Category: Probate

Diverse Family Structures Have Unique Estate Planning Challenges

Diverse Family Structures Have Unique Estate Planning Challenges

American family law has traditionally focused on the nuclear family. However, Forbes reports that only 18% of American adults now fit this model. There are many new types of families today, such as blended families, single-parent households and LGBTQ+ families. Dated legal definitions of family could be a hurdle in your estate planning. Diverse family structures have unique estate planning challenges. However, it’s a hurdle you can overcome with knowledge and legal guidance.

Most legal protections and rights cater to the assumption that a family is a married couple with blood children. This alone creates obstacles for many families, even those that look traditional. Many heterosexual couples have children but haven’t yet married. This can deprive them of various rights and may exclude partners from inheritance.

Blended families with stepchildren also frequently struggle with inheritance. If the parents fail to lay out the rights of the children, it can go to a lengthy probate process. Likewise, the children of single parents face a uniquely uncertain future should their parents die unexpectedly. Another diverse family type that frequently struggles with family law is LGBTQ+ families. The rights of same-sex couples vary widely by state, which makes estate planning especially important for them.

These diverse families and more can find themselves underserved by laws that don’t have them in mind. However, that doesn’t mean that their wishes must go un-respected. There are many estate planning tools available that can help people clarify and execute their wishes once they’re gone.

Advanced estate planning techniques can give anyone greater control of their estate.  Everyone with a significant estate or minor children should have an estate plan. However, diverse families need to use these tools to safeguard their wishes.

  • Wills: A well-drafted will is Step One. It makes it far easier to ensure that your assets go to your inheritors as you wish.
  • Trusts: Trusts offer greater control over asset distribution while avoiding will-related pitfalls. Living trusts can be adjusted during one’s lifetime, while irrevocable trusts protect assets but are permanent.
  • Powers of attorney: Financial and healthcare powers of attorney let a trusted person decide if the primary individual is incapacitated.
  • Testamentary guardianship: Single-parent, blended families and same-sex couples should appoint guardians for minor children in their wills.
  • Beneficiary Designations: Designate the beneficiaries for life insurance, retirement and investment accounts. This ensures that the executor of your will transfers assets according to your wishes.

The evolving definition of family challenges conventional estate planning. Unmarried couples, blended families and other non-traditional arrangements often need tailored estate plans. However, untangling estate law on your own isn’t easy.

Diverse family structures have unique estate planning challenges. Schedule a consultation with an estate planning attorney, who will address local laws and your unique family structure, to craft a comprehensive estate plan. If you would like to learn more about planning for blended families, please visit our previous posts.

Reference: Forbes (April 2, 2024) How Expanding The Legal Definition Of Family Helps Us All

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Understanding Your Options and Responsibilities when Inheriting a House

Understanding Your Options and Responsibilities when Inheriting a House

Understanding your options and responsibilities is critical when inheriting a house, whether you sell it, keep it, or rent it out. Insights from LendingTree show you how to make the most of your inheritance. Inheriting a house can be a life-changing event with emotional and financial implications.

When inheriting a house, you don’t immediately receive the title in your name. The inheritance process involves probate, where a judge reviews the will and appoints an executor to carry out the deceased’s will. The executor handles responsibilities like insurance, identifying debts or liens and paying utilities. They also distribute belongings and manage property taxes. This ensures that the estate’s assets settle any outstanding debts before you receive ownership.

When you’re in line to inherit a home, there are five steps you should take immediately.

  1. Communicate with the Executor: Establish a clear line of communication with the executor. This will help you learn the necessary information and simplify the transfer process.
  2. Coordinate with Co-Heirs: Work with the others if you are one of several heirs. Avoid costly disputes by deciding whether to sell, keep, or rent the property.
  3. Get an Appraisal: An appraisal calculates the property’s value. This informs your decision to keep, sell, or rent the home while informing you of tax liabilities.
  4. Evaluate Debts: Identify any liens or debts tied to the property and compare them against the house’s value. Understand the financial implications and incorporate that into your decision.
  5. Seek Professional Advice: Consult estate planning attorneys, accountants and financial advisors. These professionals can clarify ownership-related problems, such as debt obligations and inheritance taxes.

