If you are not married to your partner, each of you should make sure to craft a thorough estate plan to provide for the other in the event of death or incapacity. Otherwise, your partner or you will not receive anything if the other dies. The rules of intestate succession provide that an individual’s property is distributed among their closest relatives if they die without a will.
Making a will allows you to leave assets to your partner and also name a guardian for any young children. If neither parent is available to raise a child, a court will appoint a guardian. It generally will honor the choice of the parents unless this appears to be a serious mistake. In the event that your partner is not a legal parent of a child, you can name them as the guardian and attach a letter to your will to explain why this is the right choice. (If the child’s other legal parent is still alive and available, however, their rights probably will trump your partner’s rights.)
Many people who accumulate significant assets choose to create a trust later in life. This can replace or complement a will. A trust contains the same assets that a will would convey, and it allows the beneficiaries of the trust to avoid probate, which is required for a will. Some trusts are revocable, while others are irrevocable, so you should think about whether you want to retain the ability to change your decision later. Trusts that are designed to benefit unmarried partners are no different from trusts designed for spouses, children, or other relatives.
Living Wills and Durable Powers of Attorney
In the event that you become incapacitated, you likely will want your partner to have authority over financial and medical matters affecting you. A health care power of attorney and a living will will allow your partner to handle medical decisions and make sure that your wishes for end-of-life care are respected. Meanwhile, a financial power of attorney will give your partner control over your assets if you are incapacitated. This can allow them to keep up with a shared mortgage or other expenses without going to court for a hearing on whether you are incapacitated and whether your partner is the appropriate person to make these decisions for you.
Establishing Joint Ownership of Assets
In addition to making estate planning documents, you can adjust your ownership of certain valuable types of property to be held in a joint tenancy with a right of survivorship. Thus, your partner or you will automatically inherit these assets in their entirety when one of you dies. This is usually a simple matter of putting both names on the title document of the asset, such as the deed to a house.
Bank Accounts, Investment Accounts, and Retirement Accounts
Certain types of property cannot be transferred through your will. This may be comforting in some ways because it means that intestate succession rules do not apply. However, you may want to make sure to designate your partner as the beneficiary of the funds in these accounts. This involves getting a beneficiary designation form from the entity in charge of the account and putting your partner’s name on the form. As with wills, these forms can be changed at any time.