A growing number of American adults are choosing to cohabitate instead of getting married. Their reasons for cohabitation range from financial need to “been there, done that.” Some unmarried couples believe they do not need an estate plan because do not have kids together. However, there are several reasons why committed unmarried couples should consider estate planning together.
One reason to consider estate planning is the ability to appoint each other to make major medical decisions. A document called a healthcare power of attorney is considered one of the most important estate planning documents. In a healthcare power of attorney, a person can appoint other individuals to make medical decisions when that person is unable to communicate choices for medical care. Often without this document in place, an unmarried partner will not be allowed to make any healthcare decisions when the other partner is hospitalized. Instead, to gain the right to make medical decisions for an incapacitated loved one, the unmarried partner could face costly guardianship proceedings in court. Executing a healthcare power of attorney could resolve some of the stress that comes with caring for a loved one in a medical setting.
If unmarried couples reside in the same home, estate planning could be important in ensuring that the real property passes to the surviving partner. For example, consider a scenario where both individuals paid half the costs to purchase a home, but the home was actually titled in only one partner’s name because that partner had a better credit score. If the homeowner partner died without a will, the house would not transfer to the surviving partner. Instead, the home would pass to relatives of the deceased partner under North Carolina intestacy laws. Having a will in place could ensure that the surviving partner receives title in the home after the other partner died or at least have the right to continue to reside there. A will would similarly ensure that other assets in the estate passed along to specific people instead of the individuals outlined in intestacy laws.
Marital Status takes on more meaning if a senior couple is contemplating planning for long-term care costs or even applying for certain benefits like Veterans’ Aid and Attendance or when determining eligibility for certain benefits like Medicaid. Unmarried seniors may also want to consider whether revocable living trusts are beneficial to ensure that both a partner as well as children from previous relationships will be taken care of upon death. A trust could ensure that an unmarried partner would be able to continue to reside in the pair’s residence, with use of their combined furnishings and household goods, while still ensuring that the first to die’s wishes are met regarding distribution of assets to children or other decendents.
The best way to ensure unmarried partners will be taken care of during the incapacity or death of the other partner is to talk to an estate planning attorney for recommendations.