Moving into the inherited house can provide a new residence or vacation home. However, this option can be costly due to mortgages, taxes, repairs and insurance. Renting out the property can provide passive income, while keeping it in the family. Buy out other heirs or work with them to share costs and rental income. Selling the house is a straightforward way to obtain immediate cash. The proceeds can help pay off debts tied to the house, and the remaining proceeds will go to the heirs.

If debts and taxes are associated with the house, that doesn’t mean you need to sell. There are many ways to finance the home and keep your inheritance.

  • Mortgage Assumption: Take over the existing mortgage if its terms are better than what you’d get with a new loan. The lender must approve the assumption.
  • New Purchase or Refinance Mortgage: You can obtain a new mortgage or refinance to put the house in your name. This option is particularly useful when the property has a reverse mortgage.Prop
  • Cash-Out Refinance: Refinance the mortgage with a cash-out option to tap into the home’s equity to cover expenses, like buying out heirs or making repairs.
  • Investment Property Loan: Mortgage an investment property if you plan to rent the house.

Key Takeaways:

  • Inheriting a House: The probate court oversees the inheritance process, and the executor handles legal and financial responsibilities.
  • Options: Move in, rent out, or sell the property based on financial goals and agreements with co-heirs.
  • Financing: Explore mortgage assumptions, new or refinanced mortgages and other financing options.

Understanding your options and responsibilities when inheriting a house requires legal, financial and practical knowledge. Consult with an experienced estate planning attorney as soon as you can. If you would like to learn more about inheriting property, please visit our previous posts. 

Reference: LendingTree (Nov. 16, 2021) “Inheriting a House? Here’s What to Expect”

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Updating Beneficiaries after Gray Divorce

Updating Beneficiaries after Gray Divorce

Navigating the complexities of estate planning after a mid- to late-life divorce, or “gray divorce,” requires meticulous attention to detail and proactive measures, according to Kiplinger’s article, Don’t Forget to Update Beneficiaries After a Gray Divorce. Updating beneficiaries after a gray divorce is critical to estate planning. This article explores essential considerations for those undergoing a gray divorce, emphasizing the importance of reevaluating estate plans to reflect current intentions and relationships.

While family law attorneys primarily focus on asset division during divorce proceedings, it’s imperative to consider the fate of these assets post-divorce, particularly concerning beneficiaries. Updating beneficiaries on investment accounts, retirement funds and life insurance policies is paramount. Failure to do so could result in unintended consequences, potentially leaving assets to a former spouse.

Many states have statutes that automatically revoke a former spouse as a beneficiary post-divorce. However, these laws vary, and some exceptions exist, notably under the Employee Retirement Income Security Act (ERISA) plans. Understanding the nuances of state laws and ERISA regulations is vital to ensure compliance and avoid costly mistakes.

In some divorces, waivers might be used in decrees to address survivorship benefits related to retirement plans. The effectiveness of these waivers relies on adherence to plan documents and detailed planning. Consulting with a knowledgeable estate planning attorney and incorporating specific language in property settlement agreements can mitigate risks and ensure comprehensive protection of assets.

Key Takeaways:

  • Proactive Approach: Do not wait until after your divorce is finalized to update your beneficiaries. Proactively review and revise beneficiary designations on all relevant accounts.
  • Understanding State Laws: Familiarize yourself with your state’s automatic revocation laws and how they affect beneficiary designations. Ensure that these laws align with your post-divorce intentions.
  • Consulting with Professionals: Consult with an experienced estate planning attorney to navigate the complexities of beneficiary updates and ensure compliance with state laws and ERISA regulations.
  • Detailed Planning: Use specific language in property settlement agreements to address survivorship benefits associated with retirement plans and other assets. Attention to detail is essential to avoid potential conflicts and ensure that your wishes are upheld.

