Estate planning for those who are not married

Sep 7, 2021 | Estate Planning

What happens to someone’s estate when he or she is not married? Those who have remained unmarried might feel as though they do not need to worry about estate planning at all, especially since discussions on the matter tend to focus on people with spouses and children. While your needs as an unmarried individual might be different, they are just as important.There will still be some aspects of traditional estate planning advice that hold true. For example, it is still a good idea to create a will that disperses your property after death. However, you might want to prioritize documents that preserve your wishes during the end of your life.

Planning for end-of-life care

Like most people, you would like to live your last days in dignity according to your wishes. Without a spouse or other clear family member to make decisions on your behalf, doctors might not have any guidance when it comes to providing you care. To ensure that medical staff can fulfill your wishes, you should create a:

  • Living will
  • Health care power of attorney
  • Document naming those allowed to visit

The living will should outline your medical care wishes, especially when it comes to life-saving treatments. You should also create a health care power of attorney to accompany this document. This document names a trusted individual who can use your wishes outlined in your living will to make medical decisions on your behalf.

Keeping your finances in check

If you are in the hospital or otherwise incapacitated, maintaining your finances might be difficult or even impossible. This is where a financial power of attorney comes into play. The person named in a financial power of attorney can maintain your financial affairs in situations when you are unable to do so. This includes completing tasks, such as paying:

  • Mortgages
  • Hospital bills
  • Car loans

You should also take into account how you will pay for end-of-life or long-term care. It is not enough to hope that extended family members will take on the cost of such care. Incorporating long-term care insurance into your estate plan is a good option for most people.

Using a revocable trust

A revocable trust can be a great tool for anyone who is unmarried, has no children and is interested in protecting the distribution of assets after death. Property in a revocable trust will avoid probate, streamlining the distribution. This also makes it easier for surviving relatives who might have to otherwise deal with the time-consuming probate process.Everyone has their own unique estate planning needs. What works well for one person might not be suitable for another. Learning more about your own needs and how those fit into Colorado estate planning laws is often a vital step in planning for your future.

How Does Estate Planning Differ for Unmarried Individuals Compared to Married Couples?

Estate planning for unmarried individuals presents unique challenges compared to married couples. While married couples often benefit from the estate tax exemption and state laws that automatically transfer assets to the surviving spouse, unmarried partners don’t have these inherent protections. State laws vary, but many don’t recognize unmarried partners as heirs, meaning without proper planning, the surviving partner could be left with nothing.

What Are the Key Considerations for Unmarried Partners in Estate Planning?

Unmarried partners need to be proactive in their estate planning. One of the primary tools is a revocable living trust, which allows assets to bypass probate proceedings, a court process that can be lengthy and expensive. By placing assets in this trust, the successor trustee can distribute them according to the trust’s terms without court intervention.

Another crucial consideration is the estate tax. While married couples can transfer an unlimited amount to the surviving spouse without incurring estate taxes, unmarried partners don’t have this advantage. However, they can leverage the gift tax exemption to transfer assets during their lifetime, reducing the estate’s value and potential tax.

How Can Unmarried Individuals Ensure Their Partner Inherits Their Assets?

To ensure the surviving partner inherits, unmarried couples should consider joint ownership, specifically joint tenancy. Assets owned in joint tenancy automatically pass to the surviving joint tenant upon one partner’s death. Beneficiary designations on retirement accounts, mutual funds, and bank accounts should also be updated to reflect the unmarried partner as the primary beneficiary.

A durable power of attorney and health care proxy are essential legal documents that allow one partner to make financial decisions and medical decisions, respectively, on behalf of the other if incapacitated.

Consulting with an estate planning attorney can help. They can provide tailored estate planning tips, taking into account domestic partnership or common law marriage provisions in specific states, ensuring both partners are protected and their wishes honored.

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