Estate Planning For Unmarried Partners
It may be more important than you realize!
The concepts discussed here apply to all unmarried couples, including gay, lesbian, and heterosexual.
What if I do nothing?
According to California law, if you die without a will or other estate planning device, your assets will be distributed strictly to your family members, while your partner will receive nothing. It does not matter how important the relationship with your partner was, or how long-standing.
In order to ensure that certain property will actually be received by your partner, you must use a will, living trust, or joint tenancy. It is unwise to assume that because you lived together, that will be enough proof of your intent and therefore your partner will be able to inherit your assets. You must have an estate plan.
A will is a document in which you identify to whom your property shall be given after you die. Through a will, you can leave your property to anyone you choose, in whatever proportions you choose, including leaving everything to your partner. If you have minor children, you can name a guardian for them in the will. There will be a court process called probate during which the court confirms the inventory and oversees the distribution of assets. The court probate process, however, can be expensive and time-consuming.
A living trust is a good way to avoid the expense and delay of probate while still ensuring the transfer of your assets to your partner after death. In the living trust document, you name the person(s) who shall receive your assets and you appoint someone who will apportion the trust assets after you die. After signing the living trust document, you continue to own and fully control all of your assets. A living trust permits the smooth, inexpensive transfer of assets after death, without the court-supervised probate process. It makes it easier for your partner and for your family.
Owning assets in joint tenancy can also be a useful way to transfer property to your partner. When one joint tenant dies, the remaining joint tenants automatically own the entire asset. For example, if you own a house in joint tenancy with your partner, when you die your partner will own the entire house. One drawback is that by putting an asset owned by you into joint tenancy with your partner, you are making a gift to him or her right now. If you want or need that asset back later, you may not be able to get it back.
A will can, and frequently is, contested by the family of the decedent (deceased person), especially if they have not come to terms with the decedent's choices during life. In addition, a will is public. Anyone can go to the courthouse and see your will after you die.
A living trust is much less open to challenge than a will. Courts are less likely to overturn it since you put the living trust into place and lived with it during your lifetime. In addition, a living trust is private. Even after you die, no one except the beneficiary has the right to know how you allocated your assets.
Through a document called a Durable Power of Attorney (DPA), you can appoint your partner to act as your agent, with authority to make certain decisions for you. The DPA goes into effect only if you become legally incapacitated, which must be certified in writing by your doctor. Then, your agent will step in and perform the actions which you have outlined in the DPA. Examples of actions you may authorize your agent to perform are: making your mortgage payments, collecting money due to you and depositing it in your bank account, paying bills, and even keeping your business running. The DPA can be drafted to include as many or as few different transactions as you wish.
If you do not prepare and sign a Durable Power of Attorney, someone will have to petition in court to be appointed as your agent. This can be expensive, time-consuming, and distressing to all involved, especially if there is a conflict between your partner and a family member.
There is another Power of Attorney, called the Durable Power of Attorney for Health Care (DPAHC), in which you appoint an agent to make health care decisions for you if you become incapacitated. This is an especially important document. There was a recent case in which a woman was severely injured in a car accident and she had not signed a DPAHC. Her parents successfully petitioned the court to be appointed as her health care agents, and to exclude her female partner. After that, while she was in the hospital and during her subsequent long incapacity, her partner was not permitted to care for her or even talk with her. Had she signed a DPAHC, her long-time companion could have made medical decisions for her, visited her in the Intensive Care Unit, taken care of her, and been by her side during the long ordeal.
What should I do?
For anyone in an unmarried partnership, it is important to have some form of estate planning in order to avoid disinheriting your partner. If you do not have an appropriate plan in place, state law will take over, your assets will be distributed according to a "one-way-fits-all" system, and your partner will receive nothing.
An estate planning attorney can help you put the documents into place, including the DPA and DPAHC, which will protect you during life and enable your partner to have meaningful participation in case of emergency.
Deborah A. Malkin
Offering complimentary initial consultation to discuss creating a will or trust.
About Deborah Malkin
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