In conclusion, updating beneficiaries after a gray divorce is critical to estate planning. By taking proactive measures, understanding relevant laws and seeking professional guidance, you can protect your assets and secure the financial future of your loved ones. Ready to embark on your post-divorce estate planning journey? Schedule a consultation today and gain peace of mind knowing that your assets are in trusted hands. If you would like to learn more about divorce and reevaluating your estate planning, please visit our previous posts. 

Reference: Kiplinger (April 15, 2024) Don’t Forget to Update Beneficiaries After a Gray Divorce

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Topics You need to Address before a Mid-Life Marriage

Topics You need to Address before a Mid-Life Marriage

Today’s wedding couple is as likely to be 30 or 50 years old as they are to be in their twenties. This trend underscores the importance of having open discussions about finances and retirement before exchanging vows. A recent article from Next Avenue, “The Talk Over-50s Should Have Before Tying the Knot.” Whether you’re getting married for the first time or the second, being closer to retirement has major financial implications. There are topics you need to address before a mid-life marriage.

The most important thing is to disclose each person’s financial situation completely. For some people, this includes their retirement goals and lifestyle choices. What are the potential healthcare issues? Is there debt to be considered? How are each managing their investments?

If both people own homes, a plan for going forward needs to ask a simple question: where will the couple live? Will one sell their home or turn it into a rental property? If it is sold, will the seller retain all the income, or will they buy into ownership of the joint residence? Emotional attachments to homes can make this a difficult discussion, but it needs to be addressed.

Getting married changes each spouse’s legal status, meaning estate plans must be updated. If both have an existing estate plan, it needs to be reviewed. Powers of Attorney, Healthcare Proxy, and other estate planning documents must also be updated.

While reviewing and revising estate plans, don’t neglect to check on any accounts with named beneficiaries. More than a few ex-spouses have received insurance proceeds or accounts because someone neglected to update these accounts. The named beneficiary overrides anything in your will, which is critical to updating the estate plan.

If you both have children from prior marriages, meeting with an estate planning attorney to determine how to manage property distribution is another critical step before getting married. You may wish to create and fund trusts before marriage, so assets remain separate property. There are as many different types of trusts as there are family situations, from keeping assets separate to providing for a surviving spouse while ensuring biological children receive their inheritance (SLAT), or family trusts where assets are moved into the trust for the surviving spouse to allocate assets to heirs based on their needs.

Social Security planning should also be part of the discussion. If one spouse is a widow who was receiving survivor benefits, they could lose those benefits when they get married.

Talk with an estate planning attorney to address these topics before a mid-life marriage. That way you fully understand your situation and ensure you and your spouse are ready for the changes and challenges of your senior years together. If you would like to learn more about mid-life or second marriages and estate planning, please visit our previous posts. 

Reference: Next Avenue (March 14, 2024) “The Talk Over-50s Should Have Before Tying the Knot”

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Estate Planning for Veterans and Active Military Is Important

Estate Planning for Veterans and Active Military Is Important

Your dedication to your country is unwavering as a veteran or active military service member. While you’re committed to your duty, you must protect yourself and your loved ones and preserve your legacy. Veterans and active military personnel can and should create an estate plan to match their unique needs. Based on Trust & Will’s article, “Estate Planning for Veterans & Active Military,” we look at why estate planning for veterans and active military personnel is so important.

Military life is marked by unpredictability and uncertainty for you and your family, making estate planning a vital aspect of preparing for the future. Many individuals have plans to distribute funds and appoint trusted loved ones to handle medical and financial matters if the unthinkable happens. Estate planning is essential to help provide for your loved ones if you pass away or are incapacitated. Knowing that your family will be cared for can give you peace of mind.

