Estate Planning for Unmarried Couples
According to the National Center for Marriage and Family Research, there are over 20 million unmarried,
cohabitating couples as of 2022 in the United States. Regardless of the reasoning for not being married, these couples potentially face unique challenges when it comes to estate planning and managing their assets. Without marriage or the proper estate planning, your partner may not inherit any of your estate or have a say in your end-of-life care. This blog post will discuss ways to ensure your partner is included in the distribution of your estate while still protecting your assets.
Drafting a Will
Wills can be used to name your partner as a beneficiary or as personal representative of your estate. This avoids intestate laws that could potentially cause your estate to pass to someone in your family against your wishes. If you have children with your partner but are not married, a will can also be used to name a guardian for your children that you and your partner both agree on.
Establish a Joint Trust
A joint revocable trust is another way to ensure your assets are protected. Even if you are not married, you can still create a joint revocable trust with your partner. Assets and real estate owned both individually and jointly can be titled under a trust to ensure they are protected upon the death of you or your partner. Trusts can also be used to potentially avoid a probate administration. Though revocable trusts are amendable, it is advisable to contact an estate planning attorney to ensure you have considered all available options.
Powers of Attorney
Without a Financial or Health Care Power of Attorney, your partner would most likely not have any ability to make decisions regarding your end-of-life care. Powers of Attorney documents can be used to give your partner the power to make both financial and health care decisions on your behalf should you become incapacitated or unable to advocate for yourself. Health care powers of attorney are generally not activated unless two doctors deem you incapacitated.
Pay-On-Death Beneficiary Designations
Naming your partner as a pay-on-death beneficiary to your various financial accounts, insurance policies,
securities, etc. can ensure your funds are distributed according to your wishes upon your death. Many financial institutions offer pay-on-death designation forms. Please note that these designations should take into account your overall estate planning goals, so it could prove helpful to contact an attorney for more information.
Wisconsin does not have any state inheritance tax. Furthermore, as of 2023, the federal exemption for gift and estate tax is $12,920,000 for an individual. For smaller estates, federal tax rates are not of upmost concern. However, for larger estates, unmarried couples do not enjoy the tax exemptions that married couples have when transferring assets to each other. Everyone’s individual tax situations may differ. However, establishing a trust with your partner is a potential way to avoid federal estate tax upon your death if you exceed the exemption limit.
Sometimes, even the most important people in our lives are not recognized as heirs to our assets under the law. Drafting a comprehensive estate plan, including a will, trust, powers of attorney documents, and beneficiary designations, is a great way to ensure your partner is included in the execution of your estate. The attorneys at Malm & LaFave, S.C. are here to tailor your estate plan to fit any unique circumstance. Contact our office at 414-228-5250 to begin drafting your documents today.