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Unmarried Couples and Estate Planning: Does It Make Sense?

Published October 18, 2018 by Brady Cobin Law Group, PLLC

A couple shaking hands with a professionalSometimes we are asked whether a couple that lives together — an unmarried couple — needs estate planning. Our answer is an emphatic “Yes.” There are protections married couples have that unmarried couples do not, which makes estate planning more important in many ways for unmarried couples.

Whether they are a younger couple not ready to tie the knot, or older divorced or widowed adults who don’t feel the need to formalize a relationship, many American couples live happy lives together without marrying. At the Brady Cobin Law Group, we offer estate planning tailored to the needs of North Carolina couples who live with a domestic partner, including straight or gay couples who are not married.

Move Carefully When Moving Together

Estate planning for couples often starts with worst-case scenarios: What if one of you unexpectedly dies or becomes terminally incapacitated? We have worked with the heartbroken survivors left with avoidable legal problems that compound their grief.

If a couple is married but there is no will or other legal instructions when one spouse dies, it is more complex, but the courts generally see the surviving spouse as the natural heir or legal proxy. But when a couple is not married, a partner can be shut out of end-of-life decisions for their loved one. An individual could be left homeless with the death of a live-in partner whose legal heirs now own the house that was under title to only one name.

Marriage is a legal institution. If you do not choose to have the legal protection of marriage, you must make your own contractual arrangements. Our will and estate attorneys can help you plan for the future for yourself and your loved ones.

3 Estate Planning Documents NC Unmarried Couples Needs Now

Estate planning means establishing legal documents that state who receives your property and money after you die and who makes decisions about your well-being if you cannot decide for yourself.

If you are not married to the person who you would want to make end-of-life decisions for you if you become incapacitated, you should set forth your wishes in legal directives as soon as possible.

Here are three legal tools every committed couple should have:

  • Wills or a Trust. A will outlines how your estate (property and financial assets) should be divided and who receives what. If you want everything to go to your partner, it can be as simple as that. If there are pieces of property that you want someone else to have, or money you want to donate to a school, charity, or cause, a will can establish your wishes.
    • A revocable trust is a more complex legal entity, but it makes administration of your estate easier. A revocable living trust would assume ownership of all assets assigned to it (such as a couple’s combined assets), and you would establish yourself and your partner as trustees empowered to use and distribute the trust’s assets. The death of one trustee would not affect the surviving trustee’s control of the trust’s assets.
    • A trust can name a successor trustee(s) and provide for the disposition of certain assets to other individuals or entities in certain circumstances, such as a specified trustee’s death or the death of both trustees.
  • Power of Attorney. A power of attorney gives someone else the right to make decisions on your behalf in circumstances outlined in the legal document, such as if you become incapacitated. A medical power of attorney designates someone you trust to handle your health care decisions. A general power of attorney may grant blanket legal authority or specify the types of decisions included or excluded, such as for disposition of assets including financial accounts or real estate. 
  • Health Care Directive. A health care directive, or “advanced directive,” documents what end-of-life decisions you would make for yourself, such as when to administer or withhold medical care. It is a gift you and your partner can give one another to eliminate the burden of such decisions if and when the need comes.

Additionally, you should make sure any real property or other valuable assets, such as cars or boats, are in both of your names or your living trust’s name. Next, review accounts for which there is or can be a beneficiary named, such as life insurance; 401(k) and Roth IRAs, and bank accounts, and ensure they name the proper beneficiary upon your death or that they are transferred to your living trust.

Why Should Unmarried Couples Have an Estate Plan?

Unmarried couples break up just like married couples do. But divorce is a legal act reserved for married couples and for which state law and the courts provide guidance.

While an unmarried couple in North Carolina does not benefit from established separation and divorce procedures and protections, the couple can rely on a cohabitation agreement if they have planned ahead. A cohabitation agreement spells out what will happen in a breakup.

We can help you establish a cohabitation or “living together” agreement similar to a prenuptial agreement. These agreements are enforceable in every U.S. state. We can make suggestions of topics the agreement should cover, but the final document can be written to your specifications and with as much or as little detail as you desire.

Some agreements address cohabitation as well as what happens in the event of a breakup. They may outline how living expenses will be divided and how disputes will be resolved, for example.

Most cohabitation agreements identify assets and personal property each partner owned when they moved in together and which would be kept separate in a breakup. This is beneficial for protecting family heirlooms, for example. An agreement could also address how personal property acquired while together would be divided or sold in the event of a breakup.

A cohabitation agreement could also identify existing debt, such as college loans, and each partner’s responsibility for their own previously acquired debts while living together and if no longer living together. The agreement would also address how debts incurred together would be handled in case of a breakup.

Contact Our Estate Planning Attorneys Today

Unmarried couples who live together will experience everything a married couple experiences but without the legal protection of the marriage contract. Proper estate planning provides that protection for couples who plan to spend their lives together but not marry.

The Brady Cobin Law Group can help you establish legal documents that protect the life you build together and your future. Schedule a consultation today with a knowledgeable Raleigh estate planning attorney.

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