A will serves as a cornerstone of your estate plan, allowing you to:

  • Protect Your Family: Specify guardianship for minor children, ensuring they’re cared for by trusted individuals in your absence.
  • Distribute Assets Seamlessly: Designate beneficiaries and outline asset distribution instructions, including real estate, retirement and financial accounts, sentimental items, and other property.
  • Plan for the Unexpected: Outline your preferences for medical care and end-of-life decisions to prepare for unforeseen circumstances.

In the military, adaptability is critical, but so is ensuring your affairs are managed in your absence. Powers of Attorney enable you to:

  • Delegate Your Decisions: If you are incapacitated, designate trusted individuals to handle your legal, financial, and medical decisions.
  • Manage Your Affairs: Maintain continuity in managing assets, paying bills, and making critical decisions, even during deployments or periods of incapacity.
  • Mitigate Financial Risk: Protect against financial exploitation and past-due bills by appointing reliable agents to act in your best interests.

For military families, asset protection and efficient wealth transfer are paramount. Trusts offer a range of benefits, including:

  • Asset Preservation: Safeguard assets during incapacity or deployment, ensuring financial stability for your family.
  • Probate Avoidance: Streamline the distribution of assets to beneficiaries, bypassing the lengthy and costly probate process.
  • Tax Efficiency: Minimize estate taxes and maximize tax savings, preserving more of your hard-earned assets for future generations.

Your dedication and sacrifice are unmatched as a veteran or active military service member. That is why estate planning is so important for veterans and active military personnel. By prioritizing estate planning and including will, trust, and power of attorney strategies, you can protect your loved ones and preserve your legacy for generations. Consult with an experienced estate planning attorney for peace of mind. If you would like to learn more about planning for veterans, please visit our previous posts. 

Reference: Trust & Will “Estate Planning for Veterans & Active Military,”

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The Complexities of Co-Owning a Vacation Home

The Complexities of Co-Owning a Vacation Home

Dreaming of a vacation home you can escape to at any moment is wonderful. However, the reality of co-owning that slice of paradise with friends or family might be more complicated than you think, explains Better Homes and Garden’s article, “What You Need to Know Before You Buy a Vacation Home with Friends or Family.” Let’s dive into the complexities and considerations of co-owning a vacation home, inspired by insights from experts in the field.

Co-owning a vacation home often starts with a dream shared among friends or family. It’s an appealing idea, especially when the cost of owning a vacation spot on your own seems out of reach. The idea of pooling resources to afford a better, more luxurious property in a prime location is tempting. It promises a place to stay and a shared investment, potentially increasing in value over time.

The main attraction of co-owning is financial efficiency. You can access better properties in desirable locations without shouldering the entire financial burden alone. It allows more frequent visits to your favorite vacation spot and turns an otherwise unreachable dream into a tangible reality. Owning a property with others can also create deeper bonds and shared memories that last a lifetime.

However, with the benefits come significant risks and potential pitfalls. Co-ownership can lead to financial disputes, disagreements over property use, maintenance responsibilities and even conflicts about the property’s future. What happens if one owner wants out of their part of the property or if one owner passes away unexpectedly? What if personal circumstances change, affecting

Before jumping into co-ownership, having detailed conversations about every aspect of the property’s future is crucial. Discussing and agreeing on a budget, usage schedules, guests, pets and even decor can prevent misunderstandings down the line. It’s also wise to consider legal structures, like becoming tenants in common or forming an LLC, to manage the property, ensuring that all agreements are in writing to protect everyone involved.

Getting legal advice from an estate, real estate, or business attorney when considering purchasing joint-owned property is essential. A trusted attorney can help draft a comprehensive co-ownership contract with your friend or family member that outlines each owner’s rights, responsibilities, financial commitments and the procedures for resolving disputes or selling shares in the property. This agreement safeguards your financial interest in the vacation home, ensuring that it remains a source of joy rather than a cause of strife.

