Estate Planning Challenges Faced by Unmarried Couples

Estate planning is a critical aspect of financial and personal security. It ensures that an individual’s wishes are honored and their loved ones are protected. Taking this into account, for unmarried couples, estate planning presents unique challenges that can complicate the process. Unmarried partners do not enjoy certain legal protections and benefits by default that their married counterparts do.

A reputable estate planning attorney can draft essential documents such as wills, health care proxies, and durable powers of attorney to ensure that each partner’s wishes are legally recognized.

Legal Recognition and Inheritance Rights

One of the primary challenges unmarried couples face is the lack of legal recognition. In many jurisdictions, the law does not automatically recognize unmarried partners as legal heirs. This means that if one partner dies without a will, the surviving partner may not inherit any of the deceased partner’s assets. Instead, the estate may be distributed according to intestacy laws, which typically favor biological relatives over partners.

Solution: Create a Will

To ensure that assets are distributed according to their wishes, unmarried couples should create a will. A will allows individuals to specify who will receive their property, money, and other assets upon their death. Without a will, the state’s default rules will apply, potentially leaving the surviving partner without support.

Health Care and Medical Decisions

Married couples are often automatically granted the legal authority to make medical decisions for each other in the event of incapacitation. Unmarried couples do not have this automatic right, which can lead to significant challenges during medical emergencies.

Solution: Health Care Proxy and Durable Power of Attorney

Unmarried partners should execute a health care proxy (or medical power of attorney) and a durable power of attorney. These documents designate each other as the decision-makers for medical and financial matters. This can ensure that wishes get respected if one partner becomes incapacitated.

Property Ownership

Joint ownership of property can be more complex for unmarried couples. Without proper planning, the surviving partner may not automatically inherit the deceased partner’s share of jointly owned property. This can lead to legal disputes with the deceased partner’s family.

Solution: Joint Tenancy with Right of Survivorship

Unmarried couples should consider holding property as joint tenants with the right of survivorship (JTWROS). This arrangement ensures that if one partner dies, the other automatically inherits their share. 

Retirement Accounts and Beneficiary Designations

Beneficiary designations on retirement accounts, life insurance policies, and other financial accounts are essential for unmarried couples. If these designations are not updated to reflect the current partner, the assets may go to a former spouse or biological relative by default.

Solution: Update Beneficiary Designations

Regularly review and update beneficiary designations on all financial accounts to ensure they reflect your current wishes. This simple step can prevent assets from unintentionally going to the wrong person.

Estate Taxes

Unmarried couples do not benefit from the same estate tax exemptions available to married couples. This can result in significant tax liabilities for the surviving partner.

Solution: Estate Planning Strategies

Consult with an estate planning attorney to explore strategies for minimizing estate taxes. This may be done by making charitable donations or gifting assets during the partners’ lifetimes.

Access to Digital Assets

In today’s digital age, managing digital assets such as social media accounts, online banking, and email accounts can be complicated. Without proper authorization, the surviving partner may have difficulty accessing these accounts.

Solution: Digital Estate Plan

You should create a digital estate plan that includes a list of digital assets and login information, along with written authorization granting your partner access to these accounts. This can be included as part of a comprehensive estate plan.

Guardianship of Minor Children

For unmarried couples with children, the issue of guardianship can be particularly challenging. If one partner passes away, the surviving partner may not automatically gain custody of the children, especially if they are not the biological or legally adoptive parent.

Solution: Nominate a Guardian in a Will

Unmarried couples should nominate each other as the guardian of their minor children in their wills. This legal step can provide your partner with custody of your children and allow them to continue to care for them.

How Can an Attorney-Drafted Estate Plan Help Unmarried Partners?

Establishing Legal Authority

Attorneys can help unmarried couples establish legal authority for making decisions on behalf of each other. This includes preparing health care proxies and durable powers of attorney, which grant the partner the right to make medical and financial decisions if one becomes incapacitated.

Dispute Prevention

Clear, legally binding documents can prevent disputes with biological family members over inheritance and decision-making. Your lawyer can make sure that all documents are properly drafted and executed to minimize the risk of conflict and legal battles.

Minimizing Estate Taxes

Unmarried couples do not benefit from the same estate tax exemptions as married couples. An experienced estate planning lawyer can develop strategies to minimize estate taxes. For instance, asset gifting and charitable donations over your lifetime can help reduce the overall tax burden.

Protect Your Legacy Together with Forever Estate Plan

Are you and your partner ready to protect your well-earned assets and secure your future? The Forever Estate Plan offers a unique kind of flexibility to address the needs of unmarried couples. This plan can be customized to work the way you intend it to in all 50 states. Our estate planning process is built to provide peace of mind and legal security. To know more, call us at (803) 792-0793 or fill out this online contact form.