Unmarried couples do not enjoy all the legal protections afforded by marriage; however, many of these protections can be captured through a well-drafted estate plan that contains at a minimum the following four components:
Will or Trust
Creating a will or trust allows you to designate who will receive your assets after you pass away. You can name your partner as the sole beneficiary in your will or trust or you can designate only certain assets to be distributed to your partner. Specifically naming your partner in your will or trust allows your partner to inherit any assets you designate. Without a will in place, your assets will be distributed to your heirs according to the intestate succession laws of Maryland. Your blood relatives will trump your partner. A non-family member, such as your partner, is not eligible to receive any assets from your estate during probate. The only way to ensure your partner inherits what you intend is to name him or her in your will or trust.
Many unmarried couples find the flexibility afforded under creating a revocable living trust better suits their situation than a simple will. With a revocable trust, you avoid probate and can write very specific terms about how your assets are managed and distributed both during your life and after you pass away.
Prepare a Durable Power of Attorney
Planning not only for death but incapacity is an important part of estate planning for unmarried couples. A durable power of attorney allows you to designate your partner as your agent and grant specific powers to assist in financial matters. The power of attorney only activates at such time you are deemed incapacitated. Upon activation, your partner, acting as your agent, can make important decisions and handle your legal and financial matters. When you pass away, the power of attorney expires. At that point, the executor of your estate picks up to handle all financial matters (which may still be your partner if you designated such in your will).
Prepare a Health Care Power of Attorney
Similar to the durable power of attorney, the healthcare power of attorney allows you to designate your partner to make medical decisions on your behalf at such time you are deemed incapacitated. If you do not have this document in place, the court will intervene and appoint a guardian. You have no say at that point who that guardian will be.
Cohabitation Agreements
It is also wise for unmarried couples to enter into a formal cohabitation agreement. These documents help safeguard your individual interests and assets by containing many of the same provisions found in premarital agreements. The main objective is to prevent or minimize conflict in the event of a future break up or death of a partner.
Beneficiary Designations
As with all comprehensive estate planning, you should also periodically review your beneficiary designations on all life insurance policies, retirement accounts, investment accounts and annuities to make sure they are accurate and up-to-date.
To get started on a comprehensive estate plan as an unmarried couple, contact the experienced estate planning attorneys at Stouffer Legal in the Greater Baltimore area. You can schedule an appointment by calling us at (443) 470-3599 or emailing us at office@stoufferlegal.com