Co-owning a vacation home offers a unique opportunity to make your dream of a getaway spot a reality. However, it’s not without its challenges. By prioritizing open communication, financial clarity and professional legal advice, you can navigate the complexities of co-ownership. Remember, the goal is to create a space that enhances your life and relationships, not one that leads to unnecessary stress or conflict. Your estate planning attorney will help you fully grasp the complexities of co-owning a vacation home. If you are interested in learning more about managing real property in your estate plan, please visit our previous posts.

Reference: Better Homes and Gardens (June 29, 2023) “What You Need to Know Before You Buy a Vacation Home with Friends or Family”

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Bypass Trust is a pivotal Estate Planning Tool

Bypass Trust is a pivotal Estate Planning Tool

A bypass trust, also known as a credit shelter trust or B trust, is a pivotal estate planning tool. It’s designed to help minimize estate taxes and ensure that a larger portion of your assets reaches your intended beneficiaries. A bypass trust works by allowing a surviving spouse to benefit from the trust assets during their lifetime, while preserving the trust principal for the next generation.

One of the primary benefits of a bypass trust is its ability to shield assets from estate taxes. This trust type strategically utilizes the federal estate tax exemption, allowing couples to effectively double the amount exempted from estate taxes. When one spouse passes away, the assets up to the estate tax exemption amount can be transferred into the bypass trust, thus reducing the taxable estate of the surviving spouse.

In the bypass trust arrangement, the trust is split into two separate trusts when the first spouse dies. The survivor’s trust is revocable and contains the surviving spouse’s share of the estate, while the deceased spouse’s share is transferred into the bypass trust, which becomes irrevocable. This separation allows for efficient estate tax management.

The surviving spouse plays a crucial role in a bypass trust. They have access to the trust income and, in some cases, the principal for certain needs. However, the trust assets remain in the trust and are not considered part of the surviving spouse’s estate, thus avoiding estate taxes upon their death.

Selecting a trustee for a bypass trust is an essential decision. The trustee manages the trust assets and ensures that they are used according to the terms of the trust. It’s essential to choose someone who is trustworthy and understands the financial and legal responsibilities involved.

Setting up a bypass trust requires careful planning and drafting by an experienced estate planning attorney. The trust document must outline the terms of the trust, including how the assets will be managed and distributed. This process also involves making decisions about beneficiaries and trustees.

Bypass trusts are closely tied to tax law, particularly federal estate tax laws. How a bypass trust is structured can significantly impact the estate taxes owed. Understanding current tax laws and how they affect your estate plan is crucial.

A bypass trust is most beneficial for couples with substantial assets that exceed the federal estate tax exemption amount. It’s an effective way to reduce estate taxes and ensure that more of your estate goes to your beneficiaries rather than to tax payments.

The landscape of estate planning and tax law is constantly evolving. It’s important to stay informed about changes in the law and how they may impact your estate plan. A bypass trust remains a relevant and pivotal tool in many estate planning strategies.

If you’re considering a bypass trust as part of your estate plan, consulting with an experienced estate planning attorney is essential. They can help you understand if a bypass trust is the right option for your situation and guide you through the process of setting one up. If you would like to learn more about bypass trusts and estate taxes, please visit our previous posts. 

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When and How to get Letters of Testamentary

When and How to get Letters of Testamentary

The executor manages assets until the probate process is complete. They also need proof of their authority to do so. The court-issued Letter of Testamentary provides evidence of their authority and explains a recent article from Forbes, What Is A Letter Of Testamentary?” The article details how this document works and when and how to get Letters of Testamentary.

A decedent’s last will and testament names their executor, who will manage their estate. Their duties include filing probate paperwork with the court, notifying potential heirs and creditors of the probate process and managing assets, including paying bills from the estate’s bank account. The executor is also the one to set up the estate’s bank account. When the estate is nearly completed, assets are distributed to beneficiaries.

