How Is Estate Planning Different for Unmarried Couples?

Estate planning is the process of outlining and organizing your assets following your passing. Everyone, especially unmarried couples, should plan out their wishes accordingly. Unmarried couples face different challenges than married couples when estate planning. Unfortunately, it’s common for them to neglect estate planning because they believe it doesn't apply to them. We will discuss how estate planning is different for unmarried couples and what you can do for your assets post-mortem.

Inheritance Rights

Unmarried couples aren’t entitled to joint marital property rights, as the property in question belongs to each individual. If one of the partners dies without a will, the remaining partner may not inherit anything. This can cause significant stress for the surviving partner. With estate planning, you can ensure your partner receives what you wish to leave for them without fighting for it.

Beneficiaries and Designated Agents

Married couples often name each other as beneficiaries on their life insurance policies, retirement accounts, and other estate planning documents. Unmarried couples, however, don't have that option. To ensure your surviving partner has access to your assets, designate them as beneficiaries and designated agents in your estate planning documents. This will ensure they receive the assets you want them to inherit.

Health Care Decisions

During medical emergencies, spouses can make health care decisions for each other, but unmarried couples don’t have this benefit. You’ll need to designate your partner as a medical power of attorney agent to allow them to make healthcare decisions on your behalf. While this possibility might seem premature for your stage of life, health scares can happen with little notice. So, having someone you trust by your side is best.

Property Taxes

Another way estate planning is different for unmarried couples is that the taxes on your assets could cost more to distribute. Married couples obtain exemptions on their property taxes, while one partner in an unmarried couple might pay more taxes than the other. For example, jointly owning a property may expose one partner to a higher tax rate than the other. Fortunately, estate planning can minimize the tax burden on the surviving individual.

Custody and Guardianship

Unmarried couples with children should consider guardianship and custody arrangements in their estate plan. In the event of one partner's passing, the other may lose custody rights if the deceased parent's family challenges the surviving partner's custody. An estate plan can prevent this situation from happening and protect your children's rights.

Estate planning presents a series of unique setbacks for people in unmarried relationships. These issues make establishing the framework much more important for your partner’s future. At Vancouver Wills and Trusts, we value our clients' needs and aim to make estate planning easy and understandable. Our flat fee estate planning services ensure you never need to worry about adjusting your budget to get the help you need. Schedule a consultation today, and we'll guide you through every aspect of estate planning.