is critical that unmarried couples who live together make sure that each spouse has a right to remain in the residence if one of the individuals passes away.
The best way to do this is to make sure that ownership of the property is appropriately transferred in a person’s will or trust.
Handling Issues with Retirement Accounts
If an unmarried individual owns assets like a 401(k) or an employer-sponsored life insurance policy, the other individual will not be legally entitled to receive these assets unless the other person in the couple was designated as a beneficiary. Otherwise, assets located in retirement accounts will transfer to a person’s deceased blood relatives.
Contact a Skilled Estate Planning Lawyer
If you are an unmarried couples who lives together, it can help to speak with a knowledgeable estate planning attorney. Contact Ettinger Estate Planning today to schedule a free initial consultation.