Third parties need to know who the executor is. The executor also needs proof of their authority to carry out their job tasks. The letter is a simple document issued by the probate court and typically includes the following information:

  • The court issuing the letter.
  • The name and contact details of the executor (also referred to as a “personal representative” of the estate).
  • That the personal representative was named in the will of the decedent
  • The date the executor was granted authority to manage the decedent’s estate.

What is the difference between a Letter of Testamentary and a Letter of Administration? A letter of administration can be used during the probate process. However, it serves a different process. The court uses the letter of administration if a person dies without having named a personal representative or executor. The court appoints a person to manage the estate and probate process, and the court then creates a Letter of Administration giving this individual the authority to act.

There is no guarantee or requirement for the court to appoint a family member to serve in this role. This is another reason why having a will that names an executor is essential if the family wishes to be involved in settling the estate.

What if there is no will? Without a will, there is no executor. Someone is still needed to manage the decedent’s assets and take care of the steps in probate. A surviving family member or loved one may open a probate case after death, even when there is no will. This involves filing court documents and attending a hearing. The court will then appoint an administrator, determining who has the desire and ability to serve in the role.

What about assets held in trust? If assets have been placed in a trust, a trustee has been named and is in charge of following the trust’s directions. There is no probate court involvement, which is why so many opt to place their assets in a trust as part of their estate plan. The trust becomes the legal owner of the assets once they are placed in the trust. The trust creator often acts as the trustee during their lifetime and names a successor trustee who takes over in case of incapacity or death. That person has the authority to manage the trust assets and transfer them through the trust administration process without any involvement from the court.

However, if assets were not placed in the trust, they must go through the probate process, and an executor or personal representative will need a letter to manage them.

If you have lost a loved one, or are choosing an executor, ensure you have a complete understanding of when and how to get letters of testamentary. Work with an experienced estate planning attorney familiar with your state’s laws and the court process of probate. If you are interested in learning more about probate, please visit our previous posts.

Reference: Forbes (Jan. 17, 2024) “What Is A Letter Of Testamentary?”

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A Subtrust is a Multi-Tool that serves various Purposes

A Subtrust is a Multi-Tool that serves various Purposes

A subtrust is a separate entity created under the umbrella of a primary trust or a will. A subtrust becomes active based on the terms of the trust or will when certain events happen, such as the death of the primary grantor, or creator. Subtrusts are used by estate planning attorneys to help families pass on inheritances and protect their heirs from creditors or issues such as lawsuits or divorce. A Subtrust is a multi-tool that serves various purposes, depending on the beneficiaries’ specific needs and the grantor’s goals.

A subtrust is created as part of a primary trust, often a revocable trust. The primary trust acts as a container for your assets, answering critical questions about who gets them, what they receive, when and how. The subtrust, on the other hand, is like a specialized compartment within this container, designed for specific purposes or beneficiaries. Subtrusts remain dormant within the primary trust until a triggering event, typically the death of the grantor. Upon this event, the subtrust becomes active and, in most cases, irrevocable. This means that the terms of the subtrust cannot be changed.

The activation of a subtrust initiates a process known as trust administration. This process involves naming the subtrust, obtaining a tax ID and setting up a bank account. In addition, an appointed trustee will need to manage the trust assets, including making distributions to beneficiaries, filing tax returns and ensuring that the trust operates according to the trust provisions and the grantor’s intentions.

How Do Subtrusts Work If Created Under a Will?

Subtrusts can also be effectively created under a will, offering a flexible approach to estate planning. The will itself can directly establish these trusts or designate a revocable trust as the beneficiary in what is known as a “pour-over” will. This method ensures that the assets are transferred into the trust upon the grantor’s death.

How are Subtrusts Different from Revocable Trusts?

Subtrusts offer enhanced protection for your assets and beneficiaries. Unlike a revocable trust, which can be altered during the grantor’s lifetime, a subtrust becomes irrevocable upon activation, providing a firmer legal structure. This irrevocability protects the assets from the beneficiary’s creditors and in cases of legal challenges, such as divorce or lawsuits.

