Plenty of people live together in committed relationships without getting married. The reasons vary widely. Some people say they “don’t need a piece of paper” to feel married, and that may be true. But whatever your reason for not marrying, the absence of certain pieces of paper can leave you, or your partner, in pretty dire straits. If marriage isn’t on your to-do list, but you want to protect your partner in the event of a tragedy, you need to take action. Here are the top three things you can do to protect your unmarried partner.
Let’s start with a hypothetical situation. Lee and Chris have been romantically involved for seven years, and living together for five. They are committed to each other, but for their own reasons, neither is in a rush to get married.
During the time they’ve been together, they’ve accumulated both joint assets (a couple of cars, home furnishings, and some cash) and joint debt (car loans, credit card debt). They live together in a condo Lee purchased shortly before they met. Then, disaster strikes. Lee is killed in a car accident.
If they had been married, Chris would have inherited everything or almost everything. Chris would have had to deal with their joint debt alone, but would have had their joint assets with which to do it. As things stand, however, without an estate plan, Chris has no legal right to inherit from Lee. Lee’s biological relatives would inherit Lee’s condo and other assets. Chris would have no right to stay in their home, and would be saddled with the debt taken out in their own name, or jointly with Lee.
That is the only way to make sure an unmarried partner inherits from you when you die. A will may be sufficient, depending on the circumstances, but talk to an estate-planning attorney to see if a living trust would better suit your purposes.
If you and your partner want to avoid a scenario like this, you must create an estate plan. That is the only way to make sure an unmarried partner inherits from you when you die. A will may be sufficient, depending on the circumstances, but talk to an estate-planning attorney to see if a living trust would better suit your purposes.
Now imagine that Lee didn’t die, but instead was in a coma following the accident. Lee had always told Chris that they didn’t want to exist in a persistent vegetative state, but that is exactly what is happening. Chris knows that Lee would want life support withdrawn, but Lee’s parents (who have never liked Chris) refuse any such idea.
In the meantime, bills are piling up. Lee was the primary breadwinner, and money for most of the bills came out of Lee’s bank account. But Chris can’t access Lee’s account, and doesn’t have enough money to pay the bills that are coming due.
This is another nightmare scenario, also avoidable through estate planning. If Lee and Chris had executed financial and medical powers of attorney, each naming the other as agent, this scenario could look a lot different. A durable financial power of attorney would allow Chris to manage Lee's finances, including accessing bank accounts and paying bills. A durable medical power of attorney, also called a Patient Advocate Designation, would have given Chris the legal authority to make medical decisions on Lee's behalf, in accordance with the wishes Lee expressed to Chris or in a written document.
A third thing unmarried couples can do to ensure some financial protection for each other is to review and update their beneficiary designations. These include life insurance beneficiaries, of course, but don't overlook other assets, like retirement accounts. Most retirement plans allow you to identify a beneficiary to receive the assets in the account upon your death. These assets can then pass, outside of probate, to your intended beneficiary. If no beneficiary is named, the asset will go to your next of kin, who may or may not be the person you intend to receive it.
While beneficiary designations are useful, they are not a substitute for a more comprehensive estate plan. If you are in a committed relationship outside of marriage, you need to speak with an experienced estate-planning attorney so that you and your partner will have the protection, and the peace of mind, you deserve.