Americans are foregoing marriage more than ever before. While much of the discussion involving estate planning focuses on married couples, especially those with children, this topic is just as important for a single person or someone in a long-term/committed relationship but for whatever reason decided marriages isn't for them. In fact, it is probably even more important that a single person has a well-drafted estate plan. This is because the default laws governing estates often work poorly for people without a spouse and may not adequately provide for a significant other or an 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
It is important to understand that your estate plan can change over time. You may eventually experience life changes such as getting married, having or adopting children, or buying your first home that will necessitate changes to your estate plan. Although life is constantly changing, it is best to start early when it comes to estate planning.
If you die intestate – without a will – all of your possessions and assets will be distributed according to the default laws of your state. While most state laws have a married person's assets go to their surviving spouse and children, the same cannot be said for unmarried individuals. Generally, state law provides that a single person's assets are passed on to their next of kin. This includes children, parents, and siblings. What is noticeably absent for many unmarried people are provisions providing for a long-term boyfriend or girlfriend. And, if there are no surviving close relatives, the assets will likely go to the state. To avoid the state dictating what happens to your assets, it is vital that you have a properly drafted estate plan put together.
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 extremely 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 as to 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. For unmarried people, the most common ways to hold title to property is as tenants in common and joint tenants with rights of survivorship. Property that is held as tenants in common 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, whom they may not like or never met. Joint tenants with rights of survivorship 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 drafted.
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 about the most. Contact us today so we can help.