What are Subtrusts Commonly Used for?

Subtrusts serve various purposes, depending on the beneficiaries’ specific needs and the trustor’s goals. They can be used to protect beneficiaries who are minors, financially irresponsible, or have special needs. Subtrusts can also safeguard assets from beneficiaries’ creditors, ensuring that the inheritance is used as intended by the grantor.

Subtrusts have many different names and types, each serving a unique purpose in estate planning, as outlined in an article by the American Academy of Estate Planning Attorneys titled Basics of Estate Planning: Trusts and Subtrusts.

How Do Subtrusts Avoid Probate?

A Subtrust is a multi-tool that serves various purposes, but one of the primary reasons is to avoid the lengthy and often costly process of probate. Having assets in a subtrust bypasses the court-supervised distribution process, making things smooth, quick and easy for your family and heirs after your death.

Subtrusts provide a layer of protection for beneficiaries against their creditors or their own irresponsibility. This is particularly important in cases where a beneficiary may face financial difficulties, divorce, legal disputes, or even car accidents. The subtrust provides a shield for the assets to protect them from external claims. If you would like to learn more about trusts, please visit our previous posts. 

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Estate Planning for Unmarried Senior Couples

Estate Planning for Unmarried Senior Couples

An increasing number of couples at various stages of life are choosing to live together without marrying, making estate planning a bit more challenging. This is especially true when considering estate planning for unmarried senior couples, according to a recent article from Kiplinger, “Estate Planning and the Legal Quirks of Retiree Cohabitation.”

From one perspective, living together without being legally married provides an advantage: you have your own estate plan. You may distribute assets after death with no obligation to leave anything to a partner or their biological children. In many jurisdictions, the law requires spouses to leave a significant portion to their surviving spouse. This doesn’t apply if you’re cohabitating.

However, there are downsides. For example, a surviving unmarried partner doesn’t benefit from inheriting assets without estate taxes. A non-spouse transferring assets may find themselves generating sizable estate or income taxes. To avoid this, your estate planning attorney will discuss tax liability strategies.

Owning real property together can get complicated. Consider an unmarried couple buying a property solely in one person’s name, excluding the partner to sidestep any possible gift taxes. If the sole owner dies, the partner has no claim to the property. The solution could be planning for property rights in the estate plan, possibly leaving the property outright to the partner or in trust for the partner’s use throughout their lifetime. It still has to be planned for in advance of incapacity or, of course, death.

Regarding healthcare communication and directives, special care must be taken to ensure that the couple can be involved in each other’s care and decision-making. By law, decision-making might default to the married spouse or kin. Without a designated healthcare proxy, a cohabitating partner has no legal authority to obtain medical information, make medical decisions, or, in some cases, won’t even have the ability to have access to a hospitalized partner. A healthcare power of attorney is essential for unmarried couples.

For senior couples living together, blending families can be challenging. However, blending finances can be even more complex. Living together later in life can create many concerns if there are former spouses or children from a prior relationship. If a senior decides to marry, they are advised to have a prenuptial agreement so children from previous unions are not disinherited. If a potential spouse has big issues signing such a document, it should raise a red flag to their motivation to marry.

Living together without the legal protection of marriage is an individual decision and may be seen as a means of avoiding legalities. However, it needs to be examined from the perspective of estate planning for the unmarried senior couple, to protect both parties and their families. Couples must prepare for the future, for better or worse, in sickness and health. If you would like to learn more about estate planning for unmarried couples, please visit our previous posts. 

Reference: Kiplinger (Dec. 6, 2023) “Estate Planning and the Legal Quirks of Retiree Cohabitation”

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Information in our blogs is very general in nature and should not be acted upon without first consulting with an attorney. Please feel free to contact Texas Trust Law to schedule a complimentary consultation.
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