Unmarried Couples

If you’re in an unmarried couple, you’ll probably have many of the same estate planning objectives as married couples. For example, each of you will probably want to provide immediate help for your partner if you die, possibly through life insurance. Depending on what assets you have, you may want a revocable trust with a pourover will, just as married couples do.

Whether you use a will or a trust, you’ll have to figure out what will happen to your bank account, to your partner’s bank account, to a joint bank account, and other property should one of you die. It’s especially important to make provision for property acquired while you and your partner have been living together. The real problems in cases like this are often expensive items of personal property: collectibles, art collections, furniture, and so on. If you don’t specifically include these items in your estate plan, and there are other relatives that the law presumes would take your estate under the law of intestacy, a court fight could ensue, with the survivor battling the legally presumed heirs of the dead partner.

Here’s a quick rundown of the most important documents that you’ll need.

• Wills. It’s especially important for unmarried partners to have wills because state intestacy laws presume that your blood relatives will inherit your property after you die, when in fact you may want your property to go to your partner

• Trusts. Unmarried partners may decide to use revocable trusts. These trusts can protect them in the event of disability, avoid probate, and enable assets to go to chosen beneficiaries. Each partner might set up a separate living trust for his or her separate property, and possibly a third one for shared property. Each individual trust can be used to make gifts for friends or relatives of each partner. The shared trust can leave property to the couple’s mutual friends, as well as to the surviving part.

  You don’t need a lot of money to have a living trust. They serve smaller estates just as well.

• Cohabitation or domestic partnership agreements. Cohabitation agreements, which can cover a wide range of topics, are also worth considering. To deal with each partner’s possible disability, for example, cohabitation agreements often contain mutual powers of attorney that enable partners to act on each other’s behalf. However, as with giving anyone power of attorney, you should carefully consider the consequences of giving anyone the legal power to act on your behalf. (See below and chapter 14.)

• Durable powers of attorney, which are usually used for business transactions, enable the other person to spend your money, sign your name to binding documents, and so on. Many unmarried people might want their partners to have this kind of authority if they should become disabled by age, injury or disease, but not when they are in full possession of their faculties. If you don’t want your partner to have all this power (and you may not if the relationship is tenuous), have your lawyer write the power of attorney so it is springing; that is, that it takes effect only when you have been certified incompetent by your physician. But make sure your state’s law allows this.

  And be warned that some attorneys don’t like springing powers, reasoning that if you don’t trust the person you appoint, you should not appoint him or her in the first place. Moreover, there are circumstances in which it might be hard to determine incompetence, or where the incompetence is intermittent. There could even be situations where the ill person is out of the country and hard to diagnose, or is simply missing.

  One possible solution to these problems may be to appoint co-agents, on the theory that one provides a check on the other’s exercise of discretion.

A Trust Might Be Better: Because of the difficulty of determining incompetence under a springing power of attorneys, many lawyers prefer using a funded revocable trust as a method of planning for management of assets in the event of disability.> Of course, there may be a similar problem of determining when you (the trustee) have become incompetent and the successor or co-trustee should step in to replace you. But the trust instrument (document) may provide that you are deemed to have resigned only when there is certification of your disability, or it may authorized the co-trustee or successor trustee to act on his or her own certification.

• Health Care Power of Attorney.A health care power of attorney allows your significant other to make medical decisions if you should become incapacitated, but doesn’t provide him or her control over your bank account and other non-medical affairs. Or, as an alternative, you can execute a living will specifying treatments that you want or don’t want, and not authorize someone to make health care decisions for you.

• Guardianships or conservatorships. A cohabitation agreement might also provide for mutual guardianships, so that if one partner becomes disabled, the other can take care of him or her. This is especially important if one partner’s family doesn’t accept the validity of the alternative lifestyle. Without an agreement, should you become disabled, the courts can appoint a guardian. They will often lean to a family member over someone with no legal status.

• Contract to make a will. You can change your will at any time. But each partner in a married couple is somewhat protected against sudden, capricious changes of mind by state laws that allow spouses to take against the will—that is, to receive a percentage of the deceased spouse’s estate, regardless of what the will says. The law doesn’t yet extend this sort of protection to unmarried partners.
  
  Suppose you’re putting your partner through medical school, and you stand to inherit a lot of her property. After making such a sacrifice, you don’t want her to change her mind without your knowing it and rewrite her will leaving her property to someone else.
  
  To prevent this, you might, as part of your cohabitation agreement, execute a contract to make a will, which legally binds both of you to its terms. The contract can only be changed by attacking the contract in court, a much more difficult procedure than rewriting a will. Usually, these contracts contain a provision that dissolves them when the partners agree in writing that the relationship is over. These contracts might also provide that the wills of both parties be kept at the lawyer’s office, and that neither can obtain access to them without the other being present. Obviously, these documents should be custom-tailored to the particular concerns and circumstances of each relationship, and require a lawyer to do them right.

When It’s Over

The law frequently revokes wills (and sometimes other documents) when a couple’s marriage ends. It doesn’t provide such a fail-safe for the wills of non-married partners, or their cohabitation agreements, contracts to make a will, etc. You can write into the cohabitation agreement or a contract to make a will a provision that alters the will and other documents if the parties agree that the relationship is over. If you don’t, you must remember to deal with these documents should the relationship dissolve.

In any event, you should certainly rewrite your estate plan when this happens, as with any other major life change.