Estate planning laws favor married couples, so message to unmarried partners: plan now

The lesson for unmarried couples living together: protect your finances and emotional health by taking time to establish estate-planning documents. Doing this paperwork now could save your loved one trouble later, including the loss of a home, if you die first.

Estate planning tips for unmarried couples were outlined by nextavenue, a nonprofit web site that provides news for older Americans.

Among the estate planning tips for unmarried couples discussed were health care, power of attorney in medical emergencies, access to finances and retirement funds and the right to stay in a home.

An increasing number of Americans 50 and older are in “cohabiting relationships,” according to a Pew Research Center analysis.

In 2016, four million adults 50 and older were living together, up from 2.3 million in 2007.

More than half the couples 50 and over who choose to live together had been divorced. Avoiding a repeat of that ordeal might make living together seem simpler than marriage. Living together has its own complications, however.

What estate planning challenges do unmarried couples face?

Unmarried couples, of all sexual orientations, can face a variety of problems for one big reason — estate planning laws are written to favor married couples.

If an unmarried couple fails to plan for the possibility that one partner will no longer be able to manage his or her health care due to a serious medical issue, the law will treat the other partner as a legal stranger.

For example, consider if a couple is married and one partner is rushed to the hospital unconscious and they had yet to prepare health care power of attorney documents. The legal spouse in this type of emergency would probably be permitted to make medical decisions on the ill spouse’s behalf. Partners in an unmarried couple in the same emergency will have no right to make medical decisions on behalf of each other, however.

Partners in an unmarried couple also risk their financial assets without proper estate planning. Absent documents that stipulate who has financial power of attorney, if one of the partners is incapacitated, institutions could freeze assets beyond the other partner’s access.

In these cases, courts generally rely on blood kin to make financial and medical decisions. The partner in the couple who is not ill could lose assets and even be evicted if the home is owned solely by the partner who is ill and unable to manage finances.

Other legal pitfalls of living together

Failure to secure the proper legal documents can cause other problems for an unmarried couple. A surviving partner wouldn’t be entitled to make decisions regarding the donation of the deceased’s organs or arrange for the person’s burial or cremation.

Also key for an unmarried couple is to establish a will or living trust. Without this document, the state will distribute the deceased’s assets under what is known as intestate laws. In other words, if you don't have a will, the state will make one for you — regardless of a surviving unmarried partner.

In this case, the deceased’s blood relatives, and not the surviving partner, will inherit what the couple might have considered their shared assets if the couple had failed to execute a will or living trust stating otherwise.

Also, regarding 401K retirement plans and employer-sponsored group life insurance policies: Establishing a document that designates a partner in an unmarried couple as a beneficiary ensures that, if the asset-holding partner in the couple dies, the other partner will be entitled to the assets.

Otherwise, in another twist related to estate planning for unmarried couples, the assets go to the deceased’s blood relatives.

Contact The Law Firm of Brown & Jensen in Arizona today for help with estate planning tips for unmarried couples and for estate planning help in general.