Why Estate Planning is important for Unmarried?
Estate planning is essential if you have a life partner but no marriage (or civil union) or domestic partnership certificate. Without it, neither of you will be able to inherit from the other and neither of you will be able to influence how they are treated when they are near death.
State law will determine what happens to your solely held property after your death if you pass away without a valid Will, and it would not go to an unmarried partner. Instead, if you do not have any children, your parents and other close family members would inherit.Unmarried partners are not protected by any legislation. Your partner can be excluded from the decision-making process and the bequest without a sound estate plan. Similarly, if you become incapacitated, only your spouse or someone you've named in a legitimate power of attorney is permitted to make medical decisions on your behalf.
Last Wills and Testaments
Last Will and Testament are one of the most important estate planning papers. If you own property that is important to you, you should make a Last Will so that you can leave it to the people or organizations of your choice, such as your partner, close friends, or charity organizations. In the absence of a Will and in the absence of children, your state's rules are likely to direct a large portion of your estate for your parents or siblings.
People who have Wills can live stress-free lives knowing that their loved ones will be taken care of once they pass away. People ensure the security of their hard-earned estate with the aid of a Will.
Appointing a Guardian for your minor children can also be addressed by creating a Last Will.
A guardian will not be required unless both parents are unable to care for the children, therefore if you are both the children's legal parents, you should choose someone else as their personal guardian. If just one of you is a legal parent, name the other partner as the guardian of your children.
Try TrulyWill for Free to make your Last Will and Testament online within a few minutes.
You may also find your state-specific requirements for a Last Will and Testament in this article.
Living Trust
A Living Trust gives the beneficiaries of your estate quick access to your assets, which may be beneficial if your child is still a minor. Trusts avoid the probate procedure, enabling a reliable and trusted adult to start financially supporting a single parent's kids right away.
The Use of Joint Revocable Trust for Unmarried Couples
A joint revocable trust, which is akin to the joint trust used by married couples in community property jurisdictions as their main estate planning document, is one option for unmarried couples who jointly own real estate. In most cases, the trust stipulates that while both spouses are still living, they are both beneficiaries of the trust and have equal authority to revoke and change it. When the first spouse passes away, the trust's assets are divided between the survivor and the deceased spouse, and the deceased spouse's assets are either maintained in additional trust or transferred in accordance with the deceased spouse's wishes (including tax planning).
The trust agreement typically stipulates that, upon the death of the survivor, the assets of the survivor (including those held in additional trust) will be distributed in accordance with the survivor's wishes. Each spouse signs a Pour-over Will designating the joint trust as the beneficiary of the estate, and the joint trust is the couple's primary estate planning document.
Read this article to know the benefits of a Living Trust.
Financial Power of Attorney and Medical Power of Attorney
You probably want your partner to take over and take care of you if you ever find yourself unable to manage your finances or your health care—due to an accident, a terrible illness, or advanced age. Unmarried couples cannot make financial or medical decisions for one another without written consent, unlike their married counterparts.
If you want to make sure that your partner continues to make important decisions, there are a few straightforward legal documents you should prepare. These are known as durable powers of attorney for financial and health care instructions. Without these documents, your partner can encounter significant difficulties stepping in for you in the event of an emergency or managing a straightforward financial transaction.
With a Financial power of attorney, you can designate a third party to handle your finances and property on your behalf. These duties could include paying your bills on time, depositing money in the bank, collecting insurance benefits, and more.
A Medical Power of Attorney (POA)/Healthcare Power of Attorney (HCPA) is a legal document like Living Will. A Healthcare Power of Attorney legally authorizes the third person who is trustable to give consent and directions regarding end-of-life or medical/critical care of the testator on his behalf.
Beneficiary Designations for Bank and Retirement Accounts
For a variety of reasons, you and your spouse might not want to share ownership of all your assets. And shared retirement accounts are not permitted. You'll therefore likely need further measures to ensure that any assets you own solely in your name pass to your spouse upon your passing.
These priceless assets, including some of your bank, investment, and retirement accounts, may not pass through your Will. Simply request a beneficiary designation form from the bank or account custodian and list the beneficiaries on it to ensure that the money goes to the person of your choice.
The process and the expense are simple. If you subsequently change your mind, you can simply complete and submit another form specifying a different person as a beneficiary.
HIPAA Authorization Waiver
The Health Insurance Portability and Accountability Act (HIPAA) is a Public law that aims to protect and do public welfare. As the Right to privacy is one of the fundamental rights, HIPAA prohibits sharing your medical information with anyone not directly affected by said information. Therefore, if you become mentally incapacitated and cannot make important health decisions on your own, your loved ones may not be able to access important information regarding your condition.
As an unmarried, sharing information about your condition can be essential to your health. The HIPAA authorization waiver allows single parents to create a list of people they authorize to access this information to help their medical team make the appropriate decisions for their care and even their children’s care if needed.
