Estate Planning for People Living Together, Bachelors, and Bachelorettes.
Approximately half of America’s population over the age of 16 is unmarried; therefore, it is important that a single person have a well-coordinated estate plan.
The default laws governing estates may not adequately provide for a significant other or unmarried partner. Having a cohesive and well-drafted estate plan will ensure that you protect and provide for those you truly care about upon your death.
Evolving Estate Planning
We know that life is constantly changing and that you may eventually experience life changes like getting married, having children, or buying your first home that will necessitate changes to your estate plan. It is important to understand that your estate plan can change over time.
If you die without a will, referred to as intestate, all of your possessions will be distributed according to the default laws of your state. Generally, state law provides that a single person’s assets are passed on to their next of kin (biological relative). This includes children, parents, and siblings; and, if there are no surviving close relatives, the assets will likely go to the state. Noticeably absent for many unmarried people are provisions providing for a long-term boyfriend or girlfriend.
To avoid the state dictating what happens to your assets, it is vital that you have a properly drafted estate plan put together.
As an Unmarried Person, How You Own Things Is Very Important
There is an increasing number of couples that are not getting married, and other individuals who are deciding to remain single. For this group, estate planning is important because taxes and other financial benefits tend to favor those who have tied the knot. It also brings up the need to be very careful about how assets are titled.
How your assets are titled and how the beneficiary designations are prepared will impact how your assets will be distributed upon your passing. The most common ways to hold title to property is tenants in common (TIC) and joint tenants with rights of survivorship (JTWROS).
Property that is held as TIC means that each owner owns an interest in the property. At the death of one owner, that interest is transferred according to his or her estate plan, or intestate succession if there is no estate planning. This is not an ideal way for unmarried couples to own property because at the death of one of them, the other person will end up as joint owner with the deceased’s next of kin.
JTWROS is one option for unmarried couples because when one owner dies, the property automatically transfers to the surviving owner.
There are several other planning strategies that can be beneficial for unmarried individuals -- involving tax benefits, retirement plans, wills and trusts, and healthcare powers of attorney -- if the right estate plan is carefully crafted.
Speak to an Estate Planning Attorney
If you do not have an estate plan yet, you should contact a knowledgeable estate planning attorney today. Whether you are married, single, or cohabiting with a partner, these professionals can help you craft a comprehensive financial plan that is tailored to your personal situation and assists you in protecting those you care for the most. Give us a call today so we can help.